25Jul2019 Midday Update: Wall Street Slides, Bond Yields Rise On Mixed Earnings, DOW Down 135 Points, Ford And Boeing Shares Fall

Here is the current market situation from CNN Money

Boeing 737 MAX groundings plague U.S. airlines; Southwest exits Newark

American Airlines Group Inc and Southwest Airlines Co warned on Thursday of an increasing financial toll from the prolonged Boeing 737 MAX grounding this year even as strong bookings and higher fares helped drive quarterly revenue growth.

Hershey’s tepid annual forecast overshadows quarterly profit beat

Hershey Co reported a better-than-expected quarterly profit on Thursday, but forecast 2019 earnings below Wall Street expectations as the chocolate maker expects the benefits from recent price increases to be pushed out to next year.

California, four automakers defy Trump, agree to tighten emissions rules

Four major automakers said on Thursday they have reached a voluntary agreement with the state of California on fuel efficiency rules, bypassing a Trump administration effort to strip the state of the right to fight climate change by setting its own standards.

Wall Street slides, bond yields rise on mixed earnings, ECB statement

U.S. stocks stumbled out of the starting gate and bond yields gained ground following mixed earnings and a rosier-than-expected statement from the European Central Bank’s governor.

Oil rises on Iran tensions, U.S. inventory decline

Oil prices rose about 1% on Thursday amid Middle East tensions and a big decline in U.S. crude stockpiles, but gains were capped due to lingering worries about slowing economic growth that could reduce fuel demand.

China auto group cuts 2019 sales forecast to a 5% drop

China’s biggest auto industry association has cut its sales forecast for this year due to slowing economic growth, and now expects sales to fall for the second year running.

Total plans $5 billion of asset sales to future-proof business

French energy giant Total will sell about $5 billion of assets, mostly from its exploration and production business as it sharpens its focus on low-breakeven projects that can weather weak oil prices, it said on Thursday.

Gazprom gets bids worth $3.15 billion for sale of own shares

Gazprom , the world’s biggest conventional gas producer, said on Thursday it had received bids worth 198.89 billion roubles ($3.15 billion) for 3% of its own shares that it is selling into the market.

Nissan to cut 12,500 jobs as crisis deepens after profit wipe out

Nissan Motor Co unveiled its biggest restructuring plan in a decade, axing nearly a tenth of its workforce and flagging possible plant closures to rein in costs that ballooned when Carlos Ghosn was CEO.

The $6 Trillion Pension Bailout Is Coming

Authored by Lance Roberts via RealInvestmentAdvice.com,

Fiscal responsibility is dead.

This past week, Trump announced he had reached an agreement with Congress to pass a continuing resolution which will suspend the debt ceiling until July 2021.

The good news is that it will ONLY increase spending by just $320 billion.

What a bargain, right?

It’s a lie.

That is just the “starting point” of proposed spending. Without a “debt ceiling” to constrain spending, the actual spending will be substantially higher.

However, the $320 billion is also deceiving because that is on top of the spending we have already committed. As I noted just recently:

“In 2018, the Federal Government spent $4.48 Trillion, which was equivalent to 22% of the nation’s entire nominal GDP. Of that total spending, ONLY $3.5 Trillion was financed by Federal revenues, and $986 billion was financed through debt.

In other words, if 75% of all expenditures is social welfare and interest on the debt, those payments required $3.36 Trillion of the $3.5 Trillion (or 96%) of revenue coming in.”

Do some math here.

The U.S. spent $986 billion more than it received in revenue in 2018, which is the overall “deficit.” If you just add the $320 billion to that number you are now running a $1.3 Trillion deficit.

Sure enough, this is precisely where I forecast we would be in December of 2017.

“Of course, the real question is how are you going to ‘pay for i …

Chinese Bank With $100 Billion In Assets Is About To Collapse

While the western world (and much of the eastern) has been preoccupied with predicting the consequences of Trump’s accelerating global trade/tech war and whether the Fed will launch QE before or after it sends rates back to zero, Beijing has quietly had its hands full with avoiding a bank run in the aftermath of Baoshang Bank’s failure and keeping the interbank market – which has been on the verge of freezing – alive.

Unfortunately for the PBOC, Beijing was racing against time to prevent a widespread panic after it opened the Pandora’s box when it seized Baoshang Bank, the first official bank failure in an odd replay of what happened with Bear Stearns back in 2008, when JPMorgan was gifted the historic bank for pennies on the dollar.

And with domino #1 down, the question turned to who is next, and could it be China’s Lehman.

As a reminder, back in May, shortly after the shocking failure of China’s Baoshang Bank (BSB), and its subsequent seizure by the government – the first takeover of a commercial bank since the Hainan Development Bank 20 years ago – the PBOC panicked and injected a whopping 250 billion yuan via an open-market operation, the largest since January. Alas, as we said at the time, it was too little to late, and with the interbank market roiling, with Negotiable Certificates of Deposit (NCD) and repo rates soaring (in some occult cases as high as 1000%) we said that it’s just a matter of time before another major Chinese bank collapses.

And, in order to present the list of the most likely candidates, will picked those names that – just like Baoshang – had delayed publishing their latest annual reports, the biggest red flag suggesting an upcoming solvency “event.” The list is below.

Ukraine Seizes Russian Oil Tanker, Moscow Threatens “Consequences”

Authored by Tsvetana Paraskova via OilPrice.com,

Ukraine’s security services said on Thursday they had detained a Russian oil tanker that had blocked Ukrainian warships near Crimea in November, drawing reaction from Russia which vowed ‘consequences’ should Russians aboard the tanker be taken hostage.

On Thursday, Ukraine’s security service seized Russian tanker Neyma, which Ukraine believes took part in the incident in the Kerch Strait near Crimea in November 2018.

Federal Government Brings Back Executions, Starting With 5 Child Murderers

On Thursday the Department of Justice announced that for the first time in nearly two decades it will resume capital punishment, with Attorney General William Barr announcing the process for the execution of five death-row in mates is set to move forward. It will mark the first federal executions since 2003.

“Congress has expressly authorized the death penalty through legislation adopted by the people’s representatives in both houses of Congress and signed by the President,” Barr said in a written statement released by the DOJ.

What happens if the IndiGo founders’ spat gets prolonged

What happens if the IndiGo founders’ spat gets prolongedA prolonged tussle between founders is threatening to derail IndiGo- one of world’s most successful airlines.

Rs 6,20,00,000: US’ golden pass to get costly

Rs 6,20,00,000: US’ golden pass to get costlyThe EB-5 visa will cost $900,000 after the new rules kick in from November.

JLR drags TaMo into red again: Key pointers

JLR drags TaMo into red again: Key pointersJLR reported 11.6 per cent decline in global retail sales to 128,615 vehicles for the quarter.

Zion Williamson’s shoe deal with Nike’s Jordan Brand is the richest ever for an NBA rookie

Williamson was drafted first overall in the 2019 NBA draft by the New Orleans Pelicans and will sign with Nike’s Jordan Brand.

Here’s one scary way being overweight can affect the brain in old age

In some scenarios, the brain may seem as though it’s aged 10 years

NewsWatch: Your 5-point plan for surviving the coming stock-market downturn

Conditions are looking a lot like just before last year’s selloff.