20Jun2018 Pre-Market Commentary: Wall Street Pointing To A Higher Opening, But Trade Tensions Persist, DOW Futures Up 100 Points, WTI Crude Trading Higher In The Mid 65 Handle

Here is the current market situation from CNN Money

European markets are broadly higher today with shares in London leading the region. The FTSE 100 is up 1.06% while Germany’s DAX is up 0.44% and France’s CAC 40 is up 0.37%.

Walt Disney raises bid for Fox assets to $38 per share

(Reuters) – Twenty-First Century Fox Inc said on Wednesday that Walt Disney Co has raised its offer for Fox assets to $38 per share, topping Comcast Corp’s $35 a share offer last week.

Stock futures climb after trade worries triggered selloff

(Reuters) – U.S. stock index futures rose on Wednesday, after a punishing few sessions for Wall Street due to a rapid escalation in trade tensions between the United States and China.

EU Parliament committee votes for tougher EU copyright rules to rein in tech giants

BRUSSELS (Reuters) – Google , Facebook , Microsoft and other tech giants could face more curbs on their market power after a European Parliament committee voted in favor of tougher copyright rules on Wednesday.

Tesla’s Musk says Germany a front runner for Europe Gigafactory

STOCKHOLM (Reuters) – U.S. electric carmaker Tesla favors Germany as the location for its first European Gigafactory, its chief executive said, in what would be the latest move by an outside firm into the European battery market.

After surrendering CSeries, Bombardier pushes regional plane revival

MONTREAL (Reuters) – As Bombardier surrenders hopes of securing a top spot in commercial aviation with the sale of its money-losing CSeries jet program to Airbus , the Canadian company is now drawing up plans to breathe new life into its older regional planes.

Chinese media denounces Trump trade moves as Beijing touts sincerity

BEIJING (Reuters) – The Trump administration has “blood lust” when it comes to pushing its trade agenda against China and wants to “suck the lifeblood” from China’s economy, a state-run newspaper said on Wednesday, stepping up the angry rhetoric over their dispute.

Fox to craft script for M&A summer blockbuster

(Reuters) – Twenty-First Century Fox Inc’s board is set to decide on Wednesday whether to entertain Comcast Corp’s $65 billion cash bid for the New York-based media company or stick with its roughly $52 billion all-stock offer from Walt Disney Co , people familiar with the matter said.

Dow-ned but not out: Expulsion no body blow for GE shareholders

(Reuters) – General Electric Co’s expulsion from the elite Dow Jones Industrial Average may be a bitter pill to swallow for shareholders, but it could be little more than a publicity blow for investors in the 126-year-old struggling U.S. conglomerate.

Oil traders ready for musical chairs as China tariffs loom

NEW YORK (Reuters) – Oil markets are bracing for a reshuffle of global trade flows as China threatens to impose tit-for-tat tariffs on imports of U.S. energy products, including crude.

Risk Happens Fast

Authored by Doug Kass via RealInvestmentAdvice.com,

We remain in a trading sardine market – not an eating sardine market

Hastily crafted policy that conflates politics is dangerous in a flat and networked world

The return of an untethered Orange Swan is market unfriendly … brace yourselves

The Supreme Tweeter will likely “Make Uncertainty and Volatility Great Again” (#MUVGA)

The First Half of 2018

The first half of 2018 has been a tale of two markets. Maybe three markets.

January brought a market fervor – in which global equities rose dramatically, likely in response to the expected stimulative contribution and impact of the Administration’s reduction in statutory tax rates.

As interest rates began to climb in January, bullish investor sentiment crested and the risk parity trade went array.

Stocks fell violently in February and the new regime of volatility commenced – in a market revealed as increasingly illiquid.

The S&P Index fell from nearly 2900 and successfully tested the 2550 level twice. Several meek rallies commenced but the S&P had 2-3 more successful tests at about 2600 and stocks recently closed in on 2800 (S&P Index).

1Q-2018 corporate revenues and profits didn’t disappoint but the complexion of the market had clearly changed – and valuations (the S&P Index’s price earnings ratio expanded by almost 3 points in 2017) began to contract. Wall Street, which outperformed Main Street in 2017 – reversed roles in the first six months of 2018.

While the stock market reeled with volatility since January 1, the FAANG stocks generally stood ta …

White House Accuses China Of “Persistent Economic Espionage And Aggression”

In what Bloomberg billed as the White House’s “latest salvo in the trade war between the world’s two largest economies”, the Trump administration released a 35-page report late last night fleshing out its national security concerns emanating from China’s theft of intellectual properties as well as economic policies that shield domestic Chinese companies from competition.

The report, titled “How China’s Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World”, accuses China of achieving its brisk economic growth through “aggressive acts, policies, and practices that fall outside of global norms and rules (collectively, ‘economic aggression’)” (surprisingly, not through nosebleed levels of debt issuance), before it lists two categories of said “economic aggression” that are the focus of the report; they are:

Acquire Key Technologies and Intellectual Property From Other Countries, Including the United States.

Capture the Emerging High-Technology Industries That Will Drive Future Economic Growth15 and Many Advancements in the Defense Industry.

The cites comments from the US intelligence community, which note that “Chinese actors are the world’s most active and persistent perpetrators of economic espionage” and that China covets technology in key industries like “electronics, telecommunications, robotics, data services, pharmaceuticals, mobile phone …

Border DNA Tests: Sessions Proposes Genetic Testing To Determine Biological Relationship Vs. Human Trafficking

Attorney General Jeff Sessions has been talking to members of Congress about using DNA testing to verify whether children crossing the southern U.S. border are biologically related to adults they arrive with, or if they are being smuggled into the country by human traffickers, Tony Perkins, President of the Family Research Council.

“Sessions is talking to congressional members and is hoping for a legislative fix,” Perkins said, adding that the DOJ would like to see “just, fair and enforceable” immigration policies. To that end, “They are looking at how to use DNA tests in the field to verify they are parents and not traffickers,” according to Perkins.

Covert Recordings Of Tesla’s New Model 3 Facility Reveal Something Unexpected

Update: According to Business Insider, fewer than 100 vehicles have actually made it through the “tent” facility, technically known as GA4 (or General Assembly 4) line since production began in early June. The publication also notes that it is “unlikely GA4 will provide the output Tesla needs to reach it’s 5,000 Model 3 goal for some time, according to one of the company’s employees.”

Business Insider also reported that Tesla has only built made around 6,000 Model 3s this month, well short of the 5,000/week quota set by Elon Musk.

* * *

Over the past week Tesla stock has enjoyed a torrid surge, driven by a short squeeze following an email to employees by CEO Elon Musk, in which he updated workers of the company’s plan to produce 5,000 Model 3 cars per week by the end of this month, and warning short sellers “they have about three weeks before their short position explodes”, supposedly a warning that the company will surprise Wall Street with either stellar (or at least positive) cash flow or production numbers.

Musk said the company is now producing “about 500” vehicles per day, or about 3,500 per week, adding that some parts of the production system have already reached the quota of 700 cars per day and praised staff for their hard work.

“It’s getting very exciting! All parts of the Model 3 production system are now above 500 and some are almost at 700 cars already. Congratulations to all on making so much progress,” Musk said in the email sent Friday night.

And yet, it wasn’t all clear skies, because Musk also said that there are a few bottlenecks preventing all parts of production from reach …

The Other Yield Curve Investors Should Watch as Trouble Mounts

Escalating trade tensions have helped push the U.S. Treasury yield curve to its flattest in more than a decade. But another curve deserves attention—and it is getting steeper.

Xiaomi Will Have to Dial Down Valuation Hopes

The tech company has postponed plans for a mainland Chinese listing—a blow to its hopes of a high valuation.

Can’t Anyone Here Cook Anymore?

Delivery apps like Grubhub, meal kits and takeout are a rising threat to supermarkets like Kroger and Walmart and packaged food companies like Kraft Heinz

Trucking Growth Is Up Year-over-Year In May 2018

Written by Steven Hansen

Headline data for truck shipments showed continued improvement in May 2018.

Market Extra: What GE’s stock being replaced by Walgreens in the Dow Jones Industrial Average may mean

General Electric will replace Walgreens Boots Alliance Inc., as one of the 30 components of the 122-year-old Dow Jones Industrial Average. Here’s what that means for one of the oldest equity benchmarks.

American Medical Association to investigate whether private-equity-owned practices put profits over patients

Many doctors worry that private equity and other companies emphasize profit, to the detriment of patient care.

Bank of America readies its employees to be replaced by AI

At Bank of America, preparing for a future with more artificial intelligence and fewer workers is part of the plan.