Written by Gary
Stocks gain strongly after after blue Monday, DOW trends higher today with a gain of 1.3% (SPY +0.8%).
Here is the current market situation from CNN Money | |
 | North and South American markets are broadly higher today with shares in Mexico leading the region. The IPC is up 1.29% while U.S.’s S&P 500 is up 0.94% and Brazil’s Bovespa is up 0.47%. |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
| Oil dives on fears of glut, global economic slowdownOil prices tumbled on Tuesday after reports of swelling inventories and forecasts of record U.S. and Russian output hitting a market that may see weaker demand if global growth deteriorates as many expect. |
| Facebook’s Sandberg cites need to do more after reports of Russia meddlingFacebook Inc’s Chief Operating Officer Sheryl Sandberg said on Tuesday the company needs to step up its efforts to curb misinformation after research revealed that Russia-backed organizations targeted African-Americans, who favored Hillary Clinton, to suppress voter turnout during the 2016 election. |
| Burnout, stress lead more companies to try a four-day work week(Corrects paragraph 4 to identify Perpetual Guardian as a trust company instead of an insurance company; corrects paragraph 13 to reflect that the study was conducted by Kronos and Future Workplace) |
| Equity markets edge up, dollar drops, on growth worries ahead of Fed meetingWorld stock markets inched higher on Tuesday as investors looked ahead to whether the U.S. Federal Reserve will be able to raise interest rates much further amid turbulent markets and a weakening outlook for the global economy. |
| Trump pressures Fed before meeting, warns against ‘another mistake’U.S. President Donald Trump on Tuesday further sought to pressure the Federal Reserve as the central bank prepared to start its two-day policy meeting, warning the Fed’s board not to “make yet another mistake” ahead of an expected interest rate hike. |
| Tech stocks, upbeat earnings boost Wall Street; Fed in focusWall Street rose on Tuesday, helped by technology stocks, upbeat earnings reports and a rebound in few bellwether stocks, while investors awaited clues on the Federal Reserve’s path for future rate hikes. |
| Musk’s SpaceX to raise $500 million in funding: WSJElon Musk’s rocket company SpaceX Corp is set to raise $500 million at a $30.5 billion valuation, the Wall Street Journal reported on Tuesday, citing people familiar with the fundraising. |
| Volkswagen may have to step up electric car plans to meet EU CO2 targetsVolkswagen may have to step up its plans for mass production of electric vehicles in order to meet tougher-than-expected European targets to cut greenhouse emissions from cars, its chief executive said on Tuesday. |
| Twitter tumbles on concerns about hacking activityTwitter Inc shares fell almost 7 percent on Monday after the company said it was investigating unusual traffic that might be from state-sponsored hackers and, in what appeared to be an unrelated issue, a security firm said hackers used the platform to try to steal user data. |
| “The Great Unwind Is Gathering Speed” – What Chris Whalen Is Worrying About For 2019Authored by Chris Whalen via TheInstitutionalRiskAnalyst.com, First a safe and happy holiday to all. In this issue of The Institutional Risk Analyst, we ponder past prognostications and future risks in 2019. And we are happy to announce the publication of The IRA Bank Book for Q4 2018. For those of you who were furiously buying copies of the Q3 edition last week, for which we are most grateful, hit the download link again to get the Q4 edition. You’ll want to read about why US bank earnings growth is now 100% correlated to interest rates. FYI, new editions of The IRA Bank Book are published about two weeks after the FDIC and other regulators release their institution level and aggregate data (roughly day 60 after the quarter end) for US banks. The popular IRA Top Ten Banks usually appears after quarterly earnings are complete. And yes, to your questions, we only sell the most recent edition of each report. So what is our top concerns in 2019? First comes liquidity. For the past several weeks, US equities have fallen as the great unwind gathers speed. The same pressures that are causing the Federal Open Market Committee to consider pausing on rate hikes in 2019 are forcing stocks lower. Never mind the parade of mindless reasons for the stock market reset – trade, China or even a weak US economy – the key factor pushing markets lower is the radical tightening of credit by the FOMC. Even without a single rate hike in 2019, the tightening caused by the runoff of the Fed’s bond portfolio will continue to suck liquidity out o … |
| Credit, Canada Crash As Crude Prices Collapse To 15-Month LowsWTI Crude has legged down for the 3rd time today, crashing to a $47 handle…
the lowest since Sept 2017…
And as energy tumbles, high yield credit markets and the canadian dollar are suffering the collateral damage… |
| Trump’s “50 Bs” Is Really “36.2 Bs”Earlier today, president Trump prompted confusion in the market, when in his latest tweet urging the Fed to stop hiking, the president also said “Stop with the 50 B’s.” In the absence of other hints, this was taken to suggest that Trump also wanted the Fed to not only stop hiking but also end the shrinking of its balance sheet, which as we have discussed repeatedly started shrinking by a $50 billion cap ($30 billion Trasurys and $20 billion MBS) starting in October 2018 and continuing – supposedly – at least until the end of 2019.
Only there is a problem with this statement, because while the Fed is indeed limited by a previously mandated cap on how much it can shrink its balance sheet each month (i.e. $50BN) as TSYs and MBS mature, the reality is that the real number is far smaller as the Fed only has Treasury holdings that exceed the $30 billion cap when there are refunding auctions, while MBS holdings have traditionally been lower than the monthly cap since they are at the mercy of prepayment speeds. So what does this mean in practical terms? When using the Fed’s own forecasts for actual Treasury and MBS redemptions, th … |
| Trump Foundation Agrees To Dissolve Amid A “Shocking Pattern Of Illegality”President Trump’s charity, the Donald J. Trump Foundation, has agreed to dissolve amid allegations from the New York Attorney General’s office that it engaged in a “shocking pattern of illegality.” However, New York Attorney General Barbara Underwood announced on Tuesday that her office will continue to pursue its lawsuit against the foundation.
As WaPo reports, the attorney general’s suit alleges that Trump used his charity’s money as his own piggy bank — including to help his presidential campaign by paying for giveaways at Iowa rallies.
The Trump Foundation was never the most impressive part of T … |
| November 2018 Residential Building ImprovedWritten by Steven Hansen The headline residential building permits improved and construction completions also improved relative to last month. But we keep our eyes on the rolling averages which were mixed..
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| NewsWatch: How the idea of the Fed ‘stockpiling ammunition’ could blow up the economyRaising interest rates now to be able to lower them to ward off a recession is a silly idea, Caroline Baum writes. |
| The Moneyist: My husband grew up dirt poor and doesn’t believe in insurance or banks, yet he racked up $7,000 on my credit cardThis Texas woman makes $12 an hour and is exasperated that her husband is not investing in their family’s future. |
| Project Syndicate: Europe’s struggling economy is like an all-star team that doesn’t know what game it’s playingIf the EU economy were a soccer team, it wouldn’t be losing because it doesn’t have talent, it’d be because the team isn’t playing cohesively, writes Mohamed El-Erian. |
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