Written by Gary
The US stock markets rose today (SPY +1.0%) after the latest jobs report pointed to strength in the US economy and political tensions in Italy eased.
Todays S&P 500 Chart
The Market in Perspective
Here are the headlines moving the markets. | |
Wall St. rises on strong jobs data; tech stocks climb(Reuters) – Wall Street stocks rose on Friday after the latest monthly jobs report pointed to strength in the U.S. economy and political tensions in Italy eased. | |
U.S. isolated at G7 meeting as tariffs prompt retaliationWASHINGTON/WHISTLER, British Columbia (Reuters) – U.S. President Donald Trump told Canada and the European Union on Friday to do more to bring down their trade surpluses, a day after hitting them and Mexico with import tariffs on steel and aluminum. | |
U.S. job growth surges, unemployment rate falls to 3.8 percentWASHINGTON (Reuters) – U.S. job growth accelerated in May and the unemployment rate dropped to an 18-year low of 3.8 percent, pointing to rapidly tightening labor market conditions, which could stir concerns about inflation. | |
Marchionne ramps up SUVs as prepares to hand over Fiat Chrysler wheelBALOCCO, Italy (Reuters) – Fiat Chrysler’s departing Chief Executive Sergio Marchionne delivered a plan on Friday to ramp up sport utility vehicles and invest 9 billion euros ($10.5 billion) in electric and hybrid cars in a bid to double operating profit by 2022. | |
Deutsche Bank faces another challenge with Fed stress testWASHINGTON (Reuters) – Deutsche Bank AG < DBKGn.DE> will face another challenge this month when the Federal Reserve publishes for the first time the results of a “stress test” on its U.S. operations. | |
Apple to debut phone-to-phone augmented reality: sourcesSAN FRANCISCO (Reuters) – Apple Inc next week will debut tools to let two iPhone users share augmented reality while limiting the personal data sent to its servers, two people familiar with the matter said this week. | |
Ford Motor Co’s Canada auto sales slide in May(Reuters) – Ford Motor Co on Friday reported a 3.3 percent drop in Canadian auto sales in May. | |
U.S. Commerce chief set for China trade talks amid metals tariff rancorBEIJING (Reuters) – U.S. Commerce Secretary Wilbur Ross is proceeding with plans for trade talks in Beijing on Saturday, U.S. officials said, after the Trump administration launched steel and aluminum tariffs on Western allies and renewed its tariff threats against China. | |
Honda confirms Takata air bag rupture in fatal Malaysia crash(Reuters) – A Takata air bag inflator ruptured in a fatal car crash earlier this week in Malaysia, Honda Motor Co said on Friday, in what appears to be the 23rd death worldwide linked to the faulty part that can emit deadly metal fragments. | |
US Stocks, Bonds, Dollar Bid After Quitaly Chaos, Rajoy’s Rout, & Trade War TurmoilUS Bonds Up, US Stocks Up, US Dollar Up… Everything is awesome! Here’s why: New anti-establishment Italian government? Check. New anti-establishment, socialist Spanish government? Check. Trade war between the US and Europe, Mexico, & Canada? Check. Deutsche Bank (most systemically risky bank in the world at one point) downgraded to a B-handle? Check. Fed Tightening as rate-hike odds rise after good jobs data trumps EU risk? Check. The holiday-shortened week ended with Nasdaq and Small Caps outperforming, but The Dow lower… | |
“The Spark That Lights The Fire”: Oaktree Spots A $1 Trillion Opportunity In The Coming Bond CrashBack in November, still smarting from a year he would rather forget, Russell Clark and his Horseman Capital, i.e. the “world’s most bearish hedge fund” unveiled what he would be short next: according to Clark, the next major source of alpha would be shorting fallen angel bonds. Citing a recent IMF Global Financial Report, Clark said that “US investment grade debt is very low quality, and could produce some large fallen angels. It then goes on to tell me that mutual funds are much larger in the high yield market than they used to be. It also tells me low rates means the capital losses are much higher than they used to be. And that investors in high yield mutual funds are much flightier than they used to be! Essentially the IMF are telling me that if you get a large enough fallen angel, the high yield market will freak out, and volatility will spike causing volatility targeting investors to dump leveraged positions. Sounds good to me.” One month later, in the aftermath of of Steinhoff fiasco, in which the ECB found itself long tens of millions of bonds in a company which went from investment grade to deep junk after it was revealed that it may have engaged in occasional fraud, crashing the bonds… … Mario Draghi only made the bearish “fallen angel” case more explicit, by clarifying that going forward the ECB would likely liquidate bonds which were purchased as IG and subsequently downgraded to Junk (as we explained in detail in “ | |
Morgan Stanley ‘Robots’ Will Tell Clients To “HODL” In Next Stock Market CrashDuring periods of market uncertainty, Morgan Stanley will deploy a vast army of artificial intelligence (AI) robots to tell its wealthy clients to remain calm and Hold On for Dear Life (HODL). The robots will craft personalized messages for each wealthy client about why they need to stay in overstretched, central bank driven markets. When volatility rears its ugly head, Morgan Stanley advisors usually apply a great deal of time and energy in communicating with its clients base on various platforms, including phone and email about why they should HODL. Business Insider says the robotic email messages will “appear like a human wrote them.” While complex algorithmic trading bots control much of the order flow in markets, it now seems as automation will be applied to sedate the investment bank’s clientele from selling at rich valuations. Current Shiller PE Ratio: 32.28 | |
How Business Owners Take Cues From Interest RatesAuthored by Frank Shostak via The Mises Institute, According to the Austrian Business Cycle Theory (ABCT) the artificial lowering of interest rates by the central bank leads to a misallocation of resources because businesses undertake various capital projects that prior to the lowering of interest rates weren’t considered as viable. This misallocation of resources is commonly described as an economic boom. As a rule businessmen discover their error once the central bank – that was instrumental in the artificial lowering of interest rates – reverses its stance, which in turn brings to a halt capital expansion and an ensuing economic bust. From the ABCT one can infer that the artificial lowering of interest rates sets a trap for businessmen by luring them into unsustainable business activities that are only exposed once the central bank tightens its interest rate stance. Critics of the ABCT maintain that there is no reason why businessmen should fall prey again and again to an artificial lowering of interest rates. Businessmen are likely to learn from experience, the critics argue, and not fall into the trap produced by an artificial lowering of interest rates. Correct expectations will undo or neutralize the whole process of the boom-bust cycle that is set in motion by the artificial lowering of interest rates. Hence, it is held, the ABCT is not a serious contender in the explanation of modern business cycle phenomena. According to a prominent critic of the ABCT, Gordon Tullock,
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The Italian Saga Is Far From OverAfter a week of high drama, Italy has stepped back from the brink and so have markets. But more tests loom for the country’s novice government. | |
Wacky Prices Pinch Oil Producers’ ProfitsThe differences between various types of crude are currently bigger than usual and in some cases counterintuitive. | |
The Real End Game for CBS-ViacomA little-noticed part of lawsuit says Redstone could sell a combined company and give up control. | |
Futures Movers: Oil prices fall, with U.S. benchmark ending at lowest since AprilOil prices settle lower Friday, with the U.S. benchmark marking its lowest finish since April, weighed down by rising U.S. production and the potential easing of OPEC output curbs. | |
Yes, Sears is likely to collapse, but its biggest stakeholder will be just fineAfter years of asset sales, store closures, debt exchanges and real estate moves, Sears is still suffering huge losses and declining sales and analysts say bankruptcy is very likely. | |
One year after Trump announcement on Paris accord, and climate activists are busyFriday marks the one-year anniversary of President Donald Trump’s announcement that he was pulling the U.S. out of the global Paris accord and environmental groups are clamoring for others to step up and plug the gap. |
Summary of Economic Releases this Week
Earnings Summary for Today
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