22Aug2019 Market Close: Wall Street Struggled For Direction Today, DOW Closed Up 50 Points, Penetrating The Upper Resistance Is Going To Be Difficult

S&P 500 stalls as U.S. employment, manufacturing data offset

The benchmark S&P 500 struggled for direction on Thursday as strong results from Nordstrom Inc and a fall in U.S. jobless claims offset data showing a contraction in U.S. manufacturing activity.

News Corp developing ‘Knewz.com’ service to take on Google News: WSJ

News Corp is developing a news-aggregation service to compete with Alphabet Inc’s Google News and could be launched later this year, the Wall Street Journal reported citing people familiar with the matter.

Thyssenkrupp in talks to buy steel trader Kloeckner: Handelsblatt

German industrial group Thyssenkrupp is in talks to buy metals distributor Kloeckner & Co in a move to strengthen its materials trading business, Handelsblatt reported on Thursday citing sources familiar with the matter.

Oil eases as Fed’s Jackson Hole meeting gets underway

Oil prices weakened on Thursday on worries about the global economy and as equity markets were on edge over the uncertain outlook for U.S. interest rate cuts.

China blames Canada for difficulties in relationship, demands Huawei exec be freed

China’s embassy in Canada said on Thursday that bilateral ties were suffering “gross difficulties,” and demanded Ottawa free Huawei Technologies Co Ltd Chief Financial Officer Meng Wanzhou.

Pompeo tells Trudeau U.S. focused on release of two Canadians in China

U.S. Secretary of State Mike Pompeo on Thursday assured Canadian Prime Minister Justin Trudeau that American officials were working to free two Canadian men who have been held by China since late last year.

Exclusive: KKR explores $5 billion sale of Epicor Software – sources

Buyout firm KKR & Co Inc is exploring a sale of Epicor Software Corp that could value the U.S. enterprise resource planning software provider at close to $5 billion, including debt, people familiar with the matter said on Thursday.

Stocks weak as investors eye Fed’s Jackson Hole meeting

An index of stock markets worldwide edged lower on Thursday on uncertainty over the outlook for U.S. interest rate cuts and weak U.S. manufacturing data that raised concerns about the health of the world’s largest economy.

FAA plans to test Boeing MAX software on less-experienced pilots: sources

The U.S. Federal Aviation Administration plans to test next month how pilots with around one year of experience flying Boeing 737 jets handle new software on the MAX model, four sources with knowledge of the matter said.

As Italy’s Political Crisis Worsens, Five Star Eyes Alliance With Democrats

Now that Italian President Sergio Mattarella has – at least for now – denied League leader Matteo Salvini the opportunity to become prime minister and refuses to rush into new elections that would almost certainly see Salvini emerge victorious as Italy’s next PM, Salvini’s former partner, Luigi di Maio is discussing the possibility of forming a coalition with the establishmentarian Italian Democratic Party.

The tie-up would be a strange one, even by the standards of Italian politics, as M5S (the acronym for the Five-Star Movement) has sought to market itself as an anti-establishment party – the one characteristic that it shared with Salvini’s conservative, anti-immigration League.

The Democrats expressed their desire to join forces with M5S after Mattarella gave the parties the green light on Thursday.

According to Bloomberg, Mattarella holds the power to either appoint the next prime minister or call early elections.

What Happens To Bond ETFs When Interest Rates Go Negative?

Submitted by Nicholas Colas of DataTrek Research

Exchange traded funds continue to grow, exerting ever-greater influence on US capital markets. In equities, the issue is most pronounced in small caps (12-25% ownership) and real estate investment trusts (+13% for even the largest one). In fixed income, ETFs illuminate why investors put up with negative global interest rates. International bond ETFs still pay a coupon (however small), even when rates are below zero.

“US listed exchange trade funds are a market structure risk factor.” We have heard various iterations of that concern off and on for over a decade now. The basic argument goes like this:

ETFs promise tick-by-tick liquidity even though their underlying assets may be much less liquid.

As ETFs grow in popularity, this problem will only get worse.

If and when capital markets see another bout of volatility like 2008, ETFs will create market dislocations unseen in prior cycles.

There have been 2 notable (but brief) examples of this problem in the last 3 years:

The August 24 2015 flash crash of several hundred ETFs at the open. Markets were already choppy from a recent devaluation of the Chinese yuan, and many ETFs traded for +10% discounts to their NAV through much of the morning.

The February 5th 2018 spike in US equity volatility, which led to a vicious feedback loop between CBOE VIX-tied ETFs and the underlying contracts.

We have not heard much criticism of ETFs this month, but since we expect further market volatility today is a good time to review the US ETF ecosystem. Our usual 3-point format, headlined by questions to frame the discussions, with all data courtesy of www.xtf.com:

#1: What’s the latest on ETF assets under management and money flows?

Preview Of Powell’s Jackson Hole Speech: Brace For Disappointment

While the full program of this year’s Jackson Hole symposium will be released tonight at 8pm ET, what we do know is that Chair Powell will address the symposium on Friday, August 23,at 10AM ET. Powell is widely expected to preface his prepared remarks with an update on current conditions that acknowledges continued risks from trade and global growth, similar to the July statement, however he may disappoint markets which are expecting a far more explicit commitment to future rate hikes.

‘We Will Not Find A New Deal’ – Macron Pours Cold Water On Brexit Compromise

Prime Minister Boris Johnson has just completed his first full rotation on the withdrawal agreement merry-go-round. And unfortunately for him and his Conservative Party, it doesn’t look like he accomplished much, other than winding down the clock toward Oct. 31, the new – and some claim final – ‘Brexit Day’.

To try and make some progress ahead of this weekend’s G-7 Summit in Biarritz, Johnson embarked on a brief tour of the Continent this week, where he met with German Chancellor Angela Merkel, and embattled French President Emmanuel Macron, to discuss whether an alternative to the current withdrawal agreement might be found.

On Thursday, Johnson met with Macron, and the two delivered a joint statement in Paris, following an overly lengthy and incredibly awkward handshake between the two men.

The pound rallied after Macron sounded slightly more optimistic about a new withdrawal agreement, stoking hopes that a deal might be reached to avert a ‘hard’ or ‘no deal’ Brexit, something for which the market has been bracing for months,as Johnson has insisted – unlike his predecessor – that he will gladly lead the UK over the ‘no deal’ cliff if a deal isn’t done before then.

But whatever cause for optimism that traders found in Macron’s comments, it’s doubtful that it will be maintained, as Macron pointed out that putting together a ‘substantially different’ withdrawal deal is doubtful. it’s more likely that GBP is moving based on comparisons between the French government’s comments from Wednesday vs. Macron’s on Thursday.

“Let me be very clear: We w …

Want to help India beat the current slowdown? Just go on a holiday

Want to help India beat the current slowdown? Just go on a holidayWe increase our incomes by working overtime. We contribute to India’s GDP by also spending what we earn.

CEOs are scared of the slump. Very scared.

CEOs are scared of the slump. Very scared.A downturn will mark the end of a record period of uninterrupted economic expansion.

Anil Agarwal just hung up on Anil Ambani

Anil Agarwal just hung up on Anil AmbaniAnil Agarwal-promoted Twin Star Technologies pulled out as a bidder for telecom assets of debt-ridden RCom.

The Tell: Negative-yielding bonds do not mean negative-yielding bond funds

A thought experiment from an analyst shows that there may be some appreciation in bond funds.

The Margin: ‘The Simpsons’ troll the president in clip panned as ‘worse than Trump himself’

Leave it to “The Simpsons,” through the power of one musical short, to bring the country together in a rare moment of bipartisan harmony. But

Bond Report: Treasury yields rise as Federal Reserve officials push back against rate-cut bets

U.S. Treasury yields rise Thursday after some Federal Reserve officials said they didn’t see the need for further rate cuts, underscoring the split within its rate-setting committee on the need for further policy easing.