21Jun2018 Pre-Market Commentary: Wall Street Set To Open Lower, GE Kicked Out Of The Dow, Dollar Scales 11-month Peak, Oil Slides Into The High 64 Handle

Here is the current market situation from CNN Money

European markets are lower today with shares in Germany off the most. The DAX is down 0.86% while London’s FTSE 100 is off 0.57% and France’s CAC 40 is lower by 0.51%.

Dollar scales 11-month peak, oil slides ahead of OPEC

LONDON (Reuters) – Simmering trade and political tensions and a pumped-up dollar weighed on world shares on Thursday, while oil prices were under pressure before an OPEC meeting expected to increase the world’s supply of crude.

Trade tensions build as Daimler warns on sales

BRUSSELS/FRANKFURT (Reuters) – Mercedes-Benz maker Daimler shocked investors on Thursday with a warning that trade tensions were hitting sales, while fears of a “tit-for-tat” trade war grew as Europe readied retaliatory tariffs against the United States.

Washington’s ‘capricious’ trade actions will hurt U.S. workers, China warns

BEIJING (Reuters) – China’s commerce ministry on Thursday accused the United States of being “capricious” over bilateral trade issues, and warned that the interests of U.S. workers and farmers ultimately will be hurt by Washington’s penchant for brandishing “big sticks”.

Linde, Praxair offer concessions in bid to win EU okay for merger

BRUSSELS (Reuters) – German industrial gases company Linde and U.S. peer Praxair have offered concessions in a bid to address EU antitrust concerns and secure approval for their merger.

OPEC edges closer to raising oil output, Iran’s agreement is key

VIENNA (Reuters) – OPEC edged closer on Thursday toward raising oil output, with Iran softening its opposition to an increase and Saudi Arabia warning of supply shortages and price rallies if production remained stable.

AT&T to launch wireless plans bundled with video after Time Warner win

(Reuters) – AT&T Inc will launch two new unlimited wireless plans next week that will be bundled with a new video streaming service called WatchTV, in the company’s first move to pair entertainment with phone service after closing its $85 billion acquisition of media company Time Warner Inc.

Kroger tightens 2018 profit forecast, shares soar

(Reuters) – Kroger Co on Thursday tightened its profit forecast for the full year as the grocer’s investments in delivery and online services helped it better compete with Walmart Inc and Amazon.com Inc’s Whole Foods.

Martin Sorrell hits out at WPP over handling of his sudden departure

CANNES, France (Reuters) – Martin Sorrell, the founder of WPP , used his first major public appearance since quitting as chief executive in April to hit out at the advertising giant over the treatment he received from the board.

Fiat slams EU regulators for acting as supranational tax body

LUXEMBOURG (Reuters) – Fiat Chrysler Automobiles NV on Thursday accused EU competition regulators of over-reaching their powers and acting as a supranational tax authority for the bloc when they ruled against its tax deal with Luxembourg three years ago.

Earnings Estimates – The Fade Begins (And ‘X’ Marks The Accounting Magic Spot)

Authored by Lance Roberts via RealInvestmentAdvice.com,

With roughly 98% of the S&P 500 having reported earnings, as of mid-June, we can take a closer look at the results through the 1st quarter of the year. During the most recent reported period, 12-month operating earnings per share rose from $33.85 per share in Q4-2017 to $36.43 which translates into a quarterly increase of 7.62%. While operating earnings are widely discussed by analysts and the general media; there are many problems with the way in which these earnings are derived due to one-time charges, inclusion/exclusion of material events, and outright manipulation to “beat earnings.”

Therefore, from a historical valuation perspective, reported earnings are much more relevant in determining market over/undervaluation levels. It is from this perspective the news improved markedly as 12-month reported earnings per share rose from $26.96 in Q4-2017 to $32.81, or a whopping 21.7% in Q1. This jump, of course, is directly related to the reduction in corporate tax rates following the passage of the “tax reform” bill in December of 2017.

However, as shown below, top-line revenue growth (sales) has also improved since the market bottom in early 2016. The issue is that while sales are indeed rising, the price investors are paying for each dollar of sales has grown exponentially since 2009. In other words, it is already well “priced in.”

California Cops Reject Bill That Would Limit Use Of Lethal Force

California law enforcement organizations are in staunch opposition to a new bill which would restrict the circumstances under which police officers can use deadly force in the line of duty, reports Alexei Koseff of the Sacramento Bee.

Assembly Bill 931 would increase the state mandated standard for the use of lethal force from “reasonable” to “necessary” in order to become law. While the bill passed through its first policy committee on Tuesday, it faces an uphill battle in a state legislature that typically doesn’t cross law enforcement.

“We agree that more training can result in better outcomes, but there is a fundamental disagreement about raising the standard above what the Supreme Court has said,” Jonathan Feldman, a lobbyist for the California Police Chiefs Association, told The Bee. -Sacramento Bee

Two cases heard by the U.S. Supreme Court in the 1980s set a legal precedent that police officers can …

China Quietly Approaches US To De-escalate Trade War

As fears about an escalating trade war have continued to hammer stocks on Thursday, now that Daimler has become the first company to slash guidance blaming the trade spate between the US and China for its poor forecast (who knows what the real cause is), Market News International (MNI) reported that Chinese trade officials have “quietly” approached the US to find a way to minimize punitive tariffs on Chinese goods.

The news comes after China again reiterated that it would retaliate if President Trump slaps 10% tariffs on some $200 billion in Chinese goods, something he threatened to do earlier this week. In its latest communique, China said it is “fully prepared” to respond to any new list of US tariffs, according to a spokesman for the Commerce Industry, who added that China will use “a combination of quantitative and qualitative measures” to strike back at the US. Meanwhile, India followed in the European Union’s footsteps by raising tariffs on a slew of items, including walnuts, almonds, boric acid, apples, diagnostic reagents and some hot-rolled coil products.

India also joined the global trade war, and in retaliation to US tariffs, increased its own tariffs to 70% on chickpeas and Bengal gram, according to Bloomberg.

“The increase in tariffs is a message to the U.S. administration to take concerns of other nations seriously,” said Sachin Chaturvedi, director general at New Delhi-based think tank Research and Information System for Developing Countries. “Now this is unlikely to remain …

Pound Surges After BOE Keeps Rates Unchanged But Chief Economist Unexpectedly Backs Rate Hike

While the BOE kept rates unchanged at 0.5% as expected, the market was surprised by both the hawkish undertones of the statement and the surprising addition of Haldane to the list of dissenters (McCafferty and Saunders), which made the decision a 6-3 affair when markets were expected a 7-2 split.

MPC vote by a majority of 6-3 to maintain #BankRate at 0.5% pic.twitter.com/mn214NAKeh

— Bank of England (@bankofengland) June 21, 2018

The flip by BoE Chief Economist Haldane was surprising due to his recent vote for a hold; as a result, odds of a rate hike in August, when the BOE will publish new estimates, have been sharply boosted, which is in turn reflected in cable, which has surged nearly 100 pips rising above 1.32 in kneejerk reaction.

There were no surprises in the other aspects of the decision:

The vote split on corporate bonds:

Why Disney Can Afford to Pay More for Fox

Disney’s blockbuster track record, along with some unique quirks of comic book history, explain why it can top Comcast’s bid for 21st Century Fox’s entertainment assets.

Why Home Prices Have Nowhere to Go But Up

There are a lot of people who would like to buy a house, and plenty of them can afford to. Finding a house to buy? That is another issue.

Oracle’s Cloud Thickens

The good news it that Oracle’s cloud business continues to grow. The bad news is that investors will now have to just take the company’s word for it.

Lawmakers think Google is too cozy with China’s Huawei, warn of spying risk

Select lawmakers want Alphabet’s Google to rethink the security risk they believe comes with the company’s close ties to Chinese technology giant Huawei.

London Markets: FTSE 100 drops as oil shares extend losses; pound rallies on BOE rate vote

The U.K.’s blue-chips benchmark slid Thursday, falling further as oil shares extended losses, while the pound jumped after one more Bank of England policy maker joined the ranks in voting for an interest-rate increase.

One reason why liberals drink more lattes

It doesn’t necessarily have to do with how they taste.