11Jul2018 Market Close: Wall Street Closes Moderately Down After Trading Mostly Sideways, DOW Drops More Than 219 Points After US Unveils New Tariffs On Chinese Goods, WTI Crude Slips To The 70 Handle

Wall Street snaps gain streak as trade threat weighs

U.S. stocks fell on Wednesday, breaking a four-session streak of gains after Washington’s threat to impose tariffs on an additional $200 billion worth of Chinese goods fanned trade war fears, while a sharp drop in oil prices hit energy shares.

Stocks slide on trade war worries; oil, metals fall

U.S. stocks extended losses on Wednesday, set to snap their four-day winning streak, and metals prices slumped as U.S. threats of tariffs on an additional $200 billion worth of Chinese goods pushed the world’s two biggest economies closer to a full-scale trade war.

Uber executive Hornsey resigns in email to staff following discrimination probe

Uber Technologies Inc’s Chief People Officer Liane Hornsey resigned in an email to staff on Tuesday, following an investigation into how she handled allegations of racial discrimination at the ride-hailing firm.

Trump told Pfizer CEO price hikes hurt his drug plan: source

U.S. President Donald Trump called Pfizer Chief Executive Ian Read on Tuesday to say the company’s July 1 price hikes had complicated the administration’s drug pricing plans, prompting the company to defer its planned increases, according to a source familiar with the matter.

China vows to hit back over U.S. proposal for fresh tariffs

China accused the United States of bullying and warned it would hit back after the Trump administration raised the stakes in their trade dispute, threatening 10 percent tariffs on $200 billion of Chinese goods and rattling global markets.

Crude oil benchmark Brent sees biggest one-day fall in two years

Global benchmark Brent crude oil had its biggest one-day drop in two years on Wednesday as escalating U.S.-China trade tensions threatened to hurt oil demand, and news that Libya would reopen its ports raised expectations of growing supply.

Dollar hits 6-month high against yen as trade fears trumped

The U.S. dollar strengthened on Wednesday as the market put aside trade tension fears and focused on the Labor Department’s expectation-beating inflation report, which increased prospects that the Federal Reserve will raise interest rates another two times this year.

Brazil prosecutors allege jailed GE executive helped company partake in medical cartel

General Electric Co’s chief executive for Latin America took part in a medical equipment price-fixing scheme while at the conglomerate, making it a member of an international health-care cartel, according to allegations in a document filed by federal prosecutors.

Exclusive: Airbus faces A330 delivery delays amid HNA Group woes – sources

Airbus faces a logjam of undelivered A330 jets worth well over $1 billion for airlines affiliated to China’s debt-laden HNA Group following a stand-off over late payments, according to industry sources and a Reuters examination of parked aircraft.

Trump Tariff Threat Sparks Commodity Carnage, Yield Curve Crash, Stock Slump

And that happened…

China tumbled overnight…

Europe was ugly…

US Futures show the action best… the sudden panic bid at the US cash open…

Bond Bears Reach Record High As Big Money Managers Bet Billions On ‘Growth’

Bond yields have to rise, right? It’s a no-brainer… tax cuts, higher spending, global synchronous recovery, inflation – what can go wrong?

And that appears to be the group-think belief of some of the world’s bigger bond fund managers, who have staked more than $100 billion in one of the boldest bond bets of the post-crisis era: That a global economy firing on all cylinders would spur government yields in the West and boost emerging-market credits.

But notably, as Bloomberg reports, the wager comes in the form of bond funds that have a negative average duration, meaning they are heavily positioned for rising interest rates.

But the trades are struggling. A perfect storm — including muted core inflation increases and relentless haven flows — has kept a lid on longer-dated developed-market yields. Trade tensions and a stronger dollar have killed the emerging-market rally, bucking consensus on Wall Street.

“Trade tensions have hurt our European growth thesis,” argued McIntyre, who oversees $58 billion …

CME Exchange Reports “Widespread Technical Problem”

Update: according to a bulletin update from the CME, the ECBOT, Globex and Nymex are once again available for trading.

However some traders continue to report intermittent problems with order execution and clearing, and are getting notices such as this one:

“We are aware of a technical issue in which multiple Market Segment Gateways failed over. Support is investigating.”

More as we see it.

* * *

We may have found the reason for the sharp selloff in commodities, and the leg lower in the ES this afternoon: it appears that the CME is experiencing major issues, in some reported cases not accepting buy orders.

CME platform rejecting my orders —@CMEGroup

— Anthony Grisanti (@AnthonyGriz) July 11, 2018

Initially, the CME advised traders it was experiencing a segment gateway error, advising that it was “investigating” without providing further information.

Then, the CME acknowledged …

Paulsen Warns “This Happened Prior To 6 Of The Last 7 Recessions”

“This less-followed indicator has a good enough relationship with recession risk during the last 50 years that it should not be ignored,” warned Jim Paulsen, Leuthold’s chief investment strategist, in a note to clients this week.

Having warned last week that “it’s been too quiet, for too long,” Paulsen now sees the potential catalyst for the market’s next move as low-rated investment-grade credit spreads blow out beyond an historically crucial level.

As Bloomberg reports, for the first time since just prior to the 2007-2009 recession, premiums on the lowest-rated tranche of investment-grade U.S. corporate bonds have risen to 2 percent after being below that level, according to data compiled by the Minneapolis-based research group.

The analysis looks at the gap in yields between corporate debt rated Baa by Moody’s Investors Service and those on 10-year Treasuries.

When Will Trade Battles End? Watch Economies, Not Politicians

After a brief May hiatus, a full-fledged Sino-U.S. trade fight looks increasingly likely. The deciding factor might not be what you think.

Disney’s $71 Billion Bid for Fox Is Now Worth $90 Billion

It’s official: Disney’s $71 billion offer for 21st Century Fox is actually worth more than $90 billion. Both sides of the Atlantic are now watching Comcast.

Don’t Fall for Pepsi’s Sugar High

PepsiCo shares had their biggest percentage increase in nearly a decade Tuesday morning on hopes that the company is arresting the decline of its core, domestic beverages business. Investors are celebrating prematurely.

Bond Report: U.S. government bond rates pull back as trade impasse stokes appetite for havens

Treasurys rally Wednesday, driving yields lower, after the Trump administration said it plans on slapping a fresh round of tariffs on Chinese goods

Wondering where you can earn the most for your job anywhere in the U.S.? Wonder no more!

A new interactive tool from The Hamilton Project allows workers to see how typical earnings in occupations vary across the United States.

Treasury rates are low due to belief in ‘new normal’ theory, says Trump’s top economist

Kevin Hassett, the White House chief economist, said Wednesday that long-term bond yields are low due to mistaken belief in the ‘new normal’ view of the U.S. economy.