Written by Gary
DOW set to rise more than 130 points amid US-Mexico trade progress (SPY +0.4%) and reassuring comments from Powell at the Jackson Hole Symposium.
Here is the current market situation from CNN Money | |
 | European markets are higher today as French and German shares show gains. The CAC 40 is up 0.56% while the DAX is up 0.60%. The British FTSE 100 is closed. |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
 | Turkish lira slides nearly 5 percent as U.S. stand-off back in focusThe Turkish lira tumbled nearly 5 percent against the dollar on Monday after a week-long holiday, hit by persistent concern about a diplomatic rift with Washington over a U.S. pastor on trial in Turkey. |
| Turkish lira weakens 3 percent as markets reopen, eyes on U.S. stand-offThe Turkish lira slid 3 percent against the dollar on Monday as local markets resumed trading after a week-long holiday and investors focused again on a bitter dispute between Ankara and Washington over an American pastor being tried in Turkey. |
| Tesla shares dip 3 percent after Musk abandons buyoutShares in Tesla Inc fell just over 3 percent on Monday after it abandoned a plan to take the electric carmaker private, with some analysts suggesting it should either replace Chief Executive Elon Musk or appoint another strong senior manager. |
| Turkey’s economic pain felt as far as TennesseeTurkey’s currency crisis has roiled emerging-markets investors far and wide, including the U.S. state of Tennessee, where the state’s retirement system is the biggest institutional holder in a Turkey exchange-traded fund (ETF). |
| World stocks at highest in over two weeks, China’s yuan ralliesWorld stocks rose to their highest level in over two weeks on Monday, following reassuring comments from the U.S. Federal Reserve chief, signs of progress on a U.S.-Mexico NAFTA trade deal and a bid by China’s central bank to stabilize the yuan. |
| U.S. monitor seeks more transparency from VW over emissionsVolkswagen’s external compliance monitor on Monday said he disagreed with some VW executives’ use of privacy and attorney client privilege rights to withhold information about a $27 billion global emissions cheating scandal. |
| Yuan hits four-week high as China signals support, revives X-factor for fixingChina’s yuan finished Monday afternoon trade at a near 4-week high to the dollar after the central bank revived a “counter-cyclical factor” in its daily fixing to support the currency, halting a record 10-week slide that rattled global markets and irritated Washington. |
| Tesla’s German shares fall after CEO Musk drops plan to take company privateGermany-listed shares in Tesla fell more than 3 percent in early deals on the Tradegate exchange on Monday, after Chief Executive Elon Musk called off his bid to take the company private. |
| Mexico, U.S. closing in on NAFTA deal, talks to resume MondayU.S. and Mexican trade negotiators are close to squaring away bilateral differences on the North American Free Trade Agreement (NAFTA) and will resume talks on Monday morning, Mexican Economy Minister Ildefonso Guajardo said on Sunday. |
| Peso, Futures Pop, Dollar Drops On NAFTA Talks Conclusion HeadlinesAs we have headlined numerous times in the last week, NAFTA talks between US and Mexico were nearing coimpletion and according to CNBC have now “concluded,” with an announcement due today.
This sparked buying pressure in US stocks and the Mexican Peso and dollar weakness. |
| Averages Lie – Shocking Look At Mean Vs Median Household Savings In AmericaAuthored by Mike Shedlock via MishTalk, I have been on a rampage about average vs median income. Here’s a report about average vs median savings.
Magnify Money asks How Much Does the Average American Have in Savings? The question is irrelevant. The story is how unprepared the median person is prepared for retirement. On that score, the article does explain. Stats The average American household has $175,510 worth of savings in bank accounts and retirement savings accounts as of June 2018. The median American household currently holds about $11,700 across these same types of accounts. The top 1% of households (as measured by income) have an average of $2,495,930 in these various saving accounts. The bottom 20% have an average of $8,720. Roughly 83% of savings are in located in retirement … |
| Tesla Tumbles After Musk Pulls Going Private DealAfter Musk’s surprising Friday night announcement to pull the Tesla deal, investors were not sure whether the stock would tumble (after Musk appeared to sabotage his own deal as we discussed last night), or rise as the bulls suggested, with upside no longer “capped” by the $420 take out price. The answer was the letter, with RBC analyst Joseph Spak writing that Musk’s latest reversal on plans to go private – less than three weeks after he disclosed his intention to take the company private – was a hit to the carmaker’s credibility, while leaving the company open to “potential ramifications from an SEC investigation and shareholder lawsuits.” As a result, Tesla stock tumbled as much as 5% in pre-market trading, dropping from the mid-$320 to just above $300 which has emerged as a key support level for the stock. If the stock dips below $300, watch out below. The stock has traded as high as $387 and as low as $288 since Aug. 7 – the day Musk made his first going private announcement on Twitter – far short of the $420 a share cash-out price Musk had pitched.
“We expect shares to be under pressure in the near term as investors question the go-private process and the outcome of staying … |
| Turkish Lira Plunges After Week-long HolidayAfter a week of public holidays in Turkey, the Turkish lira tumbled as traders returned with selling on their minds, realizing that nothing of substance has changed in the past 7 days. The currency tumbled over 4.0% against the dollar, sliding as low as 6.2974 before rebounding modestly to 6.23 as the U.S. trading day got underway, while one-month implied lira volatility jumped back toward 50%.
Turkey’s 10-year bond yield slipped 12bps to 22%, after touching a record high earlier this month. As Bloomberg notes already poor sentiment remains crippled by double-digit inflation, a deepening current-account deficit and central banker reluctance to raise interest rates. While Turkey has raised rates by 500 basis points since April, it needs to boost them further by more than 600 basis points to stabilize markets, according to Societe Generale SA. Turkey is also facing a potential recession, with JPMorgan revising its forecast for Turkey’s growth next year to 1.1% from 2.8%, as a result of “worsening financial conditions and tighter liquidity conditions… Coordinated policy action by the policy makers could put Turkey on a soft landing path where rebalancing is achieved wit … |
| Regional Banks Still Need a Lending BoostA promising rebound in loan growth now appears to be fading. That could become an issue, especially for small and midsize lenders. |
| Why No One Can Catch NetflixStreaming service is so far ahead of the competition and knows how to please its customers so well that it will be very hard to dislodge. |
| App Tax a Hard One to BeatApple and Google’s app store commissions form a lucrative revenue stream that most app developers can’t sidestep in the way Netflix is attempting. That could spur regulators to take a closer look. |
| Economic Preview: Another inflation gauge is set to enter the red zone, but no worries at the Fed. Here’s whyYet another key measure of U.S. inflation could soon hit the highest level in six years, but don’t expect the head honcho at the Federal Reserve to get uptight. |
| Tim Mullaney: The hidden reason you can’t find a house to buy right nowPotential home buyers can afford new mortgages — they just won’t give up their old ones, writes Tim Mullaney. |
| The Wall Street Journal: Democrats to restrict superdelegates’ votes at 2020 conventionSuperdelegates—a group that includes DNC members, federal lawmakers, governors and past presidents and party chairmen—won’t be able to cast votes in the first presidential ballot at the party’s national convention. |
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