{"id":13382,"date":"2019-08-22T07:53:57","date_gmt":"2019-08-22T12:53:57","guid":{"rendered":"http:\/\/leavittbrothers.com\/blog\/?p=13382"},"modified":"2019-08-22T07:53:57","modified_gmt":"2019-08-22T12:53:57","slug":"before-the-open-aug-22-7","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=13382","title":{"rendered":"Before the Open (Aug 22)"},"content":{"rendered":"

Good morning. Happy Thursday. <\/span>
\n The Asian\/Pacific<\/strong> markets closed with a lean to the downside. China and Malaysia posted gains; Hong Kong, South Korea, India and the Philippines posted losses. Europe, Africa and the Middle East<\/strong> are currently mixed and little changed. Denmark, Poland, Spain and Italy are up; the UK, Turkey, South Africa and Saudi Arabia are down. Futures in the States<\/strong> point towards a flat open for the cash market. <\/span>
\n—————
\n VIDEO: <\/strong>State of the Market<\/a>
\n—————<\/span>
\n The dollar is flat. Oil is up; copper is down. Gold and silver are down. Bonds are down. <\/span>
\n Stories\/News from Seeking Alpha…<\/span>
\n Futures wavered between slight gains and losses overnight with investors largely attuned to the Fed’s symposium in Jackson Hole, Wyoming, over the next two days. Philly Fed President Patrick Harker and Dallas Fed President Robert Kaplan will kick off the festivities today, commenting on the world’s largest economy, before Fed Chair Jerome Powell takes the stage tomorrow. The ECB is also scheduled to release minutes of its July policy meeting, at which it raised the possibility of further rate cuts, money printing and a reprieve from its penalty charge on bank deposits.<\/span>
\n ‘Recalibration’ of policy stance<\/span>
\n The widely watched 2-year\/10-year U.S. yield curve flattened and then briefly inverted on Wednesday after the release of the Fed’s meeting minutes. Officials cut rates as insurance against low inflation or a deeper decline in business investment driven by the trade war, reasons that look even sharper as the central bank moves toward its meeting in September. While policymakers were deeply divided over whether to cut interest rates, they were united in wanting to signal the Fed was not on a “pre-set course” for more easing.<\/span>
\n Tax reversal<\/span>
\n A day after President Trump said he was looking at a payroll tax cut or indexing capital gains to inflation, he is no longer thinking of such moves. “I’m not looking at a tax cut now. We don’t need it. We have a strong economy,” he told reporters on the White House lawn. “I’ve studied indexing for a long time and I think it will be perceived – if I do it – as somewhat elitist. I don’t want to do that.”<\/span>
\n Ballooning U.S. deficit<\/span>
\n The federal government will rack up $12.2T in deficits through 2029, according to a new projection from the Congressional Budget Office, an $809B increase from its last projection in May. That will boost debt held by the public to 95% of gross domestic product, its highest since just after World War II. Fueling the increase from May\u2019s projection is the bipartisan deal to raise spending caps, which would add $1.7T to the deficit over the course of the next decade.<\/span>
\n Farmers vs. Big Oil<\/span>
\n Farmers have been infuriated at the Trump administration’s decision to grant waivers exempting 31 oil refineries from rules requiring them to blend corn-based ethanol into gasoline. As a result, national and state trade groups have delivered letters to the White House over the past 48 hours detailing the damage the agreements have caused the biofuel industry. Farmers, who are seeing crop prices hit hard by the trade war, have also complained that the recent government crop report did not reflect damage from historic flooding this spring.<\/span>
\n E-cig scrutiny<\/span>
\n Four dominant e-cigarette manufacturers are facing a probe from the U.S. House Energy and Commerce Committee. Chairman Frank Pallone has contacted the CEOs of Juul Labs (JUUL), Fontem Ventures (OTCQX:IMBBY), Japan Tobacco (OTCPK:JAPAF) and Reynolds American (NYSE:BTI) requesting information by Sept. 20 about the health impact of their vaping products, as well as their marketing practices related to use by children. On Wednesday, the CDC additionally said it was investigating 153 possible cases of severe lung illness associated with e-cig use.<\/span>
\n Brexit tour<\/span>
\n The prospect of a no-deal Brexit is growing after Germany’s Angela Merkel gave Boris Johnson 30 days to solve “backstop” disagreements, while the reaction was harsher in France. Ahead of a meeting today with Johnson, French President Emmanuel Macron bluntly ruled out any further talks on the divorce deal. He sees no reason to grant another Brexit delay unless there was a “significant political change” in Britain and warned that the U.K. risked being subordinated by the U.S if it crashed out of the EU.<\/span>
\n Zero interest<\/span>
\n Negative yields may be taking their toll on investor demand, as the world’s first 30-year bond offering a zero coupon struggled to find buyers. Germany sold only \u20ac824M of the notes maturing 2050, falling far short of its \u20ac2B target. A zero-coupon, 0% long-term bond is not without precedent – with the country selling 10-year, 0% paper in April 2015. Signals that the global bond rally may now be sputtering given that more than $16T of securities around the world have negative yields.<\/span>
\n No G7 agreement<\/span>
\n This weekend’s G7 summit is set to end without a joint communique for the first time since the gatherings began in 1975, after French President Emmanuel Macron decided to abandon the tradition due to “a very deep crisis of democracy.” He cited the U.S. decision to withdraw from Paris climate accords as one example of why it would be difficult to display a united front. Alongside environment and trade, analysts expect Brexit, inequality, the possible reinstatement of Russia to the “G8” and tech giant taxation to dominate the meeting.<\/span>
\n What else is happening…<\/span>
\n Google (GOOG, GOOGL) DeepMind co-founder placed on leave.<\/span>
\n Eminem publisher hits Spotify (NYSE:SPOT) with huge lawsuit.<\/span>
\n HHS pledges new funding for Merck’s (NYSE:MRK) Ebola vaccine.<\/span>
\n Reports suggest Bolsonaro will privatize Petrobras (NYSE:PBR).<\/span>
\n Boeing (NYSE:BA) ‘kill vehicle’ contract canceled by the Pentagon.<\/span>
\n Audi (OTCPK:AUDVF) to join Mercedes (OTCPK:DDAIF), BMW (OTCPK:BAMXF) self-driving alliance.<\/span>
\n Wednesday’s Key Earnings<\/strong>
\n Nordstrom (NYSE:JWN) +12.7% AH delivering strong profits.
\n L Brands (NYSE:LB) -0.5% AH dragged down by Victoria’s Secret.
\n Lowe’s (NYSE:LOW) +10.4% smashing earnings estimates.
\n Target (NYSE:TGT) +20.4% after a blowout quarter.<\/span><\/span><\/span><\/span><\/span>
\n Today’s Economic Calendar<\/strong>
\n 8:30 Initial Jobless Claims
\n 9:45 PMI Composite Flash
\n 10:00 Leading Indicators
\n 10:30 EIA Natural Gas Inventory
\n 11:00 Kansas City Fed Mfg Survey
\n 4:30 PM Money Supply
\n 4:30 PM Fed Balance Sheet<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Good morning. Happy Thursday. The Asian\/Pacific markets closed with a lean to the downside. China and Malaysia posted gains; Hong Kong, South Korea, India and the Philippines posted losses. Europe, Africa and the Middle East are currently mixed and little changed. Denmark, Poland, Spain and Italy are up; the UK, Turkey, South Africa and Saudi […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/13382"}],"collection":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13382"}],"version-history":[{"count":0,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/13382\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13382"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13382"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13382"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}