Written by Gary
The three major US benchmark indexes are mixed as we enter afternoon trading (SPY +0.1%) and the DOW down 44 points and slipping.
Here is the current market situation from CNN Money | |
North and South American markets are higher today with shares in Brazil leading the region. The Bovespa is up 0.64% while U.S.’s S&P 500 is up 0.08% and Mexico’s IPC is up 0.04%. |
What Is Moving the Markets
Here are the headlines moving the markets. | |
Wall Street edges higher as U.S.-China trade talks progress(Reuters) – U.S. stocks edged higher on Tuesday, led by financial and energy stocks, as the United States and China made progress on ironing out their trade differences and reach an agreement. | |
U.S. lawmakers say they will try to block possible ZTE deal with ChinaWASHINGTON (Reuters) – U.S. lawmakers said on Tuesday they would try to stop President Donald Trump from easing penalties on Chinese telecommunications company ZTE Corp, saying the United States should not bow to pressure from Beijing to help the troubled firm as part of a possible trade deal. | |
Facebook’s Zuckerberg apologizes to EU lawmakers over data leakBRUSSELS (Reuters) – Facebook boss Mark Zuckerberg apologised to European Union lawmakers on Tuesday for a massive data leak, in his latest attempt to draw a line under a scandal that has rocked the world’s biggest social media network. | |
Tesla’s Musk admits Model 3 braking issue, promises fix(Reuters) – Tesla Inc Chief Executive Officer Elon Musk has sought to play down a report identifying “big flaws” in its Model 3 sedan, admitting there is a braking issue with the vehicle but saying it will be fixed with a software update within days. | |
EU doubts if offer can prevent Trump tariffs or steel capsBRUSSELS (Reuters) – European Union proposals to open its markets wider to U.S. products, including cars, appear not to have persuaded Washington to lift the threat of import tariffs on EU steel and aluminum, the bloc’s trade chief said on Tuesday. | |
J.C. Penney CEO Ellison jumps ship to Lowe’s(Reuters) – J.C. Penney’s Chief Executive Officer Marvin Ellison is leaving the struggling retailer to join home improvement chain Lowe’s Cos Inc , the companies said on Tuesday, sending shares in the U.S. department store chain down 4 percent. | |
Americans report stronger finances in Trump’s first year: Federal ReserveWASHINGTON (Reuters) – The share of Americans who report they are doing “at least okay” financially rose in President Donald Trump’s first year in office, according to Federal Reserve data published on Tuesday. | |
Sony in $2.3 billion deal for EMI, becomes world’s biggest music publisherTOKYO (Reuters) – Sony Corp said on Tuesday it would pay about $2.3 billion to gain control of EMI, becoming the world’s largest music publisher in an industry that has found new life on the back of streaming services. | |
Civil rights groups criticize Amazon’s facial recognition system(Reuters) – Several U.S. civil liberties groups on Tuesday complained that Amazon.com Inc’s real-time facial recognition system, Rekognition, is helping the government with surveillance targeting large crowds, violating civil and digital rights. | |
Trump Says “No Deal On ZTE” As Senate Committee Blocks Him From Lifting BanUpdate: After Treasury Secretary Steven Mnuchin insisted this morning that there was no “quid pro quo” involved in the US’s decision to take a second look at the sanctions it imposed on Chinese telecoms firm ZTE, President Trump reiterated this afternoon that the US and China have yet to reach a deal on trade, adding that he is “not pleased” with how the talks are progressing. The news caused stocks to roll over as worries about a trade war – which had eased markedly on Mnuchin’s “trade truce” claims – bubbled back to the surface. Trump added that he expects the US to levy a “very large fine” against ZTE and require new management and a new board of directors – all of which are reportedly conditions of a potential deal reported earlier. Meanwhile, Congress has decided to throw a wrench in the works after a Senate panel on Tuesday approved an amendment that would block Trump from easing sanctions on ZTE without first certifying that the company is complying with US law. Of course, Trump’s direct contradiction of Mnuchin could be the … | |
15 Signs It’s “Getting Very Late”, From Bank of AmericaIn parallel to the now standard question of “how high can rates go before it all comes crashing down”, the one other thing the investing community desperately wants answered (as this Bloomberg piece notes), is where are we in the business cycle? According to the latest report by BofA’s Michael Hartnett, we are now so “long in the vermouth”, the late-cycle is starting to get “tipsy.” Consider the following points: 2017: Bitcoin’s rip from $300 to $19,600 in 3 years made it the biggest bubble ever 2017: Da Vinci’s Salvator Mundi sold for $450mn (would take average American 7,500 years to earn) 2017: Argentina (8 defaults in 202 years) issued a (oversubscribed) 100-year sovereign bond 2017: European high yield bonds were priced as less risky than US Treasuries 2017: the market cap of Facebook (25k employees) exceeded that of India (1.3bn people) 2018: US, UK, German, Japanese unemployment rates are at multi-decade lows 2018: the global stock of negatively-yielding global debt remains >$10tn 2018: S&P 500 trailing price-to-earnings ratio >20X…a level exceeded in just 12 of past 120 years 2018: S&P 500 price-to-book ratio >3X…a level exceeded in just 5 of past 70 years 2018: US tax cuts of $1.5tn will coincide with US corporate bond issuance of $1.5tn and US equity buybacks of $0.9tn 2018: QE “winners” (REITs, credit, EM assets) have started to underperform QE “losers” (volatility, US$, commodities, cash) Aug 22nd, 2018: S&P500 bull market becomes longest of all-time Dec 2018: Fed will be 9 hikes into tightening cycle & G4 central bank liquidity will be contracting May 2019: global profits are forecast to be 1/3 higher than their prior 2008 peak (IBES $3.3tn vs $2.4tn) July 2019 … | |
Watch Live: Zuckerberg Faces Off Against European ParliamentNearly six weeks after he testified before Congress during two back-to-back marathon sessions, Facebook CEO Mark Zuckerberg will appear before the European Parliament Tuesday to answer questions about the Cambridge Analytica scandal. The session will begin at 12:15 pm ET (or 6:15 pm local time). Zuckerberg traveled to Brussels for the occasion, where he is expected to echo many of the same points he delivered last month during his appearance before US lawmakers. Though Zuck’s testimony arrives at a less-than-opportune time. Less than a week ago, whistleblower Christopher Wylie told a Senate Panel that Russian operatives might have the personal data of millions of Facebook users. (Photo of Mark Zuckerberg, courtesy of USAToday). Antonio Tajani, president of European Parliament, announced on Twitter that Zuckerberg would allow the session to be livestreamed.
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How Sustainable Is Earnings Growth?Via Global Macro Monitor, Not very… and we will leave the calculation for the entire stock market to the stock analysts. Here’s why: Just glancing over WalMart’s latest earnings release from the week, we see two one-off macro factors that helped WalMart’s earnings in Q1, and most likely the same for other companies: Foreign exchange rate effect The tax cut Note that almost 40 percent of WalMart’s y/y revenue growth in Q1 was due to the exchange effect… And over 1300 bps of tax cut relief. | |
Is Tesla Abandoning the Mass Market?Tesla has given its first signals that it’s giving up on its ambition to become a mass-market car maker, when Chief Executive Elon Musk admitted that his promised $35,000 Model 3 vehicle would cause the company to “lose money and die” if built right away. | |
Would Cam Newton Buy Stocks Now?The TINA trade, in which there is no alternative to stocks, may be over as investors can finally earn something in cash-like securities. | |
Welcome to the U.S.-China Cold Soup WarChinese-U.S. trade relations are showing signs of warming again after this spring’s chill. Don’t mistake that for a resolution of the core issues—trade tensions increasingly look like a permanent feature of the investment environment. | |
CryptoWatch: Fears of regulation keep bitcoin under pressureDigital currencies continue to move lower Tuesday, with all major coins trading in the red. | |
Europe Markets: European stocks climb as Italy tensions ease for nowEuropean stocks moved higher on Tuesday, with Italy remaining in focus as the country’s president considered the candidate put forward by a euroskeptic alliance to lead their coalition government. | |
Thinking of selling your home? Do it before 2020, economists sayA panel of economic and housing experts sees a dip in house prices on the horizon. |
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