21Dec2018 Midday Update: Wall Street Pares Gains In Volatile Trade, DOW Down Triple Digits, Tech Drags Indexes, Investors Worry About Govt Shutdown Turning To Defensive’s

Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 0.35% while the IPC gains 0.17%. The S&P 500 is off 0.71%.

Malaysia seeks $7.5 billion in reparations from Goldman Sachs: FT

Malaysia is seeking $7.5 billion in reparations from Goldman Sachs Group Inc over its dealings with scandal-linked state fund 1MDB, the Financial Times reported on Friday, citing the country’s finance minister.

Wall Street pares gains in volatile trade; investors turn to defensives

Wall Street’s three main indexes gave up most of their earlier gains in volatile trading on Friday that traders blamed on the expiration of stock futures and options, with only the defensive sectors of the market staying consistently higher, highlighting concerns of slowing growth.

EU watchdog to rule on data exchange among market regulators

The European Union’s data watchdog will decide in coming weeks if financial regulators around the world can routinely swap information to keep markets clean without getting tangled up in the EU’s new data protection regime.

Nike shares rise as strong quarterly results allay China demand concerns

Nike Inc shares rose 9 percent on Friday, after the company’s solid quarterly results eased worries that escalating trade tensions between Washington and Beijing would weigh on China demand and hurt the sportswear maker’s growth story.

French court fines oil group Total in Iran bribery case

A Paris court fined French oil and gas group Total 500,000 euros ($570,000) on Friday for bribing foreign public officials in a case related to Iranian contracts in 1997.

Zynga buys Empires & Puzzles gamemaker in largest deal to date

(This corrects paragraph 7 of December 20 story to say Zynga acquired a unit of Peak Games, and not the entire company. The error also appeared in an earlier version)

Online clothing retailers hunt for better fit to cut costly returns

Models testing fashion brands like Adidas, Benetton and Gap are finding that almost a third of the shoes and clothes they try on are bigger or smaller than the size on the label indicates, explaining why many clothes bought online are sent back.

Williams says Fed policy views could change, listening to markets

The Federal Reserve is open to reassessing its views and listening to market signals that the U.S. economy could fall short of expectations, but for now further rate hikes appear appropriate and it is not yet ready to reconsider its portfolio-trimming plan, an influential policymaker said on Friday.

U.S. third-quarter growth trimmed; business spending slowing

The U.S. economy slowed slightly more than previously estimated in the third quarter and momentum appears to have moderated further in the fourth quarter, with new orders and shipments of manufactured capital goods falling in November.

Anticipated 2019 Debt Ceiling Debate Fuels Fears Of “Major Market Disruption”

With Washington DC in disarray over the government shutdown battle playing out between the Trump administration and Congress, veteran traders have started to worry about what it might mean for Capitol Hill’s next battle; the early March debt-ceiling reinstatement, reports Bloomberg.

If an agreement can’t be reached in less than 90 days, the Treasury will need to resort to extraordinary measures in order to meet America’s obligations.

In what’s become something of a grim ritual, lawmakers from both sides of the aisle are likely to lock horns once again as the clock to a U.S. debt default ticks down, using the threat of economic disaster to try and wrangle legislative concessions from the other party. While Congress has

Kass: Nowhere To Run, Nowhere To Hide?

Authored by Doug Kass via RealInvestmentAdvice.com,

“Nowhere to run, baby, nowhere to hide
Got nowhere to run to, baby, nowhere to hide
It’s not love I’m running from
It’s the heartbreak I know will come
Cause I know you’re no good for me
But you’ve become a part of me
Everywhere I go, your face I see
Every step I take you take with me…”

– Martha Reeves and the Vandellas, Nowhere to Run

For the past year I have concluded that the market was vulnerable to a number of factors and was likely making an important top and likely setting up for a Bear Market:

Global economic growth was becoming more ambiguous and the fragility of worldwide growth would be shortly exposed

An avalanche of debt would serve as a governor to growth

Corporate profit expectations for 2018-20 were too elevated

The pivot to monetary restraint by the Federal Reserve (taking the punch bowl away) would be market unfriendly

With less liquidity would come a new regime of volatility

The risks of fiscal and monetary policy mistakes were growing

The behavior of the President and hastily crafted policy (e.g. the U.S. retreat from Syria) would make economic uncertainty and market volatility great again (#muvga)

The reduction in the corporate tax rate has failed to deliver the growth expected to reduce the burgeoning deficit – the benefit has trickled up and not down

Market structure represented a potential marke …

Dear “Listening” Fed, What Is The Market Telling You Now?

Update: Well that did not last long. Despite Fed’s Williams’ best efforts (and CNBC’s best efforts) to spin his comments uber-dovish, it is clear, as one trader opined, “this is the stock market showing The Fed has lost credibility…”

* * *

One day after former NY Fed president Bill Dudley essentially told Bloomberg TV that the Fed would hike until something breaks as there was “not much evidence that monetary policy is too tight” pushing markets sharply lower, the current NY Fed president, and former Fed uberdove, John Williams reversed the narrative and sent stock soaring after a series of dovish comments on CNBC, saying that the “Fed is listening to markets very carefully” and is “hearing market concerns about risks to the economy.”

Shorter Williams: pic.twitter.com/Ve7IyvhAMG

— Carl Quintanilla (@carlquintanilla) December 21, 2018

“A Sea Of Fed”: Record Outflows Confirm “Policy Mistake”

One week after record redemptions from virtually all risk assets including loans prompted Bank of America’s chief investment strategist Michael Hartnett to conclude that markets are “losing the plot”, the record pace of outflows have continued with the strategist’s assessment this time, coming after the Fed decision, is that these are “policy mistake flows.”

Hartnett then proceeds to layout his recap of “2018 in a nutshell” which he summarizes by the events in the past 24 hours as “9 central bank meetings, 5 hikes (Fed, HK, Saudi, Sweden, Mexico), 4 holds (BoJ, BoE, Czech, Indonesia), 0 cuts”, indicating that central banks are again the #1 catalyst this year. And echoing what he said three weeks ago, Hartnett is convinced that the “Big Low” in risk assets in 2019 will coincide with end of tightening.

That said, we are already well on our way to said “Big Low” with 2011 global stocks currently in a bear market, and as Deutsche Bank showed earlier, virtually all assets – except the USD and cash – down for the year as follows: US dollar 5.3%, cash 1.8%, govt bonds -1.2%, HY corporate bonds -2.6%, IG bonds -3.4%, global equities -8.6%, commodities -9.0%. Specifically, global equities saw outflows of $8.3BN, European stocks saw the 4th biggest outflows ever at $5.4BN (YTD total rises to $72.8BN), while U.S. stocks had an outflow of $4.4BN (YTD outflows of $32BN).

14 December 2018 ECRI’s WLI Growth Rate Index Unchanged But Remains In Contraction

Written by Steven Hansen

ECRI’s WLI Growth Index which forecasts economic growth six months forward was unchanged but remains in contraction. ECRI also released their coincident and lagging indices this week.

NewsWatch: Here’s how a looming government shutdown could affect federal services — and stocks

Budget experts have said a shutdown isn’t out of the question, and they’ve highlighted services that could be halted.

Capitol Report: Unit of Equifax’s auditor EY certified the information security that was later breached

Equifax auditor EY’s CertifyPoint unit missed the system vulnerability that gave cybercriminals access to 48 Equifax servers containing personal information of 143 million consumers in 2017.

Trump Today: President warns of lengthy government shutdown absent a deal on border security

President Donald Trump said Friday a looming government shutdown could last for a long period of time as Washington remained at an impasse over funding for border security.