Written by Gary
US stock market index futures are pointing to a flat opening (SPY +0.01%) after Nasdaq scores record close. Crude investors sell in the face of growing U.S. production.
Here is the current market situation from CNN Money | |
 | European markets are mixed today. The DAX is up 0.95% while the CAC 40 gains 0.42%. The FTSE 100 is off 0.43%. |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
 | Tech stocks at record high as FAANGs and BATTS biteLONDON (Reuters) – World tech stocks hit a record high on Tuesday, spurred on by a new all-time peak for Apple, a 17-year top for European tech firms and news that Twitter and Netflix were set to join Wall Street’s flagship S&P 500 index. |
| Britain to rule on Rupert Murdoch’s bid for Sky on TuesdayLONDON (Reuters) – Britain will give its verdict on Rupert Murdoch’s pursuit of Sky later on Tuesday, potentially paving the way for the mogul’s Twenty-First Century Fox to go head-to-head with rival Comcast Corp for the European pay-TV group. |
| Starbucks investors mourn end of an era as Schultz exits(Reuters) – Starbucks Corp’s shares fell more than 1 percent on Tuesday as the departure of Howard Schultz, the architect of the company’s move into a cafe format in the late 1980s, added to a run of worrying headlines for the world’s biggest coffee chain. |
| Saudi Aramco names new head of finance after government reshuffle: sourcesDUBAI (Reuters) – Saudi Aramco has named six new heads of departments including its finance unit after a government reshuffle last week saw several executives at the oil giant moving to other state posts, sources familiar with the matter said on Tuesday. |
| Airline boss stirs gender debate with provocative commentSYDNEY (Reuters) – Promises by the global airline industry to do more to promote gender equality veered off course when one of its top executives suggested his CEO role was too difficult for a woman. |
| China launches DRAM chip price probe into Samsung Electronics, SK Hynix and MicronSEOUL (Reuters) – China has launched a probe into Samsung Electronics Co Ltd , SK Hynix Inc and Micron Technology Inc , the three semiconductor makers who control the market for DRAM memory chips. |
| Apple focuses on speed, parental controls in software upgradesSAN JOSE, Calif. (Reuters) – Apple Inc on Monday unveiled software upgrades that would let older iPhones run faster, help parents limit their children’s screen time and make its Siri voice assistant work more like a rival feature from Amazon.com . |
| Britain takes $2.68 billion loss on RBS share saleLONDON (Reuters) – Britain has sold some of its holding in Royal Bank of Scotland , the bank which it rescued in the 2008 financial crisis, but has taken a loss of more than 2 billion pounds ($2.68 billion) on the deal. |
| Sharp to buy Toshiba PC business, issue $1.8 billion in new sharesTOKYO (Reuters) – Japan’s Sharp Corp said it will buy Toshiba Corp’s personal computer business and issue $1.8 billion in new shares to buy back preferred stock from banks, highlighting a swift recovery under the control of Foxconn. |
| France’s “Fake News” Law Will Be Used To Silence Critics, Win ElectionsSubmitted by Intellihub There is arguably one main reason a law would be put into place to stifle so-called “fake news” and that is so the real purveyors of fake news, like CNN, can continue to push theirs according to critics of what is happening right now in France. The people at the top of the pyramid who are actually running the entire show appear to have it all figured out: in a world where down is up and up is down fake news appears almost everywhere but the real fact of the matter is that most of it comes from mainstream sources, like CNN. So I have to ask: Will the new laws be used to crackdown on sources like CNN that publish garbage or will the powers-that-be let agencies like CNN roll with whatever smut they like while other smaller outlets get targeted over “fake news”? Will the powers-that-be use the law as a weapon to remove controversial reports? French AFP reports:
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| Italian Bonds Slide After Italy’s New Prime Minister Spooks Markets With “Radical” PlansThe eye of the hurricane may have passed over Italy and the winds are again starting to pick up speed, because shortly after Morgan Stanley laid out what a worse case scenario for Rome could look like (ugly, read here), Italian bonds started selling off again, with 2Y yields rising to session highs following Italian premier Conte’s inaugural speech in which the populist premier spooked markets by reiterating that the new populist government will pursue a radical policy program, and highlighting legislative priorities that will be extremely costly – including the right to universal income, minimum wage, overhauling the healthcare system, prioritizing social rights, and so on – all without saying just how these will be paid for (spoiler alert: much more debt). Conte also said that a new flat tax would be introduced, even if no timeframe has been provided, and there was no mention of avoiding the hike in sales taxes which is currently planned for 2019, or canceling the “Fornero” pension reform. Amusingly, in the speech Conte also said that he plans on reducing public debt, although in light of the surge in spending which will not be financed with increased revenue, it is not clear how that can be achieved. As Bloomberg economist Stephanie Flanders notes “Italy cannot convincingly cut its public debt as a share of GDP without reasonable growth in nominal GDP (real growth plus inflation). Even the more optimistic forecasts do not point to nominal GDP growing much faster than 2.5% in the foreseeable future. By contrast, the average cost of its public debt is 3.1%.” A much more important chart is the following from Morgan Stanley showing what would happen to Italy’s debt/GDP if interest rates rose even modestly |
| DHS Scrambles To Find Temporary Housing For Migrant Children On Military Bases, Border StationsJust weeks after the US Department of Homeland Security introduced a new policy that allowed ICE agents to separate children and adults crossing the border, NBC News is reporting that the rapidly rising number of minors being housed at the border is forcing DHS to scramble to find new accommodations as the administration continues to separate migrant children from their parents. In May, President Trump introduced his “zero-tolerance” policy, saying that parents and migrant children would be separated at the border. The Department of Homeland Security then inflamed the situation by revealing that it had lost track of some 1,500 children. Since then, demands for more oversight at DHS have intensified. As of Sunday, 300 of 550 children currently in custody at US border stations had spent more than 72 hours there, having reached the time limit for temporary detention. These stations often lack the resources necessary to house children, including bedding and other resources.
Almost half of these children are younger than 12, meaning they’re classified as “tender age children.” Given the inadequacy of their temporary accommodations, … |
| Central Banker Observes Sudden “Evaporation” Of Dollar Funding, Warns Of Global TurmoilLast October, just as the Fed started shrinking its balance sheet, we published yet another article on what is arguably the biggest threat to not only risk assets, but also the global economy: “The Dollar Funding Shortage: It Never Went Away And It’s Starting To Get Worse Again.” While hardly a novel problem, we first discussed the return of the dollar funding shortage in March 2015, the fact that global stocks kept rising, and that overall funding conditions remained relatively loose keeping the global economy well-lubricated, prevented said dollar funding shortage from becoming a major concern to policymakers, despite occasional recent hiccups such as the Libor-OIS spread blow out, which both we and Citi explained w as a symptom of the creeping shortage of the world’s reserve currency. |
| Food Companies Can’t Figure Out What Americans Want to EatThe food industry is struggling to keep up with consumers who are shifting to fresh from packaged products while new competitors are beating them on price and quality. |
| Time for Australian Banks to Lose Their PremiumPast wrongdoing has mired Australia’s leading banks in controversy. Investors should worry, too, that the country’s rip-roaring property market is finally cooling. |
| Global Markets: A New, More Difficult StageIf last year in markets was all about strong returns, this year is about rising risks: a brewing trade war, renewed political turmoil and concerns about growth. |
| Capitol Report: Bolton sidelined as Trump prepares for North Korea meeting | Republican wants to subject Trump’s tariffs to congressional approvalNational Security Adviser John Bolton sidelined as President Donald Trump prepares for his North Korea meeting; Sen. Bob Corker wants to subject Trump’s tariffs to congressional approval; an appeal is filed in the Trump Twitter-blocking case; and more. |
| How to distribute food stamps to make them more effectiveRepublican lawmakers want to overhaul the program, but researchers have found that SNAP has its merits. |
| Outside the Box: Here’s how Trump’s opponents can ride a ‘blue wave’ to victory on Election DayDemocrats and Republicans can at least agree that the 2018 elections are anything but ordinary. |
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