Written by Gary
US stock market indexes are drifting near the unchanged line (SPY +0.1%). DOW slips as Fed takes center stage, with stocks putting in mixed performance.
Here is the current market situation from CNN Money | |
 | North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.08% while Mexico’s IPC is up 0.31% and U.S.’s S&P 500 is up 0.12%. |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
| Wall Street edges higher; Fed in focus(Reuters) – Wall Street’s main indexes posted small gains on Tuesday as bank shares gained in anticipation of an interest rate hike by the Federal Reserve at its two-day policy meeting. |
| AT&T, Justice Department await decision that could determine future of mediaWASHINGTON (Reuters) – AT&T Inc , which owns DirecTV, awaits a court ruling on Tuesday that will determine if it can buy Time Warner Inc , a decision that could prompt a cascade of pay TV companies buying television and movie makers and the first big test of the Trump administration’s antitrust teams. |
| Trump, in trade feud with allies, say won’t let them take advantage of U.S.SINGAPORE (Reuters) – U.S. President Donald Trump on Tuesday kept up his feud with America’s closest allies over trade, saying he could not allow them to continue taking advantage of the United States. |
| Exclusive: Saudi Aramco eyes partnerships as it expands refining, petrochemsDHAHRAN, Saudi Arabia (Reuters) – Saudi Aramco plans to boost investments in refining and petrochemicals to secure new markets for its crude, and sees growth in chemicals as central to its downstream strategy to lessen the risk of a slowdown in oil demand. |
| New York’s top court narrows Martin Act in $11 billion Credit Suisse caseNEW YORK (Reuters) – New York State’s highest court on Tuesday narrowed the reach of a powerful law used by the state’s attorney general to fight financial fraud, handing a partial victory to Credit Suisse Group AG in an $11 billion lawsuit over defective mortgage securities. |
| McDonald’s to post $80-$90 million charges for restructuring, layoffs(Reuters) – McDonald’s Corp plans to take $80 million to $90 million in charges during the second quarter from a restructuring at its U.S. operations that includes layoffs. |
| China’s ZTE to resume trading after $1.4 billion U.S. settlementHONG KONG (Reuters) – ZTE Corp said trading in its shares would resume on Wednesday, ending a two-month suspension, after the Chinese telecommunications giant agreed to pay up to $1.4 billion in penalties to the U.S. government and radically overhaul its management. |
| OPEC will squeeze oil buffer to historic lows with an output hikeLONDON (Reuters) – The oil industry will face the biggest squeeze on its spare production capacity in more than three decades if OPEC and its allies agree next week to hike crude output, leaving the world more at risk of a price spike from any supply disruption. |
| VW board to discuss prosecutors’ probe into Audi CEO on MondayHAMBURG/BERLIN (Reuters) – Volkswagen’s supervisory board will on Monday discuss German prosecutors’ investigation into the head of its Audi brand, as the carmaker weighs up how to tackle the latest fallout from its 2015 emissions scandal, sources said. |
| The Schizophrenic Wall Street Is Back… And This Is What Keeps It Up At NightLast August, when looking at the monthly Bank of America Fund Manager Survey, we pointed out a “paradox” in Wall Street sentiment that could only be attributed to schizophrenia (or merely another example of how central banks have broken markets): on one hand a record number of investors said that stocks are overvalued (they were correct), even as most investors admitted they – or their peers – are long tech stocks (they were also correct). Fast forward to today, when the same “schizophrenic”paradox is back as the latest, June, Fund Manager Survey reveals a set of responses that make little intuitive sense when juxtaposed. On one hand, of the 235 survey respondents with $684BN in AUM, a record 42% of investors said companies are over levered, far exceeding the 32% peak in 2008; overall an all-time high of net 34% think corporate balance sheets are overleveraged.
According to BofA CIO Michael Hartnett, “this implies downside for equities versus government bonds” as the net percentage of “improve capex” tracks global equities and bonds closely. |
| “I Own That” – Peter Navarro Apologizes For Trudeau TiradeTwo days after Trump trade advisor Peter Navarro unleashed verbal hell on Canadian PM Trudeau:
During a Fox News interview:
He has apologized for his outburst.
During an interview at The Wall Street Journal’s CFO conference, Navarro said:
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| How Robots Determine Who Makes America’s ClothesAt the turn of the century, virtually all cheaply-made, imported US clothes and shoes were made in China. Since then, however, things have changed drastically, and as Chinese labor costs have rise, China’s market share of US imports of apparel and footwear slumped, replaced by Vietnam, Indonesia and Bangladesh, and is declining at an accelerating pace.
What happened? Well, as Deutsche Bank writes in its latest Konzept magazine, when future economic historians look back at China, they might see the years 2014-2015 as a turning point. This was the time when the total working age population peaked… |
| Paris Street On Lockdown As Man Armed With Bomb Takes 3 HostagesA man who reportedly is claiming to have a bomb and a handgun has taken up to three people hostage near the center of Paris, local media is reporting. According to the Mirror, the Rue des Petites Ecuries, in the 10th arondissement where the incident is taking place, is on lockdown as police, fire trucks and ambulances rush to the scene. People nearby have shared images of the armed police presence on social media. According to online reports, the man is demanding to speak with the Iranian embassy. It’s unclear whether the case is terrorism-related.
The hostage taker is claiming that one of his hostages is “seriously injured” and another is a pregnant woman. Photos and video posted on social media show the growing police presence. The area around where the incident is unfolding has been closed to the public.
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| Grocery Chains Are Being Squeezed From All SidesPressure from rapidly changing consumer tastes, European discounters and Whole Foods will hurt smaller grocery chains most but the big players like Kroger will struggle to grow. |
| The Market That Still Believes in Global GrowthIf the economic outlook is under threat, why are high-yield bonds doing so well? |
| Xiaomi IPO Gets a Vital Helping Hand From HomeForget Chinese stocks joining MSCI’s indexes: A bigger opening-up is taking place in Chinese markets—for the country’s own technology giants. |
| May 2018 CPI: Year-over-Year Inflation Rate Now 2.8%Written by Steven Hansen According to the BLS, the Consumer Price Index (CPI-U) year-over-year inflation rate was 2.8 % – rate of year-over-year growth up 0.3 % from last month. The year-over-year core inflation (excludes energy and food) rate increased from 2.1 % to 2.2 %, and continues to be above the target set by the Federal Reserve.
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| London Markets: FTSE 100 pulls back, with investors underwhelmed by Trump-Kim pledgeU.K. stocks fell Tuesday after a historic meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un resulted in an agreement that critics said was too broad in nature when it comes to denuclearization in the Korean Peninsula. |
| Grow: Being a slacker can actually make you better at your jobThese traditional slacker moves can make you a more valuable member of the team. |
| NerdWallet: If you’re a millennial, now you can buy a retirementA new startup is offering a way for people in their 20s and 30s to purchase income annuities over time. |
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