Written by Gary
S&P, Nasdaq boosted by Facebook results, investors cautious on trade talks (SPY +0.9%).
Here is the current market situation from CNN Money
North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.25% while Mexico’s IPC is up 1.22% and U.S.’s S&P 500 is up 0.89%.
What Is Moving the Markets
|Here are the headlines moving the markets.|
U.S. wants Western tech to be used instead of Huawei kit
The United States wants to steer people away from Huawei towards Western products because of its concerns over the security of the Chinese company’s technology, the U.S. envoy to the European Union said on Thursday.
Not all Huawei’s materials come from China, company says
Huawei Technologies Co. has a proven reputation on cyberscurity and does not buy all of its materials from China, the company said on Thursday after the U.S. envoy to the European Union sought to warn consumers away from its products.
Exclusive: Airbus A380 under threat as Emirates weighs rejigged order – sources
Dubai’s Emirates is exploring switching some orders for the world’s largest jetliner, the Airbus A380, to the smaller A350 in a move raising new doubts over the future of Europe’s iconic superjumbo, people familiar with the matter said.
U.S. weekly jobless claims jump to near one-and-a-half year high
The number of Americans filing applications for unemployment benefits surged to near a 1-1/2-year high last week, but economists dismissed the jump as a fluke and said temporary factors, including a partial government shutdown, were to blame.
S&P, Nasdaq boosted by Facebook results; eyes on trade talks
The S&P 500 and the Nasdaq extended a rally on Thursday, as strong earnings from Facebook Inc added to optimism after the Federal Reserve’s dovish remarks, with investors awaiting the outcome of the U.S.-China trade talks.
Trump upbeat on China trade talks but wants broad access for U.S. firms
President Donald Trump expressed optimism about forging a comprehensive trade deal with China as high-level talks continued on Thursday, but said any arrangement that fails to open Chinese markets broadly to U.S. industry and agriculture would be unacceptable.
Fed pause sets global stocks for best January on record, yields fall
Global equity markets mostly rose on Thursday, propelled by Facebook’s stellar earnings and the Federal Reserve’s pledge to be patient in raising borrowing costs further, while U.S. bond yields fell on indications of weaker than expected inflation.
General Electric sales top Wall Street estimates, shares rally
General Electric Co beat estimates for sales and cash flow in the fourth quarter and said it had reached a tentative deal to settle a subprime mortgage case with U.S. regulators, sending its shares sharply higher.
General Electric CEO sees 2019 industrial revenue rising, cash weak
General Electric Co expects industrial revenue to rise by low to mid-single-digit percent this year, as gains at renewable energy, aviation and healthcare offset a decline in the power unit, Chief Executive Officer Larry Culp said on Thursday.
Europe Launches SWIFT Alternative To Fund Iran In Collision Course With Trump
In a move sure to unleash fury from the Trump administration, the European Union has announced it has set up a transactions channel with Iran to bypass US sanctions. The launch of INSTEX — or “Instrument in Support of Trade Exchanges” — by France, Germany, and the UK will allow non-dollar trade with Iran and is being described as facilitating humanitarian goods-related transactions only, including food, medicine and medical equipment.
Long anticipated, Thursday’s EU announcement marks the most concrete action Europe has taken to thwart Washington sanctions after the US pullout of the 2015 nuclear deal last May, and after SWIFT caved to US pressure. Europe is hoping the mechanism will act as a legal means to preventing Tehran from quitting the JCPOA, which promised sanctions relief should the country halt nuclear weapons research and development. INSTEX is expected to receive the formal endorsement of all 28 EU members, which aims to encourage skittish pharmaceutical and agricultural companies to the table with Tehran after many stopped doing business in Iran for fear of US economic retribution.
S&P Tops 2,700, Dow Above 25k As Powell-Pump Continues
After tumbling all the way to unchanged from the FOMC, The Dow has v-shape-recovered as The Powell-Put is scooted up right under the market.
The S&P is back above 2,700 – near two-month highs…
And The Dow is back above 25,000…back above its 200DMA
Trump Reportedly Interviewed Herman Cain For Fed Governor Seat
President Trump’s relentless attacks on Fed Chairman Jerome Powell must have deterred many qualified candidates from seeking one of the open seats on the central bank’s board of governors because, according to a Bloomberg report, the president just interviewed Herman Cain – yes, that Herman Cain – for one of the two empty seats.
Last week, White House advisor Larry Kudlow told reporters that Trump was looking for “highly capable” people to fill the vacancies. And presumably it wouldn’t hurt if candidates would be open to supporting President Trump’s low interest-rate agenda, particularly, we imagine, now that Powell has completely capitulated. Kudlow also said during that press conference that Trump wouldn’t renominate economist Marvin Goodfriend.
That being said, the notion that Cain could bring “the Herminator Experience” to the Eccles building isn’t totally outlandish. Because between 1992 and 1996, Cain served as a director of the Federal Reserve Bank of Kansas City, as well as deputy chairman and then chairman of the bank.
Readers will remember Cain for his short-lived but heavily covered bid for the 2012 Republican nomination – a campaign that came to an early end after allegations of sexual misconduct bubbled to the surface.
Now, the former Godfather’s Pizza CEO is probably best remembered for his infamously creepy …
Trading The Powell Capitulation: Nasdaq Meltup On Deck As CTAs Turn “100% Max Long”
As we noted yesterday, just ahead of the FOMC decision which consensus overwhelmingly expected would be “disappointing” as there was just “no way” the Fed could match the market’s dovishness (which it did, and then some), Nomura’s Charlie McElligott warned that “there is some VERY provocative, 11th hour talk through the ‘consultant/macro advisory’ circles that the Fed could state today that at a future meeting, they will lay out an actual timetable to end the balance-sheet runoff”, which would be seen by the market as a clear escalation of the thoughts trial-ballooned in the WSJ piece last week (to end QT “sooner-than-expected”)”, and the result would be wholesale panic buying response to this dovish reversal by the Fed which could send the S&P as high as 2,700-2,750.
Well, one day later, we are well on our way there, because as McElligott summarizes in his morning note, “here we are: The Fed (over the course of a month and half) goes laughably “all-in” on the slowdown story (because Equities prices now set policy I guess and not the other way around—but that’s none of my business), and markets respond with the old-school “QE trade” of old: Stocks, Bonds and Gold UP, US Dollar DOWN.”
As the Nomura strategist elaborates, not only did the Fed nuke the prior “…further gradual increases” guidance, but they actually said the next policy move is as likely “down” as it is “up”—all while “giving-in” to the market on an earlier-end to the balance-sheet run-off than previously expected.
Predictably, the Fed’s complete capitulation to the market has mutilated “tightening” expectations, and as McElligott notes STIRs no longer simply price-in a “pause,” but instead the outright end of Fed policy rate normalization, with nearly a full rate cut aga …
November 2018 Headline New Home Sales Improved?
Written by John Lounsbury and Steven Hansen
The headlines say new home sales surged but remained in contraction. Median and average sales prices declined – and the backlog of unsold homes marginally declined..
Market Extra: The last time the S&P 500 had this strong a January surge ‘Fatal Attraction’ was in theaters
The S&P 500 is on pace for its best January in more than three decades. To put that in perspective, gains for the major benchmark haven’t been this heady in January since “Fatal Attraction” made its theatrical debut in 1987.
The Margin: As measles outbreak spreads, one anti- vaxxer asks how to keep her child safe
After a measles outbreak led to a state of emergency in the Pacific Northwest, health officials across the country in Georgia confirmed this week that three people in the Atlanta area have been diagnosed with the highly contagious virus. And the anti-vaxx debate has caught fire on social media.
Futures Movers: Oil gains, with U.S. prices up more than 20% for the month
Oil futures head higher for a third straight session on Thursday, with U.S. prices looking to end the month of January with a gain of more than 20%—the strongest monthly rise in more than three years.
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