Forex & Commo Market News

Aug 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices edged up on a fall in U.S. crude inventories, although markets were still being weighed down by general oversupply.
- Gold prices inched up early after two days of losses, with investors awaiting minutes from the U.S. Federal Reserve's last meeting in July for clues on the pace of potential interest rate hikes.
- London zinc hit its highest in almost a decade, as Chinese infrastructure demand that has fed a rally in steel prices for months spills into markets for steelmaking raw materials.
- Chicago wheat futures edged higher as bargain-buying followed the deep losses in the last session that drove the market to its lowest since early June.
- The dollar was steady in Asian trade, holding onto most of its gains made after strong U.S. retail sales data kept alive the chance of another Federal Reserve interest rate hike this year.
- The benchmark IPC index closed up 0.3% at 51,339 points, while the Mexican peso slightly weakened against the US dollar, after US retail sales raised more than expected in July. America Movil gained 1.1%, while bread-maker Bimbo closed down 0.7%. The peso closed in Mexico City at 17.8080 to the dollar, up from 17.7870 Monday, after two consecutive sessions of gains ahead of the first round of negotiations between the US, Mexico and Canada to rewrite the North American Free Trade Agreement.
- Nordic markets close mixed Tuesday with Sweden's OMXS30 index ending the day 0.7% lower and the pan-Nordic OMXN40 index just above the waterline. A tentative start to the day saw stocks post minor gains as investors took heart from North Korea's decision not to follow through with its threat to attack U.S. island territory Guam following a war of words between the two nations, Saxo Bank said in a note. Some selling pressure in the basic resource and industrial sectors weighed on the Stockholm bourse while a 0.45% dip in the price of a barrel of Brent crude to $50.5 pulled Oslo's oil-heavy OBX index down by 0.7%.
- The US still hasn't developed an official position on whether it will keep, scrap or modify the North American Free Trade Agreement's arbitration system for solving international disputes between foreign investors and governments, a US trade official says. So-called investor-state dispute settlement is favored by international businesses but rejected by labor and environmental groups, some conservatives and many liberal lawmakers. "That is an issue that we are still consulting on, so we don't have a position that we can talk about at this point," the US official told reporters on a call. Republican lawmakers tend to back the investor-dispute system.
- The US side is ready to propose new and updated provisions for the North American Free Trade Agreement in "lots of areas," a US trade official told reporters. Formal negotiations on updating Nafta begin Wednesday in Washington, and the US is looking to get the talks moving on an "ambitious schedule" before political seasons heat up in Mexico and the US next year. "We are actually going to be quite ambitious in this first round," said the official, who declined to specify which areas would be formally "tabled." US trade representative Robert Lighthizer is expected to speak Wednesday about his goals for the negotiations.
- BlackRock Chief Laurence Fink calls violence in Charlottesville over the weekend during a white supremacist rally that left one woman dead "domestic terrorism," adding that the firm "rejects intolerance of any kind," according to a memo seen by WSJ. Fink says in the memo to employees Monday that the events of the weekend "where innocent people were the victims of hate-fueled violence, were profoundly troubling." Such violence, he wrote, "cannot be accepted, and it cannot be tolerated." Fink told employees that the firm tries to promote diversity and inclusion, and that such an effort requires "speaking out against prejudice and racism."
- Despite the fact that U.S. retail sales could extend the U.S. dollar recovery this week, there is still downside risk for the dollar given the U.S.-North Korea tensions and the fact that Fed policymakers are giving fewer signs of a rate increase this year, BK Asset Management says. North Korea plans to shoot missiles near Guam and USD/JPY is likely to crash because of that, BK says. "USD/JPY will fall quickly and aggressively as risk aversion hits the market." Until this week, investors sold off the dollar as the war of words between the U.S. and North Korea escalated. But now the dollar rebounds "as the silence gave investors the perfect excuse to take profits ahead of Tuesday's retail sales report," BK says. USD/JPY is up 0.7% at 110.41.
- Annual joint military exercises between the U.S. and South Korea later this month could rekindle U.S-North Korea tensions and bring renewed weakness to euro corporate bonds, Commerzbank credit strategist Marco Stoeckle warns. But this could create an opportunity for fund managers, who need to invest recent inflows. If geo-political tensions lead to fresh weakness, they could put money to work for higher returns, he adds. The military exercises are scheduled for August 21-31.
- Rising tensions between the U.S. and North Korea lately hit risk assets, but positive economic trends should prevail over the negative geopolitical development, says Rob Brauns, portfolio manager at BNP Paribas Asset Management. If so, bullish investors in euro credit will have reason to cheer: geopolitics took its toll on European corporate credit default swaps last week, increasing the cost of protection against defaults. But most analysts have a positive outlook for eurozone growth and companies' fundamentals.
- RBC Capital Markets says any medium-term increase in global bond yields must be driven out of the U.S, with European Central Bank action preventing bund yields from rising a lot. Rising U.K. gilt yields should also be driven by the U.S. RBC Capital Markets prefers spread exposure to outright positions at present, it adds.
- Brazil's Temer administration delayed until tomorrow the announcement of lower fiscal targets for this year. There's no official explanation for the delay, but local press is saying ministers can't seem to agree on a number. The current, bidding target is a budget deficit before interest payments equal to $44B, widely seen as too large for an emerging economy that should be running a surplus to pay down its escalating debt load. But revenue is below expectations thanks to a deep recession rendered even that low goal unfeasible, officials say. Local media report Finance Minister Henrique Meirelles advocates for lowering the target to a $50B deficit, but some ministers would prefer something around $53B.
- The Nasdaq Composite gained 123.36 points, or 2%, over Monday and Friday's trading sessions, giving the index its biggest two-day gain since Nov. 8, when Trump was elected. Tech companies posted big gains on Monday, lifting the index higher, as stocks broadly rallied. Among the biggest gainers was chip maker Nvidia, which was also the biggest riser among the S&P 500. The Nasdaq's two-day bounce back followed three straight sessions of declines last week on investor concerns over North Korea's nuclear program.

Aug 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices steadied in early Asian trade after sharp falls the session before to the lowest in about three weeks as a stronger U.S. dollar and a drop in Chinese refining runs hit the market.
- Gold prices fell in early trade as easing tensions between the United States and North Korea saw investors seek riskier assets like equities.
- Shanghai base metals futures fell, echoing weaker London prices overnight on a weaker dollar and mixed Chinese industrial data.
- Chicago corn futures lost ground as improved crop conditions and forecasts of more rains across the U.S. Midwest boosted expectations of a bumper crop.
- Canadian bonds eased as tensions between US and North Korea diminished, leading investors away from the safe-haven asset. The yield for Canada's two-year bonds was recently at 1.227% from 1.210% late Friday, according to electronic trading platform CanDeal. The 10-year bond yield was at 1.879% from 1.853%. Bonds traded quietly on Monday, but yields opened better offered and underperformed US Treasurys across the curve, as demand for riskier assets improved amid calmer geopolitical tensions. Inflation and upcoming talks on Nafta later this week is expected to keep Canada's bond market active.
- Brazil's fiscal troubles haven't spooked markets, with the real basically unchanged at 3.18 per dollar, but this will likely change if the Fed starts to increase its lending rate faster, says Ignacio Crespo, an economist at brokerage firm Guide Investimentos. "The international scenario has been very benign. That makes the domestic troubles less of a problem," he says. Brazil and other emerging markets are benefiting from high levels of global liquidity, Crespo says, but if the Fed starts to drain that pool of cash by increasing yields in the US, Brazil's domestic troubles would take center stage. Today the government is set to loosen its 2017 fiscal target as the budget deficit approaches 10% of GDP.
- Speaking in Colombia this morning, US Vice President Pence continues to walk back a threat by Trump to send in the US military on Venezuela's socialist government. Pence tells MSNBC the US is instead committed to finding solutions "economically and diplomatically." This, after other Latin American nations and even Venezuela's US-friendly opposition rejected the idea of US military intervention. Meantime, the White House also rejected a request by Venezuela President Maduro for a face-to-face with Trump, saying Maduro needs to restore democracy first. And the US suggestion it may implement an oil embargo on Venezuela has also been roundly criticized, since it could starve the nation's poor.
- Germany's DAX ends up 1.3% at 12,165.12, with stocks helped by the fading threat of military confrontation in North Korea. Financial stocks gain most after dropping most when tensions flared last week; Deutsche Bank rises 3.1% and Commerzbank adds 3.4%. RWE gains 2% after making upbeat comments about its 2017 outlook. Germany 2Q GDP data are due on Tuesday at 0600GMT.
- London shares gain as tensions between the US and North Korea recede somewhat amid prospects of a political resolution. The FTSE 100 Index lifts 0.8% to 7367.5 as investors in miners take advantage of a more trading-friendly start to the week. "We heard over the weekend that the US isn't interested in regime change when it comes to North Korea, and investors are bargain-hunting on the back of this," CMC Markets UK says. Among miners, Glencore rises 2.9%, followed by BHP Billiton, up 2%. Tour operator TUI also gains 5.2% on the back of an upgrade from Credit Suisse. Experian is the largest loser, down 1.2% after a Morgan Stanley downgrade.
- Nordic markets close higher with Sweden's OMXS30 index ending the day 1% higher and the pan-Nordic OMXN40 index also up 1%. "European stocks on Monday partly recovered from last week's sharp losses after senior U.S. officials over the weekend sought to play down the risk of a nuclear conflict with North Korea," Saxo Bank said in a note. Late Sunday, U.S. Secretary of Defense Jim Mattis and Secretary of State Rex Tillerson said the Trump administration was still trying to achieve the "irreversible de-nuclearization" of North Korea through diplomacy. Crude oil traded softer after West Texas Intermediate last week failed to stay above $50/barrel. Saxo added that activity remained light, with both WTI and Brent trading within relatively confined ranges. Oslo's oil-heavy OBX index was higher by 1.1%.
- Raytheon snaps up Bob Work for its board, with the corporate fate of the widely-respected former deputy defense secretary one of the most keenly-watched as the new administration pushes through new appointees. Former Boeing supply-chain chief Pat Shanahan replaced Work, who'd been at the forefront of efforts to boost the Pentagon's innovation agenda, and joins Letitia Long, ex-head of the National Geospatial-Intelligence Agency, on the RTN board. Other Obama-era appointees back in the corporate sector include ex-Air Force secretary Deborah Lee James on the Textron board, while Leidos added former Pentagon acquisition chief Frank Kendall to its director roster, with his deputy Katharina McFarland joined Engility.
- Treasurys have slipped a bit as investors emerge from the weekend feeling a little better about the geopolitical situation and willing to put their money in riskier assets. The move, though, is modest and yields face strong headwinds if they're going to climb much higher. After another soft inflation report Friday, investors are highly skeptical that the Fed will raise rates again this year. Monday is quiet in terms of economic data, but Tuesday will be more eventful with the release of monthly retail sales data. The 10-year yield was recently 2.215% vs. 2.191% Friday.
- President Trump sets his target on drug pricing again--but there appears to be little reaction yet among drugmakers' stocks. Merck's CEO, Kenneth Frazier, announced earlier that he would pull out from the President's American Manufacturing Council as "a matter of personal conscience," following Trump's initial response to the deadly violence in Virginia over the weekend. Trump was criticized for not immediately condemning white-supremacists for the violence. Trump fired back on Twitter this morning, saying now that Ken Frazier has resigned, "he will have more time to LOWER RIPOFF DRUG PRICES!" MRK stock up 0.5% in early trade.  Mylan adds 1.1%, Pfizer up .02%, Eli Lilly up 0.3%.
- Once North Korea-U.S. tensions are out of the way, the euro credit market should return to its bullish "old normal," according to J.P. Morgan strategists. This old normal is characterized by improving corporate fundamentals, after many years of falling earnings, and "stubbornly low" global inflation rates that have pushed back expectations for monetary policy tightening. The geopolitics-driven risk-off sentiment was mainly reflected in wider European credit default swap spreads last week. Spreads on both the iTraxx Europe and Crossover CDS indexes are tightening Monday.
- Those investors who bought protection against European corporate defaults recently may get frustrated by a lack of further weakness in the coming weeks and months, JPMorgan says in a note. Spreads on iTraxx indexes of European corporate credit default swaps widened last week on the back of rising U.S-North Korean tensions but tightened Monday. JPMorgan says the CDS market probably over reacted to the headlines, especially when compared with the much smaller moves in the run-up to the French presidential election earlier this year.
- S&P futures are up 12 points and Dow futures are higher as markets rebound after both major indexes ended the week down more than 1%, showing their biggest losses since March. Investors seems to be taking a cue from receding fears of an imminent conflict between the US and North Korea. Late Sunday, US Secretary of Defense Jim Mattis and Secretary of State Rex Tillerson said the US was still trying to achieve the "irreversible denuclearization" of North Korea through diplomacy. As for corporate news this week, retail earnings will again be in the spotlight with Home Depot reporting Tuesday, Target on Wednesday and Wal-Mart on Thursday. Department stores Macy's, Kohl's and JCPenney had improved sequential results last week but not enough to keep investors from souring on the sector and punishing shares.

Aug 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices dipped as a slowdown in Chinese refining activity growth cast doubts over its crude demand outlook, while rising U.S. shale output suggested supplies would likely remain high.
- Gold edged down from two-month highs, as the dollar inched up from last week's lows and investors kept a close watch on any developments on tensions over the Korean peninsula.
- London copper was little changed, holding below recent two-year peaks on a weaker dollar, as analysts flagged prospects of a correction given August's strong price gains and disappointing factory activity from China.
- Chicago wheat futures slid 1.2 percent, falling for a third consecutive session to a two-month low under pressure from abundant global supplies.
- The dollar edged higher against the yen, pulling away from last week's near 4-month low, with rising tensions between the United States and North Korea seen as the key to the near-term outlook.

Aug 14 - Vladimir's Venezuela: Leveraging loans to Caracas, Moscow snaps up oil assets 

Venezuela’s unraveling socialist government is increasingly turning to ally Russia for the cash and credit it needs to survive – and offering prized state-owned oil assets in return, sources familiar with the negotiations told Reuters. As Caracas struggles to contain an economic meltdown and violent street protests, Moscow is using its position as Venezuela’s lender of last resort to gain more control over the OPEC nation’s crude reserves, the largest in the world. Click here to read full stories.

Aug 12 - Trump Administration to Launch Probe of Alleged Chinese Technology Theft (WSJ Dow Jones)
- The Trump administration announced plans Saturday to pressure China over alleged intellectual property theft, adding the threat of trade retaliation to an ongoing campaign seeking greater cooperation from Beijing in the North Korean nuclear crisis.
- Aides said President Donald Trump will sign a directive Monday ordering his trade representative to start a formal probe into whether Chinese government agencies and companies were unfairly acquiring valuable patents and licenses from U.S. firms, either through outright theft, or by pressuring Americans to turn over their inventions as the price of
entry into China's market. "Such theft not only damages American companies, but can threaten our national security," a senior administration official said in a Saturday morning briefing for reporters.
- Officials at the briefing stressed that while they were casting a spotlight on what they consider a major irritant in bilateral commercial relations, they weren't rushing into action. They said Monday's directive would launch a study into whether a formal trade investigation was warranted, and that probe would take a year or more. They declined to discuss what sorts of penalties the U.S. might impose against China, saying that question was "premature."
- The administration made the announcement a day after Mr. Trump held a phone call with Chinese President Xi Jinping to discuss escalating tensions over North Korea's rapidly advancing nuclear weapons program. Mr. Trump has repeatedly said he would cut Beijing slack over trade issues if he felt the Chinese were being helpful in reining in Pyongyang.
- The Wall Street Journal reported earlier in the month that a new trade investigation over China's alleged forced technology transfers was in the works and had been planned for an early August announcement. But that was delayed until after an Aug.5 U.N. Security Council vote imposing new financial penalties on North Korea, which China supported. Asked if Mr. Trump discussed the pending trade investigation with Mr. Xi on Friday, an official pointed to the official White House summary of the call, which didn't mention trade issues. The White House aides said the new trade probe wasn't tied to the administration's North Korea strategy, despite the president's earlier linkage of the subjects. "These are totally unrelated events," one official said. "Trade is trade. National security is national security."
- The new probe does signal a bit of a hardening shift in Trump administration's China trade policy, as it is the first White House trade directive aimed directly at Beijing. During the 2016 presidential campaign, Mr. Trump regularly blasted the U.S.'s $347 billion trade deficit with China, and vowed to take swift, drastic retaliation if he were elected, from across-the-board tariffs to branding Beijing a "currency manipulator."
- But the early months of Mr. Trump's presidency have seen a considerably softer tone toward China over trade. He quickly dropped the campaign-trail threats, and during a genial April summit with Mr. Xi at his Mar-a-Lago Florida resort, the two countries launched a new "comprehensive economic dialogue" aimed at resolving bilateral commercial disputes amicably. A month later, China announced some modest market-opening moves, like ending a 14-year ban on U.S. beef imports, and Commerce Secretary Wilbur Ross declared economic ties between the world's two largest economies were "hitting a new high."
- But the first round of economic dialogue talks in mid-July were tense and ended up with no agreements. Officials said Saturday that impasse was one factor behind the decision to launch the new trade review. In focusing on China's voracious appetite for American intellectual property, the Trump administration responding to a longstanding complaint by Western trade groups, who say the country's industrial policies effectively force foreign companies in sectors such as autos to transfer technology to stay in the market.
- Beijing has been emboldened by the growing strength of its own companies to make more demands of foreign firms, industry executives say, and the government is careful to keep regulations vague. U.S. high-tech companies have struck a string of investments and technology-sharing agreements in software, semiconductors and other areas in the past couple of years, often under pressure from officials in closed-door meetings. China's government rejects assertions that it forces foreign companies to transfer technology or permits infringement of intellectual property. Premier Li Keqiang denied it was using industrial policies to strong-arm foreign companies into turning over technology, telling a World Economic Forum meeting in Dalian in June that "such cooperation is voluntary and helps companies expand in the Chinese market and even in third countries."
- While many U.S. companies and policy makers agree Chinese forced technology transfer is a problem, they also say it is difficult to figure out a solution. One challenge is that many U.S. firms are reluctant to lodge formal complaints, making it difficult for trade officials to make their case. "An important question going forward will be whether U.S. companies and trade associations who have highlighted the problem will actually come forward and assist our government in the investigation," said Michael Wessel, a member of the congressional U.S.-China Economic and Security Review Commission. Or, he added, "whether they will hide the facts fearful that our government won't follow through, that the Chinese will retaliate against their interests or that they'll have to admit what's happened to their critical assets."
- Another question is just what remedy the U.S. government might pursue if it felt it had a case. Options might include imposing new limits on technologies that U.S. firms could license to China, or imposing new limits on Chinese investment in the U.S. But those would likely draw complaints from U.S. firms, and may contradict other policy goals. Mr. Trump personally touted China's Foxconn Technology Group's announcement in July to build a new display panel factory in Wisconsin. The new China probe also marks a noticeable change in the process for how the Trump administration is processing trade policies, and suggests that a newly more organized and measured way to proceed with those complaints may be emerging.
- Earlier Trump trade threats were made seeking swift action, and were done without broad consultation from stakeholders, drew widespread concern from business groups and lawmakers. Among them, an April promise to impose new steel and aluminum tariffs by June -- a plan that remains stalled amid resistance. Mr. Trump also in April threatened to pull out of the North American Free Trade Agreement, but backed down after intense lobbying from allies, business groups, lawmakers and his own aides. He instead agreed to renegotiate the pact with Canada and Mexico, a process that begins Wednesday. In choosing the China trade probe, Mr. Trump is targeting an area that business groups and Republican and Democratic lawmakers have identified as a concern. His aides Saturday also stressed that in contrast with the rushed earlier attempts at handling trade matters, they were setting no deadline and that any investigation would closely follow intricate procedures, including discussions with Beijing.
- Before making any decisions on an investigation, the trade representative "would consult with the appropriate advisory committees," one official said, and "if the investigation is instituted, we would consult with China. We would give interested parties the opportunity to comment. There would likely be a hearing. And these investigations can take as much as a year before we reach a conclusion."

Aug 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices fell nearly 1 percent to hit two-week lows, dragged lower by persistent oversupply worries despite a bigger-than-expected drawdown in U.S. crude inventories.
- Gold prices held steady after touching their highest in over two months and were on track for a weekly gain, buoyed as rising tensions between the United States and North Korea triggered safe-haven buying.  
- Most Chinese base metals were trading lower, pressured by uncertainty over U.S.-North Korea tensions that was shifting investment into gold and low-risk instruments.
- Chicago soybean and corn futures edged higher as the market took a breather following last session's deep losses, but both commodities are poised for their third week of decline on a higher U.S. production outlook.
- The dollar skidded to an eight-week low against the yen as escalating tensions between the United States and North Korea triggered yet more investor flight to safety.
- Rep. Liz Cheney (R., Wy.) pushes back against West Virginia Gov. Jim Justice's proposal for some $4.5 billion of annual funding to support Eastern coal mines hit hard by competition from both natural gas and coal produced in western states like hers. "Such a policy would be flat wrong, unjust, bad economic policy and would be adopting the worse tactics of the Obama era--when the government wasted billions of taxpayer dollars attempting to pick winners and losers. What we need is continued regulatory and other relief by Congress and President Trump in support of our fossil-fuel industry and our free markets."
- Four U.S. Senators urged President Donald Trump on Thursday not to move forward with unilateral sanctions against Venezuela's oil and gas industry. Sens. John Cornyn (R., Texas), Bill Cassidy (R., La.), Thad Cochran (R., Miss.) and Roger Wicker (R., Miss.) warned that unilateral U.S. sanctions could open the door for Russia and China to gain great control over Venezuela's energy sector. They noted that Russia is consolidating control over assets in Venezuela and could one day acquire Citgo, which has large refineries in the U.S. The senators also warned that sector-wide sanctions would be damaging to U.S. energy companies and urged the president to "maintain our economic ties as leverage."
- Peruvian President Pedro Pablo Kuczynski's approval rating falls to its lowest level since taking office a year ago, according to a poll. Pollster Datum says Kuczynski's support is down to 34%, while his disapproval rating is at 62%. Kuczynski has struggled with a slowing economy, and strong congressional opposition that has forced some of his ministers to resign. Currently, he is facing nationwide protests by public teachers demanding better pay.
- US stocks fall on geopolitical tensions and disappointing earnings. The Dow falls 0.9% to 21844, the S&P sheds 1.5% to 2438 and the Nasdaq plunges 2.1% to 6217. Retailers stumble, with Macy's, the worst-performing stock in the S&P, down 10%, and Kohl's down 5.8%. But health-care products maker Perrigo soars 16% on an earnings beat and guidance raise. Crude oil slides 2.3% to $48.43. Gold gains 0.9% to $1291 while Treasury bond yields fall to 2.203% from 2.246% Wednesday. The WSJ Dollar Index falls 0.2%.
- US stock indexes extend declines, approaching their session lows, after Trump doubles down on threats to North Korea and says his "fire and fury" remark from earlier in the week may not have been tough enough. The S&P 500 falls 1.2%, on track for its steepest one-day decline since May 17. DJIA falls 0.7%, heading toward its worst day in about a month. The only sector in the S&P 500 posting gains: utilities, which many investors think of as bond proxies because of their heavy dividends. Meanwhile, the VIX surges 39%--heading toward its second biggest one-day jump of the year.
- Oil's move early this morning above $50 a barrel was short-lived, as it quickly fell back to its typical zone in the high $40s on declining stock markets. BTU Analytics' Erika Coombs says that while an extraordinary event like major Venezuela destabilization might provide lasting support above $50, for the time being "the recent rally in crude could be cut short as balances begin to tip back to being long." She notes efficiency gains by US producers and success by Nigeria and Libya in reviving production numbers, concluding "the ability for OPEC cuts to drive prices higher in 2018 continues to be in question."
- Financial support from Brazil's federal government for state governments may narrow deficit of states facing budget difficulties, but it won't eliminate the problems, Fitch says. The Brazilian states of Rio de Janeiro, Minas Gerais and Rio Grande do Sul are on track for spending to exceed income by an average of around 3.4% in 2017, according to Fitch. The three states have few other options to close their fiscal gaps because the law forbids federal banks from lending to the states if the proceeds are used to pay public employees' salaries. This "golden rule" requires all credit proceeds to be allocated to capital expenditures, Fitch says.
- London shares close heavily in the red as political tensions weigh and housebuilders fall after a downbeat sales survey. The FTSE 100 Index ends the session 1.4%, or 108.1 points lower to 7389.9. Jitters about next moves in the stand-off between Washington and Pyongyang kept traders on the sidelines. "Whenever dealers hear the word 'war' they usually run for the hills," says David Madden at CMC Markets UK. Housebuilders are among the Footsie's biggest losers after the latest report from the Royal Institute of Chartered Surveyors highlights a slowdown in sales in July as 'Brexit' uncertainty took its toll. Taylor Wimpey PLC falls 3%, Persimmon PLC drops 3% and Barratt developments PLC is off 3%. Coca-Cola HBC pops 9.2% as the bottling group posts higher 1H earnings.
- What happens to markets in the event of a potentially uncontained military conflict relating to North Korea, where global superpowers like Russia and China get involved? Nordea Markets projects that in such a scenario, the Fed gives up on shrinking its balance sheet and signals a 50 basis point rate cut, the ECB implements highly dovish forward guidance, the 10-year Treasury yield drops to around 1% or 1.5% and USD/JPY drops below 100.
- Belgian stocks fall again amid concerns among investors about the standoff over North Korea, with the Bel-20 index closing down 0.6% at 3904.93 and all but three shares ending lower. KBC recorded the session's biggest decline despite reporting solid 2Q results Thursday morning, ending 1.9% lower at EUR69.36. Umicore fell 1.8% to EUR64.06 and ING closed down 1.5% at EUR15.31. Galapagos closed up 8.3% at EUR67.83 following promising news on the development of drug.
- Brazil's government could reduce its fiscal target as soon as today, local media report, in a blow to Finance Minister Henrique Meirelles, who has pledged to rebalance public finances. The economy is performing much worse than Meirelles forecast a year ago, causing tax revenue to come in below expectations. Congress also barred some of the fiscal measures Meirelles proposed. The current fiscal target is a primary result--or the budget balance before interest payments--that is nearly $41B in negative territory, but analysts say the shortfall could reach $50B. That means no money left to pay down a ballooning debt. The target is biding and Meirelles needs Congress's approval to change it.
- The CBOE Volatility Index, or VIX, jumps about 20% to 13.37 as major US stock indexes slip and government bond prices rise. It's on track to close at its highest level in almost two months, as the US's heightened tensions with North Korea persist. This morning, a weak producer-price index report also dampened inflation expectations.

Aug 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil futures inched down despite official figures showing U.S. crude inventories fell more than expected, with an analyst saying the market had settled into a range.
- Gold held steady near two-month highs hit the session before, bolstered by safe-haven demand triggered by rising tensions on the Korean peninsula.
- China aluminium extended gains to strike its highest since 2012, with investors flooding into the market on prospects that capacity closures in the world's top producer would tighten supply.
- U.S. corn edged lower as traders readied for a widely watched U.S. Department of Agriculture report that is anticipated to show lower production as a result of recent dry weather.
- The Swiss franc eased versus the dollar, but still held on to the bulk of hefty gains made the previous day as heightened tensions between the United States and North Korea sent investors looking for havens.
- U.S. defense stocks marked up again in pre-open trade on the back of east Asia tensions, led by a 1.5% advance at Raytheon in the wake of its Wednesday evening investor meeting. RTN says Japan and South Korea are considering incremental missile defense purchases, moves that would also benefit Lockheed Martin among others. However, acquisition process for such systems can take two, three or even more years, notes RBC Capital Markets.
- S&P futures are down 9 points and Dow futures are also lower amid rising tensions between the US and North Korea. In a second day of specific threats aimed at the US, North Korea lashed out at President Trump and warned of an "enveloping fire" in the coming weeks targeting Guam. In US corporate news, Kohl's is up 3% in premarket trading after 2Q earnings this morning that beat Wall Street estimates. KSS CEO says "the traffic momentum that we saw in the combined March/April period accelerated in the second quarter." Fellow retailer Macy's is due to report 2Q results this morning as well, with Nordstrom due to release results after the close of trading.
- The euro credit market seems to be stuck between fundamentals on one hand and "fire and fury" on the other, according to ING strategists. The latter refers to U.S. President Donald Trump's warning to North Korea that it will face "fire and fury" if it threatens the U.S . Rising tensions between the two nuclear powers have triggered an increase in the cost of protection against corporate defaults as reflected in credit-default swap indexes. But euro corporate bond values have been resilient lately, ING adds.
- German government bonds look set to shed some of their large Wednesday gains, as investors' response to the U.S-North Korean tensions looks more like a "classical risk-off move" than the start of a trend, Commerzbank rates strategist Christoph Rieger says. Yields on 10-year German bonds rise by 1 basis point to 0.43% in early Thursday trading, having tumbled from highs of 0.48% Wednesday, according to Tradeweb. Yields move inversely to bond prices.
- The Dow falls 0.2% to 22049, the S&P 500 declines just under a point to 2474 and the Nasdaq drops 0.3% to 6352 over worries of a potential conflict between the US and North Korea. Earlier Wednesday, South Korea's Kospi index closed down 1.1% and Japan's Nikkei ended 1.3% lower. Cimarex Energy is at the top of the S&P with a 6.9% gain a day after posting its earnings. Crude oil gains 0.8% to $49.57. At the very bottom of the S&P is Dentsply Sirona, down 8.5% after releasing earnings before the market opened. Treasury yields fall to 2.249% from 2.282% Tuesday. The WSJ dollar index falls less than 0.1%.
- Canadian government bonds are up, following US Treasurys higher, as flaring tensions between North Korea and the US stoke demand for haven assets. The yield on the 10-year Canadian bond was 1.902% compared to 1.935% Tuesday, while the yield on the 2-year bond was 1.238% versus 1.276% previously. Haven assets like US government bonds, gold and the Japanese yen rose Wednesday while stocks mostly fell, after North Korea said it was examining a plan for a missile strike on the US military base in Guam.
- Investors flock to a fund tracking large and midcap Korean firms, sending options volume to about triple the average usually recorded, Trade Alert data show. The ratio of bearish options to bullish options on the iShares MSCI South Korea Capped ETF spiked to 4.55, above the 22-day moving average of 3.69, Trade Alert data show. EWY was down 2% a day after Trump bluntly warned North Korea against making further threats to the US, saying it would be met with "fire and fury." An options measure called skew, which measures the cost to protect against further stock declines, was near a year-long high.
- Nordic markets close mixed with Sweden's OMXS30 index ending the day 0.6% lower, the pan-Nordic OMXN40 index up 0.2% while Oslo's oil-heavy OBX index finished just below flat. European stocks were driven mostly lower as rising tensions between the US and North Korea sent a wave of risk-off sentiment across markets, Saxo Bank says. "Geopolitical tensions rise after US President Donald Trump warned North Korea on Tuesday that threats to the US would be met with "fire and fury"...dampening appetite for risk assets (equities, industrial commodities) in favour of traditional safe havens (gold, silver, bonds, Japanese yen, Swiss franc)." Denmark's Novo Nordisk tops the Stoxx Europe 600 index after lifting growth targets on expectations of robust sales of its type-2 diabetes drug Victoza and long-acting insulin Tresiba.
- London's top flight falls as investors run for cover on fears about a standoff between the US and North Korea. The FTSE 100 Index drops 0.6% to 7498.50 as market players seek safe-haven investments like precious metals. Silver miner Fresnillo gains 5.1% while gold producer Randgold lifts 2.9%. Defensive stocks like utilities also do well, with UK water company United Utilities rises 0.9%. Security group G4S is the biggest loser, declining 7.4% as revenue falls in the Middle East and India. "Emerging economies account for 40% of the sales stream and the minimal growth spooked dealers," CMC Markets UK says.
- Oil investors this morning are trying to make heads and tails of a rising threat from North Korea combined with a more hawkish-sounding President Trump. "War, at least conventional war, is generally bullish for oil," says Price Futures' Phil Flynn. He says oil's initial sell-off yesterday on Trump's "fire and fury" comment was a knee-jerk worry that war fears could hamper economic activity. "Yet if the war drums continue to beat we should see oil rise, especially because the uncertainty from the fallout of what war might bring." He notes the months leading up to Operation Desert Storm in the early 90's saw oil rally.

Aug 09 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Crude futures fell for a third day despite a bigger than expected fall in U.S. oil inventories reported by an industry group, with doubts lingering over OPEC's ability to restrain supply as promised.
- Gold prices rose amid rising tensions between the United States and North Korea after the North responded to warnings from U.S. President Donald Trump with a threat to strike the U.S. territory of Guam.
- Shanghai aluminium and copper roared to the highest in around five years as investors flooded into metals on expectations of capacity cuts in coal and aluminium in China.
- U.S. soybeans edged higher, extending gains into a third consecutive session amid forecasts for cool, dry weather in key U.S. growing regions.
- The yen hit an eight-week high against the dollar and made broad gains against other peers, reacting to the latest bout of geopolitical tensions stemming from the Korean Peninsula.
- Gold prices in are up 0.1% at $1,266 a troy ounce in electronic trading, after closing at $1,262.60 a troy ounce earlier in the session. Trump demands North Korea not "make any more threats" to the US, saying the US would respond "with the fire and the fury like the world has never seen." Gold is a popular destination for investors during times of political uncertainty.
- The S&P 500 and Dow Jones Industrial Average extend losses after President Donald Trump issues warnings to North Korea about its nuclear weapons program. North Korea will face "the fire and the fury," such as the world has never seen if it threatens the US, Trump told reporters in New Jersey. DJIA fell to a loss of 52 points, before rebounding and is now down 34 points. S&P 500 had dipped as well. The CBOE Volatility Index, or VIX, jumps 14% to 11.29.
- In news of note for agricultural suppliers and utility managers, federal climate analysts say the US continues to run hotter than average, at a pace that puts 2017 to date among the warmest in 123 years of record-keeping. In a regular assessment of US climate trends, they report above-average temperatures across the nation in the first seven months of 2017. Sections of the Northwest are running cooler than average so far, but warmer in the Southwest and the Rockies through to the East Coast due to record and near-record warmth earlier in the year. Florida, North Carolina and South Carolina had their warmest January-July on record, they say.
- US coal exports continue to soar under Trump, up 60% through May vs that period of 2016, at 37M short tons, the EIA says in its monthly Short Term Energy Outlook. It says export growth will probably slow down, but still sees a 17% increase for 2017, at 70M short tons. "The increase in coal exports contributes to an expected 58Mst (8%) increase in coal production in 2017," it adds. While Trump's support of coal is certainly helping the industry, a sharp rise in Asian benchmark coal prices last year has also been important, allowing US coal exports to compete in Asia.
- Base metals are doing well, with nickel up 2.5% at $10,640 a ton, zinc up 1.9% at $2929 a ton, and aluminum up 2.9% at $2,031 a ton at three-year highs. While its partly a case that "a rising tide lifts all ships," this is part of a broader reaction to a longer-term trend, SP Angel's John Meyer says. A lot of traders are afraid of the effect of environmentally-driven smelting-capacity cuts due to begin this winter, Meyer says, adding that many are bringing forward their purchases to avoid a panicked rush later on. "Capacity closures have so far not always meant production closures, but now the Chinese government is getting more serious," the analyst adds.
- Brazil's fiscal troubles are back in the spotlight after months of political gridlock that stalled economic reform. It seems increasingly unlikely that an already dismal fiscal target will be met. Brazil is aiming at a primary deficit--the budget balance before interest payments--equal to 2.1% of GDP, which means not a penny will be left to pay down escalating debt. But a lingering recession is sapping tax revenue, widening the hole. Itau bank economists say the government is counting on extra revenue from concessions and a tax-amnesty program to meet the target. But in a country plagued with red tape, they warn that any "disappointments and delays could jeopardize the target."
- Major oil firms operating in Venezuela have been pulling their expatriate staff out of the country amid concerns that violence related to a political and economic crisis could soon get out of hand. "Repsol, with stakes in the Carabobo heavy oil and Perla gas fields, is most exposed as Venezuela has typically accounted for about 10% of its production," says Tudor Pickering, noting that other firms evacuating workers or considering it include Norway's Statoil, Italy's Eni, France's Total, and Chevron. "Critically, oil production accounts for 95% of the country's forex earnings."
- Jacobs Engineering meets earnings estimates in its fiscal 3Q as it finalizes plans to buy a company to help it capture more government-services business. JEC's $2.85 billion deal to buy CH2M Hill comes as engineering and construction firms bet on a rise in infrastructure spending proposed by President Donald Trump. Construction stocks that soared after his election have gradually retreated as his plans have been slow to materialize. Shares in JEC are down 8% this year after reaching a 2017 peak in January. Still, JEC executives say the company's union with CH2M, expected to close later this year, will be the beginning of its "next exciting chapter."
- The PBoC resumes appreciation of the yuan ahead of the release of July trade data and as the greenback slipped anew overnight. Today's daily trading midpoint was put at CNY6.7184, versus CNY6.7228 yesterday. "The CNY is expected to remain relatively steady compared to regional peers" ahead of major events including the party congress, the US "semiannual FX policy report and Trump's China visit," says Gao Qi, currency strategist for emerging market Asia at Scotiabank.
- US legislators' confirmation late last week of a pair of Trump nominees to the Federal Energy Regulatory Commission will create a quorum that should allow delayed natural-gas pipeline projects to get rolling. BTU Analytics says the confirmations are welcoming as "they will allow a crucial step in the pipeline regulatory process to resume." But it adds "this doesn't mean pipeline developers and shippers should rest easy. A FERC quorum and approval is only half the battle and will not solve the larger challenges faced at the state level." Projects in the Marcellus and Utica regions that were thrown into limbo or saw construction-schedule uncertainties may yet face issues.

Aug 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices edged lower but still held near nine-week highs, supported by robust U.S. jobs data last week and a slight fall in the U.S. drill rig count, even as rising output from OPEC capped crude markets.
- Gold held steady near two-week lows, with the dollar remaining supported by expectations of monetary tightening in the United States following stronger-than-expected jobs data last week.
- Shanghai copper came within a whisker of its highest in four years after a rally in steel unleashed short-covering across metals, before prices quickly retraced in line with a stronger dollar.
- Chicago soybean futures rose nearly 1 percent as the market rebounded from last week's lowest since late June, although gains were capped by forecasts of crop-friendly weather in the U.S. Midwest.
- Net bullish bets on gold prices rose to the highest level since June 13 in the week ended Tuesday. According to CFTC data, bullish gold bets by hedge funds and other speculative investors outnumbered bearish bets by 122,773, the most since mid-June, when net bullish bets totaled 155,037. Gold prices rose to six-week highs Tuesday amid US political uncertainty, but retreated Friday after an upbeat jobs report fueled expectations of another Federal Reserve interest rate increase in 2017. Gold typically struggles to compete with yield-bearing investments when borrowing costs rise. Prices are up more than 9% for the year.
- Under fire by a new Trump administration banking official, a federal bank regulator defends its role in approving new banks. The Federal Deposit Insurance Corp. says its role in providing deposit insurance that's often required to open a bank is an "important safeguard" for the financial system. The agency was responding to accusations by acting Comptroller of the Currency Keith Noreika, who has claimed the FDIC has held up bank applications. "That's unconscionable for a regulatory agency," Noreika says in a podcast hosted by the Commodity Futures Trade Commission. Noreika calls for lawmakers to pass legislation that would allow agencies to bypass the FDIC in approving new banks.
- Gary Cohn, the director of the White House National Economic Council, says global central banks "did what they were supposed to do" after the 2008 financial crisis, and the challenge for economic policymakers now was to "transition the economy ... to a more normalized system," he says in an interview on Bloomberg Television. He says fiscal policy should be able to assist in that process by removing regulatory and tax barriers. "We can help by making it easier to make capital flow into the United States," he says. Trump has said he is considering nominating Cohn Fed chairman next year.
- The WSJ Dollar Index surges 0.6%, on track for its biggest daily gain since January. USD's rally began in early New York trading after a strong US jobs report but was supercharged after White House advisor Gary Cohn discussed the prospect for tax reform in a TV interview. FX traders homed in on Cohn's comments indicating the White House's tax plan will include incentives for US companies to repatriate overseas cash, which analysts expect to bolster demand for dollars. "There's been an accumulation of positive news for the dollar," said Credit Agricole's Vassili Serebriakov. Still, he cautions that with issues such as the debt ceiling likely to take priority, "the tax agenda is not going to be relevant until much later in the year."
- Brazilian lawmakers understand the need for fiscal reform, but many fear irking voters if they approve things like tougher retirement rules, says political consultant Thiago de Aragao. "They all acknowledge the importance of reform in private, but many talk it down in public," he says. Aragao thinks President Temer has the momentum to pass pension reform after defeating an attempt to send him to trial for corruption, but won't be easy. "The administration has proved it is capable of rallying lawmakers. Now they need to devise the right strategy to do it again." Temer got 263 votes that were enough to dodge the accusations, but needs 308 to pass pension reform.
- As Cigna becomes the latest health insurer to beat expectations on its 2Q earnings, it reports better-than-expected results in its individual business, while uncertainty in Washington hovers over the future of Affordable Care Act plans. The insurer says it saw results that were $4M better than expected from the ACA's risk-adjustment program. But CI warns that medical costs in individual plans tend to be higher in the second half of the year and it still expects a loss on the business for the year, though "a better result than last year," says CFO Eric Palmer. CI also declines to give any indication on developments regarding its litigation with former merger partner Anthem, or the likelihood of getting that deal's termination fee.
- One reason most banks got out of the physical commodities business? Sometimes the EPA comes knocking. The environmental watchdog is seeking $1M from Morgan Stanley, arguing that the bank sold gasoline in 2013 and 2014 that didn't meet pollution standards, MS disclosed today. The bank sold that business in 2014 and is out of the physical-oil business, like most of its peers. MS said discussions with the EPA are ongoing.
- Morgan Stanley said it got five more years from federal regulators to wind down private-equity and hedge fund investments that are banned under the Volcker Rule. At year-end MS had $1.9B worth of such investments, which are left over from before the crisis and span equity, debt funds, real estate and other alternative investments. Goldman Sachs, which has about $6B in non-Volcker-compliant stakes, already said it got the extension, as did Citi, which has about $400M in such investments.

Aug 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil markets dipped, with U.S. crude remaining below $50 per barrel, restrained by rising output from the United States as well as producer club OPEC.
- Gold held steady, close to a seven-week high hit earlier this week, as the dollar eased to hover near multi-month lows ahead of monthly U.S. nonfarm payrolls data due out later and amid continuing U.S. political uncertainty.
- Base metals mostly traded flat as investors digested bearish Chinese and U.S. economic data.
- Chicago soybean futures inched lower with the market poised for its biggest weekly fall in a year, weighed down by crop-friendly weather across key U.S. producing states.
- The S&P 500 and Nasdaq Composite extend declines while the Dow Jones Industrial Average falls into negative territory before rebounding after the WSJ reports that Special Counsel Robert Mueller has impaneled a grand jury in Washington to investigate Russia's interference in the 2016 elections. Strong corporate earnings have allowed US stocks to climb to fresh highs this year even as many investors have scaled back expectations for tax cuts and fiscal stimulus from Washington, citing gridlock in DC. The DJIA is up 7 points to 22023 after closing above the 22000 mark for the first time ever Wednesday. S&P off 0.2% and COMP is off 0.4%.
- Prospects of a Mexican credit downgrade evaporate as Fitch Ratings affirms its BBB+ sovereign rating and returns the outlook to stable from negative, citing reduced risks to growth and stabilizing public debt. "Mexico continues to deliver on fiscal consolidation, which together with the recent appreciation of the peso is expected to put the public debt burden on a renewed downward path in 2017 and beyond," Fitch says. S&P put its outlook on Mexico's BBB+ rating back to stable last month. Moody's, which has Mexico one notch higher at A3, maintains a negative outlook but affirmed the rating earlier this year. The three ratings firms changed the outlook to negative in 2016 on concerns ranging from rising debt, lower oil revenue, and the threat of protectionist US policies.
- Fannie Mae reports a 2Q profit of $3.2B and says it will send $3.1B to the Treasury Department in September "if the Federal Housing Finance Agency declares a dividend in this amount." Since being put into US government conservatorship during the housing crisis, FNMA and rival Freddie Mac have been required to return dividends to the US Treasury under normal conditions. But FHFA Director Mel Watt has said he might order the companies to retain their earnings -- despite objections from the Treasury -- prompting FNMA's careful language. FNMA's net interest income drops 5% from last year, partly due to lower refinancing activity. The company has been shifting its focus to mortgage guarantees rather than portfolios.

Aug 03 - GBP/USD at 10.5-Month High After UK Services PMI, Before BOE (Dow Jones)
Sterling adds to gains, rising to its highest in ten and a half months against the dollar after a purchasing managers' survey showed activity in the important U.K. services sector continued to increase in July. The PMI figure stood at 53.8 last month, marginally below forecasts for 53.9 but still showing decent growth, with a reading above 50 signalling growth rather than contraction. It was also higher than June's 53.4. Sterling rises 0.25% to reach $1.3267, its strongest since mid-September 2016, from $1.3232 beforehand. The euro falls 0.36% on the day to 0.8932, from 0.8947 beforehand. Focus for the pound is on Thursday's Bank of England rate decision at 1100 GMT.

Aug 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil dipped as a rally that has pushed up prices by almost 10 percent since early last week lost momentum despite renewed signs of a gradually tightening U.S. market.
- Gold prices fell as the dollar inched up from multi-month lows and as signs that the U.S. economy was strengthening turned investor focus on to risk assets.
- Chinese metals futures opened firmer across the board, boosted by a weak U.S. dollar.
- Chicago wheat futures lost more ground, falling for a fourth consecutive session and trading close to its lowest since late June on pressure from ample global supplies.
- Abe's cabinet reshuffle is likely to have little-to-no impact on Japanese markets because "people are disappointed in him, not necessarily in his cabinet," says Koji Fukaya, head of FPG Securities. Meanwhile, there is some expectations of new economic policy longer term. Stocks opened down slightly despite an uptick in dollar-yen from overnight lows, with the Nikkei off 0.2%.
- The Senate Agriculture Committee approves three nominees--two Republicans and one Democrat--to serve as commissioners on the Commodity Futures Trading Commission. The nominees were approved via voice vote, so there were no recorded dissenting votes. The nominees now proceed to the Senate floor for a vote, though it's unclear when that might occur, given a massive backlog of Trump administration nominees. Michigan Sen. Debbie Stabenow, the top Democrat on the Agriculture Committee, said last week that she wanted a full slate of nominees--which would include an additional Democratic commissioner--before proceeding to a floor vote.
- Brazilian markets react positively as investors grew confident President Michel Temer has gathered enough support to avoid being removed from office for a trial on corruption allegations. Brazil's main stock index, Ibovespa, finished the session 0.9% higher while the dollar weakened 0.3% against the Brazilian real. Local lawmakers were set to vote late Wednesday on whether Temer should face trial. Congress members, even in the opposition, say Temer will have enough votes to stop the legal process against him in Congress. The president has been charged for allegedly accepting bribes and has denied all the accusations.
- JPMorgan says in its 10Q that its estimate in excess of already established reserves ranges up to $1.9B as of June 30. That is down slightly from an estimate of up to $2.3B as of the end of 1Q, or March 31. JPM evaluates its outstanding legal proceedings each quarter to assess litigation reserves and adjust accordingly. Its litigation reserves have been trending downward in most of the past several quarters, including legal benefits, or gains, instead of expenses in some recent quarters. Questions remain over whether the Trump Administration will soften
its stance on bank regulations that was initially anticipated but have yet to occur.
- Brazil's government is set to defeat a motion in Congress to put President Michel Temer on trial for corruption charges by a wide margin, consulting firm Eurasia says. Temer only needs one-third of the lower house's 513 deputies, plus one, to either vote against the motion, or simply not show up, to avoid trial, Eurasia says. The consulting firm says it now looks like he could garner close to 300 votes, more than previously estimated, Eurasia says. Temer, charged with allegedly taking bribes, denies the accusations against him.
- Europe posed less of a risk to global supply chains in 2Q, according to Dun & Bradstreet Corp. The region's made up for 29.94% of global supply chain risks, slightly less than during 1Q. The main driver for the decline in supply chain risk in Europe is the election of Emmanuel Macron as French president in May, analysts wrote. His main opponent, Marine Le Pen, during the election campaign vowed to withdraw France from international trade agreements and the EU, and suspend the country's membership of the Schengen border-free zone. "Macron's victory brings greater clarity," analysts at Dun & Bradstreet said.
- Hospital losses from unpaid medical bills may rise in 2018 even if Republicans' effort to repeal the Affordable Care Act remains stalled, Fitch Ratings says in a new report. Unpaid hospital bills, known as uncompensated care, declined under the ACA as more patients gained access to subsidized health insurance under the law. But uncertainty about White House support for some ACA subsidies has prompted confusion in markets where subsidized insurance is sold. Some insurers have exited the ACA markets and others propose significant premium increases for 2018. "Uncompensated care could tick up in 2018 if fewer people buy plans," in ACA markets "due to higher premiums or a dearth of plan choices," Fitch says.
- The Senate Commerce Committee approves three nominees for the Federal Communications Commission, making it likely the agency will be up to full strength soon. The nominees could be approved by the full Senate in coming days. The FCC currently has three of its five seats filled, two by Republicans and one by a Democrat. By a voice vote, the Commerce Committee approved another term for Chairman Ajit Pai and a new term for former Democratic member Jessica Rosenworcel. It also approves a new GOP nominee, agency general counsel Brendan Carr. However, Commerce Committee Democrats make clear they only want to approve Carr for the remainder of a current term, and oppose giving him an additional five-year term now. Some worry that Carr, a former aide to Pai, might not be independent enough. Democrats also want to be able to pair Carr's renomination for a full term with the next Democratic nomination to improve the Democratic nominee's chances of Senate confirmation.
- A Canadian poll suggests a majority of its citizens say the country should consider changes to its supply-management agricultural regime if it means securing a better deal in the coming talks to revamp Nafta. Angus Reid Institute said over a quarter of respondents said Canada should offer to US and Mexico to scrap its supply-management regime, which has already earned criticism from President Trump, and 45% suggested Canadian negotiators should use the scheme as a bargaining chip in talks. Meanwhile, 29% said the system must be preserved. Under supply management, prices for dairy products, eggs and chickens are set based on the average costs of production. Production is controlled through a regulated quota system, and competition is thwarted through tariffs.
- Brazil's lower house of Congress might not be able to gather a quorum to vote Wednesday on whether or not to put President Michel Temer on trial for corruption. Lawmaker Silvio Costa admitted the opposition doesn't currently have the votes needed to approve a trial, but said more than enough lawmakers have agreed not to enter the session to deny a quorum. "Our fight today is to avoid the vote... if it happens today, the president will win," Costa says in a telephone interview. Temer, who has been charged with corruption for allegedly taking bribes, denies any wrongdoing.
- Analysts applaud Humana's announcement that it expects to alleviate the effects of a downgrade on Medicare's quality-measure star ratings, which should help earnings and enrollment next year. The company now expects 74% of its members to be in highly-rated plans in 2018, up from previous warning that it could be down to 37%. Citi says "this should enhance its competitive position in MA, certainly relative to prior expectations," and Leerink suggests "meaningful additional EPS revisions for 2018." Humana also expects it will be able to add Medicare membership next year, and CEO Bruce Broussard says during the earnings call that the company has a "good feeling about going into 2018." The company says it has managed to craft Medicare plans for next year with benefits similar to this year, despite needing to offset the effects of a returning health-insurance tax. HUM gains 4.3%.
- Brazil's economy is showing signs of improving, with unemployment, inflation and interest rates declining and industry starting to recover, and putting President Michel Temer on trial for corruption would put that at risk, his lawyer said Wednesday in Congress. Temer is accused of accepting bribes, and he has denied any wrongdoing. His lawyer, Antonio Claudio Mariz de Oliveira, spoke Wednesday at the start of the session that will vote on whether or not to allow a trial to take place. If two-thirds of the lower house votes to permit the trial, and the Supreme Court votes to accept the process, Temer would be removed from office for up to six months, and he would be removed permanently if tried and found guilty.

Aug 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices fell 1 percent, with rising U.S. fuel inventories pulling U.S. crude back below $50 per barrel, while ongoing high OPEC supplies weighed on international prices.
- Gold edged lower as the dollar firmed and as investors took profits after downbeat U.S. data propelled prices to a seven-week high in the previous session.
- London copper slipped but stayed within the reach of two-year highs hit earlier this week, as a slightly firmer dollar sparked profit-taking while a brightening view of China's growth prospects underpinned prices.
- U.S. soybeans edged higher, pulling away from a near one-month low touched in the previous session, though gains were checked as fears of potential losses from recent dry weather eased.
- Apple continues to add to its swelling cash reserves during the quarter, bringing the total to $261.5B. More than 90% of its cash is held overseas and investor hopes have been rising that the Trump Administration's plan for a tax holiday would allow AAPL to bring the cash home without paying steep taxes. CFO Luca Maestri says the company retired $3.5B of debt and issued the equivalent of $10.8B in debt during the quarter.
- Martin Marietta Materials said Congress' failure to agree to a budget, or reach an agreement over spending with the Trump administration, could imperil its financial projections for the year. Overall, the company expects increased spending on infrastructure -- but not as a result of a President Donald Trump's plan to pump $1 trillion into American roads, bridges and other public works projects. That plan has yet to materialize. The company cited increased spending resulting from an Obama era transportation spending bill and various state and local initiatives. An MLM executive praised the Trump administration's work on reducing regulatory burdens as helpful and "somewhat unheralded." MLM falls 6.4% to $211.91.
- Anthem is pulling back its Affordable Care Act exchange presence in another state, California. The state's insurance exchange, Covered California, announces Anthem will withdraw next year from 16 of the state's 19 pricing regions, where it has about 153,000 enrollees. It will remain in three regions, where it covers about 108,000 people, which is 41% of its current exchange enrollment in California, the exchange says. The pullback won't leave any counties at risk of lacking an exchange insurer for next year. ANTM has said it will pull out of three state exchanges--Ohio, Indiana and Wisconsin--and has plans to sharply reduce its footprint in Nevada. ANTM has said if uncertainty about the future of the exchanges continues, it may further pull back from exchanges and boost its rate requests.
- Phillips 66 tops 2Q EPS estimates. The oil company holds a 25% stake in the newly operating Bakken Pipeline, which includes the Dakota Access Pipeline that was marked by months of protests in North Dakota but ultimately given the go-ahead by President Trump. CEO Greg Garland says the Bakken was among projects placed into service during the quarter giving the company momentum. PSX also added two polyethylene units as part of a joint project with Chevron on the Gulf Coast, where the two companies hope to convert byproduct from shale drilling into plastic used in household products. PSX shares up 1.6% to $85.07.
- Gluskin Sheff's David Rosenberg says there's "beaucoup d'amour" in the US about Canada, due in part to recent Trump administration hijinks, and that's providing a lift to C$. "The adulation for anything Canada has grown even stronger--and several were GOP supporters too, who now seem fed up," Rosenberg tells subscribers of his daily note. He acknowledges he expressed some caution earlier about C$'s rapid rise to a 14-month high, or in C$1.24 level. In today's note, Rosenberg says any dip in C$ "should probably be bought," and that the currency has entered a new and firmer range. "The loonie has shifted from a C$1.30-C$1.40 range to a C$1.20-C$1.30 band. Trade according," he says.
- Pfizer CEO Ian Read suggests big deal-making is on hold for Washington to take up tax reform. On an earnings call, Read talks up the company's pipeline while saying the company will wait on a tax overhaul before looking at any big deal. "Right now, I believe we need to see tax reform or the absence of tax reform to understand what the asset values are. We then would look at deal-making, he said. Pfizer faces generic competition for some key products, such as erectile dysfunction drug Viagra, whose eventual sales losses could be offset through a deal or new drug launch. The company has said that much of its cash is overseas. PFE falls 1.2% to $32.76.

Aug 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- U.S. oil opened above $50 per barrel for the first time since late May, supported by strong fuel demand, but ongoing high supplies from producer club OPEC kept prices from rising further.
- Gold prices held steady near seven-week highs, after registering their biggest monthly gain in five in July, supported by a slump in the U.S. dollar and political uncertainty.
- London copper consolidated after hitting a more than two-year high in the previous session, as profit taking capped a rally spurred by a weaker dollar and solid global growth reports.
- U.S. soybeans fell 1 percent after the U.S. Department of Agriculture pegged the condition of the crop above market forecasts, dampening fears of potential yield losses as a result of recent hot, dry weather.
- Trump Participates in Swearing-in of White House Chief of Staff and Other Events to Watch Today
President Donald Trump participates in the swearing-in of White House Chief of Staff John Kelly at 10 a.m. before holding a cabinet meeting. The president meets with U.S. Ambassador to Israel David Friedman at 11:30 a.m. and Secretary of State Rex Tillerson at 1:30 p.m. He awards the Medal of Honor to former Army Specialist Five James McCloughan for conspicuous gallantry during the Vietnam War at 3 p.m. Vice President Mike Pence is in Estonia for meetings with officials and to participate in a briefing with the Baltic leaders on the North Atlantic Treaty Organization's Enhanced Forward Presence mission. The vice president is on foreign travel to Estonia, Georgia and Montenegro through Aug. 2.

Jul 31 - Euro Strength Blunts Amcor's Pain from Rising AUD (Macquarie Dow Jones)
Packaging company Amcor makes 95% of its sales outside of Australia and New Zealand, so the Australian dollar's recent rise to its highest level since May 2015 is negative for its dividend when converted back to local currency. But there's good news in the strength of the euro as around a third of Amcor's 1H revenue came from Western Europe. Macquarie estimates that a 1-cent change in EUR/USD boosts Amcor's net profit by around US$2.5M. "Hence relative to our EUR/USD 1.073 forecast in FY18, in isolation, spot euro would add 3% to FY18 USD EPS," Macquarie says. It keeps an outperform call on Amcor and A$17.17/share price target. AMC last traded at A$15.38.

Jul 31 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices hit a two-month high, lifted by a tightening U.S. crude market and the threat of sanctions against OPEC-member Venezuela.
- Gold prices held around their highest in nearly seven weeks as tensions on the Korean peninsula boosted safe-haven demand for the metal and as the U.S. dollar hovered close to multi-month lows.
- London copper rallied to within a whisker of its highest in more than two years after manufacturing data from top user China confirmed growth tempered slightly but stayed firm in July.
- Chicago wheat futures slid almost 1 percent, hovering near a one-month low set last week, as fears of decreased production of high-quality grains in the United States were offset by abundant global supply.

Jul 29 - Trump Set to Sign Russia Sanctions Bill (WSJ)
- President Donald Trump plans to sign a sanctions bill aimed at punishing Russia for its alleged interference in the 2016 U.S. election, the White House said Friday. White House press secretary Sarah Huckabee Sanders sent a statement to reporters late Friday saying the president has reviewed the final version of the bill "and, based on its responsiveness to his negotiations, approves the bill and intends to sign it."
- The measure, which also imposes sanctions on Iran and North Korea, passed the Senate on Thursday on a 98-2 vote. The same bill passed the House on Tuesday, 419-3. The overwhelming majority showed the president that there was enough strength in Congress to override a veto should he choose to block the legislation.
- While the measure was debated in Congress, White House officials wouldn't commit to whether the president would sign the bill, saying it may infringe on presidential authority. The bill included a provision that would require the president to consult Congress before relaxing any sanctions against Moscow or restoring Russia's control over diplomatic compounds in the U.S. that had been seized by the Obama administration as part of U.S. reprisals for the alleged election interference.
- Mr. Trump has expressed skepticism about U.S. intelligence findings that Russia meddled in the election. Russia has denied the allegations.  Should the bill become law, the president would have to notify Congress if he wants to lift sanctions on Moscow. Congress then would have 30 days to pass a resolution of disapproval to stop the president. Should Mr. Trump veto that resolution, Congress would have 10 days to override the veto.
- The legislation represents a political challenge for the president, coming as congressional committees and Special Counsel Robert Mueller are investigating Russia's actions last year in a probe that also is seeking to determine whether anyone in the Trump campaign colluded with Moscow. Mr. Trump and Russian officials have denied any collusion. A U.S. intelligence assessment in January concluded that the alleged Russian interference was directed from the highest levels of its government. Its tactics allegedly included hacking state election systems; infiltrating and leaking information from party committees and political strategists; and using social media and other outlets to disseminate negative stories about Democratic nominee Hillary Clinton and positive messages about Mr. Trump.
- Russia didn't wait for the White House to announce whether Mr. Trump would sign the bill to retaliate. Moscow struck back Friday, forcing Washington to cut its diplomatic presence in the country to 455 and close a U.S. diplomatic retreat outside Moscow. If the limit applies to overall staff, the result would be a dramatic reduction in the U.S. government's operation in the country, which includes the embassy in Moscow and consulates in St. Petersburg, Vladivostok and Yekaterinburg.
- The bill would tighten restrictions on the extension of credit to Russian entities and mandate sanctions on those deemed to be undermining cybersecurity as well as those engaging in significant transactions involving the Russian defense and intelligence sectors.
- It would allow some joint energy ventures to go ahead but would sanction new projects and joint ventures in which a sanctioned Russian person or entity holds a stake of 33% or more.
- The bill maintains a provision that says the president may impose penalties on firms backing a high-profile Russian pipeline project but stops short of mandating penalties. That provision has upset Europeans because it poses a potential risk to the Nord Stream 2 pipeline, a Gazprom project backed by a consortium of five European companies, to transport gas from Russia to Europe through the Baltic Sea.
- After European countries, including Germany and Austria, protested, lawmakers added a stipulation that the president may impose sanctions, but "in coordination with allies of the United States."
- U.S. energy companies had lobbied Congress against the bill, citing their concern over an earlier version that included measures to block partnerships with Russian individuals or companies, which they said could scuttle any U.S. business partnership that involved Russian entities.
- The U.S. Treasury Department recently imposed a $2 million fine on Exxon Mobil Corp. for signing eight documents relating to oil and gas projects in Russia that were also signed by Igor Sechin, who was under U.S. sanctions at the time.
- The legislation also imposes new sanctions on Iran's ballistic-missile program and the Iran's Revolutionary Guard Corps, and attempts to squeeze the cash available to North Korea for its nuclear and ballistic-missile programs.

Jul 29 - Trump's Pick to Shake Up the Fed (WSJ)
  Randal Quarles is expected to try to reduce central bank's influence on lenders. Randal Quarles became skeptical of government intervention during decades of work in the financial world. Now he is set to take the lead in shaping oversight at one of the greatest interveners of all: the Federal Reserve.
  Mr. Quarles, who would be President Donald Trump's first appointee to the central bank, is expected to be confirmed in coming months for a four-year term as Fed vice chairman for supervision. That would make him the most influential U.S. financial regulator and give him a voice on monetary policy. His de facto predecessor, former Fed governor Daniel Tarullo, engineered broad new curbs on risk-taking by the largest U.S. banks. Mr. Quarles, a 59-year-old amateur pilot and former government official who has made millions advising and investing in banks, has a record that suggests he will seek to reduce the Fed's influence on bankers' decisions, rather than expand it.
  "Some refinements will undoubtedly be in order," Mr. Quarles told the Senate Banking Committee on Thursday, referring to the U.S. regulatory regime. "The key question will be ensuring that...we do so while maintaining the robust resilience of the system to shocks."
  Mr. Quarles's approach may conflict with that of Fed Chairwoman Janet Yellen, who supported Mr. Tarullo's agenda. Her term as chair ends in February. Mr. Quarles has separately advocated that the Fed articulate a more rigid formula for setting monetary policy, an idea Ms. Yellen has criticized. Friends and former colleagues said that if Mr. Quarles does try to change direction at the Fed, they expect him to move slowly and methodically, and to seek consensus. Cerebral with a wry wit, Mr. Quarles spent nights as a young lawyer at Davis Polk & Wardwell LLP reading the firm's files on railroad reorganizations in the late 19th century.
  "I had been interested in the history of that era," he explained in a 2010 paper.
  When asked, "How are you?" he has a stock reply, former colleagues say: "Better than average."
  Mr. Tarullo, who left the Fed in April, cracked the whip on the largest U.S. banks in part by employing the element of surprise. In "stress tests" and "living wills" examining how banks plan for the worst scenarios, he and other regulators ratcheted up their expectations over time and publicly rebuked bankers for perceived failings -- scoldings that the regulators said were necessary to clean up what they saw as woeful risk management.
  Bankers have called for years for more predictability in the exams, in part to avoid further public thrashings. At his confirmation hearing Thursday, Mr. Quarles said the Fed should publish more information about the stress tests. "The benefits of the transparency outweigh any of the theoretical costs," he said.
  Mr. Quarles also said he would review rules about banks' capital levels as well as the Volcker rule, which restricts banks from trading unless it is on customers' behalf. He avoided specifics. "I don't have a view as to whether [capital requirements] should be higher or lower," he said. During his career, Mr. Quarles has repeatedly criticized unpredictable policy-making. "When governments have discretion, markets and citizens cannot be sure how the government will act, and that uncertainty results in inefficiency, delay and politicization," he wrote in the 2010 paper. He said in 2015 that regulatory policy since the 2008 financial crisis "tended to make the government a player" in the financial sector when "it should be a referee." At the same time, Mr. Quarles has separated himself from others who claim the "free market" mantle. As a senior Treasury official in the 2000s, he advocated allowing foreign governments to have more wiggle room in dealing with bond investors -- a policy opposed by some Wall Street money managers. He once called Timothy Geithner, President Barack Obama's first Treasury secretary and an architect of the 2008 bailouts, "a very strong choice" for the cabinet position.
  Ravi Menon, a Singaporean official who engaged in last-minute talks with Mr. Quarles on a U.S.-Singapore trade deal, wrote in 2004, "Right from the start, we took a problem-solving approach aimed at finding middle ground rather than trying to convert each other on ideological arguments."
  Still, Mr. Quarles's background has raised concerns among Democrats. As a banking lawyer at Davis Polk in the 1990s, he helped banks such as J.P. Morgan Chase & Co. navigate regulatory limits to expand their securities businesses. He joined executives from J.P. Morgan and HSBC Holdings PLC at the Salzburg Global Seminar, held in the Austrian Alps at the hotel where "The Sound of Music" was filmed, and co-led a discussion on the future of banking.
  During the financial crisis, as a partner at private-equity giant Carlyle Group, he lobbied successfully for regulators to allow him and other big money managers to pump money into troubled banks. "The primary purpose of this job is to stand up to the largest financial institutions in this country," Sen. Elizabeth Warren (D., Mass.) told Mr. Quarles Thursday. "You have no history of having done that."
  Despite the Democrats' concerns, Republicans alone have the votes to confirm Mr. Quarles for the job, and none criticized him Thursday. It isn't clear when they will vote on his confirmation. Mr. Quarles has had financial ties to some banks he could soon regulate. He married into Utah's Eccles family, which received a stake in Wells Fargo & Co. through the sale of a Utah bank in 2000. His financial disclosure, which was signed in June, said he owns Wells Fargo stock valued at more than $1 million and has exercised lines of credit of more than $1 million each from Wells Fargo and Morgan Stanley.
  Since 2014, he has helped manage the family's wealth at Cynosure Group, investing in financial companies including a Georgia bank holding company, Brand Group Holdings Inc. Mr. Quarles has pledged that if he is confirmed, he will unwind his bank holdings and pay back the loans to meet conflict-of-interest rules.

Jul 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

 - Oil prices edged lower but were still near 8-week highs, buoyed by a decline in U.S. inventories and OPEC's ongoing efforts to curb production.
- Gold steadied after retreating from a more than six-week high hit in the previous session, with investors looking for cues on the health of the U.S. economy from second-quarter gross domestic product data due later in the session.
- Copper prices drifted in early Asian trading with little movement in currency markets, a key driver over recent sessions.
- U.S. wheat remained steady and was poised to finish the week down 4 percent as fears of tighter global supplies waned despite the dry weather across North America.
- The dollar dipped against its major peers, its mild bounce earlier petering out ahead of the second quarter U.S. economic growth data due later in the session.

Jul 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices were sitting just below 8-week highs, buoyed by hopes that a steeper-than-expected decline in U.S. crude oil inventories will reduce global oversupply.
- Gold rose for a second day, hitting a six-week high, on rising demand for the yellow metal as the dollar dropped to a 13-month low after the U.S. Federal Reserve indicated that it would keep to a slow path of monetary tightening.  
- London copper hovered below two-year highs touched in the previous session, supported by a weaker dollar and increasingly upbeat views about China's economic growth and metals demand.
- U.S. wheat rose 1 percent to rebound from a near one-month low touched in the previous session, with a widely watched crop tour showing extensive damage to yields from recent hot, dry weather.
- Barrick Gold posts 2Q earnings and sales that beat analyst estimates, bolstered by higher gold and copper production despite recent concerns over its Tanzania operations. The Toronto-based gold producer posts EPS of 22c on $2.16B of revenue, compared with analysts' forecast of 18c on $2.03B. ABX also announces plans to begin discussions with the Tanzanian government next week about the concentrate export ban, which slashed earnings of Acacia Mining, a company Barrick holds a 64% stake in.
- Barrick says production at its Bulyanhulu gold mine in Tanzania may not be sustainable after Sept. 30 because of the rate of cash outflow during an export ban on some of the company's gold and other mineral concentrate production in the country. Barrick owns three gold mines in Tanzania through its 64% owned Acacia Mining. Tanzania stopped exports at two of the mines earlier this year amid a tax dispute. Barrick said it would evaluate its gold production guidance if Acacia revises its annual outlook. Acacia accounts for about 10% of Barrick's 2017 gold production guidance.
- Tullow's chief executive sees limited effect in the short run from a move by European countries to phase out the use of the combustion engine. The UK is the latest country to plan a ban on new diesel and petrol cars after 2040. France and Norway have proposed similar measures. "We are going to see a move towards greener more electric vehicles in the coming decade," says the oil and gas exploration company's CEO, Paul McDade. "But you know if you look at the global use of hydrocarbons, personal transports are quite a small percentage of the overall." According to the Energy Information Administration, transportation was 29% of the share of energy used in the US in 2016, and petroleum products provided about 92% of the total energy for the sector.
- United States Steel isn't concerned that the Trump Administration is taking its time in deciding whether to impose more extensive duties on imported steel. Commerce Secretary, Wilbur Ross had earlier predicted the government's investigation would be completed by the end of June. X's CEO David Burritt says opponents of tariffs have stepped up their lobbying, but he remains confident the administration will "go broad and go deep," in imposing tariffs to discourage steel imports. US steel manufacturers argue that discounted steel from foreign countries weakens their ability to supply steel for national security purposes. "This administration understands what's at stake here," he tells analysts during a conference call. X up 8% at $26.43 after reporting better-than-expected 2Q results late Tuesday.
- Brazil's central bank will likely cut its Selic rate to 9.25% from 10.25% today, but it shouldn't, says economist Paulo Nepomuceno. He thinks the bank should make a smaller cut, to 9.5% given the uncertainties stemming from the country's political crisis. President Temer is at risk of being suspended to stand trial for corruption, in which case the future of his fiscal-austerity agenda will be up in the air. "Any basic scenario for Brazil today must include four of five possibilities," Nepomuceno says. So, he argues the central bank should slow down now and perhaps resume full-point trimming at its Sep. 6 meeting.
- Uncertainty over the fate of the North American Free Trade Agreement is already hurting US exports to Mexico, an American farm group told lawmakers. "We have strong but unconfirmed evidence that Mexico is slated to purchase between seven and eight cargoes of corn from South America beginning in August and September," Floyd Gaibler, trade director at the US Grains Council, told the House Agriculture Committee. "Given the political uncertainty, our customs have told us...they will resort to the more volatile and risky spot market."
- Anthem says that if it doesn't get more certainty about the future of the ACA marketplaces quickly, it will "further narrow our level of participation," in exchanges. During the 2Q earnings call, CEO Joseph Swedish strongly emphasizes the need for an answer about federal cost-sharing reduction payments and reiterates that without them the insurer may need rates that are around 18% to 20% above the increases it's already requesting, and some markets may not be able to sustain such hikes. He says "time is of the essence," and ANTM hopes for a decision on the payments at least in September. The insurer has announced it will exit the exchanges in three of the 14 states where it currently sells those plans.
- General Dynamics CEO Phebe Novakovic says the much-touted boost in Pentagon spending is taking longer than expected, a function of the slow congressional budget approval process and delays in appointing key DoD officials. "Both are proceeding more slowly than we thought might happen," she says on the 2Q call, echoing private grumblings from fellow defense executives. Empty Pentagon offices have made it tougher to process some contract awards. GD shares down 2.6% to $198.12 after a mixed 2Q, including a narrow beat on profit and 2017 guidance in line with expectations.
- EUR/USD falls 0.1% to $1.1642 as the U.S. dollar strengthens after the Senate finally passed a procedural motion to open debate on repealing and replacing Obamacare. But Rabobank says there's other news on the radar--U.S. and EU relations. The U.S. voted in favour of a bill that imposes new sanctions on Russia, Iran, and North Korea, the same bill that the EU has threatened will mean counter-measures. "It appears that U.S.-Russian relations are set to deteriorate further; U.S.-Iranian and U.S.-North Korean relations could not be much worse already, but what U.S.-EU relations will do remains to be seen," Rabobank says.

Jul 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices firmed to hold near eight-week highs hit in the previous session, on expectations of a drawdown in U.S. stocks and as a rise in shale oil production shows signs of slowing.
- Gold prices were steady as investors awaited a statement from the Federal Reserve for clues on the outlook for the U.S. central bank's monetary policy.
- London copper climbed to its highest in two years, as momentum from a weaker dollar and hopes that China will further ease its monetary policy helped fuel chart-based buys.
- U.S. wheat edged higher after earlier hitting a near one-month low, though gains were curbed by easing fears of tight supplies as a result of recent dry weather.
- Drama over Senate health-care legislation may put the shares of health-care companies back on a rollercoaster. "Expect high volatility and pressure on hospital multiples, and the same volatility with some relief rallies for UNH [UnitedHealth] should it appear that something actually could get passed," suggests Sheryl Skolnick of Mizuho. Hospital shares will likely be affected by investors' nervousness about the likelihood of Medicaid cutbacks. Insurers like UNH could see a rally if it appears the Affordable Care Act's insurance tax is likely to get repealed. But insurers with big Medicaid businesses could see risks similar to those for hospital stocks, and those with a significant position in the ACA's marketplaces may also find their shares sliding if legislation doesn't include provisions to steady exchanges.
- Echoing the views of health insurers, the American Academy of Actuaries push Republicans in the Senate, now debating health-care legislation, to include measures that would stabilize insurance marketplaces next year. In a statement, the actuaries said lawmakers need to fund federal cost-sharing payments, enforce the individual mandate that requires most Americans to have insurance coverage and boost funding "aimed at lowering premiums," likely through a program such as reinsurance. But it's far from clear that the Senate's current direction will lead toward such provisions -- staffers say Republicans are considering a "skinny repeal" that would strike the mandate but do little else.
- Even limited sanctions against Venezuela could disrupt the country's oil output and result in higher crude prices, Barclays analysts say. A sharp disruption could raise oil prices at least $5 to $7 a barrel if it were to last more than a few months. "It may be just the opportunity OPEC needs to exit its current strategy," Barclays says. Still, close ties between the US and Venezuelan oil industries mean there's reason to think there won't be any drastic moves. "In contrast to the energy-related sanctions imposed on Russia and Iran, the more entrenched connections between US companies and consumers and the Venezuelan oil industry lead us to believe that the US administration will take a cautious approach," Barclays says.
- The new premier of British Columbia, John Horgan, says it's "critically important" Canadian PM Justin Trudeau and Trump reach a deal regarding softwood-lumber trade before talks to revamp Nafta begin in earnest next month. "We need to get it off the table," says Horgan, who became BC premier last week. BC is Canada's largest producer of softwood lumber, which is used mostly in the construction of homes. US has imposed tariffs of up to 30% on imported Canadian softwood lumber in the latest flareup in decades-long US-Canada trade spat. Letting the lumber row drag any longer threatens to complicate the Nafta negotiations, trade experts in US and Canada have warned. Horgan is traveling to Washington this week, in which he will meet with Commerce Secretary Wilbur Ross, who is said to be keen to strike a
lumber deal.
- AK Steel CEO Kirk Reich says on 2Q call that recent steel price increases reflect higher costs of inputs such as coal and scrap rather than buyer nervousness about the potential impact of the US trade probe into imports. AKS up 12%--reversing its decline over the past six weeks--after forecast beating 2Q. Company also yet to decide whether to reopen an idled plant, which could depend in part on the Section 232 investigation into imports. US Steel up 5% ahead of its own report after the close, with Nucor 1.9% higher and TimkenSteel gaining
- The Trump administration's objectives for renegotiating the North American Free Trade Agreement match with, and in some aspects represent, a more positive scenario than Morgan Stanley's Mexico bull case. The objectives, released last week, include preserving tariff-free trade in the Nafta zone, plus new regulations to govern ecommerce, as well as labor and environmental rules inspired by the scuttled Trans-Pacific Partnership. In addition, a US proposal to lower corporate taxes could boost the manufacturing sectors in both countries, Morgan Stanley says. The blueprint for a Nafta revision, which is much softer than many in Mexico had feared, supports a bullish view on the Mexican peso, emerging market stocks, bonds and sovereign debt, "which (puts) Mexico in the sweet spot until the end of the year at least," the bank writes.
- Eli Lilly CEO David Ricks says he expects President Donald Trump to issue an executive order targeting drug prices. Ricks tells WSJ he doesn't know exactly what Trump has in store, but hopes it will include several items the pharmaceutical industry has pushed for: lowering patients' out-of-pocket costs by requiring insurers to pass through rebates that drug makers pay, encouraging more "outcomes-based" contracts that tie the price of drugs to how well they work in patients and funding FDA efforts to speed up approval of generic drugs to increase competition. Noticeably absent, however, are measures that critics of high drug prices say would be more effective, such as allowing the federal Medicare program to directly negotiate prices.
- Centene's higher-than-expected earnings reflect a bump from its Affordable Care Act exchange business. CEO Michael Neidorff says company leaders now expect that "margins will be at the high end of our guidance range." Centene says it had around 1.1 million exchange enrollees at the end of June and their demographics met its expectations. Centene reiterates its plan to expand its exchange business, saying that it expects to do well growing in places such as Missouri where it has a Medicaid presence. The company also says it likes being the only exchange insurer in a region, which ensures they have all the risk mix of the population. Centene says that "90% or more" of its exchange enrollees get federal subsidies. CNC gains 1.7% to $85.61.
- Centene says it expects "headline noise" around Republicans' legislative efforts on health care will persist, and says they are "a moving target with a long way to play out." The company lays out its priorities for a bill, which include repealing the health-insurance tax, a reinsurance program and a strong push for continuation of the federal cost-sharing reduction payments. CEO Michael Neidorff says that at the state and federal level, government "leadership understands that to eliminate the CSRs is to create havoc in the insured marketplace." He believes that "there is not the appetite" to strip health coverage from poor people and "in the end, they will do the right thing for this vulnerable population." Centene says it hasn't seen any slowdown of the Medicaid contract pipeline amid the legislative battle.
- As Venezuela's political crisis reaches a boiling point, Eurasia Group says US oil sanctions look "increasingly likely." President Maduro will go ahead with a Constituent Assembly vote Sunday despite protests from the opposition and international community, it says, and in doing so will cross a "presidential red line" set by Trump. "Among the menu of options, a ban on US imports of Venezuela crude oil is more likely than also sanctioning financial transactions, as the latter would have an impact on US jobs owing to the effect it would have on US-based service providers like Halliburton and Weatherford," the firm says.
- Companies and unions remained a small part of overall political spending in 2016, the Conference Board's Committee for Economic Development reports. Individuals made two thirds of contributions to Super PACs, while corporations gave 5.9%, mostly from closely held firms; unions gave 5.8%; and trade associations gave 0.8%. Direct spending by trade groups amounted to about 0.4% of all spending for 2016, while union direct spending made up 0.3%. Direct spending by "social welfare" groups that can hide their donors amounted to about 2%. The findings mirror a preliminary study of data through July 31 last year.
- Trump's criticism of the Washington Post have taken a turn toward another company also in newspaper owner Jeff Bezos' portfolio. "Is Fake News Washington Post being used as a lobbyist weapon against Congress to keep Politicians from looking into Amazon no-tax monopoly?" he muses. Bezos owns the Post separately from AMZN. On April 1, AMZN expanded its sales-tax collection to any of the remaining 45 states which have such levies that it wasn't already doing so in.

Jul 25 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices extended gains after Saudi Arabia pledged to curb exports from next month and OPEC called on several members to boost compliance with production cuts to help rein in global oversupply and tackle flagging prices.
- Gold prices held steady, after hitting a one-month high in the previous session, buoyed by political uncertainty in the United States, as investors awaited the Federal Reserve meeting for clues on monetary policy.
- London copper struck its highest level since mid February after a unexpected strength in China's economy and a weaker dollar fanned upside technical momentum.
- U.S. soybeans rose as much as 2 percent to hit a near two-week high after the U.S. Department of Agriculture said more of the crop had been damaged by recent dry weather than expected.
- Relations between the US and Mexican governments might be warming a bit, but with Nafta's renegotiation slated to begin in less than a month, most Mexicans view President Trump very darkly, a new opinion survey suggests. Nearly 9 of every 10 Mexicans view Trump unfavorably and only 3% favorably, according to the in-person poll of 1,200 people nationwide conducted for the El Financiero newspaper. The poll has a 2.8% margin of error.
- The benchmark IPC index closes up 0.2% at 51,665.6 points, while the Mexican peso weakens against the US dollar, as investors adopt a cautious stance ahead of this week's US Federal Reserve policy decision. America Movil gains 2.1%, while bread-maker Bimbo closes up 1.6%. The peso, closes in Mexico City at 17.7025 to the dollar, up from 17.6480 Friday. The Mexican currency recently hit a 14-month high against the greenback as the Trump administration softened its stance on Nafta.
- There's a generational divide when it comes to how Americans feel about CEOs speaking out on social and political issues, according to a new report by Weber Shandwick. Among the more than 1,000 US adults surveyed by the communications firm, 47% of those between ages 18 and 36 said CEOs have a responsibility to speak up on issues important to society, while only 28% of Gen-Xers and Baby Boomers agreed. Millennials also outpaced older generations in their awareness of CEO activism and their likelihood of buying from a company whose CEO speaks out on social issues--51% said they'd buy from a business led by someone who takes a position they agree with.
- Venezuelans who are against President Maduro are also widely opposed to economic sanctions that the Trump administration is threatening to level against Caracas unless it halts plans to rewrite the constitution, Torino Capital says. It cites a poll it conducted in partnership with Venezuelan pollster Datanalisis, finding 52% of opposition supporters against potential US sanctions. The poll also finds 63% of respondents saying Maduro's detractors should not promote US sanctions as a way to topple the government. A little more than half rejected the opposition's lobbying efforts to convince international financial institutions to blacklist Venezuela. While oil sanctions could be devastating for the Maduro administration, analysts warn they could also backfire by further crimping food imports and providing fuel for Maduro's routine accusations of a Washington-led coup.
- Venezuela's opposition begins the second and final week of what it calls "Zero Hour," as it tries with street protests to convince President Maduro to cancel a planned Sunday vote that could lead to a new Constitution. US President Trump is threatening sanctions that may include an oil embargo if Maduro doesn't cancel the vote, which many view as an attempt to create a permanent dictatorship. In a weekend Twitter message, Maduro indicated a willingness for a last-minute deal, saying "I recognize the opposition, and I know they have political strength." Saying his message was aimed specifically for opposition leader Julio Borges, Maduro urged "a peace deal."
- Fresh political issues in DC, and its resultant impact on the dollar in recent days, should soon take a back seat, says Michael McCarthy at CMC Markets. Data from the US and Japan this week "could dominate market thinking." Release include both economic and a pickup in the US earnings season. Then, of course, there's the FOMC. "The outlook for markets may change considerably, especially if recent US economic weakness persists."
- As the euro hits fresh 2-year highs versus the dollar, helping not just is US political worries but the prospect of ECB easing back on bond-buying, says Toshihiko Sakai at Mitsubishi UFJ. He notes ECB officials have said nothing regarding the common currency's strength, fueling speculation for central-bank tapering there. The euro got as high as $1.1684, according to EBS, and is currently around $1.1675, up 0.1% from late-Friday levels in New York.

Jul 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices gained after a steep fall the session before, buoyed by expectations that a joint OPEC and non-OPEC meeting later in the day may address rising output in Nigeria and Libya, two OPEC members so far exempt from a push to cut production.
- Gold prices touched their highest in four weeks, supported by political uncertainty in the United States that pushed the dollar to its lowest in over a year.
- London copper was marking time near its highest since early March on Monday ahead of the release of a spate of global manufacturing reports, underpinned by extended weakness in the dollar and prospects of tighter mine supply.
- U.S. corn futures fell 2 percent to hit a one-week low as forecasts for rain eased fears of potential production losses.
- Any US sanctions against Venezuela's oil industry will increase the country's chance of a debt default, Venezuelan bond traders say. Venezuela has resorted to ad hoc measures like drastically reducing its food imports to make its debt payments. The US is a key source of cash for Caracas, buying about half of Venezuela's exports. While the South American country in recent years has increased oil shipments to Asia, it can't rely on allies like China because much of the oil Venezuela sends there is used to pay down existing debt, which would not provide immediate funds for the cash-strapped Maduro administration. Lowering oil revenues would also further hinder President Maduro's ability to continue providing economic benefits to government factions.
- With the Trump administration threatening sanctions against the country, Venezuela's government seems more likely now to deliver on the creation of a so-called constituent assembly tasked with rewriting the constitution, Eurasia Group says. For President Nicolas Maduro, "backing down now would look like he is kowtowing to Washington," the risk consultancy says. Venezuela has not been a priority for the Trump administration, Eurasia notes. But while targeted sanctions against individual officials are likely to come first, Trump may not shy away from greater sanctions against Venezuela's oil industry. "He will likely deliver on those threats if the threat alone doesn't work," it adds.
- Luis Almagro, General Secretary of the Organization of American States, says he backs US plans to level targeted sanctions against Venezuelan officials, but doubts the measure will deter the South American government from going through with its controversial effort to rewrite the constitution. Almagro told that to US senators this week as the Trump administration warns of upcoming penalties against Venezuelan individuals and possibly even stricter measures to curtail the oil-export revenues Venezuela depends on. Florida Senator Marco Rubio has been among the loudest of US voices calling for tough sanctions against Venezuela but it remains unclear if Washington will implement any kind of oil embargo as Venezuela remains the US's third-largest foreign supplier.
- ING says U.S. dollar weakness is "economically unjustified," but more falls are likely because of U.S. political concerns. The latest in a series of bad news to come out of Washington relates to Robert Mueller's investigation of Russian inteference in last year's election, with media reports suggesting it could extend to President Donald Trump's finances. "In this environment, it's hard to see anything but the dollar staying on the back foot," says ING. The U.S. dollar is down against the euro and sterling on Friday, with EUR/USD up 0.1% and GBP/USD up 0.2%, although EUR/USD is also driven by broad euro strength.
- Up modestly by midday in Asian trading, the dollar has slid to session lows as European action has gotten under way as the currency continues to get roughed up. The WSJ Dollar Index set a fresh 9 1/2-month low Thursday as the euro logged its best level in late New York trading since January 2015 at $1.1632. The euro is now above $1.1665 while the WSJ Index is off 0.1%. Trump investigations continue to weigh, analysts say. "US political uncertainty is now having an outright dampening effect on investor sentiment," says Viraj Patel, forex strategist at ING in London. ANZ strategist Irene Cheung adds White House issues "could draw its focus away from economic reforms."
- Only a realistic possibility of an impeachment in the US could significantly derail stock markets there, says CMC Markets' Ric Spooner. Still, he cautions that possibility is still a long way off. Meanwhile, disappointment on Trump's stalled policy agenda is already priced in, contends Spooner, even as US stocks remain at record highs. "I think stock markets haven't in my view got much expectations that there will be any tax reform and stimulus."
- Nucor's CEO says there's strong support from the Trump administration for sweeping tariffs on imported steel, even after the administration missed its self-imposed deadline for completing its investigation by the end of June. "Our elected officials and the administration are beginning to have a better understanding of the consequences of imports." John Ferriola tells analysts during a conference call "What we are advocating in Washington is a very broad-based [tariff] ruling that will include virtually all of the steel products." The administration is
considering invoking a little-used provision of the 1960s-vintage Trade Expansion Act permitting tariffs on imports if they undermine national security. US steel companies argue that a flood of cheap foreign steel has weakened their ability to provide steel for defense and national security infrastructure.

Jul 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices were little changed ahead of a key meeting of major oil producing nations next week, sitting below the $50 per barrel level that was briefly breached for the first time in 6 weeks in the previous session.  
- Gold held steady near a three-week high and was on track for a second consecutive weekly gain, underpinned by a weaker dollar and U.S. political uncertainty.
- A weak dollar helped lift copper prices in early Asian trading, reversing an overnight dip.
- U.S. corn edged lower, but the grain was on track to post a weekly gain of around 3.5 pct as forecasts for continued adverse weather stoked fears of production losses.
- Up modestly by midday in Asian trading, the dollar has slid to session lows as European action has gotten under way as the currency continues to get roughed up. The WSJ Dollar Index set a fresh 9 1/2-month low Thursday as the euro logged its best level in late New York trading since January 2015 at $1.1632. The euro is now above $1.1665 while the WSJ Index is off 0.1%. Trump investigations continue to weigh, analysts say. "US political uncertainty is now having an outright dampening effect on investor sentiment," says Viraj Patel, forex strategist at ING in London. ANZ strategist Irene Cheung adds White House issues "could draw its focus away from economic reforms."
- Only a realistic possibility of an impeachment in the US could significantly derail stock markets there, says CMC Markets' Ric Spooner. Still, he cautions that possibility is still a long way off. Meanwhile, disappointment on Trump's stalled policy agenda is already priced in, contends Spooner, even as US stocks remain at record highs. "I think stock markets haven't in my view got much expectations that there will be any tax reform and stimulus."
- Nucor's CEO says there's strong support from the Trump administration for sweeping tariffs on imported steel, even after the administration missed its self-imposed deadline for completing its investigation by the end of June. "Our elected officials and the administration are beginning to have a better understanding of the consequences of imports." John Ferriola tells analysts during a conference call "What we are advocating in Washington is a very broad-based [tariff] ruling that will include virtually all of the steel products." The administration is
considering invoking a little-used provision of the 1960s-vintage Trade Expansion Act permitting tariffs on imports if they undermine national security. US steel companies argue that a flood of cheap foreign steel has weakened their ability to provide steel for defense and national security infrastructure.
- The CEOs of drug makers Merck and Pfizer and glass maker Corning appeared at the White House with President Trump today to announce new GLW glass packaging for drugs and vaccines, vials that MRK and PFE helped develop and may use for some of their products. The companies say the new glass packaging has improved strength, durability and damage resistance compared with older products. Development of the product predates the Trump Administration, but the companies said a White House American innovation office facilitated the collaboration. Trump tested the new Corning vial by using a machine to apply pressure to it. It didn't break.
- Former Utah Gov Jon Huntsman would step down from Caterpillar's board if is he confirmed as U.S. ambassador to Russia, the company said. The White House announced Mr. Huntsman's nomination on Tuesday. "His service as a trade ambassador, a popular governor of Utah and his ambassadorships to Singapore and China provide the experience needed in a complex global environment," CAT said. "As a member of Caterpillar's board of directors, Gov. Huntsman has offered invaluable wisdom to our executives."
- United Auto Workers President Dennis Williams says the union will launch its own "Buy American" campaign soon, starting with a public contest around Labor Day to generate ideas for radio, television and social media spots. The UAW, whose anti-trade stance jibes with President Trump's America first agenda, has long pushed for consumers to buy American made products to support local jobs. Williams, speaking to reporters in Detroit, points to the Trump Administration's "Made In America" initiative which started this week highlighting US-built products as evidence of the buzz around the topic right now. "Consumers have power," Williams says. "They can't be lazy about this. If they want America to flourish and bring back good jobs, they have to be a part of this, as well."
- Canada PM Justin Trudeau enjoys a sizable lead over his political opponents and his government's approval rating is close to 50%, in part because Canadians are more confident about the economy, according to a poll from Ottawa-based Abacus Data. Nearing the Liberal government's two-year anniversary, the poll says 43% would vote Liberal if the election were held today, versus 31% for the Conservative Party. The approval rating of the Liberal government stands at 48%, compared with a 34% disapproval rating. Abacus says Trudeau's relatively strong performance is tied to country's improving economy, which in 1Q posted the best growth among G7, and prompted BoC to raise rates for first time in 7 years.
- The dollar extends losses after Bloomberg reports that the probe into ties between the Donald Trump campaign and Russia is now looking at transactions involving Trump's businesses, citing people familiar with the matter. The ICE Dollar Index is down 0.7%, compared to a decline of 0.2% before the story was released. The dollar has extended losses against the Japanese yen and euro. Jefferies' Brad Bechtel said the report "just increases the uncertainty" surrounding the administration and its pro-growth agenda.
- Gold prices reversed losses and are now up 0.4% at $1,246.40 a troy ounce after a Bloomberg report that the US special counsel investigating ties between Donald Trump's campaign and Russia in last year's election will also review transactions involving Trump's businesses as well as those of his associates. The dollar fell on the news as well, further bolstering gold's gains.
- For the first time in nearly a decade, members of the House and Senate aren't tussling over amendments seeking to benefit competing technologies intended to save flight data and cockpit voice recordings in the event of airliner accidents. Legislation to reauthorize the Federal Aviation Administration's powers past September calls for the agency, rather than lawmakers, to determine the benefits of various approaches. By the end of the decade, Airbus is committed to start installing what are called deployable recorders -- designed to pop out of an aircraft's tail in a crash -- on the assembly line. Rival Boeing and some FAA managers, who consider such systems unnecessary and prone to potentially hazardous malfunctions, instead favor streaming data off planes. International safety standards permit options.
- Indian outsourcer Wipro posted flat net profit for the quarter ended June 30 as it, like its local peers, faces challenges from a changing technological landscape and scrutiny of its use of the U.S.'s skilled-worker visa program. Net profit for was 20.8 billion rupees ($322 million), compared with 20.5 billion rupees a year ago. While Indian outsourcers are trying to offer clients the more-sophisticated services they seek, President Trump has criticized the companies' use of the H-1B program, on which they depend to send workers to the U.S., their
most important market.
- Gold prices are slightly lower, down 0.26% at $1,237.72 a troy ounce, coming off gains made in the past week amid a minor rally in the U.S. dollar. That decline results from golds antagonistic relationship with the dollar, which is up after traders bought into the currency after it had been weakened by a week of politics-driven pressure. The WSJ Dollar Index, which measures the dollar against a basket of other currencies, is up 0.23% at 87.23, although remains 0.78% down on-the-week. The dollar's earlier losses came after traders questioned President Donald Trump's ability to push through his legislative agenda, said Mr. Govett, pointing to the failure of Senate Republicans to repeal and replace Obamacare.

Jul 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices held steady, hanging on to gains made the previous session when falling U.S. crude stocks lifted the market, as analysts offered mixed supply outlooks for the commodity ahead of a key OPEC meeting next week.
- Gold prices edged lower, with the dollar steady as markets looked to a meeting of the European Central Bank later in the day for clues on the outlook for its stimulus programme.
- London copper marked time near its highest since early March, underpinned by brighter prospects for China's economy but awaiting a U.S. jobs report for cues on near-term direction.
- U.S. wheat fell more than 1 percent to hit a three-week low, weighed down by ample global supplies despite lingering fears for high quality crops.
- The euro held near a 14-month high against the dollar as investors look to hints from the European Central Bank on tapering of its stimulus, while the yen barely budged after the Bank of Japan kept monetary policy on hold.
The fate of Japan's monetary policy is now dependant on Trump and the US economy, some analysts contend. "If Trump makes no progress in his economic policy (because of scandals), the US economy could start weakening again," notes Mari Iwashita, chief market economist at SMBC Friend Securities. She adds expectations for additional BoJ easing could heighten if such concerns mount. "Because the Japanese economy depends on external demand, it will likely get hit if the US economy begins staggering."
- Though the Nikkei remains above 20000 this morning, investors are looking for downside protection amid the sharp drop in Abe's support, says Kyoya Okazawa, head of global markets for BNP Paribas in Japan. "His weak political capital could impact markets." Among investor concerns is that deflation will return, the yen will appreciate and the Nikkei will see corrections. These are potential tail risks, Okazawa says, although if Abe was to resign "the magnitude would be the same as Brexit or Trump's election."
- In the first half, Japan's trade surplus against the US dropped 5.4% on year to Y3.2 trillion ($28.6 billion). The surplus also shrank in 2H last year from a year earlier, the Ministry of Finance says. Still, the surplus has come under the spotlight after President Donald Trump named Japan one of the countries contributing to the US trade deficit, along with China. Japanese exports to the US rose 2.9% in the first half from a year earlier, backed by demand for SUVs and automotive components, while imports increased 10.7%, as Japan imported more liquified natural gas and grains.
- Leaders of the Air Line Pilots Association are stepping up the fight against legislative proposals to reduce mandatory flight-time requirements for newly hired first officers. The Senate Commerce Committee already has voted to allow more new copilots to start flying passengers with less than 1,500 hours in their log books. "ALPA will not relent in our drive to beat back" such provisions, says Tim Canoll, the union's president. The House is expected to side with ALPA, and union officials are increasingly optimistic of eventually reaching a compromise with GOP Senate leaders. Senate Minority Leader Charles Schumer has vowed to block any bill weakening the 1,500-hour requirement, which currently can be reduced only for ex-military pilots and college graduates.
- Proposals for an import tariff won't prompt auto makers to shift production to the US unless the duty is set above 40%, the author of a new study says. A border adjustment tax of just 15% would boost average vehicle production costs by $1,025, but not shift manufacturing from Mexico, the study says. "To force people to change the supply chain pro-actively, it's probably [a border adjustment tax rate of] 40-50%," Xavier Mosquet, a managing director at Boston Consulting, tells reporters. The study, which was commissioned by the Motor & equipment Manufacturing Association, an industry lobby, finds auto makers would pass along costs with higher sticker prices and reduced advanced technology content in vehicles.
- Two of the Trump administration's top financial nominees will move closer to Senate confirmation next week. The Senate Banking Committee will hold a July 27 hearing on the nominations of Randal Quarles to become the Fed's point man on financial regulation and Joseph Otting to head the Office of the Comptroller of Currency, according to a Senate aide. A spokewoman for the committee, which has yet to publicly announce the hearing, declined to comment. The hearing is typically followed by a committee vote to confirm nominees.
- United Technologies says layoffs for its Carrier plant in Indianapolis are continuing as planned. Some media outlets recently questioned whether UTX was living up to its fall deal with Trump, who spent months criticizing plans to move more than 2,000 jobs to Mexico. UTX agreed to a $7M incentive package from the state to keep about 800 jobs in the state with the remainder going to Mexico. It will also have 300 headquarters and engineering jobs still in the state. The layoffs will hit 600 workers over the next several months with about half of them leaving tomorrow.
- Rep. Debbie Dingell (D., Mich.) sounds an urgent need to keep the US ahead on developing self-driving cars during a legislation markup today. "Automated vehicles are going to be developed whether we like it or not," she says, adding that the question is whether the US will cede testing and development advances to China, Japan or the European Union. Auto makers, including GM and Ford in her home state, contend that onerous regulations and conflicting rules could send testing elsewhere. She takes pains to portray the current bill as putting "safety first and foremost as it must." The bill requires companies to submit safety certification assessments to regulators, but forbids the US Transportation Secretary from conditioning deployment or testing of automated vehicles on review of those assessments.
- Some Democrats on House Energy and Commerce subcommittee look to slow self-driving car legislation, flagging concerns over curtailing states' regulatory power. Democrats urge Republicans delay full-committee consideration of bill set for next week until bi-partisan deals are reached on those aspects. "I cannot endorse this legislation" absent bi-partisan agreement, says Rep Jan Schakowsky (D, Ill) during subcommittee markup. Bill aims to limit states' ability to enact patchwork of regulations that would potentially conflict with US rules, a key provision lobbied for by auto makers and tech companies. Bill also aims to buttress National Highway Traffic Safety Administration's ability to exempt vehicles from U.S. safety standards with demonstration safety not being sacrificed. Bill heads to House floor in September at earliest.
- Morgan Stanley CEO James Gorman said in his remarks on the Wall Street firm's earnings call that "US corporate taxes are too high." He added that "if the administration and Congress can achieve a sensible realignment of tax rates," with other developed economies, it would be a "clear positive for our business and corporate America." Earlier, at a recent industry conference, Gorman said that reducing the corporate tax rate from 35% to 25% would result in a 15% increase to MS's earnings.
- U.S. Senator John McCain introduces legislation to repeal the Jones Act, which requires all cargo ships travelling between U.S. ports to be American. The Act, which dates to 1920, mandates that such vessels be U.S.-made, U.S.-flagged and U.S. owned as well as being crewed by .U.S. citizens. This means such vessels operate at a cost at least three times higher than non-U.S. ships, which is passed down to cargo owners and consumers. "I have long advocated the repeal of the Jones Act, an archaic law that hinders free trade, stifles the economy and ultimately hurts consumers," McCain said after introducing his so-called Open America's Waters act of 2017. But supporters of the Jones Act have repeatedly fenced off such efforts citing national security risks and large scale layoffs at American shipbuilding yards.

Jul 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices fell after a rise in U.S. crude inventories and ongoing high output from OPEC producers revived concerns of a fuel supply overhang.
- Gold prices held steady, not far from the over two-week highs hit in the previous session, as the dollar crept up from multi-month lows even as fading prospects of a U.S. monetary tightening continued to pressure the greenback.
- London copper consolidated near four-and-a-half month highs, weighed down by a slightly firmer dollar but supported by a pick-up in China's industrial activity that helped drive second-quarter economic growth.
- U.S. corn edged lower, though losses were checked by fears that dry weather across a key producing region could stoke further production losses.
- Canada's chief envoy in Washington, David MacNaughton, says a dispute-settlement mechanism must be part of a renegotiated Nafta. The Trump administration is seeking to repeal the scheme in place, known as Chapter 19, so the ambassador's comments have already emerged as significant disagreement between the US and Canada ahead of next month's Nafta talks. "We think that it's critical to have some kind of a dispute resolution mechanism incorporated," MacNaughton said in an interview with Canada's CTV Network. "Whether or not that dispute resolution mechanism can be improved or modernized, I think we're up for discussions around that. But there needs to be some kind of a dispute resolution mechanism."
- Energy Secretary Rick Perry says at a Washington press conference a cleaner environment and a strong, prosperous economy will go hand in hand by using an "all of the above" energy approach that includes oil, clean-burning coal, natural gas, renewables and more. Speaking with the head of the International Energy Agency, Perry says the US won't chart the renewable-centric course proffered by allies like Germany. "Germany, in its current share of renewable energy, was driven to a surcharge in electric rates," he says. "German households now pay the highest electricity prices in Europe, as much as three times what we pay in the US."
- Harley-Davidson's disappointing 2Q retail sales and layoff announcement are dimming prospects of a so-called Trump bump for the Milwaukee-based motorcycle maker. After Trump's election last year, analysts thought HOG could benefit from a proposed border tax on imports and more purchases from construction workers who benefit from plans to overhaul the nation's aging infrastructure. HOG executives and union leaders have visited the White House as Trump mulled ways to boost US manufacturing and promote American-made products. "In terms of perception that would clearly benefit a company like Harley-Davidson, but clearly we're not seeing it," Wedbush Securities analyst James Hardiman says. Plans for a border tax and an overhaul of the US tax code have yet to materialize. Nor has an infrastructure-spending plan. HOG declined to immediately elaborate on how many workers it would lay off and at which US factories. HOG falls 8.1% to $47.75.
- The Trump administration didn't specify a clear plan for the investor arbitration system in Nafta when it published objectives for the pact's renegotiation on Monday. Today, House lawmakers got an earful from companies that want to keep the controversial provision, known as investor-state dispute settlement, or ISDS. "Even if ISDS is never used, it serves as an important insurance policy," said Dennis Arriola, executive vice president for corporate strategy at Sempra Energy. The chief executive of Kansas City Southern, Patrick Ottensmeyer, said his company needs the arbitration system to protect his firm's $4.5B in Mexican investments.
- Venezuelan bonds are steady after President Trump's threat late Monday to issue additional sanctions against the government if it makes good on promises to re-draft the constitution with the help of a new assembly July 30. Stuart Culverhouse of Exotix says extending existing sanctions--which now are mainly targeted at individuals--to include oil exports could precipitate a default "although it may not be immediate as the government finds ways around them and relies more on its friends." Bond prices would drop in the case of a default but prices will find support with the anticipation of an orderly restructuring under a new market friendly regime, he says, with recovery value at 70 cents on the dollar in a best case scenario.
- The euro and the Australian dollar are major beneficiaries of U.S. dollar weakness, both reaching 14-month highs. Unless U.S. data improve, the euro is headed for $1.16 and the Australian dollar for $0.80, says Boris Schlossberg, Managing Director of FX Strategy at BK Asset Management. The euro rises 0.85% to $1.1585; the Australian dollar jumps 1.56% to $0.7924, having earlier hit $0.7943, according to Factset. The U.S. dollar dropped after two Republican senators withdrew support for the bill to replace Obamacare. Mr. Schlossberg says the news exacerbated "already negative" dollar sentiment. Reserve Bank of Australia minutes overnight also boosted the Australian dollar, with the RBA estimating a neutral nominal cash rate around 200 basis points above the current level.
- Many of the provisions to renegotiate Nafta released by the US on are vague, including rules of origin. Mexican officials have said that they are open to reviewing rules of origin, as long as proposed changes don't threaten to hurt investment by making it easier for manufacturers to bypass Mexico if they're unable to import certain components from outside the region to make products bound for the US.
- During a call with analysts, UnitedHealth CEO Stephen Hemsley generally steers clear of discussing the furor around Republicans' start-and-stop efforts to pass a broad health overhaul. He refers briefly to uncertainty around national and state policy as a headwind for 2018 but says "at this stage in the national conversation, speculation about any outcome here would be just that." He also reiterates the company's opposition to the Affordable Care Act's health-insurance tax, which he said was a specific headwind for next year and which he said would, if not cancelled, "further destabilize the market, which is already fragile." UNH reports 2Q earnings that came in ahead of expectations and revenue that was roughly in line. UHN off 0.8% to $185.04.
- A set of simpler provisions for labor markets within Nafta could become a key tool to garner support from Democrat lawmakers and US labor groups, Mexican observers say. Mexico's low wages and the wide wage disparities between the two countries have long been criticized by Nafta's detractors. "A labor agreement within Nafta would only have teeth if it includes trade sanctions and clear enforcement rules" that go beyond national government jurisdiction, said Carlos Heredia, an activist and professor of Mexico's CIDE university who has long opposed Nafta's labor provisions.
- The USTR's objectives for Nafta negotiations are positive for Mexico as the US seeks to maintain duty-free market access for industrial and other goods. "They obviously went along with a free-trade discourse," says Carlos Vejar, a trade attorney at Holland & Knight. "That means there is no intention to impose tariffs or go into what Mexico was always afraid of - of moving back into a tariff system," he adds. The peso is slightly stronger against the US dollar at 17.5240 in Mexico City, near a 14-month high, but several analysts express surprise there wasn't a bigger reaction. Still, the peso is up 26% from its record low hit in January.
- The Trump administration's goal of eliminating Nafta's dispute-settlement system-- which allows Canada and Mexico to challenge anti-dumping and countervailing duties imposed by Washington--could prove to be a "dealbreaker" for Canada's Liberal government says Ottawa-based trade consultancy Export Action Global. The firm thinks the system, also known in trade circles as the Chapter 19 provision, is a crucial component of Nafta because it ensures US law "cannot be applied in a protectionist manner to block otherwise fair two-way trade." The dispute-settlement mechanism was key for Canada when it reached the 1988 free-trade pact with the US, or Nafta's predecessor. "It was a dealbreaker a generation ago for Canada and remains so today," firm adds.
- US home builder confidence fell to the lowest level in eight months amid rising costs for materials, fallout from the Trump administration's trade policies. National Association of Home Builders housing market index slipped two points to 64 in July, the trade group says. That was the worst reading since November. "Market prices increased due to lumber trade policies," said NAHB Chief Economist Robert Dietz. The Trump administration in April proposed a 20% tariff on Canadian lumber imports and in June said it was considering another layer of duties, factors behind higher prices.

Jul 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices were stable, supported by strong consumption but weighed by ongoing high supplies from producer club OPEC and also the United States.
- Gold prices rose to a two-week high as the dollar dipped to multi-month lows amid fading prospects of further rate hikes by the U.S. Federal Reserve this year and doubts whether President Donald Trump would be able to push through healthcare reforms.  
- Copper prices edged up in early Asian trading, extending gains in the wake of strong Chinese economic data that boosted the outlook for metals demand.
- U.S. corn climbed 2 percent as forecasts for hot, dry weather across a key producing region stoked fears of further output losses.
- The Trump administration on Monday published its long-awaited negotiating objectives for a planned overhaul of the North American Free Trade Agreement, or Nafta. The objectives, required for a rewrite of the law, allow U.S. officials to begin formal talks with Canada and Mexico in as little as 30 days. The move also opens up what's expected to be a spirited debate in Congress, where majority votes would be needed in the House and Senate to pass any new deal. Here are some major takeaways:
- TPP By Another Name :
The Nafta objectives include a number of items already negotiated under the Trans-Pacific Partnership, which President Trump killed on his first full workday in the Oval Office. They include rules covering state-owned enterprises, e-commerce and financial services. These should be easy parts to negotiate, since all three nations already agreed to such measures under TPP.
- Environment and Labor :
The administration says it wants to make environmental and labor disputes subject to Nafta arbitration panels -- meaning that alleged violations can be punished by the imposition of tariffs. They would replace weak labor and environmental panels that were added to Nafta after the main accord was negotiated as a way to win congressional support for the trade pact. Businesses in all three countries are likely to object.
- Currency :
The administration wants to make Nafta the first U.S. trade pact to police "currency manipulation." That would be a big deal -- and one that may be easy to reach, because neither Canada nor Mexico face such accusations, which are usually leveled at Asian trading partners. The goal would be to establish this as precedent for future trade pacts.
- Tougher Enforcement :
One area where the plan does embrace the trade warrior agenda is a proposal to scrap a special Nafta provision that has made it easier for Canada and Mexico to avert U.S. trade sanctions, the so-called "Chapter 19 dispute settlement mechanism" that allows Nafta partners to challenge duties before a special Nafta tribunal available only to them. Canada in particular has made keeping Chapter 19 a priority. Chad Bown of the Peterson Institute for International Economics says the Trump administration's general focus on tougher enforcement will likely push Canada to dig in on keeping Chapter 19, making this one likely flashpoint of the talks.
- Investor Protection :
There is no provision of Nafta -- or other trade deals -- that irks critics more than the ability of investors to sue governments in arbitration panels over policies they deem antibusiness. A loss of sovereignty, the critics say. A necessary alternative to corrupt legal systems, counters business. The U.S. seeks a middle-ground that may not exist: The U.S. wouldn't eliminate the panels, but would constrain their power in the U.S.
- Who's Nafta For ?
The document does acknowledge some winners from Nafta -- notably "farmers and ranchers" who got "much needed market access" from the pact. That's a nod to the (heavily Republican) farm-state lawmakers who have made clear to Mr.Trump he'd better not mess with their success. It largely portrays the pact as a raw deal for "American workers," slammed by factories lost due to outsourcing. The broad goal is to help companies "grow their exports." Left unmentioned: American consumers, who, economists say, have gained tremendously from the pact through cheaper prices and greater variety.
- Which Trump Faction Won ?
All Trump trade pronouncements are scrutinized for which faction of his advisers won: the economic nationalists who shaped his campaign platform, or the globalists who run his economic team. The quick Kremlinology says it's the globalists, led by Gary Cohn, the former Goldman Sachs Group Inc. president running the White House National Economic Council. That said, the battle isn't over. Many of the provisions remain vague. And Mr. Trump has reserved the right to pull out altogether -- the goal of his nationalist advisers -- if he's not pleased with the final result.

Jul 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices rose, supported by a slowdown in the growth of rigs looking for crude in the United States and because of strong refinery demand from China.
- Gold rose as investors sought higher returns in alternative asset classes as the outlook for further interest rate hikes in the United States dimmed following softer U.S. economic data last week that also pushed the dollar to multi-month lows.
- London copper edged up to its highest in two weeks, supported by a weaker dollar and an upbeat second quarter for China's economy which brightened demand prospects for metals.
- U.S. wheat fell 1 percent to hit a 17-day low as rains across a key producing region weighed on prices, though forecasts for continued dry weather provided a floor to losses.

Jul 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil markets dipped, pulled down by high fuel inventories and improving industry efficiency, but were still on track for a solid weekly gain.
- Gold prices were largely unchanged as the dollar steadied ahead of key U.S. economic data, but the metal remained on course for its first weekly gain in three.
- London copper was marking time at the top of its recent range, with encouraging import data from China and improved prospects for the global economy supporting prices.
- U.S. wheat rose nearly 1 percent to move away from a two-week low touched in the previous session, but prices remained under pressure from forecasts for cooler temperatures that could help crops.
- A top Democrat on the Senate Banking Committee calls for the elimination of a pricing system used by stock exchanges that creates conflicts of interest for brokers. Sen. Mark Warner (D., Va.) tells SEC Chairman Jay Clayton in a letter that the SEC should prohibit the system. Known as "maker-taker," exchanges pay a rebate to traders who provide standing orders to trade, while charging investors who trade against those orders. Exchanges say it rewards traders who add liquidity to their platforms, while charging those who benefit from it. Critics say maker-taker pricing encourages brokers to send orders to less transparent private venues, which tend to charge lower fees than exchanges. They also claim rebates have enticed some proprietary traders whose activity adds little value.
- Nike chairman Phil Knight donated $100,000 to the House Speaker Paul Ryan's reelection committee this year, according to receipts filed with the Federal Election Commission. Knight, 79, also donated $5,000 to the Prosperity Action super political action committee, which lists its honorary chairman as Ryan. The NKE co-founder further pledged $33,900 to the National Republican Senatorial Committee during the period. Knight, a registered Republican, has been a prolific donor to political candidates including more than $330,000 in donations to Oregon House Republican candidates last fall, according to the Eugene (Ore.) Register-Guard. His individual contributions stand in contrast with disbursements from the Nike Inc. Federal PAC, which awarded roughly $22,100 in to Democratic-affiliated candidates and $14,500 to Republicans during the first five months of 2015, per the FEC.
- Even though possible catalysts for bank growth haven't panned out yet, that hasn't stopped Charlotte-based Novare Capital Management from getting overweight on large bank stocks. With an expectation for higher rates and following JPMorgan Chief James Dimon's calls for tax and regulatory reform, "we have a view we like in the space," says James Harlow, a vice president at the firm. "We need clarity out of politics in Washington," adds Brian Rudisill, a senior portfolio manager. Then there's an expectation that companies will spend money making acquisitions or expanding. Novare owns about $3M of JPM.
- A tariff on imported steel could raise costs for US auto makers, RBC Capital says. President Trump this week reiterated his plan to impose curbs on steel imports, without giving specifics. RBC says Ford, GM and FCA mostly use domestically sourced steel. A tariff or quotas on imported steel could lead to higher prices of domestic steel. It also could curb the price of foreign steel, creating a wider disparity in steel costs between US and foreign auto
makers, RBC says. "This could eventually lead to a reduction in U.S. built vehicles and U.S. auto jobs," opposite of the administration's intentions, the bank says.
- Tapping experienced NASA hand Scott Pace as executive secretary of the White House's newly revived National Space Council isn't likely to end the Trump administration's gridlock over space issues. Lacking a NASA administrator, new funding priorities and a clear-cut plan for getting astronauts to Mars in coming decades, NASA's career officials remain severely constrained in charting a different course. The agency soon will announce plans for more unmanned rovers to land on the surface of Mars, but money for eventual manned exploration of the Red Planet still hasn't been identified or earmarked. Reducing launch costs for national-security satellites is another longstanding, thorny issue confronting the policy group.
- The July reading of the University of Michigan's consumer sentiment index underscores a recurring theme: consumers have growing doubts that policy makers in Washington will achieve success in revitalizing a US economy that has grown slowly in recent years. The University of Michigan says the preliminary reading of its consumer-sentiment index was 93.1 in July, down from a June reading of 95.1 and a May reading of 97.1. Another widely-watched index of consumer confidence--the Conference Board's Consumer Confidence index--crested in March and has declined in recent months. "The data indicate that hopes for a prolonged period of 3% GDP growth sparked by Trump's victory have largely vanished," says Richard Curtin, the survey's chief economist, in a statement. Curtin says the level of the consumer sentiment index is consistent with a growth rate "just above 2%."
- Euro corporate bond spreads have tightened significantly from April onward, as Emmanuel Macron beat far-right Marine Le Pen in the French presidential race, but such a rally is unlikely to happen again in 2017, Bank of America Merrill Lynch strategists say. And valuations should be an impediment to euro credit performance in 2H. Euro investment-grade spreads are now tighter versus dollar spreads, having been level in mid-March. This could spur some global investors to switch from euro to dollar corporate debt, BAML adds.
- President Trump nominates Russ Behnam, an aide to Democratic Senator Debbie Stabenow (Mich.) to the Commodity Futures Trading Commission. Behnam is the first Democratic nominee for the CFTC put forward by the Trump administration. Two Republicans have been nominated for open commissioner slots, and Acting Chairman J. Christopher Giancarlo's nomination to be permanent chairman recently passed the Senate Agriculture Committee by a 16-5 margin. Current Democratic Commissioner Sharon Bowen has announced her intent to step down in the coming months, so Trump will need to nominate another Democrat soon. Senate Agriculture Committee Chairman Pat Roberts (Kans.) has expressed a preference to proceed with all the commissioner nominees at once. Bipartisan pairings typically make it easier to pass the nominees expeditiously through the Senate.

Jul 13 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices were stable as strong demand from China eased concerns of an ongoing fuel glut.  
- Gold prices rose after U.S. Federal Reserve Chair Janet Yellen said the central bank would only gradually tighten monetary policy, curbing speculation that interest rates would rise more than once this year.
- Chinese copper futures rose in early Asian trading, buoyed by a weaker U.S. dollar.
- U.S. wheat fell 2 percent to hit a two-week low after the U.S. Department of Agriculture raised its estimate for U.S. production this season, easing fears of tight supply after recent dry weather.
- The Trump administration notifies South Korea it wants to hold talks next month on amending a five-year-old bilateral trade pact, seeking ways to cut the US's $27.6B goods deficit with its Asian ally. Trump's trade representative, Robert Lighthizer, sends a letter to his South Korean counterpart calling for a special session to discuss amendments to be held within 30 days in Washington to "resolve several problems regarding market access in Korea for US exports, and, most importantly, address our significant trade imbalance." His letter didn't specify which sectors would be discussed, but the American auto industry in particular has complained about what it considers ongoing trade barriers in South Korea. The move is one of many taken by Trump to revisit American trade pacts. The review of the US-Korea Free Trade Agreement is likely to come around the same time the US opens talks in mid-August with Mexico and Canada to renegotiate Nafta.
- After another death linked to rupture-prone Takata air bags and an expanded recall this week, two Democratic senators write Transportation Secretary Elaine Chao and the acting NHTSA head urging all devices with drying agents be recalled. They also seek rupture rates for all affected vehicles. Sens. Richard Blumenthal (D., Conn.) and Edward Markey (D., Mass.), longtime critics of traffic-safety regulators and auto makers, express alarm that a subset of air bags with drying agents meant to help prevent explosions are now deemed risky. "NHTSA has been much too generous in allowing Takata until 2019 to prove that ammonium nitrate inflaters with a drying agent are not at risk of rupturing," they write. "Knowing now that even desiccated ammonium nitrate inflaters pose a safety risk, it seems obvious that ammonium nitrate, whether desiccated or not, should not be used as a propellant in any air bag."
- The health-insurance industry, which has generally taken muted stances on the Republican health-overhaul bills, is coming out with guns blazing against a provision proposed by Texas Senator Ted Cruz. The Cruz plan would let insurers that sell plans that conform to the Affordable Care Act's regulations also sell policies that don't. A letter from America's Health Insurance Plans says the setup "would create an un-level playing field that would lead to....unstable health insurance markets." The Blue Cross Blue Shield Association calls the plan "unworkable as it would undermine pre-existing condition protections, increase premiums and destabilize the market."
- Silicon Valley's campaign to defend net neutrality rules is at odds with many carriers' past policy positions, though telecom's heavy hitters are hardly downplaying the media blitz. Tech companies organized Wednesday's "Day of Action" to defend FCC rules designed to protect internet providers from meddling with their customers' bits. AT&T, though it opposes FCC rules on the books, said Tuesday it would "join" the campaign and wants rules for internet providers to come from Congress. Verizon stays on the sidelines but says the consumer protections at issue "deserve to be written in ink, not pencil," another appeal for legislative action.
- Asked directly whether she would stay on for a second four-year term as Fed chairwoman during congressional testimony, Yellen says that's "something I would discuss with the president." So far, according to Yellen, that hasn't been an issue. Yellen's term as chairwoman expires in February.
- Would Janet Yellen stay at the Federal Reserve if Donald Trump asked? The chairwoman hasn't answered the question before, and she wouldn't answer it today when asked during testimony before Congress. "What I've previously said is that I absolutely intend to serve out my term," she said. "I'm very focused on trying to achieve our congressionally mandated objectives, and I really haven't had to give further thought at this point to this question." Though Trump is likely to replace Yellen when her term expires in February, he hasn't ruled out asking her to stay on.
- Although revelations about communication between Donald Trump Jr. and Russia's prosecutor general further suggest an attempt to influence the last year's election, markets don't seem too bothered. "The pressure-cooker anticipation for the events" kept US stocks little changed Tuesday, says Jingyi Pan, a market strategist at IG Group. Stock markets in Asia lack clear direction Wednesday ahead of Yellen's Capitol Hill appearances. Gold, a traditional risk hedge, is only up modestly.
- The supposed cloud cast over markets the past 12 hours in the wake of the Trump/Russia probe comes as "markets have recently been reluctant to take defensive action against possible, as opposed to probable, risk events," notes Ric Spooner of CMC Markets. "This reflects the supportive macro background for shares created by low interest rates and improving world economic growth. However, there are concerns that the US administration is becoming increasingly mired in day-to-day difficulties, limiting the political capital it needs to achieve difficult economic reform and stimulus."
- New emails disclosed concerning Donald Trump Jr.'s 2016 meeting with a Russian lawyer fill in details that could be legally problematic for the president's son, say legal experts. The emails reveal two key pieces of information that had been obscured or contradicted by Trump Jr.'s previous accounts of his June 2016 meeting in New York City with Russian defense lawyer Natalia Veselnitskaya, who represents Russian state-owned corporations. The president's son knew that he would be meeting with a foreign national and that she was essentially a messenger for the Russian government. Federal election law makes it a felony to accept or solicit a campaign donation from a foreign national or foreign government. A donation can be "anything of value." The new emails don't amount to a slam-dunk indictment of Trump Jr., the legal experts say, but could help build a criminal or civil-enforcement case.
- The left-leaning activists at Fed Up were one of the strongest voices demanding a minority appointment for Atlanta Fed president, and that happened. Now the group is targeting the Richmond Fed's top slot, vacated in a leak scandal by Jeffrey Lacker last spring. Fed Up wants a minority in that slot too, and says it's especially important given that it views Lacker as insensitive to the concerns of minorities. The group also points out the Richmond Fed slot is the only current Fed gig not open to control by the Trump dministration, which has several governor slots to fill.

Jul 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices rose more than 1.5 percent, extending gains from the previous day as the U.S. government cut its crude production outlook for next year and as fuel inventories plunged.
- Gold edged up for a third day on a weaker U.S. dollar while investors awaited testimony from U.S. Federal Reserve Chair Janet Yellen and central bank officials expressed caution about further interest rate hikes.
- Copper prices climbed in Asia to the highest in more than one week amid a weaker U.S. dollar and concerns about industrial action that could further crimp mine supply.
- U.S. corn retreated from a one-year high touched in the previous session as traders squared positions ahead of a widely watched U.S. government report, though losses were checked as dry U.S. weather stoked fears of production losses.
- New emails disclosed concerning Donald Trump Jr.'s 2016 meeting with a Russian lawyer fill in details that could be legally problematic for the president's son, say legal experts. The emails reveal two key pieces of information that had been obscured or contradicted by Trump Jr.'s previous accounts of his June 2016 meeting in New York City with Russian defense lawyer Natalia Veselnitskaya, who represents Russian state-owned corporations. The president's son knew that he would be meeting with a foreign national and that she was essentially a messenger for the Russian government. Federal election law makes it a felony to accept or solicit a campaign donation from a foreign national or foreign government. A donation can be "anything of value." The new emails don't amount to a slam-dunk indictment of Trump Jr., the legal experts say, but could help build a criminal or civil-enforcement case.
- The left-leaning activists at Fed Up were one of the strongest voices demanding a minority appointment for Atlanta Fed president, and that happened. Now the group is targeting the Richmond Fed's top slot, vacated in a leak scandal by Jeffrey Lacker last spring. Fed Up wants a minority in that slot too, and says it's especially important given that it views Lacker as insensitive to the concerns of minorities. The group also points out the Richmond Fed slot is the only current Fed gig not open to control by the Trump Administration, which has several governor slots to fill.
- US stocks end mostly unchanged, bouncing back from losses suffered after Donald Trump Jr. released emails about meeting with a Russian lawyer to discuss allegedly incriminating information about Hillary Clinton during the 2016 presidential campaign. The Dow closes up less than a point to 21409, the S&P sheds less than two points to 2426 and the Nasdaq--helped by tech companies--gains 0.3% to 6193. The Dow had fallen more than 100 points late Tuesday morning after Donald Trump Jr. released the email chain on Twitter. Crude gains 1.6% to $45.10 and energy companies were the best performing sector in the S&P 500. Gold gains 0.2% to $1216 and 10-year Treasury yields settle at 2.356% compared with 2.371% Monday.
- Brazilian senators are poised to approve by a wide margin changes to the country's labor laws, according to analysts at Eurasia Group. Labor reform will bring relief to the corporate sector and its approval would suggest that other business-friendly reforms are still possible despite the country's political turmoil. However, its approval wouldn't necessarily help President Temer. "While the administration will spin a likely victory as a sign of strength, in reality the approval only suggests that lawmakers are responsive to the need of approving reforms able to generate conditions for an economic recovery," Eurasia says.
- The news about Donald Trump Jr's emails gives a boost to the bond market and bond prices are now headed for a second consecutive day of gains--a reprieve following a two-week selloff. "The more bad news for the Trump administration," the less likely he will be able to get any of his stimulative growth policies enacted, says Mary Ann Hurley, vice president of fixed-income trading at DA Davidson. "Investors should be concerned about their equity weighting" if the news about Russia link with the US elections continue to unfold, she says. The 10-year yield is 2.355%, down slightly from 2.371% Monday.
- US agricultural groups warn Commerce Secretary Wilbur Ross that new trade barriers to steel and aluminum imports could boomerang on the Farm Belt. "US agriculture is highly dependent on exports, which means it is particularly vulnerable to retaliation," say groups representing US farmers, dairymen, cattle ranchers and hog producers. Many nations that sell steel to US buyers are big customers for US-produced grain, milk and meat, and "the potential for retaliation from these trading partners is very real," the farm groups say. The Trump administration earlier this month missed its own deadline for finishing a major probe of steel imports, amid pushback from business groups worried about higher costs and trade reprisals.
- An index tracking news coverage of the global economy falls for the third consecutive month. Absolute Strategy Research, which compiles the ASR/WSJ index, says its measure dropped to 54.7 in June compared with a 57 reading in May and cites the inflation component--which has fallen 53 points since the start of the year--as "the biggest drag," on the index. In contrast, ASR says the labor component of the index still shows above-trend readings. Overall, ASR says its newsflow indicator has yet to reach levels consistent with a negative equity-to-bonds return ratio. In a nod to the global political climate, ASR adds that elections have kept policy uncertainty high, "even as uncertainty around protectionism or tax policy has fallen away."
- US stock indexes fall shortly before noon, with several traders pointing to the release of Donald Trump Jr.'s emails as the catalyst for the latest moves. In a statement describing the emails between Donald Trump Jr. and publicist Rob Goldstone, Donald Trump Jr. says he was offered a meeting to discuss information about Hillary Clinton that he "thought was political opposition research." The S&P 500 is down 0.4%, the Nasdaq Composite loses 0.1% and the Dow Jones Industrial Average falls 0.4%. Major indexes had largely traded in a narrow range prior to the release of the email.
- A bout of risk off positioning is hitting the markets at the moment after Donald Trump Jr releases email chain on setting up meeting with Russian lawyer. The news pushes down US stocks and helps the bond market recoup earlier losses. The 10-year yield is 2.368%, down slightly from 2.371% Monday.
- Global investment in the electricity sector has exceeded combined spending on oil, gas and coal supply for the first time in 2016, says the International Energy Agency, reflecting increased investor focus on renewable sources of energy. The growth in electricity investment also come as the share of clean-energy spending reached a record 43% of total supply investment, the agency says. It expects investment in upstream oil and gas sector to stabilize in 2017, led mainly by the US while the rest of the world remains largely stagnant. For 2016, total energy investment fell 12%, in its second consecutive year of declines.
- Regulation expert Neomi Rao will soon move to the Trump administration from her current post as associate professor of law at conservative George Mason University. The Senate confirmed her nomination to head a powerful federal office which reviews and assesses the costs and benefits of government rules. Rao has written and talked about what she sees as an overly broad delegation of authority to regulators, a philosophy that sorts well with the deregulatory agenda of the current White House. Already, Trump has moved to roll back a number of Obama-era regulations on energy and financial regulations, and Rao's office will likely assist in that effort. Sen. Elizabeth Warren said Rao's appointment will give corporations more power over DC rule-making and cripple the agencies' ability to enforce consumer-friendly laws and rules.

Jul 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices edged up, lifted in part by a strong demand outlook for the coming weeks, but overall market conditions remain weak on the back of ample supplies and a more subdued outlook for long-term demand.
- Gold edged lower on a firmer dollar and equities as the market awaited cues on the path of interest rate hikes in the United States ahead of Federal Reserve Chair Janet Yellen's testimony on Wednesday.
- Copper held largely steady in Asia amid modest support from investors after losing ground overnight on fresh signs of oversupply.  
- U.S. wheat rose nearly 1.5 percent as forecasts for further crop-damaging weather across a key growing region pushed prices towards a two-year high hit last week.
- The Pentagon finally sends its annual updates on the cost and performance of big weapons programs to Congress this week, providing a potential opportunity for the kind of "Trump tweet" that hasn't rattled the industry since the president took a swing at the new Ford-class aircraft carrier's catapult back in May. Crucially, the reports peg performance at December 31, providing runway for the type of "improvements" the White House has already cited in relation to the Lockheed Martin F-35 and the Air Force One replacement led by Boeing.
- A defamation lawsuit filed against President Trump by a onetime contestant for the "The Apprentice" shouldn't proceed while he is in office, attorneys for the president said Friday in a motion seeking to dismiss the case. The motion, filed late Friday in New York state court, based its arguments on the US Constitution's Supremacy Clause, which establishes that the constitution and federal laws hold primacy over state laws. The clause bars the state court from handling the lawsuit, brought by restaurateur Summer Zervos, the motion stated. Gloria Allred, who represents Zervos, had no immediate comment Friday. She has previously said that no man is above the law, including the president.
- The national debate over where Americans can carry guns has landed, quite literally, at the courthouse door. This year, lawmakers in Arkansas and Oklahoma passed bills expanding the right to bear arms to court buildings, for state employees or elected officials. Another bill, pending in Ohio, would allow any gun owners with concealed-carry permits to come armed into courthouses and other gun-free zones without facing criminal charges. Since 2013, more than a dozen mostly Republican-led states have considered measures easing courthouse restrictions, although generally guns are still banned inside individual courtrooms. Proponents of these eased laws say they are about securing the rights of law-abiding gun owners to protect themselves in public places. But the more expansive bills have met resistance from people concerned that allowing firearms in courthouses would invite trouble.
- Trump to Appoint Fed Bank Regulator (WSJ)
President Donald Trump plans to put his first mark on the Federal Reserve by nominating Randal Quarles, an investment-fund manager and former Republican Treasury official, to be the central bank's top official in charge of regulating big banks.
     The choice of Mr. Quarles, expected for months and confirmed by a White House official Monday, would put a more industry-friendly voice in perhaps the most powerful U.S. bank-regulatory post: Fed vice chair of supervision.
     That job was created by Congress in 2010 and was never filled during the Obama administration, although former Fed governor Daniel Tarullo filled the role de facto. If confirmed by the Senate, Mr. Quarles would take a lead role in carrying out the Trump administration's goal of rethinking many financial regulations adopted during the Obama era.
     Mr. Quarles would also weigh in on monetary policy as one of seven members of the Fed's board of governors, now short-staffed with only four members. His views in that sphere could put him at odds with his new colleagues, notably because he has criticized the Fed's policy of keeping interest rates near zero for years following the financial crisis, and advocated for a monetary-policy rule, or formula, to guide rate decisions.
     The Fed board has three vacancies, and the White House hopes to offer two more nominees as soon as possible, the official said. The administration has also begun the search for the next Fed chairman, though Mr. Trump hasn't ruled out nominating Chairwoman Janet Yellen to a second term, to begin when her current term expires in February.
     Mr. Quarles has donated to Republican candidates for years and served in the Treasury Department in both Bush administrations, working on both international affairs and as undersecretary for domestic finance, a senior job that involves coordination with the many U.S. agencies that oversee the financial sector.
     He left the government in 2006 and was a managing director at the Carlyle Group private-equity firm, investing in troubled banks. He is now managing director at Cynosure Group, a Utah investment firm.
     Mr. Quarles, in a March 2016 Wall Street Journal op-ed that he co-wrote, said he didn't support "arbitrarily taking an ax to big banks and irreparably damaging the economy." He endorsed a review of postcrisis regulations but warned that "the consequence of a dramatic increase in bank capital is an increase in the cost of bank credit."
     Analysts and government officials have said nominating Mr. Quarles, an establishment Republican, would be a sign that the White House favors more incremental rather than radical changes to the Fed, an institution that has long engendered mistrust among the economic nationalists who backed Mr. Trump during his campaign last year.
     Mr. Trump's team has advocated a rethink of Wall Street rules but has few officials in place at financial regulatory agencies. If confirmed, Mr. Quarles would immediately take over the job of overseeing the Fed's regulatory staff, which supervises some of the largest U.S. financial firms including J.P. Morgan Chase & Co., Bank of America Corp. and Citigroup Inc.
     He could push for changes in the way the Fed oversees those firms, but he couldn't change the rules on his own. For that, he would need the support of other members of the Fed's board and other agencies.
     The choice of Mr. Quarles "shows that we're looking for a change to the heavy-handed approach to regulation from the prior administration," the White House official said Monday. Mr. Quarles, the official said, "has a track record of working well with others to implement public policy."
     Obama administration officials have said stricter curbs on financial risk-taking were warranted in the wake of the financial crisis.
     Mr. Quarles would find some familiar faces at the Fed. He has worked before with Fed governor Jerome Powell, who is now the point person on the Fed's regulatory efforts and also served in the George H.W. Bush administration and worked at Carlyle Group.
     Mr. Quarles is married to Hope Eccles, who is a relative of Marriner Eccles, the New Deal-era Fed chairman whose name is on the building where Mr. Quarles would have his office.
     Ms. Yellen is set to testify on Wednesday and Thursday on Capitol Hill, where she will likely be asked about Mr. Quarles and the Fed's agenda. In the past, she has said she is open to changing some bank rules but not what she regards as core changes adopted after the 2008 financial bailouts. Ms. Yellen has objected to proposals to require the Fed to use a mathematical monetary-policy rule, an approach popular among some conservatives who argue central banks have too much discretion and should be more accountable to the public.
     Mr. Quarles said in the 2016 op-ed that low-interest-rate policies have "led to a rise in speculative positions" across the financial system and that a monetary-policy rule would reduce the incentive for big banks and smaller firms to take dangerous risks.
     The White House has been searching for a candidate with experience in small, locally focused community banks for the third opening, as a result of a law requiring that someone on the Fed board have experience in that industry.
     But finding a nominee has been difficult in part because of federal ethics rules that require Fed officials to divest of their interest in financial firms. Once a regulatory nominee is selected, the process for security and ethics reviews has been taking about two months.

Jul 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices recovered some losses after a 3 percent fall in the previous session, but markets remain under pressure from high drilling activity in the United States and ample supplies from producer club OPEC.
- Gold inched lower as the dollar steadied and as Asian equities firmed following stronger-than-expected U.S. jobs data late last week that reinforced expectations of another interest rate hike in the United States.
- London copper inched up after a solid U.S. jobs report buoyed hopes that an economic recovery is taking root in the world's top economy, spurring appetite for riskier assets.
- The dollar was on solid footing, after a bigger-than-expected increase in U.S. jobs suggested the Federal Reserve would stick with its tightening plans for the rest of this year.
- U.S. corn futures rose more than 1.5 percent to hit a one-year high as forecasts for soaring temperatures raised fears of potential crop losses.
- New York cocoa on ICE Futures dropped the most in 2-1/2-weeks on Friday, under pressure from currency-driven selling and broad-based commodities weakness, led by sliding crude oil prices.
- Malaysian palm oil futures hit their highest in a month and a half in early trade, aided by gains in rival oilseed soy on the Chicago Board of Trade (CBOT) and China's Dalian Commodity Exchange.
- A new report by A.M. Best highlights the growing importance of Medicaid in the bottom line of the health-insurance industry -- and the risk of that burgeoning role as Republicans debate bills that would cut back the program substantially. Managed Medicaid revenue and enrollment have grown consistently--for enrollment, 31.7% in 2014, 13.2% in 2015 and 4.1% in 2016. So has Medicaid's share of total premium, from 10.2% in 2007 to 26.5% in 2016. But margins have actually thinned, to 0.8% in 2016 from 2.4% in 2015 and 2% in 2015. The A.M. Best analysts suggest the dropoff in margins may partly reflect that new enrollees were seeking more medical services as time went on.
- A bill loosening Brazil's labor regulation is set to be voted at the Senate next week. If approved, it would indicate that economic reform sponsored by President Temer still has some support in Congress even after he was charged by the attorney general with taking bribes, something he denies. Pundits believe the labor reform will pass, but the political environment has been too volatile for comfort. The bill changes about a hundred of the labor code's 922 articles. Among other things, the reform backs up contracts signed by labor unions and employers and which now are constantly ruled against by judges. If approved, the law goes for Temer's sanction.
- Turnout will be key at the two important upcoming votes in embattled Venezuela. On July 30, President Maduro has called for a vote to elect an assembly tasked with rewriting the constitution, a move polls show most of the country is against. But on July 16, the president's detractors are planning their own unofficial referendum to delegitimize the constitutional redraft. The referendum faces severe logistical challenges, in that it won't have any backing from national electoral authorities. "But in a country with 19.8 million registered voters, turnout of several million would send a very strong signal," Eurasia Group says. It adds, however, that tension are likely to only rise given that president's plan is seen as his last chance to hold on to power democratically.
- The G20 summit is more than just a marginal issue for investors as the influence of politics on financial markets has increased since the financial- and debt crisis and since the election of Donald Trump as U.S. President, say Helaba economists. The most important issues Helaba economists look out for at the meeting are whether political gaps will be bridged or whether new cracks emerge, and whether there will be a trade war with the U.S. or whether signals emerge that point to a relaxation in trade tensions Helaba economists say. "The most recent speech of Trump in Warsaw has nevertheless given little hope for that," Helaba says. The summit of the world's 20 leading industrialized and emerging economies takes place in the German city of Hamburg on July 7-8.

Jul 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices fell by more than 1 percent, with U.S. crude futures dipping below $45 per barrel as news of a rise in U.S. production added to earlier reports that OPEC output was also on the rise.
- Gold fell, set for its biggest weekly loss in two months, as investors sought higher returns from a firmer U.S. dollar and rising Treasury yields and awaited American non-farm payroll data later in the day.
- Aluminium retreated in early Asian trading after a positive showing overnight, with investors focusing on robust global supply.  
- U.S. wheat fell 1 percent as prices continued to retreat from a two-year high touched earlier in the week, though the commodity was still on track for its fifth straight weekly gain.
- North Korea tensions include a bigger tail risk than usual for global markets, says Greg Gibbs, currency strategist at AMP in Denver. From a forex viewpoint, he contends the climate builds a case in favor of the euro over the greenback and Asian currencies as Europe is relatively well-placed to avoid disruption and may benefit from closer relations with China. Gibbs thinks China and Russia may see North Korea as a wedge issue they can use to drive a bigger gap between the US and its traditional allies, in particular Europe. Meanwhile, relations between the US and China threaten to deteriorate and may already be weighing on Asian currencies, he adds.
- Pledging to reorient the U.S.'s space programs and particularly reinvigorate NASA's human exploration efforts, Vice President Mike Pence used an appearance at Florida's Kennedy Space Center to assert that his boss, President Donald Trump, is committed to championing a new era of space endeavors. But the speech, devoid any scientific, policy or budgetary details or initiatives, raised a host of questions about how the White House seeks to accomplish that goal. While NASA and congressional leaders have been tussling for years about whether astronauts should return to the surface of the moon, the vice president declared without elaborating or identifying any timetable: "Our nation will return to the moon, and we will put American boots on the face of Mars."
- The decision by Brazil's police to shake up the team overseeing the sprawling Car Wash investigation, after reducing the number of top officers dedicated to the probe, undermines ongoing efforts to fight corruption, prosecutors in the southern city of Curitiba say in a note to the press. Earlier Thursday, the Federal Police announced it would integrate the Car Wash police task force into a larger antigraft group. The Federal Police denies any attempt to weaken the investigation, which has involved several high-ranking politicians and businessmen.
- Interior Dept. Sec. Ryan Zinke issues an order to speed up the federal permitting process for developing energy on government land, and he vows to hold more lease sales for oil and gas drillers. The department cancelled 11 lease sales last year, but the law requires them to be hold at least quarterly, the secretary says. He also cites an average 257-day wait to get permits to drill or build associated infrastructure like roads on federal lands--a wait he says will come down to 30 days. Interior's moves to streamline processes is aimed at generating more energy at home instead of relying so much on foreign countries. "It's better to produce here under reasonable regulations that watch it be produced overseas with no regulations," Sec. Zinke says.
- The May trade deficit with Mexico reached $7.3B, the highest since October 2007, when the deficit hit $7.5B, according to the US Commerce Department. The figures, not adjusted for seasonality, cover US trade in goods. One reason behind the widening trade deficit could be the strong dollar, which, despite weakening in recent months, remains relatively strong and makes US goods to other countries more expensive while foreign goods become cheaper internationally. Trade figures carry political implications as President Donald Trump seeks to revamp US trade deals with other countries.
- The jump of 10-year German government bond yields above the 0.5% level eats into what little is left of the so-called Trump reflation trade. The gap between 10-year Treasurys and bunds jumped to over 230 bps last December from around 165 bps before U.S. Presidential election in November. But the gap has gradually eroded, in line with decreasing confidence in President Trump's ability to push through a reflationary economic agenda. The gap stands at just 183 bps after the move in bund yields Thursday, compared with around 189 on Wednesday.

Jul 06 - Trump Travels to Poland, Germany and Other Events to Watch Today (Dow Jones)

- Oil prices recovered some ground on strong demand in the United States, but analysts cautioned that oversupply would continue to drag on markets after a steep fall in the previous session.
- Gold held steady, after hitting an eight-week low in the previous session, as the Federal Reserve minutes released on Wednesday showed the central bank was split on how inflation might affect the future pace of interest rate hikes.
- The dollar steadied against its peers after the Federal Reserve's policy meeting minutes took the wind out of its advance, with the market awaiting comments by central bankers and U.S. data for its next cues.  
- London copper steadied near one-week lows as the dollar eased back from highs triggered by a Federal Reserve meeting that clouded the outlook for the pace of future interest rate rises.
- U.S. wheat fell 3 percent, snapping a six-day rally in which prices soared more than 20 percent, though concerns over widespread damage across key U.S. producing regions due to hot, dry weather kept the grain near a two-year high.
- President Donald Trump departs on foreign travel to Poland and Germany. While in Poland, he will meet with President Andrzej Duda to discuss bilateral and regional issues; meet with Croatian President Kolinda Grabar-Kitarovic; deliver a "major speech;" and attend the Three Seas Initiative summit. Vice President Mike Pence participates in phone calls with Afghan President Ashraf Ghani (10 a.m. ET) and European Union High Representative for Foreign Affairs Federica Mogherini (10:30 a.m.) from the White House. Homeland Security Secretary John Kelly begins trip to Mexico City to meet government officials.
- German Chancellor Angela Merkel and China's President Xi Jinping pledged to boost economic cooperation between their countries as they met ahead of what is expected to be an unusually tense international summit on Friday. "We are very happy to see that thanks to efforts from both sides, Chinese-German relations have entered a new phase," Mr. Xi said Wednesday, according to a German translation of his remarks. U.S. President Donald Trump's "America First" policies, his threats to crack down on abuse of free trade, and his withdrawal from the Paris climate change accord have brought Germany and China, two of the world's largest exporters and both defenders of the climate agreement, closer together. This new closeness is expected to feature prominently later this week when Ms. Merkel chairs this year's G-20 summit of the world's largest economies, which will force her into a delicate balancing act between her commitment to the Western alliance and her professed aversion to Mr. Trump's international agenda. "Economic relations between China and Germany are of course very important," Ms. Merkel told a joint press conference with Mr. Xi. "We don't only exchange goods, but we're also cooperating more and more in technological areas."
 If the value of exports and imports are combined, China beat the U.S. and France to become Germany's leading trading partner for the first time last year. Germany exported EUR76.1 billion ($86.4 billion) of goods to China, making the Asian giant its fifth-largest export partner, and imports from China reached EUR93.8 billion, making it Germany's biggest supplier.
 The two-day G-20 summit starts Friday in Hamburg. European delegates have said they would confront Mr. Trump on his trade stance and on his decision to withdraw from the Paris accord.
  Ms. Merkel said she expected difficult negotiations.
  "It's not easy to bring together all 20 countries with all their developments and positions," she said. "I don't know yet what the final result will look like."
  Apart from conflicting views on free trade, climate protection is seen as the main stumbling block at the G-20 meeting. China, the world's largest emitter of carbon ahead of the U.S., has said it would stick to its commitments under the Paris deal, which saw more than 190 countries pledge to cut greenhouse-gas emissions.
  In separate comments published Wednesday, Ms. Merkel also took direct aim at Mr. Trump's trade policy. The U.S. view of globalization, she told the Die Zeit weekly, was "not about a win-win situation but about winners and losers... Not just the few should benefit from economic progress. Everybody should participate."
  Several commercial deals were signed on Wednesday, timed to the meeting between Ms. Merkel and Mr. Xi. These included an agreement between car maker Daimler AG and BAIC Motor Corp. to develop electric cars; strategic partnerships between industrial conglomerate Siemens AG and Chinese companies; and a Chinese order for 140 aircraft from Airbus SE. No figure was given for the value of the contract.
  Ms. Merkel also pledged that Germany would participate in China's planned revival of ancient Silk Road trading routes from China to Europe if the tendering process was transparent. Ms. Merkel didn't elaborate on what form this participation would take.
  The project to improve infrastructure along China's main international trade channels is expected to generate more than $900 billion in investments in roads, ports, pipelines and other projects.

Jul 06 - Brexit & Beyond: French PM Warns of Debt 'Volcano', Poland Preps for Trump, Eurozone Economy Speeds Up (Dow Jones)
  French Prime Minister Warns of Cuts to Tame Its 'Volcano' of Debt: French Prime Minister Edouard Philippe on Tuesday warned that the country is reeling under an "unbearable" debt burden and pledged austerity measures in a speech outlining policies for President Emmanuel Macron's five-year term in office.
  Poland Prepares 'Absolutely Huge' Welcome for Trump: Poland is working to put on a hero's welcome for Mr. Trump as he prepares to give a major speech to thousand of Poles in a Warsaw square. Behind that effort is a recognition across the continent that Mr. Trump has the potential to change the balance of power in Europe.
  Italy Formally Takes Control of Monte dei Paschi: The Italian government took control of Banca Monte dei Paschi di Siena on Tuesday, injecting EUR5.4 billion ($6.1 billion) into the troubled lender as part of a broad plan to bring one of Europe's weakest banks back to health.
  Eurozone Economy Picked Up Speed in Second Quarter: The eurozone's economic recovery likely accelerated in the three months to June, according to business surveys that have been a good guide to growth in the past.
  U.K.'s Economic Engine Loses Momentum: The engine of U.K. growth slowed in June as uncertainty over the general election and concern about Brexit negotiations held back spending, according to a survey on Wednesday.
  ECB Hasn't Discussed Halting Easy Monetary Policy, Says Key Board Member: The European Central Bank hasn't discussed making changes to its monetary policy, a key member of its executive board said, underscoring the central bank's patient approach to normalizing its expansionary programs.
  Legal Case Revives German Angst Over ECB Bond-Buying: For many in Europe, the European Central Bank's bond-buying program has played a key role in stemming the financial crisis and returning the region to solid growth. But some in Germany remain worried, writes Todd Buell.
  EU Promises Italy More Aid for Migrant Crisis: The European Union's executive branch Tuesday promised Italy an extra EUR35 million in a bid to quell tensions in the bloc over how to respond to an increasing number of migrants crossing the Mediterranean from Libya.
  New EU Digital Chief Expected to Forge Ahead With Tough Tech Rules:  A Bulgarian politician is set to begin a two-year term next week as the European Union's new digital chief, during which time she is expected to forge ahead with plans by the bloc's executive body to push through tough new rules that could constrain how American tech companies operate in Europe.

Jul 05 - The dollar slipped against the yen (Reuters)

- Oil dipped, pulled down by another rise in OPEC supplies despite a pledge to cut production, but geopolitical tensions in the Korean peninsula and the Middle East put a floor under prices.  
- Gold prices edged up as tensions on the Korean peninsula stoked safe-haven demand for the metal, while the release of minutes from the U.S. Federal Reserve's last meeting was also in focus.  
- The dollar slipped against the yen on concerns about rising tensions between the United States and North Korea while the Canadian dollar held firm after the nation's central bank chief backed an interest rate increase.
- London copper was treading water amid heightened risk aversion in Asia following a North Korean missile test, while strike threats at a South American copper mine lent support to prices.

Jul 05 - Sterling More Likely to Fall to $1.25 Than Rise to $1.30, ING Says (Dow Jones)
Sterling trades down 0.15% at $1.2900, having failed to sustain a rise above $1.30 following comments from Bank of England policymakers, including Governor Mark Carney, suggesting a near-term rate increase was possible. But ING analysts say the discrepancy between U.K. and U.S. data means the pound is more likely to drop to $1.25 than rise back above $1.30. "The combination of weak UK macro data and a US data-driven recovery in USD sentiment would suggest that GBP/USD's short-term gravitational pull is more like 1.25 (rather than 1.30)," it says in a note. A move below $1.2850 this week could confirm this view, it says.

Jul 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices retreated in Asian trade, halting a run of eight straight days of gains on signs that a persistent rise in U.S. crude production is running out of steam.
- Gold edged higher, supported by a ballistic missile test by North Korea and an easing dollar, but was still sitting near seven-week lows hit in the previous session.  
- The yen gained broadly after North Korea's missile launch deepened geopolitical concerns, while the Australian dollar slipped after the Reserve Bank of Australia wrongfooted speculators who had bet it would switch to a hawkish stance.
- Shanghai zinc futures opened more than 1 percent higher, tracking similar overnight gains in the London market amid expectations the metal's fundamentals had turned a corner, thanks to a robust outlook for Chinese steel.
- Israel Aerospace Industries appears to have the inside track to build the replacement for Spacecom's Amos-6 commercial communications satellite, destroyed last fall when a SpaceX rocket exploded during routine ground tests a day before its scheduled launch. AIA is in talks with Spacecom about a more-advanced configuration to replace the AIA-built Amos-6, according to industry officials, and the final design is expected to have some national-security capabilities. The discussions coincide with high-level deliberations between Israeli government officials and the country's leading aerospace companies over potentially enhanced taxpayer support for satellite research and development. As part of the policy debate, Israel's space agency also is likely to enjoy a funding boost.
- Analysts surveyed by the Bank of Mexico keep their growth forecast for Mexico this year unchanged at 2%, according to the median estimate of the 37 economists surveyed. Despite Trump's protectionist rhetoric, Mexico's economy showed a remarkable resilience in the January-March period, but analysts see an economic slowdown from 2Q. For 2018, economists are expecting a 2.25% growth. Economists see annual inflation ending this year at 6%, up from 5.9% in the previous survey in May. The Bank of Mexico has raised rates seven consecutive times since September to contain inflation, but indicated in June the tightening cycle has ended for now.
- Mexicans living abroad sent home $2.6B in May, a 4.5% increase from a year earlier, the central bank reports. In the January-May period, remittances were up 6.3% at $11.5B, a record for the period, although in Mexican peso terms the rate of growth has slowed as the currency has recovered 21% from record lows reached in January. Banorte sees remittances boosted in part by the tougher migration policies of the Trump administration that could have prompted migrant workers to send more money home, fearing a greater probability of being deported. "We continue to believe that the flow of remittances will be influenced by Trump's anti-immigration policy," Banorte says.
- Germany's DAX closes up 1.2% at 12486.29 after Merkel says tax cuts will be part of her party's agenda after September elections, fueling hopes consumer spending will boost the economy. The remarks come alongside strong June eurozone PMI data. Volumes were normal, despite the start to the school holiday season in the state of Hesse, and ahead of the US July 4 holiday Tuesday. Thyssenkrupp leads the blue chips to close up 4.9% after a report the company will decide on a merging its steel operations with Tata Steel Europe by end-September. Financial stocks also gain, with Commerzbank up 4.3%, and Deutsche Bank ending 3.7% higher. On Tuesday, investors will eye EU producer prices, German new-car registrations and the start to a meeting of G20 finance chiefs and central bank deputies.

Jul 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices rose, lifted by the first fall in U.S. drilling activity in months, although gains were capped by reports of rising OPEC output last month even as the group has pledged to cut supply.
- Gold edged lower as investors shunned safe-haven assets for equities, with Asian stocks remaining near two-year highs, and as the dollar rose from a nine-month low, reducing the demand for bullion.
- London copper was supported just below the $6,000 level, the first trading day of the second half of the year, as brighter factory demand from China underpinned prices.
- Chicago wheat futures jumped 2.7 percent to hit their highest in two years as forecasts for continued dry weather in key U.S. growing regions stoked fears of production losses.
- Nomura says regime change in Venezuela isn't a matter of if, but rather when. With the political and economic crisis weighing, the bank expects some kind of transition. "However, it is difficult to quantify whether it's within 6 hours or 6 months," the bank notes. With government deploying tanks into the streets this week to thwart an alleged call for rebellion by a security officer, Nomura say Venezuela's political stalemate could be reaching a breakpoint. The alleged defection also suggests more supporters of the ruling Socialist Party are likely to break ranks as President Maduro moves ahead with his controversial plan to scrap the constitution with the creation of a supreme governing body on July 30.
- The Trump administration's decision to delay the conclusion of its investigation into additional tariffs on imported steel likely slows down a parallel probe into tariffs on imported aluminum. The administration's action on steel duties has always been viewed as a road map for revising US trade policy for the aluminum industry, which has been suffering from the same global oversupply conditions as the steel industry. The aluminum industry is urging the administration to take a more limited approach to duties than the across-the-board duties being considered for the steel industry. The Aluminium Association says it's "following up with key decision makers in the Trump administration to keep the focus on China to remedy trade issues facing aluminum." The aluminum industry wants Mexico and Canada spared from any duties to protect key trading relationships.
- Facebook is punishing users who share a lot of fake news. Friday, FB said its research revealed a "tiny group of people" who regularly share a lot of posts containing "clickbait, sensationalism, and misinformation." FB has identified those spammers and will demote some their posts in the news feed. The posts affected will be links to individual articles -- not videos, photos, status updates and other posts. Publishers who see a lot of traffic from those types of users could see a drop in distribution, FB said. This is part of FB's effort to find technical solutions to root out misinformation. FB's efforts have been underway since the U.S. presidential election.
- The odds of the US slapping aggressive, across-the-board tariffs on imported steel appear to be weakening as President Trump heads to the G20 summit in Germany where other world leaders are expected to relay their opposition to tariffs. "Given Trump's apparent tendency to change his opinion after discussions with US allies, we would argue that any conclusions that 20%-25% tariffs are a done deal may be overly presumptive," says Axiom Capital Management. Commerce Department missed its self-imposed deadline today for making a recommendation on tariffs after acknowledging the complexities of the move and the effects on US trade. Axiom says the run up in US steel prices lately from the threat of additional tariffs could quickly evaporate if the Administration changes course.
- Brazil's Central Bank President Ilan Goldfajn reaffirms that austerity measures, particularly one reducing social-security entitlement, are the key to restoring stability after a historic recession. But pundits are increasingly ruling out any meaningful pension reform before next year's general election. A bill sponsored by President Michel Temer is unlikely to be touched by lawmakers before the Lower House decides whether to put him on trial for corruption, a discussion started yesterday and likely to last several weeks. Temer may also come out of this process too weak to advance such an unpopular matter, analysts say. Meanwhile, the budget deficit reached 9.2% of GDP in May, and gross debt jumped to 72.5% of GDP.
- Brazil's fiscal performance worsened considerably in May. Central-bank data shows a deficit of $9.3B in the primary result, which excludes interest payments to highlight the country's ability to pay down debt. That is a sharp reversal from a $3.9B surplus the month before and an ominous sign as economic reform meant to save taxpayer money is stuck in a Congress swamped by political crises. Policymakers are already talking about raising taxes later this year if it becomes clear fiscal targets won't be met, with potentially harmful consequences for an economy forecast to expand less than 0.5% in 2017 after two years of contraction.
- Americans became less confident about the economy in June, but not quite as much as we previously thought. The University of Michigan says its index of consumer sentiment was 95.1 in June, down from 97.1 in May--but up from the preliminary June reading of 94.5. That would suggest the hit to sentiment following former FBI director James Comey's June 8 congressional testimony, which had been flagged in the early report, faded somewhat in subsequent weeks.
- When the University of Michigan reported a preliminary June consumer-sentiment reading of 94.5, down from May's 97.1, it noted a sharp decline came after former FBI director James Comey's congressional testimony on June 8. "The recent erosion of confidence was due to more negative perceptions of the proposed economic policies among Democrats and the reduced likelihood of passage of these policies among Republicans," survey chief economist Richard Curtin said at the time. Watch the final sentiment reading for June, due out at 10am ET, to see if that trend held up for the month as a whole. Economists surveyed by WSJ expect a final reading of 94.4, down just a bit from the early estimate.

Jun 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Crude oil futures were on track for their biggest weekly gain since mid-May, ending five weeks of losses with prices underpinned by a decline in U.S. output.
- Gold held steady, supported by a plunging dollar and declining stocks but hawkish comments from major central banks suggesting a shift toward tighter monetary policies kept the bullion shy of major gains.
- The euro traded near a 14-month high and was on track for its best quarter in nearly 7 years, lifted by growing expectations that the European Central Bank is preparing to scale back its monetary stimulus.
- London copper was steady near the key level of $6,000 a tonne and looked set to rack up a 7-percent gain in the first half of the year, with prices supported by a weaker dollar and brighter factory growth China.
- U.S. spring wheat rose for a seventh straight session, trading near last session's three-year high as fears of output losses in key growing areas of the United States pushed the market towards its biggest monthly gain since 2010.
- Trump approves a pipeline that will carry refined petroleum products from Texas to Mexico. NuStar Logistics' New Burgos Pipeline received a presidential permit Thursday, according to the State Department. Trump had announced his approval of the project, without naming it, during a speech at the Department of Energy, saying it would run "right under the wall." The new line will deliver as much as 108,000 barrels per day of refined products, including liquefied petroleum gas and natural gas liquids, from Edinburg, Texas, to the Pemex Burgos Gas plant in Reynoas, Mexico. The new line runs along the same right of way as NuStar's existing Burgos pipeline. The Burgos line and NuStar's Dos Laredos pipeline, which also crosses from Texas to Mexico, also received permits Thursday, allowing those lines to carry a broader range of products.
- Is Trump really helping the oil industry with his continued promotion of oil exploration and development? He reiterates promises Thursday to increase offshore exploration, and unshackle oil and gas development from years of burdensome regulations, moves that could certainly boost jobs and economic growth in the short term. But it may also lead to more oil production amid tepid demand, leading then to more surpluses of supplies and lower prices that ultimately reduce jobs and GDP growth. Oil prices have fallen 20% since inauguration day to $45, and some say that's partly due to oil production surges in places like Texas that felt invigorated by Trump's election and support.
- Brazil's Supreme Court decides that plea bargains at the core of the country's historic anticorruption drive can't be modified by a judge, unless in extreme cases--for instance, if it becomes clear that the agreement was obtained under torture. Benefits offered by the prosecutor may also be erased if it is shown that the defendant didn't provide all the promised information and evidence. "It's a historic decision that makes plea deals much stronger," Attorney General Rodrigo Janot says to reporters after the vote. Earlier in the discussion, the court seemed to be leaning toward allowing judges to change the terms after the confession at will, which could make plea deals unworkable.
- Commerce Secretary Wilbur Ross says that after Census Bureau Director John Thompson retires on Friday, two longtime bureau employees will lead the agency on an interim basis. Ron Jarmin, the current associate director for economic programs, will perform the duties of director and Enrique Lamas, the associate director for demographic programs, will act as deputy director. "The Census Bureau, along with the 2020 Census, are in good hands with these two men at the helm until the Senate confirms new leadership," Ross says in a statement.
- Trump's energy speech was heavy on talk of ending the "war on coal" and bringing back American jobs, and light on references to energy-generating technologies like solar and wind power. One reference to renewable energy came when the president mentioned revitalizing nuclear power. In March, wind and solar accounted for 10% of total electricity generation in the US for the first time, according to the federal Energy Information Administration.
- President Trump says a "golden era of American energy is now underway," as he details a six-point energy plan:
1) To revive and expand the nuclear energy sector;
2) Treasury will address barriers to financing of highly efficient overseas coal energy plants;
3) Building a new petroleum pipeline to Mexico that'll go "right under the wall.";
4) Facilitating for a major US company to sell more natural gas to South Korea;
5) Energy Dept will approve two long-term applications to export additional natural gas from a Louisiana LNG terminal;
and 6) Will unlock offshore areas currently closed to development by creating new offshore oil and gas leasing programs.
- Trump announces plans for the Department of Interior to restart its process for approving areas for offshore oil and gas drilling, including potentially allowing exploration in Alaska's arctic waters and off the coast of the Atlantic Ocean. Under Obama, the department had moved to block drilling in some of those areas as part of a five-year process of evaluating potential leasing areas. The administration will now begin a process that could last a year or more to reevaluate all the potential leasing opportunities, according to Trump and administration officials.
- President Trump says in a speech today he's ushering in a "new American energy policy" that moves beyond mere American energy independence and leads to "American energy dominance." He says his administration is also ending "intrusive" EPA regulations that have reduced American jobs. Trump says a key plan is to significantly boost US energy exports. "We will export American energy all around the world and all over the globe."
- The EU has filed an appeal against a recent World Trade Organization ruling on large commercial aircraft subsidies. The case involves subsidies the EU says Boeing has received from the US and is the counter-case to an earlier one the US brought against European country support to Airbus. The appeal, widely expected, is against the WTO ruling that the US removed some, though not all subsidies to BA. The appeals process could drag into next year.
- The Senate Agriculture Committee advanced the nomination of J. Christopher Giancarlo to be chairman of the Commodity Futures Trading Commission by a 16-5 vote on Thursday. All five dissenting votes were from Democrats, though Giancarlo won the support of others including the committee's top Democrat, Sen. Debbie Stabenow (D, Mich). The nomination now proceeds to the full Senate, though no vote has been scheduled yet. CFTC currently has just two members, and Democratic Commissioner Sharon Bowen recently announced her intent to step down, citing the slow pace of work on the commission.
- Investors should watch what Trump does rather than what he says--and his actions suggest he wants to bring capital to the US and enhance innovation, says Catherine Wood, CEO of US-based ARK Investment Management, during a panel discussion at the World Economic Forum in Dalian, China. "I think he's a negotiator. I'm much-more optimistic as I see the nuances in his remarks." She added that Trump's tax-cut plan and meetings with fintech executives mean a lot of campaign rhetoric which caused fear about protectionism may not be carried out.
- Global equity markets are caught between improving fundamentals and constraining valuations, but should offer positive returns in 2H and into 2018, says David Lafferty, chief market strategist at Natixis Global Asset Management. Based on slightly better relative valuations and less "Trump risk," Natixis retains its modest preference for European and emerging markets. But the remainder of this year will likely offer some negative surprises--which could include a Trump tax disappointment, a US debt-ceiling debacle, new evidence of slowing growth in China or geopolitical missteps in the Middle East or North Korea--and increased volatility, Lafferty says. Such political setbacks may provide a chance to rebalance into better valuations, assuming they don't undermine the upward trend in
economic activity, he says.

Jun 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Crude oil rose for a sixth straight session to its highest since June 19 on a decline in U.S. output, but ongoing worries about global oversupply continued to drag.
- Gold edged higher as the U.S. dollar weakened against other currencies on bets that central banks in Europe were preparing to scale back monetary stimulus, but the bullion's gains were capped by a surge in equities.
- The dollar wallowed at one-year lows against the euro and slipped against sterling in Asian trade as investors priced in tighter monetary policy in Europe.
- London copper punched through a key technical level as falling supply and a weaker dollar lifted prices to their highest since April.
- U.S. spring wheat futures hit a three-year high as dry weather threatened to reduce U.S. spring crop production, while Chicago wheat futures rose for a third consecutive session.
- The fate of Brazil's President Temer could start to be decided any day now in the Lower House. The country's Supreme Court says corruption charges pressed on Monday by Attorney General Rodrigo Janot against Temer will be sent straight to the House, skipping a potential defense hearing, which now is likely to happen at the Chamber. Lawmakers need to OK the charges, which haven't arrived yet, before a trial is launched. Temer has said he did nothing wrong. His survival will depend on a fractious Congress where support for him is showing signs of waning.
- Brazil's Federal Police late Tuesday said they had to suspend issuing passports due to a lack of funds for migration control and travel documents. One of the prosecutors leading Brazil's massive Car Wash graft investigation accused President Michel Temer, who is currently under investigation for corruption, of trying to suffocate the Federal Police, which carry out the country's many graft probes. The lack of funding could be harming ongoing investigations all over Brazil, the prosecutor said. Temer's office declined to comment.
- Textron appointing Lisa Atherton, head of its military helicopter business, to lead its defense unit following planned nomination of incumbent Ellen Lord as the Pentagon's chief weapon's buyer. Lord, an advocate of streamlining the arms export sales process, would become the second industry executive to join the Pentagon leadership, with former Boeing supply-chain chief Pat Shanahan nominated as deputy defense secretary. Senate Armed Services Committee approved Shanahan's nomination despite giving him a rough ride in his confirmation hearing last week.
- It wasn't so long ago Bank of Canada Gov. Stephen Poloz was warning about the risk posed by US trade-policy uncertainty, given Trump's push to revamp Nafta, and how that justified a cautious approach on rates. BoC's messaging has evolved this month, and that was evident in Poloz's comments on Nafta in CNBC interview. He says there could be a negative shock from a massive rewrite of Nafta, but it's "impossible to quantify." He says the Nafta overhang did fuel uncertainty among firms in 1Q, but nevertheless the economy grew 3.7% annualized. "We can't deny the data and just weigh it against something completely unknown thing. So we have to deal with what we have."
- Former Alaska Governor Sarah Palin is claiming in a federal lawsuit that the New York Times defamed her when it published an editorial--since corrected--suggesting she helped incite the 2011 assassination attempt against former Democratic Representative Gabrielle Giffords. In a complaint filed in federal court in Manhattan Tuesday, the 2008 Republican vice presidential nominee says she seeks "to hold The Times accountable for...publishing a statement about her that it knew to be false: that Mrs. Palin was responsible for inciting a mass shooting at a political event in January 2011." "We have not reviewed the claim yet but will defend against any claim vigorously," a Times spokeswoman said Tuesday evening.
- California on July 7 will add glyphosate -- the key chemical in Monsanto's widely used Roundup weedkiller -- to its list of chemicals known to the state to cause cancer, according to a notice from the state's Office of Environmental Health Hazard Assessment. Monsanto has challenged the move in court, arguing that California's decision relies on a flawed assessment of scientific research by the International Agency for Research on Cancer, which in 2015 deemed glyphosate probably has the potential to cause cancer. Monsanto lost a court decision in the matter, and though the company's appealed, there's been no court order to delay the California listing. Monsanto, citing reviews of U.S. and European chemical regulators that found no cancer link for glyphosate, says it will continue to fight California's move.
- As the EPA proposes to rescind the Obama administration's Waters of the U.S. rule, farm groups hail the downfall of a regulation that many had held up as an example of federal overreach and bureaucratic red tape, and an issue that helped turn out farmers for candidate Donald Trump in November. "We are thankful this Administration is working to draw clear lines in terms of what is and what is not jurisdictional under the Clean Water Act," says Wesley Spurlock, president of the National Corn Growers Association, saying the EPA's move give farmers a freer hand to manage water quality on their own.

Jun 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil markets were steady to lower after a report of rising U.S. fuel and crude inventories underscored concerns that a three-year supply glut is far from over.
- Gold prices firmed as the dollar struggled and shares weakened after a vote on U.S. healthcare reforms was postponed and European Central Bank President Mario Draghi hinted the ECB could trim its stimulus this year.
- The euro hit a 10-month high after the European Central Bank chief hinted the days of the ECB's aggressive stimulus are numbered, and as the dollar was pressured after a vote on U.S. healthcare legislation was delayed.
- London copper eased from near three-month highs hit the previous session, as prices consolidated after rising alongside a weaker dollar, with a tighter supply side underpinning gains.
- U.S. wheat edged up to extend two-day gains to more than 1 percent, with concerns that dry weather would hit crops in key producing regions.
- A barrage of environmental regulations on coal doesn't deserve the credit it gets for bringing down the industry, says Jamie Heller of Hellerworx. In a speech at the EIA Energy Conference in Washington, he says two other factors--competition from natural gas that helped collapse prices, and coal companies' "colossally bad decisions" several years ago to overspend on coking coal investments--are what really did in the industry. "While the environmental groups claim credit for having shut down a number of coal-fired power plants, and President Trump claims that with policy changes he's going to bring back the coal industry, I think this is all posturing."
- Venezuelan President Nicolas Maduro's attempts to remove a rebellious attorney general will only deepen the country's constitutional crisis and help an eventual political transition, Eurasia Group says. Venezuelan law says only congress--now controlled by the opposition--can remove Luisa Ortega Diaz, the fact that Maduro seems prepared to ignore as he pushes ahead with lawsuits against her. "Her removal will serve as an additional rallying cry for the opposition ... helping to prompt an eventual transition," the firm says.
- Potential changes to the US's H1B-visa policy for specialty workers would result in a short-term impact on Tata Consulting's business in the country, Girish Ramachandran, the president of the Asia Pacific region at Tata Consulting. "Of course, there would be an impact," Ramachandran said at the World Economic Forum's Annual Meeting of  the New Champions in Dalian, China. Tata Consulting, a unit of Tata Sons Ltd, has in the past years focused on hiring more local talent, Ramachandran said, a trend that is being mirrored in other markets that Tata Consulting is operating in.
- Exemptions from US motor-vehicle safety standards "are not willy-nilly," says Mitch Bainwol, head of a Washington lobbying group representing a dozen auto makers, in response to questioning from Rep. Debbie Dingell (D., Mich.) during a congressional hearing on self-driving cars. The National Highway Traffic Safety Administration currently allows companies to avoid complying with existing US regulations under limited circumstances in an effort to balance safety with encouraging testing and innovation. Bainwol pushes back against suggestions the process isn't rigorous. "You have to submit evidence to NHTSA. The notion that this is just the wild, wild, west is just not accurate," he says. Some critics have expressed skepticism, though. "Stop relying on voluntary guidance," says Alan Morrison, associate dean for public interest and public service at George Washington University's law school. "If the federal government doesn't get involved, the states are going to fill the vacuum." Auto makers' and tech companies' biggest concern is different self-driving-car regulations across state lines.
- States setting their own different standards for self-driving cars would be a "disaster," says David Strickland, the former head of National Highway Traffic Safety Administration during the Obama administration, who now represents car and technology companies as partner at law firm Venable. During a House Energy and Commerce subcommittee hearing, Strickland cites decades of federal standards preventing safety gaps across US. He testifies that "50 mini NHTSAs" could spell doom for the auto industry, which relies on uniform standards for testing and selling vehicles. Strickland represents Ford, Volvo, Uber, Lyft and Alphabet's (GOOGL) Waymo.
- Canada PM Justin Trudeau says at Ottawa press conference he has no qualms about running bigger-than-expected budget deficits. He says when the Liberals came to power in 2015, they sensed Canada was of falling into general malaise among households, and that threatened to put advantages the country holds -- such as diversity and inclusiveness -- at risk. "Something had to change," he said, "the middle class didn't feel good about their economic future or their [children's] future." Canada has bolstered spending on infrastructure on a multiyear plan, and cut tax rates for the middle class, but pledged to hold annual budget deficits to C$10B. Budget deficit for Canada's federal government expected to hit nearly C$22B for FY16-17, and C$25B in FY17-18.
- Democrats on Capitol Hill highlight a lack of leadership at the National Highway Traffic Safety Administration and tag emerging legislative effort on self-driving cars as partisan during a House Energy and Commerce subcommittee hearing. "Once again we have no one to testify here from the administration," Rep. Frank Pallone (D., NJ) says, pointing to a "leadership vacuum" at agency. "NHTSA must have an active role for self-driving cars to be actively deployed on our roads." The NHTSA head departed at the end of the Obama administration and hasn't been replaced. Rep. Doris Matsui (D., Calif.) says she's "disappointed" with the current legislative process. "We ought to be working together on bipartisan legislation rather than these piecemeal bills," she says. Intimating legislation could undo safety efforts in California, she says NHTSA should have resources to "fill the void." Funding for the agency is a longtime partisan battle. Current legislation envisions keeping regulation of self-driving cars with NHTSA to avoid a patchwork of state rules that car and tech companies want to avoid.
- Policy efforts from Canada's Liberal government to invest in infrastructure and cut tax rates for middle-income households are "bearing fruit," PM Justin Trudeau tells reporters. He cited the level of Canada's unemployment rate, at 6.6% in May from above 7% when Liberals took office, and the creation of 317K jobs over the past 12 months. At press conference in Ottawa, Trudeau asked why the government doesn't boast about impressive economic data, like Trump White House tends to do. He said he won't get too excited with month-over-month changes in data, and is more focused on what longer-term trends are indicating. He said the spending government is undertaking to improve job prospects and incomes "will take a long while to kick in."
- Energy Secretary Rick Perry says "we're done" with allowing energy policy-making driven by political agendas. Speaking at the EIA Energy Conference in Washington, he says people liked to "say they were for American energy independence and domestic energy development, they just didn't want to drill for it or mine for it, and they didn't want to transport it and they didn't want to sell it." This led to exploration on federal lands dropping, and exploration permit requests that "withered on the vine." But now, he says: "Those days are over, we're done with that type of approach. We want policies -- better yet, we want action -- that makes America safer, stronger and freer."
- The lumber market is sharply lower with the US Commerce Department announcing preliminary anti-dumping duties on Canadian lumber up to 7.72%, below expectations. The duties are part of an escalating trade dispute with Canada. Futures are down 5.4% at $355.50 per 1,000 board feet. Tall Tree Lumber Co says expectations were at 10% and that the news is seen as bearish.
- Speaking to reporters in Ottawa, Canada PM Trudeau says he's developed a "constructive and productive" relationship with the Trump White House, and hopes that will translate into a negotiated settlement on the decades-long softwood lumber row. On Monday, Commerce Department said it would issue antidumping duties that would mean some imports of Canada lumber would face duties as high as nearly 31%. Trudeau said Canada is ready to begin trilateral talks on Nafta, and in the meantime is focused on a possible agreement on softwood. Commerce Secretary Wilbur Ross said he was "optimistic" the two sides could reach lumber settlement, but until then Washington would apply duties and "stand up for American companies and their workers."
- The Conference Board at 10am ET will release its index of US consumer confidence, and economists surveyed by WSJ expect a June reading of 116. That would be the third consecutive decline after the gauge in March touched its highest level since the end of 2000. It would also follow the softening trend in the University of Michigan's consumer-sentiment index, which fell to 94.5 in early June from 97.1 in May. The Michigan survey noted a sharp decline in sentiment after former FBI director James Comey's June 8 congressional testimony, so watch today's Conference Board report for any hint that political tension in Washington is weighing on consumer onfidence more broadly.

Jun 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Crude oil futures rose for a fourth consecutive session as investors covered short positions, though worries over a festering supply glut kept a lid on prices.
- Gold held steady supported by an easing dollar, with investors looking to a speech later in the day by Federal Reserve Chair Janet Yellen for clues on the outlook for U.S. monetary policy.
- The dollar rose to its highest level against the yen in nearly five weeks ahead of comments from Federal Reserve Chair Janet Yellen that are expected to underline her positive view of the U.S. economic outlook.
- Copper prices eased in early Asian trading, hurt by weak U.S. durable goods figures and a firm dollar.
- U.S. soybeans rose half a percent, extending gains into a third session after the U.S. Department of Agriculture pegged the condition of the crop below market expectations.
- In a speech in Washington, Energy Secretary Rick Perry reiterates that as head of the Department of Energy, he encourages open-mindedness when it comes to issues like climate change and other controversial topics. "It's okay for us to ask questions, to be skeptical about information," he says. "Let's dig into this a little deeper, let's find the other side and talk about it." He adds that creating more energy, more jobs and a booming economy doesn't have to be bad for Mother Nature. "You can have economic growth and you can take care of the environment at the same time."
- Two separate hecklers have interrupted Energy Secretary Rick Perry in the early minutes of his speech at the EIA Energy Conference in Washington, calling him a climate denier. Perry tells one that she is wrong about him being a climate change denier. "I said I don't think it [carbon dioxide emissions from human activity] was the main dial [of climate change]. What are you? Are you one of those 100 percenters?" Perry says to her. She and the other heckler are eventually shouted out of the room by members of the audience, and Perry continues on. "We're gonna power through this" speech, he says.
- US Energy Secretary Rick Perry is set to speak this morning at the government's EIA Energy Conference in Washington, where he may provide details on the Trump administration's efforts to make changes to the Department of Energy. At the conference Monday, Oregon Republican Congressman Greg Walden said modernizing the department was important since it was created back in the late 1970s. "A lot has changed since the 1970s, and it's time to have a 21st Century Energy Department...I understand you'll hear it from Secretary Perry himself."
- On PBS NewsHour, Buffett again backs the US moving toward single-payer health care, saying that is "probably is the best system" for the country. He contends it would bring down costs, which the Berkshire (BRKB) chief has criticized. "We are such a rich country. In a sense, we can afford to do" go single-payer, he said. The longtime Democrat campaigned for Hillary Clinton but has mostly refrained from criticizing Trump since the election.
- The Supreme Court partially revives Trump's executive order suspending travel from six countries and halting refugee resettlement. But the court also says the travel ban "may not be enforced against foreign nationals who have a credible claim of a bona fide relationship with a person or entity in the United States." What is a bona fide relationship? It's not entirely clear. Legal experts and even some of the justices said court's emphasis on a "bona fide relationship" would be fought over in the lower courts in the months to come.
- The Supreme Court's decision to review and allow partial enforcement of Trump's executive order banning immigration from six predominantly Muslim countries inspired dueling narratives that hinted at litigation likely to unfold over the summer. For Trump, the order amounted to a "clear victory for national security" that "allows the travel suspension for the six terror-prone countries and the refugee suspension to become largely effective," according to the president's statement after the ruling. Omar Jadwat, director of the Immigrants' Rights Project at the American Civil Liberties Union, which is representing groups challenging Trump's directive, said the high court's order, "properly construed, should really allow for only the narrowest implementation of the ban."
- The resilience of US equity markets to the distractions of the Trump administration is a positive backdrop for risk-sensitive AUD, Westpac says. Chinese markets are of course less helpful as the deleveraging push continues, but the uptrend in steel prices suggests potential for recovery in iron-ore prices, it adds. The rebound in Australian job creation keeps RBA rate cut talk at bay. But Westpac expects the ongoing rise in US interest rates to chip away at AUD/USD, leaving it around 0.73 by 3Q.
- Health-care delivery is of vital social importance, but the more important legislative initiative for investors remains tax reform, says David Joy, chief market strategist at Ameriprise Financial. To get there, the Trump administration first has to work through healthcare so its effect on the budget can be determined, Joy says. The transition to working on tax reform won't necessarily be derailed should health-care reform fail, but "clearly, legislative momentum would be lost and the room in the budget for tax reform would be diminished," he says. Success in health-care reform, on the other hand, "could re-energize enthusiasm for tax reform, and provide the boost to stocks that has been set aside since March," he says.
- The newest addition to the Senate Republican health bill is probably good news for insurers but not for hospitals, analysts say. The new provision says that if consumers haven't maintained coverage continuously and want to buy a plan, they need to wait six months. The idea is to prod healthy people to remain insured, which helps insurers, which fear an unhealthy pool of enrollees. But "it will do little to help hospitals," writes Sheryl Skolnick of Mizuho Securities. "Think about it: I don't buy insurance, I get sick, can't get coverage, so I go to the ER, resulting in a no-pay, high-cost outcome."
- Sen. Ted Cruz (R., Texas) wants to accelerate the permitting process for exporting natural gas to countries that don't have free-trade agreements with the US. His office announces the Natural Gas Export Expansion Act, aimed at boosting liquefied natural gas flows out of the US. The legislation seeks to amend the Natural Gas Act to expedite non-FTA export permits, treating them the same as free-trade nations. "Expedited LNG exports will strengthen our position against current and potential foes of America, and benefit our friends and allies around the world," Cruz's office says. The current review process for an application to export LNG to non-FTA countries can take years. One Texas company that filed its initial application in October 2012 didn't receive Dept. of Energy approval in April. The US is already expected to be a net natural gas exporter by 2018, as more LNG shipping terminals come online in Texas and Louisiana. Earlier this month, the first LNG shipment from the US arrived in Poland, which traditionally is supplied by Russia.
- There's persistent talk about a possible increase to the gasoline tax to fund infrastructure improvements, especially after President Trump said several weeks ago he was considering it. But House Energy and Commerce Committee Chairman Greg Walden says he isn't seeing anything concrete. "There's a lot of talk about 'How do we fund the nation's infrastructure?' Who should pay for it? And how do we pay for it?'" the Republican congressman says at the EIA Energy Conference in Washington. "I don't hear that [a fuel tax] coming as a refrain out of the administration or the House of the Senate, at this point. I wouldn't rule anything out."

Jun 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices rose more than 1 percent on a weaker dollar, but another rise in U.S. drilling activity stoked worries that a global supply glut will persist despite an OPEC-led effort to curb output.
- Gold prices edged lower as investors remained cautious ahead of a flurry of U.S. data due this week, with firmer Asian stocks also weighing on the market.
- The dollar drifted as U.S. Treasury yields stayed low amid fading expectations that the Federal Reserve will hike interest rates again later this year.
- London copper eased but remained within reach of the highest in more than two months, after expectations of the U.S. interest rate hike trajectory were tempered which weighed on the dollar.
- U.S. wheat futures fell 0.5 percent, retreating from a one-year high, although fears of global production losses underpinned prices.
- A draft of a Trump executive order on drug pricing is "a strong signal ... that the pharmaceutical industry will emerge from the current debate on drug pricing unscathed," Height Securities says. The draft includes policies "on the pharmaceutical industry's wish list," such as strengthening patent protection overseas and spurring government health programs to sign contracts that tie the price of a drug to how well it works in patients. And the draft is silent on what Height calls the "biggest lever to reduce drug prices"--allowing the federal Medicare health program for the elderly to directly negotiate drug prices.
- The International Federation of Accountants is calling upon G20 leaders to use an upcoming summit in Hamburg in early July to renew their commitment to international tax and accounting standards. "Unfortunately over the past years, some of the consensus has fallen away. On a regional and national level, these regulations are often not followed through," IFAC CFO Russell Guthrie says. One example is the introduction of rules on base erosion and profit shifting by the Organization for Economic Co-Operation and Development aimed at reducing tax avoidance. Earlier this month, more than 70 countries and jurisdictions signed an agreement limiting the ability of multinationals to exploit divergences between tax treaties, a practice known as treaty shopping. The US, however, wasn't among the signatories. "The current administration is going its own way, without much regard for international organizations," Guthrie says. "The US has not made a move on any of the BEPS-items," he adds.
- The euro looks "cheap" according to UBS, which says shrinking political risks within the eurozone make the currency look attractive. In particular French president Emmanuel Macron winning presidential elections and securing a majority in the parliament sweeps away fears of far-right parties gaining further momentum, which could impact the euro. "EUR/USD should grind higher over time, as Eurozone political risk has been reduced." Since the first round of the French election, EUR/USD has rallied 4% to $1.1189. But UBS is bullish on EUR/USD only from a long-term perspective, given resilient eurozone growth. Short-term it would rather "focus positions elsewhere" because "near-term risk-reward has  deteriorated." Long-term, UBS sees EUR/USD rising toward its estimate of fair value at $1.25.
- The upcoming federal election in Germany should ensure Deutsche Telecom issues new bonds to finance a potential T-Mobile US/Sprint merger instead of going for a rights issue, Commerzbank analyst Patrick Kohlmann says in a note. The reason is that the German government won't be "keen to justify a substantial U.S. investment" ahead of the election. The federal government holds 14.5% of DT and state-owned development bank KfW owns a further 17.5%. Instead, Dr. Kohlmann thinks a senior unsecured debt-financed merger or a 50% senior/50% subordinated debt-funded deal are more likely. The German election is due September 24.
- With the eurozone looking like a haven given political uncertainty in the U.S. and the U.K, buying long-dated Italian government bonds to pick up yields of 2-3% seems a "decent bet," AXA Investment Managers' fixed income CIO Chris Iggo says in a note. Italian government bonds start yielding more than 2% from 2028 onward and more than 3% from 2044, based on Tradeweb data. Even though Mr. Iggo and his colleagues "do worry about Italy," things should be calm over the summer.
- State-run Korea Gas Corp. , or Kogas, confirms its chief executive will accompany South Korean President Moon Jae-in to Washington next week, where more purchases of US shale gas by Seoul are likely to be discussed in the backdrop of the Trump administration's growing complaints about a widening US trade deficit. Kogas, the world's largest corporate buyer of liquefied natural gas, signed a deal 5 years ago with Texas-based Cheniere to import 2.8 million tons of LNG annually for 20 years starting this summer. South Korea posted a $23 billion surplus in trade with the US in 2016.
- The American Hospital Association had little to say about the Senate bill to repeal Obamacare--none of it good. The powerful trade group urged the Senate "to go back to the drawing board and develop legislation that continues to provide coverage to all Americans who currently have it." The Senate unveiled a bill that would delay a rollback of the law's Medicaid expansion as proposed by the House GOP, but would likely make steeper cuts to federal Medicaid financing overall, say hospital and physician group officials.
- The repeal of the health-insurer tax is "a key positive" for managed-care companies, according to Credit Suisse, though it warns the individual market still may have problems. Some are skeptical that a Medicaid cutback set for 2024 will ever take effect, they write. The bill contains "a harsh cut in 2024 that we don't see as feasible to enact and maintain," writes Sarah James of Piper Jaffray. She suggests it will be "punted each year" the way that cuts to doctor payments under Medicare under a previous payment methodology once were.

Jun 23 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil edged up, recovering some of the steep falls earlier in the week, but crude is still set for the worst first-half decline in two decades despite ongoing production cuts.
- Gold prices edged higher as the dollar softened and risk aversion due to geopolitical events buoyed the safe-haven appeal of the metal.
- Copper and other major base metals were little changed in early Asian trading, with investors marking time ahead of next week's U.S. inflation-linked indicators.
- Chicago corn was poised for its biggest weekly decline in a year with the market falling for a second consecutive week, weighed down by forecasts of crop-friendly weather in the U.S. Midwest.
- Sprint CEO Marcelo Claure says on CNBC a merger between his company and T-Mobile would create stronger competition for AT&T and Verizon. "This is a scale game," he says, standing outside the White House after a tech and telecom summit arranged by Trump. "If the government were to allow us to combine, we would still be No. 3." Claure says a combined company would have synergies of $30B-$40B in net present value. The companies contemplated a merger in 2014 but backed down in the face of regulator opposition. Talks have resumed recently, but the sides remain far apart on many issues, according to people familiar with the discussions.
- Initial response to the Senate healthcare bill from groups representing doctors and patients is negative, echoing the groups' reaction to the House bill. The American Psychiatric Association, which represents 37,000 physicians, urges the Senate to reject the bill, saying it "rolls back Medicaid expansion, caps the Medicaid program significantly...and removes protections for people with pre-existing health conditions." The American Lung Association said proposed cuts to Medicaid would hurt many adults and children with asthma, chronic obstructive pulmonary disease and other lung conditions. Shatterproof, a nonprofit that advocates for better prevention and treatment of substance abuse, says it will continue to pressure senators to reject the bill, which it says will have "devastating effects for Americans with substance use disorders."
- CAC-40 closes 0.1% higher after US Senate Republicans release their healthcare bill. Drugmaker Sanofi closes up 2.4% at EUR88.65, as health-spending cuts in the bill proved more modest than expected. Investors are watching for detailed French GDP figures on Friday at 0845 CET.
- Commerce Secretary Wilbur Ross says Amazon hasn't done anything that would trigger antitrust concern. According to a transcript from Fox Business Network's Varney & Co., he says acquiring Whole Foods is a "clever move ... . But I surely don't see any anti-trust implications in that." He adds  it's hard to predict the response to anything in a populist climate, "but I don't believe that Amazon has been using predatory pricing or any such thing to compete unfairly. And it seems to me what America is all about is competing fairly." AMZN said last week it was acquiring WFM for $13.7B, including debt, its first major foray into brick and mortar.
- Mexico's annual core inflation holding around 4.8% in mid-June is "a tentative sign that the effect of last year's depreciation in the peso is starting to fade," Capital Economics says. "Provided this continues, today's rate hike could prove to be the final move in the tightening cycle." The firm shares the consensus view that the Bank of Mexico will raise the overnight interest rate target by 25 bps to 7%. CPI rose 0.15% in the first half of June, carrying the annual rate to 6.3%, its fastest since early 2009.
- US policy makers' efforts to ease a series of post-crisis rules are aimed primarily at making the federal rulebook more "efficient," rather than a plan to broadly kill the 2010 Dodd-Frank law, Jay Powell, the Fed's point man on financial regulation, tells Senate lawmakers. "I don't think what we're talking about here amounts to... broad deregulation," Powell says in testimony before the Senate Banking Committee. The panel is drafting bipartisan legislation to make post-crisis regulations less burdensome on Wall Street in a bid to spur lending and generate economic growth.
- Shares of health-related companies are leading gains in the S&P 500 again as Senate Republicans roll out a bill that they hope will allow them to repeal and replace the Affordable Care Act. The S&P 500 health-care sector is up 1.4%, jumping past the broader S&P 500's 0.1% gain. At the top of the group: shares of biotechnology firms and drugmakers. Gilead Sciences jumps 4.6% to $70.62, Regeneron Pharmaceuticals adds 2.5% to $535.10 and
Bristol-Myers Squibb rises 2.8% to $57.66. Drugmakers' shares have rallied in recent sessions, as news reports have suggested the Trump administration --which has promised to address drug pricing-- will push for largely industry-friendly changes.
- The risk that the Federal Reserve may be moving ahead of the curve in its interest rate-rise path, given declining inflation rates and a shift in political risk from Europe into the U.S. argue for a tighter yield spread between 10-year U.S. and German bonds, Rabobank says. In fact, the Dutch bank says it wouldn't be unreasonable to reach a spread of 165 bps - a level last seen before the U.S. presidential election in November. The gap currently stands at 191.3 bps, down from 233.38 bps in late December. Yields move inversely to bond prices, so a tightening U.S-German spread means Treasurys would outperform.
- The resignation of several French ministers over the alleged misuse of European Parliament funds is unlikely to stall reforms, Barclays economist Philippe Gudin says in a note. Given that the party of President Emmanuel Macron, La Republique En Marche, commands a majority in parliament, the government will likely get the green light for a fast-track process when it comes to labor market changes. The bond market doesn't seem concerned about early setbacks for the Macron government either, as the gap between 10-year French and German government bond yields remains tight at around 33%, according to Tradeweb.
- The potential for Saudi Arabia to cut more oil production is stronger under Mohammed bin Salman, Saudi's freshly installed crown prince and force behind Amarco's planned IPO, says consultancy FGE. "The current policy of market management as well as market share is managed under MBS' watch, so we should be prepared for Saudi Arabia to do whatever it takes to keep the prices above $50 a barrel." It thinks that could include cutting daily production back to the November 2014 level of 9.4 million barrel. Last month's average was 9.94 million, based on OPEC data.
- U.S. Treasury Secretary Steven Mnuchin asks for South Korea's cooperation in imposing further economic and financial sanctions on Pyongyang in a phone call early Thursday with South Korea's new finance minister. Kim Dong-yeon reaffirmed that Seoul won't tolerate any development of nuclear weapons and ballistic missiles in North Korea, promising to cooperate closely with the United States and the international community in addressing the issue, a finance ministry statement says.
- The House Financial Services committee approves the final pieces of a flood-insurance overhaul plan, sending the package to the full House. Starting last week, the committee advanced a series of measures meant to lift the National Flood Insurance Program out of a deficit and revamp how the insurance program works, including getting private insurers to offer flood coverage. Republicans and Democrats are divided on many of the possible changes, but did agree in a bipartisan vote to pay out claims faster and raise penalties for fraudulent claims. The Senate banking panel is preparing its own plan to address the program, perhaps adding parts from the House plan that received bipartisan support.

Jun 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices rose after U.S. crude and gasoline stockpiles fell, but worries over whether OPEC-led output cuts would be able to rein in a three-year glut continued to drag.
- Gold prices rose for a second straight day, supported by an easing dollar and weakness in U.S. Treasury yields.

- London copper held on to hefty overnight gains, spurred on by data showing the metals's shift to global a supply deficit.
- Chicago wheat futures slid for a second session as the market took a breather after climbing to a one-year high earlier this week, with traders pausing to assess damage from unfavourable weather across the United States and Europe.
- Canadian PM Justin Trudeau tells lawmakers he spoke with Trump last week over the phone about why Canada should be exempted from any curbs on steel imports his administration may implement. The White House is expected in the coming days to reveal findings of a months-long probe into whether to halt steel imports from certain countries due to national-security concerns, through a rarely-used 1962 trade law. Trudeau says during the Canadian legislature's question-period session Canada "has no business" being viewed as national-security threat, given the close trading ties between the two countries. Two-way trade in steel between US and Canada reached roughly $8.8B last year.
- Traders bidding up biotech stocks as though the threat of significant drug-price regulations are moot following a New York Times article on Wednesday that says Trump administration is considering executive order that is largely pro-industry. Quantitative hedge funds playing big part in "leading the rally," which is also fueled by encouraging recent study data from Clovis and positive reaction to stock offerings from CLVS and AveXis, says Jefferies healthcare trading desk. And while "machines likely driving a lot of this move today," actively managed funds could become more aggressive "if investors get a sense that the rally here is sustainable," Jefferies says. "We think Biotech continues to climb here given the technical trading nature ongoing." Nasdaq Biotechnology index up 3.6%.
- The Trump administration's pullback on federal environmental regulations probably won't give a big boost to the oil and gas industry. Fitch says proposed rollbacks and delayed implementation of a number of environmental regulations--including rules on methane emissions and flaring--is likely to have "only a small effect" on oil and gas activity in the short term. The agency says a federal pullback also comes with the risk that state and local governments will push back, as some did following Trump's decision to quit the Paris climate accord.
- US Trade Representative Robert Lighthizer tells Congress that if China were granted "market economy" status by the World Trade Organization, "that would be cataclysmic for the WTO." China is currently branded a non-market economy by the Geneva-based organization, making it easier for the US and other countries to block cheaper Chinese exports. China has filed complaints at the WTO demanding a shift in that status. "This is without question the most serious litigation matter we have at the WTO right now," he said in response to a question about the matter during testimony before the Senate Finance Committee. China filed its complaint last December and it will likely take several years to work its way through the WTO legal system.
- Trump's trade czar says the administration hasn't come to a decision yet as to whether it will seek to negotiating binding rules to prevent currency manipulation as a part of an overhaul of the North American Free Trade Agreement. "We're still debating the issue of whether to put a currency manipulation provision in here," US trade representative Robert Lighthizer tells the Senate Finance Committee. "I'm still in discussions with the Secretary of the Treasury and members of this committee and certainly the Ways and Means Committee" in the House of Representatives, he says. In the past Treasury officials have worried such rules could reduce the options for setting US monetary policy, but proponents of currency provisions say the rules would be tailored to allow quantitative easing and avoid limiting US policy options.
- President Trump's trade czar tells US senators the US trade deficit suggests structural problems with the global trading system which the Trump administration is seeking to change. "The president's view and mine is that when you see a trade deficit in hundreds of billions of dollars... one must then be concerned that the deficit represents structural problems in global trade," said Robert Lighthizer, the newly confirmed US trade representative. Most economists say the US trade deficit stems from economic imbalances, especially US investment and savings levels, but the Trump administration hopes new deals with trading partners and punitive steps against countries blamed for violating trade rules will lead to more balanced imports and exports.
- President Donald Trump's top trade policymaker reiterated a pledge that the administration will ramp up enforcement actions against trading partners, saying that "we have a number of potential cases under review as we speak." Robert Lighthizer, in a prepared testimony before the Senate Finance Committee Wednesday, did not specify what sectors the cases involved. Mr. Lighthizer also noted that the administration's proposed budget seeks extra funds for trade enforcement.
- The Trump administration's top trade official told Congress Wednesday "we intend to move very quickly" on renegotiating the North American Free Trade Agreement. U.S. Trade Representative Robert Lighthizer provided the Senate Finance Committee new details on the planned timetable for rewriting the 24-year-old pact with Mexico and Canada. Mr. Lighthizer said the administration would publish its negotiating objectives on July 17, timing that would allow officials to launch the formal renegotiation in mid-August, according to congressional requirements. Mr. Lighthizer also said that due to high public interest, the USTR will hold three days of public hearings on the Nafta renegotiation from June 27 through June 29. Oregon Sen. Ron Wyden, the top Democrat on the panel, warned Mr. Lighthizer against moving too quickly, saying "I'm all for being swift, but I'm also a firm believer that you get results before you set a cutoff date," adding that there's a "serious danger that an artificial deadline" will weaken the American negotiating hand.
- The S&P 500 health-care sector index is up 0.9%, the best-performing group in the S&P 500 so far in the session, while the broader S&P 500 inches up 0.1%. Health stocks took a hit last year as scrutiny over drug-pricing tactics sent shares of biotechnology firms and drugmakers sharply lower, but have since rebounded to emerge as the second-best performing sector in the S&P 500 in 2017. But moves on Capitol Hill by GOP representatives to push forward another health-care bill could rattle the sector again.
- The city of San Bernardino, Calif, has emerged from bankruptcy after nearly five years. City officials said in a press release on Monday, adding that they've begun paying past debts as part of the chapter 9 process. The city of roughly 200,000 people, located outside of Los Angeles, filed for bankruptcy in 2012, suffering from double-digit unemployment and lower tax revenue from fallen property values. Throughout the case, San Bernardino officials found ways to save money aside from cutting the amount of debt it faced.
- President Donald Trump's administration is taking a much different tact with manufacturer's than its predecessor, Jay Timmons, president of the National Association of Manufacturers, said Wednesday, ahead of introducing Labor Secretary Alexander Acosta at his trade group's annual conference. "Much needed change has finally come to the department," Timmons said. During President Barack Obama's administration, businesses had "a rough relationship" with the Labor Department he said. "Regulations coming out of the Department of Labor were not good for business, they were not good for investment and jobs in this country."
- The Labor Department will have less of a role in designing and administering apprenticeship programs, Labor Secretary Alexander Acosta tells the National Association of Manufacturers. He points out that the Education Department doesn't directly accredit colleges. Similarly, he said his department shouldn't need to register every apprenticeship program. "We are going to work with a variety of third parties, like trade and industry groups, companies and unions, and empower these groups to design the apprenticeships," Acosta says, reiterating plans the White House announced last week. "We're saying you know more about what you do that we do." He said the department, however, will maintain some oversight to ensure quality.

Jun 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices dipped, trading around multi-month lows as investors discounted evidence of strong compliance by OPEC and non-OPEC oil producers with a deal to cut global output.
- Gold inched up after hitting its lowest in five weeks in the previous session, buoyed as equities fell and the U.S. dollar eased from one-month highs following a tumble in crude oil prices.
- London copper was trading flat in early Asian trade, capped by a stronger dollar that pushed prices lower overnight.
- U.S. wheat edged down for the first time in five sessions to retreat from a near one-year high touched the previous day, though concerns over potential yield losses in France and the United States helped limit losses.
- The pound fell below $1.26 for the first time since Theresa May called the snap election.
- Saudi stocks opened higher in the wake of news that the king has named Prince Mohammed bin Salman--architect of Saudi Arabia's ambitious reforms program to reshape the kingdom's oil dependent economy--as the new crown prince and index compiler MSCI saying it will consider adding Saudi stocks to emerging-market measures as early as next year. The opening of the kingdom's stock market to international investors, to attract more foreign capital, is part of measures undertaken by Prince Mohammed. An emerging-market classification by compilers such as MSCI can help attract billions in additional inflows from funds which track such indexes. The main Tadawul stock index is up 1.8% at 7078.
- The naming of Mohammed bin Salman as Saudi Arabia's new crown prince could prove to be a bullish driver over time for the oil market. The 31-year old is the main architect behind the ongoing effort of taking Saudi Aramco public. As such, he would likely implement measures to lift oil prices in order to have a higher valuation before the IPO, rumored to occur next year. However, a persistent glut of oil and high production from non-OPEC nations still stands to counter the cartel's ongoing effort to push prices up. Oil prices didn't move after the announcement and remain down slightly on the session in Asia.
- One less risk factor for markets is Republicans keeping an Atlanta-area House seat in the most-expensive such election in US history. Traders were watching the race for a sign of a Trump backlash in a long-Republican district. Despite soft approval numbers for the president, Democrats to date have been unable to turn that into electoral gains.
- Donald Trump's tweet on North Korea may also be weighing on South Korean equities and the won in addition to an MSCI decision on China shares, says Sean Callow, a senior currency strategist at Westpac. The Kospi is down 0.8% with the USD/KRW down 0.1% at 1141.60 won. "Korea is the biggest story of the past couple of hours," says Callow. "While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out," Trump tweeted. The message implies Trump is ready to change policy and take a harder line, Callow says.
- Canada faces significant competitive constraints in the medium term due in part to policies the Trump administration is ushering in, says Eric Lascelles, chief economist at RBC Global Asset Management. In a blog post, Lascelles cites possible changes to US tax, environment and banking policies as working against Canada. Meanwhile, some regions in Canada are tightening labor laws, and the rise of US shale has undercut Canadian crude prices. "It's not an outright disadvantage for Canada, but it's all tilting toward the US's favor," Lascelles tells WSJ. He adds it's leading him to anticipate below-consensus growth over the next several years, starting with 2% this year and 1.5% expansion in 2018.
- Another day, another task force, but the new one on the futures of US sanctions convened by the Center for a New American Security includes a couple of notable corporate appointees presumably blessed by their internal compliance departments. Alongside the usual parade of financiers--looking at you, Goldman Sachs --and energy companies such as Chevron, there's GE's senior counsel Karan Bhatia, a Bush-era trade and transport official. And while Boeing has been at the tip of the spear in commentary on trade policy, the think tank has tapped Airbus Americas head of compliance Patricia Dudley, who's flying the industry flag.
- Brazil's government-supported labor bill had a surprising setback today at a Senate committee, where the bill, which reduces regulation, was rejected by 10-to-9 votes. It now goes to another committee tomorrow before moving to the voting floor, likely by next week. After the vote, Sen. Romero Juca, who supports the bill, says the result doesn't change its prospects. "The reform is important and we will approve it," he says. But markets didn't like the news. The Ibovespa stock index dropped to 60826 points after the vote from 61584, and the Brazilian real weakened to 3.34 to the dollar from 3.31.
- A number of environmental groups that have been accused Exxon Mobil of knowing about the harmful effects of climate decades ago and sowing doubt about the science didn't welcome the news that the company has joined a coalition of big industrial companies backing a carbon tax. The groups, which include, pointed to a provision in the carbon tax proposal that they say would give a form of immunity to energy companies for past advocacy efforts or pollution. Exxon has denied sowing doubt on climate change.
- An unexpectedly rough ride for former Boeing supply-chain chief Pat Shanahan during Senate confirmation hearing as nominee to become deputy defense secretary. Sen John McCain rails on Shanahan over arming Ukraine, and morphs a mini tirade into concerns over defense industry consolidation. "I am concerned that 90% of defense spending is in the hands of five corporations, of which you represent one," McCain says. "Frankly I'm not overjoyed that you came from one of the five." Shanahan says he'll recuse himself from any decisions involving BA, unless granted a waiver, though that still leaves his role in some acquisitions unclear as Boeing pursues big upcoming deals in missile defense and military jets.
- Many of the world's biggest oil companies today revealed their support for a carbon tax proposal authored by GOP stalwarts James Baker and George Shultz, both former Secretaries of State and Treasury in Republican administrations. Founding members of the Climate Leadership Council include BP Plc, Exxon Mobil, Royal Dutch Shell and Total SA, and the group also includes Johnson & Johnson, General Motors and other blue chip companies. The proposal, which would set a price on carbon and return the proceeds to taxpayers in the form of quarterly dividends, currently does not have widespread support in the Republican-led Congress.

Jun 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil markets held around seven-month lows as investors focused on persistent signs of rising supply that are undermining attempts by OPEC and other producers to support prices.
- Gold inched higher, supported by global political uncertainties, after touching a five-week low earlier in the session as a key U.S. Federal Reserve official reaffirmed its hawkish stance on interest rate hikes.
- London copper traded little changed, supported by upbeat sentiment over the global economy after confidence at Japanese manufacturers rebounded, but prices were capped by a stronger dollar.
- Chicago wheat futures rose 1 percent, gaining for a fourth consecutive session with prices underpinned by a further decline in the condition of the U.S. spring crop following weeks of dry weather.
- Top trade officials from the US and UK says they're eager to explore a bilateral free-trade agreement between the two countries -- but any possible deal is likely at least two years away from taking shape. "We're not allowed to conclude any negotiations as long as we're still part of the European Union," Liam Fox, the UK's international trade secretary told a US government-run investment conference just outside  Washington, in a joint appearance with Commerce Secretary Wilbur Ross. Fox says that means no pact before March 2019. But Fox made clear he was eager to begin exploring the prospects, adding that "we have a trade working group already set up" to explore post-Brexit trading relationships. "From the US side, we've made clear we're prepared to begin as soon as the UK is ready," Ross says.
- Of the 97 proposed changes including in Treasury's financial regulation white paper last week, 62 can be enacted simply through rulemaking, Goldman Sachs analysts say. And with 19 of 22 key regulatory leadership positions opening up over the next 18 months, the administration will get a chance to prove its "personnel is policy" line. The areas most dependent on congressional action are changes to the Volcker ban against proprietary trading and private-fund sponsorship, as well as any dismantling or reorganization of the Consumer Financial Protection Bureau.
- Whether they approve or disapprove of Trump and his policies, Americans appear to be giving CEOs broad latitude to work with the president and most want them to work with him at least some of the time. According to a survey of more than 800 adults by public-affairs firm Global Strategy Group, 26% say companies should work with Trump "all of the time" and 22% say they should never work with the president. The remainder say corporations should work against the administration some of the time and, on other occasions, with it. Both Democrats and Republicans say the businesses that pick and choose when to work with the president are responsible and fair.
- Political polarization in US and Europe is weighing on decision-making processes and could affect some advanced economy sovereign ratings, according to S&P Global Ratings. Disagreements between US political parties have stymied legislation in congress, especially on the fiscal side. The lack of a clear majority in UK government is likely to affect Brexit negotiations, S&P says. An anti-European party winning in the upcoming Italian general elections would weigh on country's financial and market stability. There is little appetite for major reforms to the architecture of monetary union in key Eurozone members despite pro-European victories in France and the Netherlands,  S&P Global Ratings credit analyst Frank Gill says.
- The US government switches sides in a case set to go before the Supreme Court this year on whether employers can require workers to sign arbitration agreements in which they must waive their right to collective action when pursuing work-related legal claims. The Justice Department under Obama had chosen to represent the National Labor Relations Board's position that such requirements are illegal. But in that case, NLRB v. Murphy Oil, Trump's acting solicitor general now reverses course and files an amicus brief saying it supports Murphy. The Supreme Court will take up three cases involving arbitration agreements with class-action waivers. Of the three, the government is only a party in the Murphy case. The NLRB may choose to take over the defense of its prior position from the DOJ, but the agency is now under Republican leadership and it may decline to do so.
- Energy Sec Rick Perry says on CNBC he believes climate is changing and man is affecting it. But he says it's okay to question how much impact man is having. "This idea that science is absolutely settled, and if you don't believe it's settled then you're somehow or another a neanderthal, that is so inappropriate," he says. "Being a skeptic on some of these issues is quite alright." Asked whether he believes carbon dioxide is the primary control knob for the temperature of the earth and climate, he says: "No, most likely the primary control knob is the ocean waters and this environment that we live in."
- Might investors need to start considering a possible changing of the guard in Japanese politics? Abe's "unchallenged leadership" since 2012 is starting to show some weakness, contends Amir Anvarzadeh at BGC Partners. The PM is pushing unpopular measures like casino legalization, changing  Japan's pacifist constitution and restarting nuclear-power plants. "Although we are a year away before new elections start to come into the market's view, his recent slip in the polls is indeed worth keeping a close eye on." Not to forget the BoJ's likely starting to taper next year, Anvarzadeh adds.
- The probe into links between the White House and Russia is reminiscent of the twists that the investigation into President Clinton took from Whitewater to Monica Lewinsky, says AMP Chief Economist, Shane Oliver. His view remains that the Democrats may find something to impeach Trump on when they get control of the House of Representatives after the November 2018 mid-terms, but in the meantime the Republicans are unlikely to impeach Trump. Rather anticipation of the likely loss of control of Congress after November next year will see Republicans pull together to pass their pro-business agenda including around healthcare and tax reforms, he adds. The shooting of Republican Congressional members only adds to this.

Jun 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices dipped, weighed down by a continuing expansion in U.S. drilling that has helped to maintain high global supplies despite an OPEC-led initiative to cut production to tighten the market.
- Gold edged lower to touch a near four-week low as the dollar held firm, with the market waiting on comments from a top U.S. Federal Reserve official after last week's soft economic data.
- London copper traded little changed as broader financial markets gave no directional cues, with the potential for inventory builds as the monthly prompt date comes due potentially keeping a lid on prices.
- Chicago wheat futures slid as the market took a breather after rallying around 5 percent in the last two sessions on the back of dry weather hitting U.S. yields.
- Sterling held steady ahead of the start of Brexit negotiations, with investors also awaiting comments from a top Federal Reserve official to see whether the U.S. dollar's recent rise can be sustained.

- Mining company Gold Reserve says it has received its first $40M payment as part of the $1B that an arbitration court said Venezuela's government owes them for expropriated gold assets. Venezuela--short on cash and amid persistent debt default concerns--will pay off the remainder in installments over the next two years, the Spokane, Wash., miner says. But it notes that under an amendment to the settlement agreement, some of the payments may be collateralized with Venezuelan sovereign bonds, which markets currently rate as one of the riskiest debt classes in the world.
- "Today's moves actually limit the possibility for positive change on the island and risk ceding growth opportunities to other countries that, frankly, may not share America's interest in a free and democratic Cuba that respects human rights," Myron Brilliant, the chamber's executive vice president, said in a statement. "We remain committed to working with all relevant parties to remove the antiquated policies that hinder the empowerment of the American and Cuban people."
- Venezuela central bank's reserves are back to around $10B, meaning the cash-strapped country has all but completely used up the cash injection it received in late May after Goldman Sachs' asset management division bought Venezuelan bonds for $865M. Nomura also added $30M. Both banks paid less than a third of the bonds' nominal value. There are still $100M worth of those bonds unaccounted for and it is unclear if the government sold them. Opposition lawmakers have warned that they may not honor the debt if President Maduro's embattled government falls and they take over.
- Trump and cabinet officials are reportedly considering an executive order on pharmaceutical drug pricing, but it's still likely a "few weeks away," and when it comes it may be "quite vague," Evercore says. The administration isn't planning "broad action to curb drug pricing," and if anything "should be good news for the pharmaceutical and bio [technology] industries and investors because" nothing close to sweeping action is being considered, the investment bank says. Since transformative policy changes have to go through Congress, the president likely to seek a "quick 'win,'" such as by ordering the health secretary to consider "value-based pricing," arrangements touted by the pharma industry, where manufacturers get paid based on how effective they are in improving patients' health. Traders aren't paying attention to Evercore's rosy outlook, with the Nasdaq Biotechnology index down 0.5% on Friday, vs. a 0.2% decline in the S&P 500 and 0.3% slide in the Nasdaq Composite.
- At a conference in Ottawa, former Canadian PM Brian Mulroney relays to attendees a bit of what President Trump told him during a dinner in February at Mar-a-Lago in Palm Beach, Florida, regarding Trump's thoughts on PM Justin Trudeau. Mulroney says Trump told him, "I got along great with Justin, and I think we can do marvelous things together." He says this bodes well for Canada as it enters Nafta renegotiations in August. Ahead of the talks, his advice for Canada negotiators is to "keep our heads down and our mouths shut, and don't take the bait," on rhetoric from Washington. "Canada is not going to win a damn thing if we win a war [in the media]."
- California Attorney General Xavier Becerra cautiously lauds EPA Administrator Scott Pruitt's signal that the state's waiver to set tougher vehicle emission standards are safe from attack. Pruitt's comments are "good news for all Californians, and I hope Administrator Pruitt is good to his word," Becerra says. "If at some point down the line our efforts to combat air pollution are threatened, I am prepared to take any and all action necessary to defend our progress." Pruitt Thursday during a congressional hearing said the waiver was "not under review" and said the EPA was committed to recognizing role of states in tackling air quality. Many other states follow California's standards, including New York, making up large portion of US auto market. The Trump administration earlier this year reopened a review of US emissions standards, a move California decried.
- US House Speaker Paul Ryan will give what his office is billing as a major speech on tax policy June 20 to a group of manufacturers in Washington. Ryan's speech comes almost exactly a year after he and other House Republicans released their tax policy blueprint for lower tax rates and a broader tax base. That plan, especially a border-adjusted corporate tax, is under sustained attack from companies and from Republicans in the House and Senate. Ryan is attempting to revive momentum for that plan while also reaching a deal with senators and the Trump administration.
- A California waiver to set tougher vehicle emissions standards than the federal government suddenly looks safer after EPA Administrator Scott Pruitt signals revoking it isn't on the agency's agenda during a Thursday congressional hearing. "Currently, the waiver is not under review," Pruitt said in response to a question from Rep. Ken Calvert (R., Calif.). "It's important we recognize the role of the states in achieving good air quality standards. That's something we're committed to in the agency and the waiver is not currently being reviewed by the EPA." Revoking the waiver would be an unprecedented action likely to spark litigation. The issue became hot after the Trump administration reopened a review of US car emissions standards that the EPA had closed in January just before inauguration. California and the US for now are aligned on tough standards that auto makers are looking to ease.
- Former Canadian PM Brian Mulroney, who helped craft the North American Free Trade Agreement, says renegotiation of Nafta presents an "absolutely crucial" moment for the country, adding the Liberal government's political fortunes could be at stake. At an Ottawa conference, he says he's confident PM Justin Trudeau has put together a top-flight team to defend and champion Canada's interests, led by Foreign Minister Chrystia Freeland. Freeland, he says, "performed acrobatics" to get the EU-Canada trade deal finalized after it hit a potential unraveling. "We are not some pushover little country that you are going to ambush," Mulroney says. "We have a C$2 trillion economy with 36 million people. We have the strength to say no."
- US households' confidence dimmed in early June, and Washington might be the cause. The University of Michigan says its preliminary June reading on consumer sentiment was 94.5, down from May's final figure of 97.1. Economists surveyed by The Wall Street Journal had expected a preliminary June reading of 97.0. There was a large decline in sentiment observed since June 8, according to Richard Curtin, the survey's chief economist, which is when former FBI director James Comey testified before Congress about his firing in May. Curtin noted the largest confidence drop was among independents, followed by Republicans; Democrats saw the smallest decline.
- Gauges of US consumer confidence jumped after the November presidential election and have come down only a bit since then. That trend is seen continuing today when the University of Michigan releases its preliminary consumer-sentiment reading for June. Economists surveyed by WSJ expect an overall index of 97.0 -- which would be little changed from May's 97.1, April's 97.0 and March's 96.9. Still, a partisan divide lurks under the seemingly placid surface. In May, the survey's chief economist noted, pessimistic Democrats were "expecting a recession" and optimistic Republicans predicted "more robust economic growth." The latest report, coming at 10am ET, may reveal if that split has narrowed at all headed into the summer months.

Jun 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices were not far off six-month lows, held down by an ongoing supply overhang that persists despite an OPEC-led effort to cut production and prop up crude markets.
- Gold edged lower to hit a three-week low and was on track for a second weekly fall, dragged down as upbeat U.S. economic data supported the dollar.
- London copper edged up but was still eyeing its biggest weekly drop since early May as markets priced in a higher U.S. interest rate environment that would support the dollar.
- Chicago wheat climbed to its highest since early May with the market on track for a second week of gains as dry weather in parts of North America threatens to reduce yields.
- Wesley Batista, CEO of embattled Brazilian meatpacking giant JBS SA, steps down from the board of Pilgrim's Pride, the US poultry processor majority-owned by JBS, as efforts continue to contain fallout from Brazilian corruption scandals. Colorado-based PPC says Batista resigned effective immediately and will be replaced on PPC's board with Denilson Molina, CFO of JBS' US foods division. In late May Batista's brother Joesley also left PPC's board, after negotiating a plea deal with prosecutors in Brazil related to corruption investigations involving politicians there, including President Michel Temer. PPC down 1.8%, but shares have soared 26% so far this year thanks to fat profits in the chicken business.
- White House budget director Mick Mulvaney says he hopes the Federal Reserve is able to successfully manage the reduction of its $4.5T portfolio of bonds and other assets. Fed Chairwoman Janet Yellen outlined plans Wednesday to start later this year allowing assets to mature slowly without reinvesting the proceeds. "She said she didn't think that would restrict their ability to still conduct monetary policy. I hope she's right," Mulvaney says during a briefing with reporters. "The growth of the balance sheet was an unprecedented experiment so the reduction of the balance sheet is going to be the flip-side of that same coin. And I hope they will manage it efficiently."
- Shares of Nucor fall 3.2% after the steel company gave a gloomy outlook for the current quarter, forecasting EPS of $1-$1.05, below analysts expectations of $1.22. NUE blames the 2Q profit warning on declines in its steel mills business and a slowdown in construction markets linked in part to foreign steel imports. Headwinds should clear soon, however. Steel imports to the US are already down over the past five months amid open trade probes by the Trump administration, NUE says.
- Canada's chief envoy in Washington, David MacNaughton, tells Canadian senators in Ottawa the fate of the Nafta renegotiations will depend on how quickly the US wants to move and how many issues it wants addressed. Washington is in the midst of a 90-day consultation period, and talks could begin as early as mid-August. "We can probably all agree fairly quickly on some things the three countries can do to modernize" Nafta, says MacNaughton, who's viewed as key Canadian player on Nafta. "The more issues you put on the table, the longer and more complicated the talks can become. We'll see how much US wants to put on table." The US would like talks completed by the end of 2017, with aim to avoid talks dragging on and affecting Mexico presidential election next year.
- The Senate Finance Committee advances Trump's nominee for Treasury undersecretary for international affairs, ex-Bear Stearns chief economist David Malpass. The veteran of the Reagan and G.H.W. Bush administrations wins broad bipartisan support, with the exception of two Democratic senators. Malpass is expected to take a more critical view of multilateral institutions than his recent predecessors, but former Republican colleagues say he'll also see a pragmatic use for them in projecting US power abroad. The committee's greenlight bodes well for full chamber passage.
- The path to rate renormalization and the Fed's balance-sheet reduction, will be shallow and gradual, says Rich Taylor, client portfolio manager at American Century Investments. A few days ago, there was a 55% chance of another increase in September; now, there's a 20% chance of a September increase and 32% chance of a December hike, Taylor says. With economic fundamentals basically unchanged and consistent with 2% growth, and core inflation still running below the Fed's 2% target, the rates market continues to be range bound. With a strong likelihood of continued political stagnation in addition to global geopolitical risks, "there are too many headwinds to achieving above trend growth and inflation in the near term," which should keep rates range bound for a while, he says.

Jun 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices wallowed near their lowest levels in seven months early, hurt by high global inventories and doubts over OPEC's  ability to implement production cuts.
- Gold edged up from a near three-week low hit in the previous session, supported by softer U.S. economic data and a fall in Asian shares following a report that President Donald Trump was being probed for possible obstruction of justice.
- London copper dipped to its lowest in a week after the U.S. Federal Reserve raised rates for the second time this year,  boosting financing costs for industry.
- Chicago soybean futures slid for a second day, while corn edged up after easing in the last session as ample supplies from South America and forecasts of rains in the U.S. grain belt weighed on prices.
- The dollar nursed losses, after weak U.S. inflation data left investors wondering if the Federal Reserve would be able to  follow up its latest rate hike with another later this year.
- The Senate Finance Committee advances Trump's nominee for Treasury undersecretary for international affairs, ex-Bear Stearns chief economist David Malpass. The veteran of the Reagan and G.H.W. Bush administrations wins broad bipartisan support, with the exception of two Democratic senators. Malpass is expected to take a more critical view of multilateral institutions than his recent predecessors, but former Republican colleagues say he'll also see a pragmatic use for them in projecting US power abroad. The committee's greenlight bodes well for full chamber passage.
- The path to rate renormalization and the Fed's balance-sheet reduction, will be shallow and gradual, says Rich Taylor, client portfolio manager at American Century Investments. A few days ago, there was a 55% chance of another increase in September; now, there's a 20% chance of a September increase and 32% chance of a December hike, Taylor says. With economic fundamentals basically unchanged and consistent with 2% growth, and core inflation still running below the Fed's 2% target, the rates market continues to be range bound. With a strong likelihood of continued political stagnation in addition to global geopolitical risks, "there are too many headwinds to achieving above trend growth and inflation in the near term," which should keep rates range bound for a while, he says.
- Argentina's former president Cristina Kirchner launches a new political party organization, the Citizens Unity Front, which she is expected to use to compete for a seat in the Senate this October. In a series of tweets, Kirchner criticized President Mauricio Macri's government, but she stopped short of formally announcing her candidacy. Pollsters say Kirchner would be a good candidate, with a solid 33% approval rating, likely enough to get elected in the province of Buenos Aires. But with a nearly 48% disapproval rating, according to consultants Management & Fit, Kirchner would be a weak presidential candidate in 2019 and she represents little political threat to Macri. Kirchner faces multiple corruption investigations but would obtain congressional immunity if she took office.
- Yellen says she's open to looking at ways to reduce regulatory burdens surrounding the Volcker Rule, as recommended by a report from the Treasury Department released Monday. Yellen notes the Fed has already suggested exempting small banks from the rule, as Treasury also did. But she said she was pleased to see the report--required by an executive order from Trump--endorsed a restriction on proprietary trading. "We do have some ideas for how we might simplify the rule, and certainly it's something we are quite open to looking at," she says.
- Does Janet Yellen want to stay on as Fed chairwoman after her term is up at the end of February? She wouldn't say today and, in any case, said, "I have not had conversations with the president about future plans." President Trump said earlier this year Yellen was doing a good job, though last year he said he would probably replace her when her term is up. Yellen did say the administration has been "working hard" to fill three vacancies on the Fed board. "I do very much hope that there will be nominations in the not-too-distant future and that the Senate will take those up expeditiously."
- Highmark Health's Delaware insurance unit is seeking a 34% rate increase for its Affordable Care Act marketplace plans next year, according to the state's insurance regulator. Highmark, which is expected to be the only exchange insurer in the state after Aetna's announced withdrawal, asked for the increase assuming the federal government won't make cost-sharing payments or enforce the individual mandate for most people to have insurance, the regulator says. Rate filings for ACA plans are being closely watched around the country as the Republican Congress tries to pass a health-care bill.
- The Senate Agriculture Committee will hold a hearing next Thursday on the nomination of J. Christopher Giancarlo to be chairman of the Commodity Futures Trading Commission. Giancarlo has been serving as the acting chairman since former Chairman Timothy Massad left at the end of the Obama administration. The CFTC currently has just two members, Giancarlo and Democratic Commissioner Sharon Bowen, three short of its full complement. The Trump administration has nominated two additional Republicans for commissioner positions, and is in negotiations over a Democratic nominee. Commissioner nominations typically proceed as bipartisan pairings.
- Farm groups are appealing to Congress to beef up funding for USDA's lending arm, with demand for farm loans in 2017 expected to match or exceed last year's record. Nearly two dozen farm groups penned a letter to congressional appropriators, requesting additional funding for the Farm Service Agency, which provides direct and guaranteed loans to US farmers. Last year, record loan demand prompted lawmakers to increase FSA funding by $1.4B, and farm groups anticipate demand will be every bit as strong--or stronger--this year, thanks to languishing farm incomes. "The outlook for 2017 grain and livestock prices appears to be no better than in 2016, likely meaning FSA loans will be even more vital to the financial viability of farm and ranch operations," the letter says.
- The Trump administration is using its budget proposal to put multilateral institutions such as the World Bank and the IMF on notice, says US Treasury Secretary Steven Mnuchin in prepared remarks to a House Appropriations subcommittee. "Treasury's international budget request should send a message that the international financial institutions need to operate more efficiently," Mnuchin says. "Just as our federal government is streamlining, so too must these entities." That may mean cuts beyond the proposed 15% reduction in promised funding for a key World Bank lending unit. "We will preserve investments where they make sense, but we must balance priorities in order to fund other parts of the government," he adds.
- IMF Managing Director Christine Lagarde said Wednesday that though she's happy to see strong economic data from the United States, she's worried about a combination of market enthusiasm and financial deregulation. She said she worried about asset valuations "probably pushed by a degree of exuberance that is difficult to explain at this point in time and proposed financial regulation modifications which if generalized to the entire banking sector in a country like the U.S. would be a cause for worry." She said some regulations could be eased for small banks, but she cautioned that going far beyond that "would be a factor of concern" when combined with the strong economy and asset prices. She was speaking at a conference in Frankfurt.

Jun 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (Dow Jones)
- Oil prices fell around 1 percent after data showed a build in U.S. crude stocks and OPEC reported a rise in its production despite its pledge to cut back on output.
- Gold inched up as the market waited for direction from the outcome of a two-day U.S. Federal Reserve meeting, with the central bank expected to hike interest rates and give indications on its monetary policy for the rest of the year.
- Copper prices eased in early Asian trading, with investors cautious ahead of the outcome of a two-day meeting where the U.S Federal Reserve is expected to hike interest rates and give clues on its policy outlook for the rest of the year.
- U.S. spring wheat futures rose 2.2 pct, with the market poised for its biggest two-day rally in as many years on concerns over dry weather hitting yields in the United States and Canada.
- The dollar eased with investors looking past an expected U.S. rate hike later in the day for clues on Federal Reserve policy for the rest of the year.
- Investors may be warming back up to Canadian markets after recent comments from Bank of Canada officials that signal a potential rate hike in the coming months. While some economists now expect a rate hike much sooner than previously expected, Scotiabank's Derek Holt notes that BOC Governor Stephen Poloz didn't provide a strong rebuttal to his deputy's recent comments. That could mean the BOC is still waiting for evidence of a business investment rebound amidst uncertainty stemming from the US election, as well as a much more robust Canadian export outlook. Also worth noting is the impact low rates have played on Canada's housing and household finances, which would be highly vulnerable if monetary policy tightens.
- Treasury Secretary Steven Mnuchin says his agency can fund the government "through September" if Congress fails to lift the federal borrowing limit before August. That seemed to be a shift from his comments Monday that Treasury can fund the government through "the beginning of September." The administration has offered few details on when it expects to run out of cash to meet the government's obligations. Congress leaves for a five-week summer recess July 28. He urged them to raise the ceiling before then to "send a message to the rest of the world and the markets that we take our credit very seriously."
- The expected tax overhaul by the Trump administration may end companies' ability to deduct their debt interest payments from their tax bills. "What we are hoping is that the interest deduction is grandfathered, says Harris Corp. CFO Rahul Ghai, speaking on the sidelines of the WSJ CFO Network in Washington D.C. Companies made the decision to take on debt under a different tax regime and with the assumption of certain benefits, he says. "The right thing to do is to make sure old interest is grandfathered irrespective of the future," he says.
- Duke Energy opposes proposals to pay for tax reform by cutting companies' ability to deduct interest payments, says CFO Steven Young. The utility borrows in debt markets to pay for grid and plant upgrades. If it couldn't deduct the interest, customer rates would rise, he cautions. "It's very critical to us," he says.
- Individual investors in the US say geopolitical risks ranks as the top threat to the investment climate in the coming year, according to a Wells Fargo/Gallup survey of 1,005 adults with total savings and investments of at least $10,000. Three-quarters of investors were "very or somewhat worried" about flare-ups in tensions around the world, while 69% said they were concerned about the political climate in the US and 49% said they were worried about the economy. "Given recent headlines, it's not surprising that investors are more concerned that geopolitical risks pose a greater threat to their investments than the economy. While the news may be concerning to investors, we advise clients not to let those anxieties impact their investment plan because that doesn't change the underlying positive fundamentals of the economy," said Brian Rehling, co-head of global fixed income strategy at Wells Fargo Investment Institute.
- Where next for Transdigm after the aerospace part maker's Monday selloff following a CNBC report that Sen. Elizabeth Warren had written to the Pentagon about its sales practices ? Except Warren's office declined to release any letter, or confirm its existence, unlike two House members who had already raised similar concerns. TDG sold off more than 4% at one point on heavy volume, ending a four-week rally that drove it to a seven-month high. Short sellers have been circling the company all year, and investors will now be wary of further shots from lawmakers across TDG's bows.
- Amgen finance chief David Meline said he is "very encouraged" by the prospects of the Trump Administration's plan for lower corporate tax rates but that efforts to implement it are behind schedule. "We are slipping on the schedule," Meline says at the WSJ's CFO Network annual meeting in Washington, DC. He said he considers a proposed 15% corporate tax rate just one scenario that he will weigh when making capital allocation decisions.
- Eastman Chemical supports tax reform but is worried about how it's going to be funded, finance chief Curtis Espeland says on the sidelines of the WSJ's CFO Network Annual Meeting in Washington, DC. One possible way of funding the tax overhaul is scrapping bonus depreciation that allows companies to accelerate deductions for capital investments. "Eliminating bonus depreciation won't support manufacturing growth in the United States," Espeland says. "It will incentivize people to build plants outside the US."

Jun 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices edged up, lifted by statements that Saudi Arabia was making significant supply cuts, although rising U.S. output meant that markets remain well supplied.
- Gold held steady as investors remained cautious ahead of a two-day U.S. Federal Reserve meeting that is likely to provide hints on the central bank's interest rate policy for the remainder of the year.
- London copper eased from near a two-month high ahead of the U.S. Federal Reserve's interest rate decision due later in the week, while China zinc premiums surged on healthy demand and limited supply.
- Chicago wheat futures bounced back, rising nearly 1 percent as the condition of the U.S. spring crop was pegged well behind market expectations, stoking fears of production losses.
- The Canadian dollar rose to its highest level in nearly two months, buoyed by hawkish comments from Canada's central bank, while worries about UK political uncertainty dented sterling.
- US Commerce Secretary Ross is concerned about outsourcing high-tech products to foreign countries, including China. "I'm very worried about the semiconductor industry," he said at WSJ's CFO Network annual meeting in DC. Such shifts could leave the US vulnerable to interruption in critical supply chains. "Where are you going to get your product from?" he asked. "We have to be very careful about technology."
- Qatar is a major producer of helium, often used as a cooling agent in making semiconductors and fiber optics. But helium circulation has been hit after Saudi Arabia and others closed their borders to Qatar. Japan industrial-gas companies Iwatani and Air Water have said the helium they produce in Qatar hasn't been able to leave the tiny Persian Gulf country since the rift. The duo ship helium to the UAE through Saudi Arabia over land, where it's shipped by sea to Japan. "With the severance of diplomatic ties, that's become impossible," said Iwatani spokesman Masaaki Kichise. It still has a month's inventory and is considering securing more helium from the US, another major producer, he added. Air Water is planning to secure helium from the US and Australia, said spokesman Koji Aratani.
- Legg Mason & Co., a Baltimore asset manager, is not worried about Britain's exit from the European Union and the potential loss of so-called passporting rights allowing for easy access to Continental Europe. "We are not too fuzzed about Brexit," says finance chief Peter H. Nachtwey at the WSJ's CFO Network Annual Meeting in Washington. Legg Mason already has subsidiaries in Luxembourg and Dublin.
- Earlier this year Argentina eliminated a 35% tax on computer, laptop and tablet imports, leading prices to plunge. But the government has no plans to similarly cut import taxes on TVs, air conditioners or other appliances, meaning prices of such items will remain exorbitantly high. Taxes on such items mean these goods can cost up to three times more than in neighboring Chile or in the US. That stifles consumption and depresses retail sales. Cabinet officials, though, say the government could cut import taxes on smartphones later this year. "Cheaper TVs won't boost productivity but cheaper cell phones would," one official says.
- Argentina's economy appeared to strengthen in May, according to an index of leading economic indicators published by Torcuato Di Tella University. The index suggests that the odds the economy will fall back into recession have slid to 9% from 12% a month ago. Nine of the 10 indicators measured by the university, including a gauge of stock prices, are up from the previous month. The index seems to confirm government assertions that Argentina's economy is now back on track and will grow this year and each of the coming years, even if at moderate rates of about 3% annually. Such numbers, while not spectacular, will still benefit President Mauricio Macri as he tries to overhaul tax and labor regulations.
- The most powerful US retail lobbying group sends a letter to US Trade Representative Robert Lighthizer outlining the industry's top priorities in the expected Nafta renegotiation between the US, Canada and Mexico. The list includes keeping the agreement trilateral, making sure tariffs on all goods remain fixed at zero and not imposing new measures to origin rules that would disrupt the global supply chain. "Under no circumstance should the United States seek to impose new duties on imports from Canada or Mexico," Matthew Shay, CEO of the National Retail Federation says. The group also seeks to discourage changes to Nafta's enforcement protocol based on bilateral trade balances, quotas on goods such as winter fruits and vegetables imported from Mexico, or customs duties on electronic information transmissions.
- For a long time, Peruvians said crime was their biggest concern. But that appears to have changed following a large graft scandal involving Brazil's Odebrecht that has led to corruption allegations against a former president and other government officials. A survey by Peru's statistics agency INEI says that 48% of the population identify corruption as the country's biggest problem, followed by crime, poverty, lack of employment and the quality of public education.
- Last week's trade deal that limits the amount of refined sugar Mexico can send to the US is expected to raise US prices, while greater supply in Mexico is likely to have the opposite effect at a time when inflation is at an 8-year high. Domestic sugar prices in the CPI peaked up 41% last August, and were up an annual 23% in May--Citi notes. Although sugar has only a 0.18% weighting in the index, items that use sugar, especially soda, account for 1.9% of the CPI. The fact Mexico didn't bring high-fructose corn syrup imports to the negotiating table "reinforces out takeaway of the agreement leading to potential excess supply of sweeteners in the Mexican market," says Citi.
- A lawsuit filed Monday by attorneys general in Maryland and the District of Columbia allege government payments to President Donald Trump's hotels and other businesses violate the US Constitution. The lawsuit, similar to one filed in New York by a government watchdog group in January, pivots on Trump's decision to place his business assets into a trust, rather than divest upon taking office.
- The head of a US Department of Justice division that monitors the country's bankruptcy courts told Congress last week that reclassifying marijuana wouldn't make the division more lenient on companies in the marijuana industry that file for bankruptcy. At a hearing, US Trustee Program Director Cliff White emphasized that as long as the drug is illegal in the eyes of the federal government, his office will try to block companies with marijuana assets from using the bankruptcy system to get a fresh start. White said his office has seen an increase in the number of companies in the marijuana industry file for bankruptcy in recent years.
- Government lawyers said Friday that the US Constitution permits President Donald Trump's hotels and other businesses to accept payments from foreign governments, in response to a lawsuit alleging such payments violate the Constitution. Instead of divesting after he was elected president, Trump put his business assets into a trust and let his two adult sons run the Trump Organization. Citizens for Responsibility and Ethics in Washington, a watchdog group that tracks corporate influence in politics and public policy, seized on Trump's refusal to divest in a January lawsuit filed in federal district court in Manhattan, one of several cases targeting Trump's business ties and conduct during his presidential campaign.
- Kansas' move last week to put an end to four years of extensive tax cuts is good for the state's credit, according to a report by Moody's Investors Service. The cuts had contributed to a $500M budget gap that led the state to put off pension contributions and draw on rainy day funds, according to the report. Those moves were "essentially policy choices, not acts of desperation driven by economic hardship," the ratings agency says.

Jun 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices rose as futures traders bet the market may have bottomed after a recent steep fall, even as physical markets remain bloated by oversupply, especially from a relentless rise in U.S. drilling.
- Gold inched up as Asian stocks fell and the dollar eased ahead of a U.S. Federal Reserve policy meeting that could give clues on the pace of interest rate hikes over the rest of the year.
- Copper prices climbed for a forth consecutive session, underpinned by strong demand from top consumer China and concerns over tight supplies from Chile.
- Chicago wheat futures slid for a second session, giving up some of last week's gains as the U.S. government forecast higher production.
- Sterling steadied as British Prime Minister Theresa May scrambled to pick up the pieces and reunite her Conservative Party after a disastrous election that could disrupt Brexit negotiations.
- A Brazilian electoral judge finishes an exposition he started Thursday morning showing how millions of Brazilian reais skimmed from state oil company Petrobras were used to finance the winning Rousseff-Temer ticket in 2014 presidential election, an allegation both deny. The judge, Herman Benjamin, called for the election to be nullified and Temer, who replaced Rousseff last year after she was impeached, be overthrown. But at least four of the court's seven judges have signaled they aren't convinced, and pundits are expecting a final ruling later today keeping Temer in the presidency, which could breathe life into his economic-reform agenda.
- London shares close higher, with the FTSE 100 index up 1% at 7527.33, benefiting from falls in the pound after the UK election resulted in a hung parliament, with no one party achieving an overall majority. This leaves uncertainty over the make-up of the next government and over Brexit negotiations. Resultant sterling falls boost the stocks of internationally-forcused companies in particular. Fresnillo and Antofagasta rise more than 3.5%, while Standard Chartered gains 2.8%. This is offset by falls in domestically-focused companies, such as housebuilders, retailers and domestic banks. Taylor Wimpey loses 3.3%, RBS is down 2.4% and M&S down 1.8%.
- Germany's DAX ends up 0.8%, nudged higher by building economic optimism and market hopes for a less disruptive Brexit after the UK election. HeidelbergCement leads the pack, gaining 3.3% on analyst rating increases. Lufthansa gains 2.2% on expectations the UK's indecisive vote makes it more likely the country will remain closer to Europe's single market after Brexit. RWE falls 1.3% and E.On slips 0.3% after strong gains this week on news of a multibillion euro tax refund.
- Nordic markets close higher with Sweden's OMXS30 index ending the day 0.7% higher and the pan-Nordic OMXN40 index up 0.8%. "The major European stock benchmarks rose as UK stocks gained on a slide in the pound after the surprise UK general election result," Saxo Bank says in a note. "Former FBI Comey's testimony to Congress offered little evidence on alleged obstruction of justice by President Trump." Crude oil got a small bounce from shortcovering while the risk of Middle East tensions escalating further also attracted some demand ahead of the weekend, Saxo added. Oslo's oil-heavy OBX index rose 0.3%.
- China's steel exports decreased 26% in May from a year earlier, as stronger demand from domestic steel users discouraged producers from sending steel out of the country. May exports were up 8% from April and Jefferies predicts that 2H exports will probably increase amid seasonally slow domestic demand. But the firm notes the "continuation of materially lower exports highlights a structural shift driven by supply-side reform and mounting global trade barriers." Imports of Chinese steel to the US have plunged over the past year because of steep tariffs. The EU Friday levies duties on imported Chinese steel for what it says are unfair government subsidies on steel exports. The EU already has antidumping duties on Chinese steel, but it's the first time the EU has deployed antisubsidy duties against Chinese steel, which now accounts for just 4% of imports of hot-rolled coiled steel into the EU, Jefferies says.
- Over the next 12 to 24 months, the UK's march toward its withdrawal from the EU in March 2019 will have hurt the nation's economy and lead to heightened volatility in its financial markets, says Peter Donisanu, investment strategy analyst at Wells Fargo Investment Institute. The firm has a bearish view on UK bonds and currency, but a neutral view on UK stocks, reflecting the positives of better-than-expected European economic and earnings fundamentals, balanced against the negatives of historically stretched equity-market valuations, Donisanu says. The British pound, which had strengthened against the US dollar heading into the election, is likely to weaken through year-end as interest-rate differentials continue to expand when the Fed tightens monetary policy as developed-market central banks abroad generally stick with accomodative monetary policy, he says.
- Brazil's Federal Police says it raided the offices of the group of embattled meatpacker JBS Friday as part of an investigation by the country's market regulator into possible insider trading, according to a statement. Brazil's market regulator CVM has been investigating suspicious trades made by the group before the revelation of a plea deal by its main shareholders involving prominent Brazilian politicians. JBS denies any irregularity in its financial operations.
- Trump tweets his support of House Republicans' passage of a Dodd Frank repeal-and-replace bill a day earlier. "Congratulations to Jeb Hensarling & Republicans on successful House vote to repeal major parts of the 2010 Dodd-Frank financial law. GROWTH!" the message said. The bill is unlikely to become law. Trump has criticized Dodd Frank broadly before, but his administration hasn't provided many details. That could change early next week when it is expected to release a Treasury department report evaluating bank rules.
- The UK general election results create an uncertain political environment, but don't fundamentally change the UK outlook in the shorter term, says Noland Carter, chief investment officer and head of Heartwood Investment Management. The asset manager is underweight UK stocks as it believes that other developed markets hold more attractive
value, and is taking no immediate actions in portfolios, Noland says. From the market's perspective, a worst-case scenario of "a high-tax, high-spend economic program, which would create an unfriendly environment for UK-based corporates," has been avoided, he says. Markets are taking the news of a hung parliament reasonably well, and there's been no "knee-jerk reaction" so far, he says. Within the UK market, the manager's bias is toward large companies, which have performed well over the last year and benefited from the depreciation of sterling, he says.
- Treasury yields have drifted higher, as some uncertainty is lifted with the Comey hearing, ECB meeting and UK elections in the rear-view mirror, and as debt auctions loom early next week. After a lengthy price rally, the 10-year yield seems to be stabilizing around 2.2%. That is still a low level for the postelection period, especially considering expectations that the Fed will raise rates next week. Hopes for fiscal stimulus are at a low point, and it could take a run of better economic data to lift growth and inflation forecasts again. The 10-year yield was recently 2.211% vs. 2.195% Thursday.
- Safety trades won out this week as investors geared up for several potentially market-moving events including the UK election, former FBI Director James Comey's testimony, and a European Central Bank meeting. Investors piled $16B into bond funds in the week through Wednesday, the biggest inflows for bond funds in 122 weeks, according to EPFR Global. Meanwhile, investors withdrew $1.3B from equity funds and put in $0.8B into gold funds--marking the largest inflows for gold in 11 weeks, according to Bank of America Merrill Lynch.
- US stock futures rise in morning trading, rebounding from overnight lows. Traders say global markets aren't panicking because Brexit is still going to happen, albeit with a weaker UK negotiating hand following the failure of Conservatives to win a majority in Parliament. That's leading both the pound and UK companies that rely on exports lower. The FTSE 100, which generates more than two thirds of its revenues overseas, is up 0.6%. US stock futures are up, which John Brady, of futures brokerage R.J. O'Brien, attributes to continued support from central banks. "It's hard to argue stocks are cheap here, but they're not majorly, maniacally expensive. With the lack of other alternatives, and with central banks remaining so cautious, there's no reason not to buy risk assets," he says.

Jun 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices stabilised following steep falls earlier this week, but they were still pressured by evidence of an ongoing fuel glut despite efforts led by OPEC to tighten the market by holding back production.
- Gold edged down ahead of the UK election verdict with early results suggesting no clear winner which could push the country into a new bout of political turmoil before Brexit talks.  
- Copper firmed in early Asian trading, helped by supply concerns in Chile and recent data pointing to robust import demand from China.
- Chicago wheat futures edged higher with the market on track for its biggest weekly gain in eight months, underpinned by hot and dry weather threatening to reduce production in North America.
- The pound fell sharply after British Prime Minister Theresa May's Conservative Party lost its parliamentary majority in a general election, throwing the country's politics into turmoil and potentially disrupting Brexit negotiations.
- The latest positioning data available for fast-money investors like hedge funds showed they weren't as negative on the pound as earlier this year. Leveraged funds slashed their negative sterling positions in the 2 months through May 23, when the number of net-short futures and options contracts on the pound hit the lowest level since shortly before the Brexit vote. The latest data, as of May 30, showed a slight uptick in the number of net bearish contracts, though it remained well below 2017's highs. Data released later Friday will provide a more-accurate picture of pre-vote positioning. Leveraged funds have been net bearish on the pound almost continuously since late 2015, CFTC data has shown.
- In the wake of Tories poised to not keep its parliamentary majority, PM May's "hard-Brexit strategy has failed and the public has rejected her popularity," says Naeem Aslam, chief market analyst at ThinkMarkets UK. The pound dropped sharply, briefly breaching $1.27, and he says sterling could test $1.22 in coming weeks. "The outcome has created maximum uncertainty, and it is only going to get worse from here if we do not get any clarity." Aslam is focused on the spread between Treasurys and UK gilts, the latter falling as results come in. "Investment wisdom dictates that the Brexit negotiation process is going to be an uphill battle," says Aslam. "This means opportunity is knocking as the yield gap would widen further. The gap is already at its record level and we expect this to build more steam from here onwards."
- Instead of the UK election, Japanese institutional investors remain focused on ECB, says Daiju Aoki, regional CIO for UBS. While policy makers didn't do anything unexpected, "they are focused on inflation." Meanwhile, investors are looking at "policy momentum" rather than uncertainties between the UK and eurozone. "It's a pound issue rather than euro," Aoki adds. Japanese investors remain positive on the euro, he says, with euro-selling this morning in Asia "no surprise" following the ECB meeting. The euro has pulled back below $1.12.
- Volatility to persist for the pound with PM May likely to not "have the last say" on Brexit, says Chang Wei Liang, a forex analyst at Mizuho in Singapore. It's "an outcome that is not only bitter to accept but could potentially risk fracturing her Conservative base." The currency slumped from around $1.2950 before the release of exit-polling data to $1.2720 afterward before rebounding to $1.28. It subsequently fell below $1.27 in the past hour before bouncing
back to just under $1.28.
- Chart support for the pound is at $1.2709, and the currency nearly got there in the initial knee-jerk selling after the release of UK exit polls. Sterling has rebounded a bit since and remains above that technical level. Only "a clear break below this support would indicate deepening market concern over the election result," says Rick Spooner, chief market analyst at CMC. That as more broadly, he posits, "The possibility of a reduced Conservative majority or even a minority government is unlikely to have a significant impact on broader global markets. The biggest market moves are likely to be confined to the UK economy." The pound has eased in recent minutes, falling to $1.2720.
- If the exit poll's prediction comes true and the UK election delivers a hung Parliament, the result would be "a very bad" deal for Britain in its ongoing divorce with the EU because it would weaken the British negotiating position in Brussels, says Stephen Gallo, European head of currency strategy at BMO. That would further hit sterling, he added. The pound fell nearly 2% versus the dollar after the exit-poll release to around $1.2750. "Confirmation would
open up a door to $1.25 as soon tonight."
- The pound's 1.5% drop right after the release of the UK election exit poll may have been exaggerated, according to Stephen Simonis Sr., chief currency consultant for FXDD Global, because "this move happened at 5 pm NY time after markets have closed.," which is "an extremely illiquid time." He adds: "this move seems extreme. Certainly, electronic stop losses were triggered along the way to further exaggerate the move." Also: "we don't think a minority government will hurt Prime Minister May's position at the Brexit negotiations. The Tories still have the most seats in Parliament and she will negotiate aggressively on the UK's behalf."
- Many analysts and investors predicted the pound would fall to $1.20 if the UK election delivered no clear majority for any party. So far, it's only fallen to $1.28 from around $1.30, after the exit poll suggested this is the likely outcome, but a bigger drop may still happen. "Should the poll prove accurate, it is likely that the pound will give up the bulk of its post-election announcement gains. After this, retreating back to the low 1.20 levels versus the [dollar] is a very real possibility," says Dean Turner, economist at UBS Wealth Management. "Nevertheless, sterling has steadied following the initial sell-off and there are few signs that anxiety has spread into other markets just yet," he adds.
- New Zealand shares fall in early trading after an exit poll showed the governing Conservative Party could lose its majority following the UK election, adding to global political uncertainty. The NZX-50 index was down about 0.2% to 7443 on a morning that was light on local company news. Among the biggest movers were outdoor retailer Kathmandu, which was 1.5% lower to NZ$1.95, and retirement-village operator Metlifecare, which was 1.4% lower to NZ$5.46.
- With the exit poll showing the Conservative Party will win only 314 out of the British Parliament's 650 seats, this situation could be reminiscent of 1974, says Nomura analyst Jordan Rochester, when the Labour Party formed a minority government. "This could be a 1974 scenario with a true hung parliament and failed coalition talks with the Conservatives attempting to govern with a minority but let's wait for the real results before diving too deep into that scenario," he says. That government, under Prime Minister Harold Wilson, only lasted between February and October, when a second election delivered a narrow majority for the Labour Party.
- The British pound weakens nearly 2% after an exit poll suggests Prime Minister Theresa May's Conservative Party may have lost its majority in the general election. "The market is not in panic mode, but it is shell shocked by this result," City Index says. The firm says uncertainty over the results, which won't be confirmed until Friday, is likely to put further downward pressure on the British currency overnight. She sees $1.253--which would mark a 1.7% slide from current values--as a key level. "The outcome of this election is impossible to predict, and we can't see how the pound could stage a recovery on the back of this," she says.
- The Brazilian electoral court judge who is overseeing a trial that could oust President Temer agrees there was an "abuse of economic power" in the 2014 elections, adding further to expectations he will vote in favor of canceling the leader's mandate. Justice Herman Benjamin is set to cast the first vote against Temer as early as Thursday night but analysts say the president still has a good chance of being absolved by the majority of the court. Temer and Rousseff, who won the 2014 election with Temer as her running mate, are under investigation for illegal campaign financing. They both deny wrongdoing.

Jun 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Crude futures edged up in early Asian trading following heavy losses in the previous session after official data showed that U.S. inventories rose for the first time in 10 weeks, reawakening concerns of a supply glut.
- Gold edged lower as investors awaited cues on market direction amid a number of geopolitical events later in the day that could boost the safe-haven demand for the metal.
- London copper rose to a one-week high after China trade improved in May which alleviated concerns over the health of the world's second-biggest economy.
- Chicago corn rose for a fifth consecutive session and traded near a one-year high hit in the previous session as concerns over dry weather across the U.S. Midwest triggered short-covering.
- Sterling traded near a two-week high, supported by expectations that Prime Minister Theresa May's party will win a majority in Britain's general election, while the euro held steady ahead of a European Central Bank policy announcement.
- From gold to industrial metals, investors are trading cautiously early in a day lined up with key events. But this could well be the lull before the storm leading to near-term volatility. Though former FBI director James Comey's prepared statement has been released ahead of his Congressional testimony, investors are probably waiting to see if there's anything more in the actual testimony later this evening that could implicate US President Trump, says OM Financial's Stuart Ive. He expects the ECB to broadly maintain monetary easing later Thursday, while the UK election may too fuel some uncertainty. Any hint of further weakness in China in its latest trade data could also drive down industrial metals.
- London spot gold prices ease marginally Thursday as the markets await key events. Investors will be closely monitoring the UK elections and the ECB meeting before taking positions. Analysts see a strong upside potential for gold to breach above a psychological threshold of $1,300 per oz, having already pushed past $1,280/oz this week to hit a 7-week high. Next week's Fed meeting will also be a crucial determinant of near term gold prices because of an expected rate rise and direction on monetary policies for the year. Spot gold is 36 cents lower at $1,286.40/oz.
- Former FBI director Comey's inquisition may now turn out to be the least interesting event for markets, NAB says. The prerelease of his prepared testimony overnight suggests while he will confirm Trump leaned on him to end the inquiry into National Security Advisor Michael Flynn, he will stop short of suggesting the president may have obstructed justice. Still, the broader Russian probe will run and run, and this particular millstone around the neck of the Trump administration looks unlikely to be lifted anytime soon, NAB adds.
- The Sierra Club blasts a memo from Attorney General Jeff Sessions ordering Justice Department prosecutors to halt extracting payments to third-party groups as part of settling ​future ​corporate wrongdoing cases. The memo has been interpreted to mean terms such as Volkswagen's agreement to invest $2B in electric-vehicle charging stations as part of its emissions-cheating settlement would be forbidden in the future--a relevant rollback given the Justice Department's pending civil case against Fiat for similar alleged transgressions. ​Daimler's Mercedes is also facing government scrutiny on diesel emissions. ​​"Jeff Sessions and the Trump administration are once again undermining critical policies that benefit the public through cleaner air and water​," said Sierra Club Environmental Law Program Director Pat Gallagher. ​Sessions's memo is "nothing more than an effort by the Trump administration to let companies like Fiat​ ​Chrysler and Mercedes off the hook.​"​ ​Memo leaves untouched policy of seeking payments to government for environmental remediation​.
- The Mexican peso firms in Mexico City to 18.2295 to the US dollar from 18.2490 Tuesday on continued momentum from the US-Mexico agreement in a sugar trade dispute, and Sunday's ruling-party election victory in a key state that for now lowers perceived risk of a less market-friendly candidate winning 2018 presidential elections. "It is unlikely for the market to be concerned about the presidential election until perhaps April-May of 2018," Nomura says. "We think political risk premium is now significantly lower than before this past weekend." The IPC stock index rises 0.1% to 49,275 points.
- When the White House earlier this week announced Joseph Otting as the nominee for Comptroller of the Currency, a top banking regulator, its official statement said he is "a graduate of the School of Credit and Financial Management at Dartmouth College." A spokeswoman for Dartmouth says an education program by that name once rented space at the Ivy League school, but it doesn't have any official affiliation with Dartmouth. Don't be surprised if Senate Democrats ask Otting about this issue during his confirmation hearing.
- Gold prices extend losses and settle lower following the early release of former FBI director James Comey's testimony to Congress, after three straight sessions of gains. Comey is scheduled to testify Thursday, but a dearth of revelations from the documents eased some investor concern about further political turmoil, and led riskier assets higher. Gold rose to six-month highs this week, trading at levels not seen since before the presidential election, on political uncertainty ahead of central-bank meetings, the UK election and Comey's statements. Gold is "now again paying attention to upcoming Fed meeting," RBC says, since central bankers are expected to raise short-term interest rates.
- Three insurance M&A deals that were "at a handshake" ahead of the US presidential election "went pencils down about a week or two after," due to uncertainty about taxes, said John Purcell, co-head of North American insurance at JPMorgan, at an S&P Global conference in New York. "The velocity of deal activity has slowed a bit," he says. But he's still working on insurance deals, he says, especially with companies that are shrinking.
- On the banks of the Ohio River, President Trump promises lofty infrastructure improvements -- including a facelift for US waterways critical to the nation's grain industry -- but remains vague on details. Trump points to decaying US locks and dams, which ferry crops to ocean ports, and tells a gathered crowd they are "going to see some amazing things happen over the next long period of time." But some farm groups worry about the particulars, including that a proposal by the administration to impose fees on grain traders and other river users as a means to fund repairs could result in lower prices paid to US farmers for their crops.
- The only criticism Trump's proposed top financial diplomat, David Malpass, faces during his short Senate nomination hearing was on the administration's dollar policy. Oregon Sen. Ron Wyden, the ranking Democrat on the Senate Finance Committee, says mixed messages from Trump and Mnuchin leave the public bewildered. "Is the administration for a strong dollar or a weak dollar?" Wyden asks rhetorically. "Nobody knows," he answers himself. Malpass didn't comment. But he says in his opening remarks part of his mandate is "protecting the trustworthiness of the US dollar." And for many years Malpass has advocated global exchange-rate stability. What that will mean in practice, however, is still unclear.
- David Malpass, Trump's candidate for top financial diplomat, faces little questioning in his Senate confirmation hearing, signaling his nomination should face scant opposition when lawmakers decide to approve him. Although the world is wary of the administration's America-first approach to economic policy and he favors downsizing some multilateral institutions, Malpass is viewed by some as more of an internationalist within the Trump team. Malpass tells the Senate Finance Committee he'd help "domestic industries remain competitive while encouraging foreign investment in the US that creates more jobs here," and that Washington's "international policies need to work toward broader prosperity."
- United Continental President Scott Kirby says he doesn't have any idea what would happen to international travel demand if the US banned passengers' carriage of electronic devices in aircraft cabins. "It will depend on what the rules are and what the government says about it," he says, speaking at a Deutsche Bank conference. "I don't think I have the right clearance level to know what the risk is," Kirby says. "We would always defer to people who have better intelligence." He says one big effect would be operational, as airlines would have to go through all the carry-on bags to weed out personal electronic devices. "I certainly wouldn't not take a trip if I can't take my iPad with me," he says, in reference to a global trade group's study that says 15% of business travelers would reconsider their travel.

Jun 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices dipped, with Brent crude futures around $50 per barrel, as fuel markets remained oversupplied, although tension in the Middle East and falling U.S. inventories lent some support.  
- Gold edged lower, although still holding near its highest in seven months, supported by a weaker dollar ahead of key political and economic events that are expected to stoke bullion's safe-haven appeal.  
- London copper edged higher in early trading in Asia as some investors switched into commodities from equities.
- Chicago wheat gained more ground, trading near last session's two-week high on worries about dry weather threatening production of high-protein wheat in the United States.
- The longer-term outlook for the dollar-yen may well depend on how much it can recover after congressional testimony from former FBI director James Comey later this week. Against many other major currencies, the dollar has already given up the gains made on hopes for fiscal stimulus since the U.S. election. The dollar's fall against the yen overnight put the pair below its important 200-day moving average around 110.42. Without a quick recovery above that, the pair is likely to fall more amid concerns about U.S. political instability, a factor that could further dent investors' hopes for U.S. fiscal stimulus. The USD/JPY is at 109.49, slightly up from 109.40 late Tuesday in New York.
- Rising political uncertainty continues to provide support for gold. Thursday remains key, with former US FBI Director James Comey set to give testimony about his dealings with Trump, while voters head to the polls in the UK, ANZ says. This comes as the diplomatic crisis in the Middle East involving Saudi Arabia and Qatar intensifies. This has seen a continued rise in safe-haven buying of the precious metal. A weaker USD is also playing its part in pushing gold higher.
- Minor early losses for New Zealand's NZ50 index, which is down 3 points to 7491.67, as investors brace for a trio of risk factors Thursday. "While it was a relatively quiet overnight session for data, there was a risk-off feel," ANZ says. On Thursday, the UK goes to the polls, there's an ECB meeting and former FBI director James Comey will give public testimony on the agency's Russia investigation. Overnight there were also rumours that China was ready to buy more US Treasuries under the right circumstances, ANZ says.
- USD remains under downside pressure against most major currencies and US 10-year Treasury yields fell by roughly 4 basis points to 2.14% in US trading. CBA says doubts about the Trump administration's ability to deliver an aggressive fiscal stimulus package through the US Congress anytime soon will continue to undermine the USD and US Treasury yields. With no policy-relevant US economic data releases the rest of the week, the USD focus is on former FBI Director James Comey's questioning by the Senate Intelligence Committee on Thursday into alleged ties between Trump's 2016 campaign team and Russia, CBA adds.
- Is there a constitutional right to follow President Donald Trump on Twitter? It's a question that no one thought to pose until recently. Pushing the issue are the First Amendment advocates at Columbia University's Knight First Amendment Institute, a months-old research, education and litigation center. The free-speech institute says it sent a letter to the Trump administration claiming that a number of individuals have been blocked from Trump's @realDonaldTrump account because they "disagreed with, criticized or mocked," the president. The institute offers examples of prolific anti-Trump tweeters who say they were blocked from @realDonaldTrump in recent days. The institute says the Constitution requires those accounts to be unblocked. The White House didn't respond to a request for comment.
- Powering through worries of a renegotiated Nafta, Mexico's light-vehicle production and exports both jumped in May. Production at the country's foreign-owned assembly plants surged 17% compared to a year ago and exports rose 14%. Through the first five months of the year, both production and exports also are up more than 14%, compared to 2016. Mexico's Nafta partners continue taking most of the exports, with greater than 3/4 of exported vehicles sold to US consumers and nearly 9% more to Canadians.
- An index tracking news coverage of the global economy falls for the second consecutive month and is now back to pre-US election levels. Absolute Strategy Research, which compiles the ASR/WSJ index, says its measure dropped to 57 in May compared with a 59.1 reading in April and believes the decline suggests news relating to the reflation trade has subsided. "We think disappointed expectations around policy could have played a strong role," ASR says. The move is historically consistent with a fall in the equity-bond returns ratio, ASR says. A measure of 50 tends to be associated with stock returns keeping pace with those of bonds year-over-year, according to ASR. The analysts add that the stimulus newsflow component of the index shows market "chatter" particularly around fiscal policy, has fallen into negative territory, which signals a tighter stance for the first time since October.
- GM CEO Mary Barra says the Trump administration's withdrawal from the Paris climate accord hasn't changed GM's plan to reduce emissions and other environmental commitments. "We understand the science and believe in the science," she says ahead of GM's shareholder meeting. She cites increased use of renewable energy at GM's factories and development of green cars like the Chevy Bolt. "We're going to take these steps regardless. We have voiced that opinion to the administration even prior to their decision." Barra is on Trump's business advisory council.
- Time to ponder a sub 2% yield again? Jack McIntyre, of Brandywine Global Investment Management, says he would not rule out that the 10-year yield could fall to as low as 1.8%. "With the uncertainty of fiscal stimulus, political uncertainty in general and concerns over the growth and inflation outlook, this will get investors wanting to own Treasurys," he says. Some traders say from a technical view, the yield has room to slide. The 10-year yield has fallen below its 200-day moving average around 2.17% and investors using historical patterns to trade could buy and push the yield to 2% or lower. But some are skeptical whether a sub-2% yield would stay for long, saying US fundamentals don't support the yield moving below 2%.
- Risk aversion boosts perceived safe-haven currencies, taking USD/JPY to a six-week low around JPY109.56, and EUR/CHF to a four-week low around CHF1.0844, according to Factset. Markets are wary before Thursday's European Central Bank meeting, U.K. election and testimony from former FBI Director Comey before U.S. Congress. John Hardy, head of forex strategy at Saxo Bank, says falling U.S. bond yields since Friday's weaker-than-forecast U.S. jobs data have pushed the dollar lower against the low-yielding yen. But he also notes yen strength unusually coinciding with relative strength in emerging market currencies and strong global risk appetite. "The apparent theme is that the market is celebrating the lack of policy tightening as the inflationary threat is failing to materialise, while refusing to fret over the risk of economic weakness."
- If political fissures widen between Qatar and Arab states, buyers of Qatar's LNG may reconsider their ties with the gas producing nation, says Bernstein Research. In such a case, US, Australia and some other emerging global gas hubs such as Mozambique would stand to benefit. So far, gas and oil exports out of Qatar have not been affected by the severance of diplomatic ties.
- With geo-political tensions continuing to provide support, London spot gold nudges higher from six-week highs. OM Financial's Stuart Ive says focus this week will be on ex-FBI director James Comey's testimony that could increase the political heat on US President Donald Trump, possibly driving gold prices higher. He says the uncertainty over UK elections as well as Middle East tensions are additional factors aiding gold's momentum. Investors are not reacting to a marginal increase in proposed tax rates on gold jewelry under India's looming goods and services tax. Spot gold is up 0.3% to $1,282.40/oz.

Jun 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices fell for a third day, hit by concerns that a political rift between Qatar and several Arab states would undermine an OPEC-led push to tighten the market.  
- Gold touched its highest in more than six weeks as Asian stock markets and the U.S. dollar weakened ahead of a UK national election and a European Central Bank meeting scheduled for Thursday.
- London copper was steady, supported by a weaker dollar, although signs of slowing growth in China and the U.S kept a lid on prices.
- Chicago wheat rose for second session and spring wheat prices hit a one-year high as adverse weather in the United States, Canada and the Black Sea region threatened global supplies.
- US Agriculture Secretary Sonny Perdue says US and Mexican officials are close to resolving a dispute over Mexican sugar exports, in what's been seen as a warm-up to the upcoming Nafta renegotiation. "Obviously these negotiations are tough, they've been tough, both sides have been very firm in some of their requirements," Perdue says during a trade visit to Canada. "I'm hopeful that both sides understand it's in both our interests to come to a resolution on this rather than reintroduce tariffs which confound and distort the market in other ways." Commerce Secretary Wilbur Ross said earlier he was confident a sugar deal would come Tuesday, after extending a previously-set Monday deadline for negotiations.
- The International Civil Aviation Organization, a UN body, says security and safety risks must be balanced when considering restrictions on fliers' personal electronic devices in aircraft cabins. The body's president, speaking to a big airline industry trade-group meeting in Mexico, says ICAO has established a cargo-safety group to consider the combined safety, security and facilitation aspects of the possibility, which is under consideration by the US Department of Homeland Security to reduce risk from improvised explosive devices hidden in laptops or tablets. The US government has said some sort of expansion of an existing and limited ban on electronics is likely, but it hasn't said when or on what routes.
- The US Chamber of Commerce's Institute for Legal Reform is renewing a campaign to require plaintiffs to disclose third-party financing arrangements in all civil cases filed in federal court. Lisa Rickard, president of the Institute for Legal Reform, sent a letter late last week to the office of the US courts asking the committee on rules of practice and procedure to consider baking in such a disclosure requirement to the federal rules. The proposal would require revealing any agreements that would give a person other than the plaintiffs' attorney "a right to receive compensation that is contingent on, and sourced from, any proceeds of the civil action, by settlement, judgment or otherwise." The would-be rule is identical to one proposed by the Chamber in 2014, which didn't advance very far in the rule-making process.
- Bill Ford says President Trump's withdrawal from the Paris climate accord won't "change anything for us." Ford, an outspoken environmentalist and great grandson of the Ford's founder, says he isn't fazed by Trump's protectionist policies, noting that the 114-year-old car maker is "pretty good at navigating choppy waters." Speaking at an event in Washington DC, Ford says the company is actively "weighing in on issues" and has a place at the table with both the Trump administration and congress. "Being in business for well over 100 years we've had to deal with every kind of regime possible."
- Imports of foreign-made steel to the US rose 24% in April from a year earlier to 2M tons, suggesting that importers may be building inventories in advance of additional US tariffs on steel later this year. Imports of semi-finished steel, which is primarily consumed by domestic steel mills, rose 86% in April and were up 84% during the first four months of 2017, says Bradford Research. April shipments of steel from domestic mills rose 0.7% from a year earlier, but were down 3.4% from March.
- White House and congressional proponents of putting a nonprofit corporation in charge of the nation's airways stress anticipated efficiencies and faster system. Compared to Canada's privatized system, they assert the Federal Aviation Administration spends proportionately nearly three times as much on what typically turn out to be less advanced improvements. But Paul Rinaldi, president of the union representing US controllers, sees uncertainty from looming budget battles on Capitol Hill as an even stronger reason to make the switch. "The status quo or doing nothing is unacceptable" he argues.
- Peru's Finance Minister Alfredo Thorne denies pressuring Comptroller General Edgar Alarcon to approve a government contract for an airport project in exchange for a budget transfer. A television program broadcast a recording Sunday where Thorne is heard telling Alarcon that the comptroller's office can help authorities advance the project with a positive report on the Chinchero project. He says President Pedro Pablo Kuczynski was holding off on transferring funds to the comptroller's office until the men spoke. The conversation was held before the comptroller's office issued a report last month citing irregularities in the contract, which led the project to being put on hold. Thorne says he has nothing to hide and that the recording was edited. Delays to construction projects caused by corruption concerns have led to a sharp slowdown in Peru's economy.
- Chile's central bank says the economy will likely grow 1%-1.75% this year, while adding that further cuts to its benchmark interest rate are unlikely. The central bank says the growth forecast takes into account weaker-than-expected economic activity in 1Q due to a mine strike. Next year, it sees growth of 2.5%-3.5%. The central bank adds that its current interest rate is compatible with inflation at 3%, the midpoint of its 2-4% target range. "In the most likely scenario, new movements to the rate won't be necessary." The rate was cut a quarter percentage point last month to 2.5%.
- It's like the rally never happened. Bank stocks are now cheaper versus the overall market than they were before the election, as investor exuberance at the prospects of tax reform and deregulation have hit a political reality in which neither seems near-term likely. KBW Nasdaq index, down 2% this year, is trading at 72% the S&P 500 on a price-to-earnings basis, versus 76% on Oct 31, according to KBW. The KRX index of smaller, regional banks is at 87% versus 91%. KBW smells a bargain: "It is hard to argue for further underperformance for the sector, [given] interest rates are higher and regulation isn't getting worse."
- Marc Kasowitz, the lawyer tapped by President Donald Trump to represent him in the investigation into possible Russian interference in the election, has been his legal bulldog for years, called upon to address grievances involving journalists, a reality-TV contestant and former business partners. But as the president again turns to the 64-year-old New York litigator, this loyal advocate will face a task unlike the legal fights he has waged for Trump in the past, in a political city that's unfamiliar territory.
- Trump's decision to pull the US out of the Paris Climate Agreement won't change long-term energy and industry trends, according to research from MSCI. A reduced regulatory burden could help the US energy sector in the short term, but a focus on increasing domestic production will likely lead to continued global oversupply of oil and natural gas, MSCI says. Meanwhile, renewable power generation will continue to get cheaper and is still expected to fall below the cost of coal power by 2020. The auto sector will continue to move towards more efficient vehicles, despite the US's more permissive stance, because Europe still accounts for a fifth of global light-vehicle sales, the research says.
- Commerce Secretary Wilbur Ross has set today as the deadline for solving a longstanding dispute over sugar trade with Mexico, threatening to slap on punitive tariffs on Mexican imports if the two sides fail to reach agreement. A Commerce spokesman said early Monday that Ross "remains hopeful there will be a negotiated solution," adding that Mexican Economy Minister Ildefonso Guajardo was in town for previously scheduled business meetings, and was also talking with Ross on the subject. Some US sugar producers have accused Mexican producers of unfairly dumping their products in the American market. The negotiations have been cast as an early test of the tenor of bigger trade talks pending: renegotiation of the North American Free Trade Agreement, which is scheduled to start in August.

Jun 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil markets rose more than 1 percent, pushed up by tensions in the Middle East where top crude exporter Saudi Arabia and other Arab states cut off ties with Qatar, and as signs of falling OPEC supplies tightened the market.
- Gold held steady after hitting its highest in over six weeks earlier, buoyed by disappointing U.S. jobs data that appeared to dilute the prospects for an aggressive string of interest rate hikes in the United States.
- London copper was steady, supported as the dollar weakened following a disappointing U.S. jobs report, while zinc and nickel prices tracked renewed weakness in steel markets.
- Chicago wheat futures rose for a second session, with prices underpinned by forecasts that hot and dry weather could hit U.S. production.
- Joining the chorus of US companies criticizing Trump's decision to abandon the Paris Climate Agreement, Citigroup global public affairs head Edward Skyler writes in a blog post the bank was "outspoken in our support for the US to remain" in the agreement, and is "disappointed President Trump chose to leave." Skyler says the bank remained committed to providing $100B in financing for clean energy, infrastructure, and related tech projects. Previously, CEO Michael Corbat had been among a group of chiefs who signed a letter urging Trump to stick with the pact. In January, Corbat was also among the banks publicly criticizing the president's travel ban executive order.
- Cybersecurity and healthcare experts in a report to Congress call for incentives to retire aging and insecure medical devices. The report, required by the Cybersecurity Information Sharing Act of 2015, makes multiple recommendations to boost cybersecurity in the nation's $148B medical device market. New incentives could be similar to the 2009 "Cash for Clunkers" program, which offset the cost of new cars with federal vouchers for drivers who traded in older, less-fuel efficient autos, the report says.
- Hedge funds and other speculative investors cut bullish bets on the dollar to their lowest level since mid-September in the week through May 30, Commodity Futures Trading Commission data shows. Bullish dollar bets fell to $7.9B this week from $8.9B the week earlier. Investors have lately been unwinding their bullish dollar bets, which totaled $26B at the start of the year, amid uncertainty over the US economy and President Donald Trump's stimulus plans. In other currencies, investors added to bets on a stronger euro.
- A new foreign-exchange system unveiled by Venezuela's cash-strapped government this week officially devalued its bolivar currency yet another 64%. President Maduro had presented the new measure as a solution to the country's chronic dollar shortages that have led the local currency's value into a steady free fall. But the system in its first week appears to be more of the same: a discretionary and opaque method of dollar distribution that appears unlikely to satisfy the needs of the crippled economy. The government sold less than $30M in its first hard-currency auction.
- The US manufacturing sector shed 1,000 jobs last month, the Labor Department reports, breaking a five-month streak of factory employment expansion. A weakening automotive industry and a still-high trade deficit are colliding with the enthusiasm for manufacturing that accompanied the Trump administration into office in January. "While the administration has initiated several trade reviews that could level the global playing field, they have yet to bear fruit," says Scott Paul, president of Alliance for American Manufacturing, a lobbying group with ties to the United Steelworkers Union. Workers and company executives alike continue to wait for the president to follow through on pledges to invigorate domestic manufacturing with more spending on public infrastructure and pro-employment tax reforms. Paul says these initiatives are beginning to look like "a fading possibility."
- The Justice Department said the executive branch can ignore congressional requests for information made by members of the minority party, in an internal opinion released Thursday that gives the Trump administration legal justification to withhold records from Democrats seeking to conduct their own inquiry into Russia-related and other matters. The Justice Department's Office of Legal Counsel, a unit that answers legal questions for government agencies and the White House, said congressional authority to oversee the executive branch may be exercised only by committees and subcommittees controlled by the party in power. Democrats have been sending White House and executive branch agencies letters on a near-daily basis on issues ranging from the Russia investigation and ethics issues to health care and environmental concerns.
- Oil prices are 3% lower since Trump said the US is leaving the Paris climate change deal, which begs the question: Is this why oil companies like ExxonMobil and ConocoPhillips wanted the US to stay in the accord? The conventional wisdom view was XOM, COP and others wanted the US to stay in the accord because they recognized climate change was real, and wanted the US to have more sway in global decision-making on fossil fuels they profit from. But maybe they just feared a reduced focus on renewables and climate change, combined with increased oil pumping, could keep oil prices low, hurting company's profits even more.
- Blue Cross and Blue Shield of Oklahoma has filed to offer Affordable Care Act plans in the state for 2018, according to the Oklahoma state insurance regulator. The insurer's moves are being closely watched because Blue Cross is the only ACA insurer left in Oklahoma, after others exited. Blue Cross parent Health Care Service Corp. earlier this year said it hadn't made final decisions about its ACA exchange footprint. Many insurers are struggling to make calls about participation amid uncertainty about the ACA's future. Regulators are worried about the possibility of bare regions around the country, where no ACA plans will be available. Already, 25 counties in western Missouri are likely to be in that situation, after Blue Cross and Blue Shield of Kansas City said it doesn't plan to offer ACA plans next year.
- Under Armour chief executive Kevin Plank criticizes Trump's withdrawal from the Paris Climate Agreement, saying "climate change is real" and that "we at Under Armour are disappointed by the administration's decision." The sportswear executive came under fire in February after expressing support for Trump, who he called an asset to the nation as a business leader in a television interview with CNBC. Plank has previously participated in a White House summit of manufacturing executives with the Trump administration. UAA didn't immediately respond to questions regarding whether Plank's disagreement with the Paris withdrawal would affect his decision to meet with Trump in the future.
- The Trump administration's decision to exit the Paris climate accord may encourage companies to postpone the business decisions needed to adjust to future needs, and will likely have negative economic implications, says Jens Peers, chief investment officer, sustainable equities and fixed income, at Mirova, an asset management company owned by Natixis Asset Management. Other countries could choose to add a carbon tax on US imports, making investments in any export-orientated production capacity potentially less attractive, Peers says. In addition, research and development spending on low carbon solutions may slow in the US, which could put US companies four or more years behind those of other nations if the economic model really goes low carbon for climate or financial reasons, he says.
- President Trump isn't the only US leader with a beef against Germany. Energy Secretary Rick Perry says he doesn't appreciate being lectured by Germany about the Paris accords on climate change when the country is pulling out of nuclear power and in some cases replacing it with coal-fired power. At a recent meeting in Rome, "the Germans were very adamant about Paris and staying in Paris, yet their emissions are headed in the wrong direction. They're taking nuclear plants off, they're backfilling with coal-burning plants," says Perry in a WSJ interview.
- Energy Secretary Rick Perry wants four nuclear reactors under construction in Georgia and South Carolina by Southern Co. and Scana to be completed. But he says it's the job of Toshiba and its US nuclear unit Westinghouse Electric, currently under chapter 11 bankruptcy protection, to make it happen. In a WSJ interview, Perry declines to put pressure on Toshiba, saying "I shouldn't be telling them how to run their company." He refrains from turning the matter into a political issue, saying he has had good talks with Japanese officials and "everybody's appropriately focused on it."

Jun 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices dropped amid worries that U.S. President Donald Trump's decision to abandon a global climate pact could spark more crude drilling in the United States, stoking a persistent glut in global supply.
- Gold fell to hit its lowest in a week, with stock markets climbing and the dollar firming after upbeat U.S. private sector job figures appeared to boost the prospects for an interest rate hike this month.
- Copper and nickel prices inched down, undermined by concerns over weakening demand and oversupply.
- Chicago wheat futures lost more ground with the market poised for its biggest weekly loss since late March as forecasts of dry weather across the U.S. grain belt are expected to boost the harvest.
- The US withdrawal from the Paris climate accord may have handed China an unprecedented opportunity to lead global climate affairs, says Wood Mackenzie principal consultant power and renewable Frank Yu. "We are going to see closer cooperation between China and the European Union in accelerating the energy transition into a low-carbon economy," says Yu. China would accelerate the development of its national carbon trading market, while lending more support to climatically-vulnerable countries, he adds. Many US companies would also likely relocate their renewable technology centers to Asia, a move that could lead to the cost of renewables falling faster in Asia and displace dirty fuels such as coal, Yu says. He adds that green capital funds are also likely to sharpen their focus on Asia, benefiting nations like India, Indonesia and Vietnam in meeting their renewable goals.
- BlackRock CEO Laurence Fink also disagrees with Trump's decision to withdraw the US from the Paris climate accord but will remain a part of an administration's advisory forum Trump has turned to for advice on policy and economic matters. "I believe there is the potential to have a positive impact," with Fink adding in a statement that "I do not agree with all of the President's policies and decisions, including today's announcement." Earlier this year, BLK said the disclosure of climate risks would be among its key engagement priorities with executives. The world's biggest money manager was among the large investors which earlier this week backed a shareholder proposal at Exxon that called for the company to share more information about how climate change and regulations could impact operations.
- Tim Cook has joined the chorus of business executives criticizing Trump's decision to withdraw from the 2015 Paris Accord. "Climate change is real and we all share a responsibility to fight it," he said in a note to Apple employees obtained by WSJ. Cook added he spoke with Trump on Tuesday and encouraged him to keep the US in the climate agreement.
- Australian mining and energy giant BHP Billiton adds to a chorus of companies expressing disappointment at the U.S. decision to withdraw from the Paris climate accord, but adds the move doesn't impact its long-held support for the agreement. It says the Paris deal provides a solid foundation for a global response to climate change. "We have been clear in our actions and commitments," says a spokeswoman, adding BHP believes the dual objectives of limiting climate change and providing reliable and affordable energy are essential to sustainable development.
- Agricultural giant Cargill calls President Trump's move to pull the US out of the Paris climate accord "extremely disappointing," and says its own efforts to address climate change and emissions will continue. "Exiting international accords like the Paris Agreement will negatively impact trade, economic vitality, the state of our environment, and relationships amongst the world community," says Cargill CEO David MacLennan. Cargill, sometimes under pressure from environmental groups and sometimes in collaboration with them, has taken steps to curb deforestation and generate more power for its food plants from renewable sources.
- Mark Zuckerberg lambasts Trump's decision to quit the Paris climate accord. The move "is bad for the environment, bad for the economy, and it puts our children's future at risk," the Facebook (FB) CEO says in a post that didn't name Trump. Zuckerberg has criticized Trump's immigration policies and isolationist tendencies in the past.
- Investors concerned the Trump administration's decision to withdraw from the Paris Agreement may signal "further anti-renewable action," may want to invest in solar and wind companies with global exposure to dampen domestic risk, says Garvin Jabusch, chief investment officer at Green Alpha Advisors, a money manager focused on investing in solutions to climate change, resource scarcity and other systemic risks to the global economy. "Stepping away from the accord now puts the US at a disadvantage four years down the road when the next set of Paris negotiations take place," Jabusch says. "It also threatens the long-term prospects of US businesses." Despite the decision to withdraw, however, wind and solar will remain a driving force in the nation's energy development, he says.
- Labor Secretary Alexander Acosta says removing the US from the Paris climate accord will support domestic manufacturing employment. "The US's withdrawal from the Paris climate accord is this administration's bold commitment to promoting pro-growth principles and rebuilding America's manufacturing base, which was under siege by the Paris accord," he says. Manufacturing was an important source of job growth early in the recovery, but gains have slowed sharply. Manufacturing employment rose just 0.3% in April compared to a year earlier, versus a 1.6% increase in overall US payroll. May figures will be released Friday. AFL-CIO President Richard Trumka denounced the move, calling it "a decision to abandon a cleaner future powered by good jobs."
- Sheryl Sandberg is a little behind on her reading. The Facebook COO was asked to respond to comments by former Democratic presidential candidate Hillary Clinton about fake news on the social network during last year's election. Her response? "I haven't seen the transcript (so) I can't react to the specific comment." Sandberg, one of Clinton's most ardent backers, adds FB is doubling down on fighting fake news and users don't want those stories on the social network.
- Trump says the US will withdraw from the 2015 Paris climate accord, citing disadvantages to US workers and the blocking of the development of "clean coal" technologies. In response to the announcement from the White House, World Coal Association CEO Benjamin Sporton says, "this decision is the result of a failure to build a genuine coalition on climate action that recognizes the role of all technologies, including low emissions coal, to achieve climate objectives." However, in the US coal has been primarily edged out by innovations in shale oil drilling that have unlocked an abundance of cheap natural gas, driven down energy prices and forced several coal producers out of business.
- In President Trump's remarks as he pulls out of the Paris Accord he avoids altogether the debate over whether climate change is a real problem, or just a "hoax" as he once called it. Instead, he frames his decision around the fairness of the deal itself, using the same type of language he's used regarding trade deals like NAFTA. "The bottom line is the Paris Accord is very unfair at the highest level to the United States," Trump says. For example, he says India makes its participation in the Paris deal "contingent upon receiving billions and billions and billions of dollars in foreign aid from developed countries," while China can do "whatever they want [in terms of emissions] for 13 years. Not us."
- Trump says the US will withdraw from the 2015 Paris climate accord, which is aimed at curbing greenhouse-gas emissions, believed to be a key driver of climate change. But Trump says the US will try to negotiate a deal that "is fair to US workers." Trump says the current agreement "blocks the development of clean coal in America."

Jun 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil futures rose from a three-week low touched the previous session, buoyed by expectations the United States could pull out of a global climate accord and by a report that showed U.S. crude stockpiles had fallen more than expected.  
- Gold held steady, after hitting a five-week high in the previous session, supported by geopolitical tensions and a weaker dollar, but expectations the U.S. Federal Reserve will hike interest rates this month weighed on prices.  
- Nickel prices fell further to hover around 11-month lows, dragged down by worries about oversupply and fears of tepid demand from steel mills in top metals consumer China.  
- Chicago soybean futures edged higher, rising for a second session as a port strike in Argentina threatened to disrupt supplies from the world's third largest exporter of the oilseed.
- The Australian dollar tumbled on Thursday after a private survey showed China's manufacturing activity unexpectedly shrank in May, casting a cloud over the global economic outlook.
- Brazil's political turmoil made a major appearance in the central bank's rate decision today. The Selic benchmark rate was cut to 10.25% from 11.25%, extending a cycle that began in October. But now that President Michel Temer could be ousted pending an electoral-court decision coming up next week, markets fear for his fiscal-reform agenda, which is key to tame long-term inflation, economists say. In a statement, the central bank says "high levels of uncertainty regarding the evolution of reforms and adjustments in the economy can have detrimental effects on economic activity."
- Elon Musk, CEO of both Tesla and SpaceX, threatens to quit White House advisory councils if President Trump decides to leave the Paris Agreement on climate change. "Don't know which way Paris will go, but I've done all I can to advise directly to POTUS, through others in WH & via councils, that we remain," Musk says on a Twitter post. Asked what he would do if the president decides to leave the accord, Musk responds, "Will have no choice but to depart councils in that case." While Musk has faced past criticism for working with the White House, he has said he wants to use the position to advocate for his point of view with President Trump.
- The Fed's latest beige book report notes worker shortages "across a broadening range of occupations and regions." One point of interest from the San Francisco Fed: "Recent changes in immigration policy created substantial labor supply shortages for low-skilled workers in the agriculture sector; as a consequence, some growers discarded portions of their harvest."
- ​From stalled tax reform to an uncertain geopolitical landscape, there are plenty of reasons for companies not to do deals. But corporate chiefs "still feel pressure to grow and position themslves, and M&A is an important part of that," Goldman Sachs Co-Chief Operating Officer David Solomon says. "CEOs by nature have to act. They have to take the current environment." He says internal GS data about the M&A pipeline "feels a little bit better the last month or two than it did in the beginning of the year." Global M&A is about flat YTD at $1.3T, down about 11% in the US. GS is the top-ranked adviser, landing on 140 deals worth $340B, according to Dealogic.
- A shareholder resolution seeking to pressure Exxon into disclosing more about how its assets would be affected by climate change passed with 62% of votes cast, a strong signal that major asset managers are concerned and interested in the topic. More than two thirds of investors approved XOM's pay practices, and the company's directors were elected with 93% of the vote.
- As President Donald Trump leans toward unwinding emissions reductions the US agreed to as part of the Paris climate accord, there's already backlash from environmental advocacy groups. Public Citizen says such a decision would be "an epic blunder," while the Sierra Club's executive director calls it a "historic mistake." Bradley Campbell, president of the Conservation Law Foundation says it "puts the US on the wrong side of history and at odds with nearly 200 other countries that understand the threat climate change poses." The president tweeted earlier today that he would announce his decision on the accord over the next few days.
- Canadian Defense Minister Harjit Sajjan is latest Canadian official to condemn Boeing's  decision to push the Commerce Department to launch a trade probe against Montreal's Bombardier on allegations it received government subsidies. In response to the Commerce probe, Canada says it's reviewing potential deals with BA--most notably the possibility of purchasing 18 of the company's F/A-18 Super Hornet jets. The BA aircraft would help meet Canada's short-term air-force needs given an aging fleet. "The interim fleet procurement requires a trusted industry partner," Sajjan says in prepared text of speech delivered at a Canadian defense and security conference. Pursuing trade action against Bombardier "is not the behavior we expect of a trusted partner. We call on Boeing to withdraw" its trade complaint, Sajjan adds.
- Exxon Mobil reiterates its view of how climate change will affect its business, saying even under scenarios where carbon emissions are severely restricted, $11T in oil and gas spending will be required. In such a scenario, XOM believes it is positioned to win out over other companies. Climate activists have questioned that conclusion, also reached by other big oil producers, noting it can't be true that everyone will be the "last man standing."
- Defense analysts have struggled to interpret how the State Department managed a total $110B in potential arms sales to Saudi Arabia which was announced during the recent presidential visit. But Lockheed Martin CEO Marillyn Hewson gives some insight. Hewson tells an investor event that the $28B in potential business for her company includes support deals stretching out 30 years. "If we saw everything... we could see new business potential of up to $28B over the life of these programs," she says. "None of it will be really near term."
- President Trump says in a morning Twitter message he'll be deciding soon on the Paris Agreement, a landmark climate accord among nations that was signed by former President Obama to reduce carbon emissions. "I will be announcing my decision on the Paris Accord over the next few days. MAKE AMERICA GREAT AGAIN!" he says. The tweet comes after a report earlier in the day from new outlet Axios that cited sources saying Trump had decided to withdraw from the accord. If the US were to pull out of the accord other nations may eventually follow, some say. But other analysts say it would only rally stronger support for the deal among other nations, leaving the US as a "rogue" on climate change.
- Finance chiefs at multinational firms are altering their tax plans or delaying decisions amid potential changes to the U.S. tax system, a survey by Taxand, a global network of tax advisory firms, has found. In a survey of finance chiefs and tax directors during a conference in Frankfurt, 55% said U.S. reform plans have resulted in them changing course or postponing decisions. According to the participants of the survey--a total of 136 finance and tax chiefs working at  multinational companies in the Americas, Europe and Asia--the transition towards a new tax system to be the most challenging issue international firms face.
- The pound has found some support in Asian trading following a selloff stoked by the latest YouGov poll in the UK showing the Conservatives' lead having shrunk further ahead of next week's election. A YouGov poll last week had a sharply narrowed gap between the Tories and Labour, which sent sterling lower then as the result raised questions about how big PM May's party may win. She called the snap vote amid presumptions that a new election would strengthen her hand in Brexit negotiations. Instead, it appears the reverse may happen. That, as a result, has some of the recent bullishness regarding the pound getting unwound. It's broadly 0.3% lower, but the pound has rebounded some in Asia after the initial post-poll selloff about 3 hours ago.

May 31 - Trump is pulling U.S. out of Paris climate deal (
- U.S. President Donald Trump has decided to withdraw from the Paris climate accord, Axios news outlet reported on Wednesday, citing two unidentified sources with direct knowledge of the decision.
- Trump who has previously called global warming a hoax, refused to endorse the landmark climate change accord at a summit of the G7 group of wealthy nations on Saturday, saying he needed more time to decide. He then tweeted that he would make an announcement this week.
- Fox News also cited an unidentified source confirming the pullout.
- The accord, agreed on by nearly 200 countries in Paris in 2015, aims to limit planetary warming in part by slashing carbon dioxide and other emissions from the burning of fossil fuels. Under the pact, the United States committed to reducing its emissions by 26 to 28 percent from 2005 levels by 2025.
- Axios said details of the pullout are being worked out by a team that includes EPA Administrator Scott Pruitt. The choice is between a formal withdrawal that could take three years or leaving the U.N. treaty that the accord is based on, which would be quicker but more extreme, according to Axios.
- The decision to withdraw from the climate accord was influenced by a letter from 22 Republican U.S. senators, including Majority Leader Mitch McConnell, calling for an exit, Axios reported.
- Former President Barack Obama, who helped broker the accord, praised the accord during a trip to Europe this month.

May 31 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Gold fell for a third day, set for its first monthly drop since December, as U.S. economic data boosted the case for an interest rate hike by the Federal Reserve next month.
- Better-than-expected China manufacturing data pushed London copper higher in early trading, reversing overnight losses.
- The British pound dropped after a new poll found that British Prime Minister Theresa May's Conservative Party risks falling short of an overall majority in the June 8 national election.
- U.S. wheat rose as much 1.3 percent after the U.S Department of Agriculture pegged the condition of the crop below market expectations, though ample global supplies provided a ceiling to gains.
- Cocoa futures in London and New York vaulted higher on Tuesday, posting their largest one-day gains since 2012, as expectations that producers in top grower Ivory Coast have sold ahead a large chunk of their 2017-18 crop stoked buying.
- Malaysian palm oil futures rebounded from a one-month low hit in the previous session, lifted by expectations of rising exports, but traders expect the market to resume its downtrend on a stronger ringgit and weaker related edible oils.
- Fed Bank of St. Louis President James Bullard says the Trump administration will need to fulfill the expectations that have driven the stock market higher. Washington does have to deliver at some point, Bullard says. ANZ says it concurs. "Our eyes are on government and fiscal policy and less on monetary policy. Policy uncertainty is high and, if it remains high, growth will eventually be impacted and market volatility will follow," ANZ adds.
- Brazil's Planning Minister Dyogo Oliveira says the country's vast corruption scandal, which has implicated some of the nation's biggest construction groups, will create more space for foreign investment in local infrastructure projects. "There will undoubtedly be an increase in the participation of large foreign companies," Oliveira says at a government-sponsored event for investors in Sao Paulo, citing growing interest from European and Asian companies. Brazil currently has 55 infrastructure projects in the pipeline, largely related to energy, highways, sanitation, ports, and oil and gas, he says.
- Second-quarter earnings and growth are likely to disappoint, BlackRock Chief Laurence Fink says. Speaking at a Deutsche Bank investor conference, the head of the world's largest asset manager says he's hearing from corporate leaders that business was weaker than expected in April and May. "It would probably tell me that markets are fully priced at this moment," he says. While some industries such as energy have benefited from Trump's executive
orders, others are still waiting for more clarity on tax reform and infrastructure spending, he says. "Overall now we're probably anticipating more than we're going to get," from equity markets, Fink says.
- The head of Brazil's lower house of Congress, Rodrigo Maia, pledges support for President Michel Temer and vows to help push through the government's labor and pension reforms. Speaking at a government-sponsored event for investors in Sao Paulo, Maia calls Temer "courageous" and says the house's agenda was aligned with that of Temer. "The agenda of the lower house is the reforms," says Maia, a long-time ally of the president.

May 26/30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- A run by U.S. oil prices towards $50 a barrel ran out of steam as persistent concerns of oversupply outweighed signs of a strong start to the American summer driving season. Gold edged up to touch a one-month high, with investors turning to the safe-haven asset as geopolitical tensions sapped their appetite for risk.
- London copper drifted after a long weekend, as markets awaited top consumer China to resume trading later this week when its factory data is also due for the next directional cues.
- Chicago soybean futures lost more ground with the market dropping to a more than 13-month low as record supplies from South America added pressure.
- The dollar firmed against a basket of currencies as the euro and sterling were pressured by political uncertainties in the UK and eurozone, even as it surrendered ground against the perceived safe-haven yen.
- Joesley Batista, the embattled chairman of Brazilian meatpacking giant JBS SA, resigns as a director of US chicken processor Pilgrim's Pride. It's been a tumultuous month for Batista, who is deeply enmeshed in a Brazilian corruption probe that has led to bribery allegations involving Brazil's past three presidents; JBS also faces multiple probes related to recent trading activities. Pilgrim's, the second-largest processor of chicken meat in the US, appointed JBS's global marketing president Tarek Farahat to replace Batista on its board, noting in an SEC filing that  Farahat has "no family relationships" with anyone else on the company's board or management team. Pilgrim's shares are down 9.2% over the past month.
- Groups on both sides of workplace-discrimination regulations are lining up against the Trump administration's proposal, included in Tuesday's budget, to merge the Office of Federal Contract Compliance Programs with the Equal Employment Opportunity Commission. Employer groups say the merger could lead to more burdensome regulation due to combining the powers of the two agencies, including the kinds of damages they can pursue. Civil and workplace rights organizations say they believe the administration would defund and de-fang OFCCP, which monitors federal contractors' labor practices, by placing it under a different agency, leading to less enforcement, according to a letter 73 groups sent to Labor Secretary Alexander Acosta Friday. The original idea had been floated to the Trump administration by the conservative Heritage Foundation.
- Lobbying groups for the oil industry sought to withdraw from a lawsuit in Oregon challenging the federal government's environmental policies, a surprise move that came on the same day they were due to file a court document revealing their position on the science of climate change. The motions filed late Thursday by the American Petroleum Institute and the American Fuel and Petrochemical Manufacturers came days after a third trade association, the National Association of Manufacturers, asked a federal judge in Oregon for permission to exit from the 2015 suit.
- Moody's Investors Service spelled out the bad news for hospitals in President Donald Trump's federal budget plan and the newest Congressional Budget Office score for the American Health Care Act. The White House and the AHCA would slash federal funding for Medicaid, leavings states to pick up the cost or make Medicaid cuts of their own. State cuts are likely, said Moody's in a report on nonprofit hospitals. States may squeeze what Medicaid pays hospitals, the rating agency said, or shrink Medicaid enrollment. Both are bad for hospitals, which could see an erosion of cash flow and more uninsured patients, Moody's said.
- Exxon Mobil CEO Darren Woods joins the ranks of major US corporate leaders who have urged President Donald Trump to stay in the Paris climate pact. Woods wrote Trump in a May 9 letter that the US is "well positioned to compete within the framework of the Paris agreement," due to its abundant supply of low cost natural gas and innovation in the industry. Woods also echoed the stated position of Secretary of State Rex Tillerson, his former boss at XOM, that remaining in the agreement will give the U.S. "a seat at the negotiating table," in future climate discussions.
- A border tax targeting imported goods would raise the cost of buying a car by an average of $1,800 per vehicle and could put up to 45,000 US manufacturing jobs at risk, a global auto parts supplier trade group says. The Motor and Equipment Manufacturers Association, an auto parts maker lobby, said a border adjustment tax (BAT) as proposed by House Republicans may force car makers to "de-content" vehicles in order to keep prices from spiking, resulting in a 3% drop in component use and the potential loss of jobs, citing a Boston Consulting Group study it commissioned. "The BAT would put a large number of jobs at immediate risk," MEMA CEO Steve Handschuh said in a statement. The trade group said offsetting the impact of a border tax would lead auto makers to shed value-added components used in advanced driver-assist and safety features such as lane keeping and emergency brakes.
- The University of Michigan says that the partisan divide among respondents to its consumer confidence survey remained sharp. Democrats expect a recession while Republicans predict robust economic growth. Richard Curtin, the survey's chief economist, said that unlike age, education, or income groups, one's political party doesn't reflect actual differences in one's own prospects for employment and income. Instead, respondents are showing their differences in policy preferences through how they respond to survey questions. Curtin said the partisan divide may continue until major federal policy proposals are deemed either inevitable or impossible.
- Brazil's president fights bribe allegations, the country's stocks and currency selloff sharply, and days later, investors pile right back in. Data from EPFR showed that flows into Brazil equity funds over the last week were the highest since 2012. While the rush into Brazil may represent investors establishing short positions, there may be another explanation, says Cameron Brandt, EPFR Global's director of research. "Investors have been conditioned in recent years to see any sell-off as a buying opportunity that will disappear quickly," Brandt writes in a note to investors. One analogous situation is Russia. While investors initially fled Russian assets after it annexed Crimea in 2014, those funds posted a 20% gain in the following three and a half months,  Brandt writes.
- Investors put cash into bond funds while extending a streak of outflows for US equity funds in the week ending Wednesday, according to data from EPFR Global. Global bond funds posted $7.8B in inflows, marking their 21st week of inflows out of the past 22 weeks, while US equity funds posted their fourth consecutive week of outflows--the longest streak since 2Q 2016. Bond funds have come back into favor this year while an initial streak of inflows into US
equity funds following Election Day has given way to outflows as investors have pared back expectations for tax cuts and fiscal stimulus from the Trump administration, which some hoped would supercharge economic growth and inflation.
- German car stocks are in view Friday following media reports U.S. President Trump complained about the country's trade surplus, Frankfurt traders say. Several German media outlets reported Trump said Thursday that Germans were "bad, very bad" because the country sold more cars to the U.S. than it imported. "They're not really new, but they're hardly helpful either," a Frankfurt trader says of Trump's comments. "German car companies appear to be a thorn in the eye for Trump," Commerzbank analyst Ulrich Leuchtmann says.
- Time for Vice Adm. Mat Winter to pay attention to Twitter as he takes over as military head of the F-35 combat jet program. The former chief of naval research will be central to shepherding a huge deal for as many as 450 jets with Lockheed Martin and engine maker Pratt & Whitney, a unit of United Technologies. All under the watchful eye of President Trump, who's taken a keen interest in the Pentagon's largest program.

May 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices fell as a relentless rise in U.S. drilling undermined an OPEC-led push to tighten supply.  
- Gold held near its highest in four weeks after rising almost 1 percent in the previous session, buoyed as geopolitical tensions boosted its safe-haven appeal.
- Copper pulled back from the previous session's three-week high on Friday as momentum sparked by a strike at one of the world's biggest copper mines, Indonesia's Grasberg, eased ahead of the long weekend break in China, the U.S. and Britain.
- U.S. soybean futures fell to a 13-month low on Friday while corn and wheat each gained more than 1 percent on spreading and position squaring ahead of a three-day weekend, traders and analysts said.
- The dollar edged higher against a basket of currencies, moving away from last week's 6-1/2-month lows and shrugging off news of North Korea's latest missile test as investor attention turned to the Federal Reserve's expected interest rate hike next month.

- Funds had been net buyers of the pound for 6-straight weeks, with net shorts falling a further $400 million to $100 million per the latest CFTC data. There hasn't been this lack of negativity against the pound since shortly before the Brexit vote in June, notes ANZ. But a tightening in election polls hit the pound Friday, after the CFTC data's latest week ended. As such, the 6-week run of falling shorts could be coming to an end, the bank adds.
- The pound should remain under pressure to start the week, following Friday's slide, as further opinion polls show a decline in support for the ruling Tories and a resurgence for Labour party. While a Conservative win still looks like the most-probable outcome, the recent polling has raised concerns about the possibility of a smaller working majority for the party or even a hung Parliament. A weak government would make it harder for Brexit negotiations, notes National Australia Bank. Versus the dollar, the pound had its worst day Friday in 4 months, falling 1.1% to $1.2803. It's little changed in early Asian trading.
- The Trump White House's 10-year US$1 trillion infrastructure spending proposal included in the 2018 budget is based on only $200 billion of Federal government infrastructure spending initiatives, says CBA, and includes $800 billion of infrastructure spending assumed to come from non-Federal funding.. Trump's budget has also come under heavy criticism because of "double-counting" and extremely rosy economic growth projections of 3% a year to
2027. By way of comparison, growth has averaged only 2.1% since 2009, CBA adds. Doubts surrounding the infrastructure plan are high and will keep the USD weak, CBA adds.

May 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil extended falls after tumbling in the previous session when OPEC and allied producers extended output cuts but disappointed investors betting on longer or larger supply curbs.
- Gold prices held steady after dipping slightly earlier in the session as Asian stocks eased following an extension of output curbs by OPEC and other producing nations that left investors hoping for bigger cuts disappointed.
- London London Metal Exchange copper hovered near its highest in three weeks, supported by supply concerns after news of further disruption at Indonesia's Grasberg, one of world's biggest copper mines.
- Chicago soybean futures dropped to a more than six-week low and were poised for a third weekly fall as a deep fall in crude oil prices and plentiful world supplies put pressure on the oilseed.
- Sterling fell after a poll showed a narrowing lead for British Prime Minister Theresa May over her opposition ahead of elections next month, while weakness in oil prices dragged on commodity-linked currencies.
- Blue Cross and Blue Shield of North Carolina says it's seeking a 22.9% average rate increase on its 2018 Affordable Care Act plans. The biggest driver in the hike is uncertainty surrounding the federal payments that help reduce health-care costs for low-income ACA enrollees, the insurer says. If those payments were guaranteed, the requested rate increase would be only 8.8%, according to the company. Indeed, Brian Tajlili, a Blue Cross executive, says the ACA marketplace in North Carolina is stabilizing, with new enrollees in his company's plans appearing healthier. Blue Cross would need a "legally binding" commitment that federal payments are coming next year, likely meaning an appropriation passed by Congress, to be confident that the money was coming, he said.
- The Vice President's office will be an advocate for changing Dodd-Frank's provisions for handling financial firm failures, Mark Calabria, the vice president's chief economist, makes clear. He says the provisions, which are under review by the administration, amount to a bailout. "If you find yourself insolvent," he said to financial firms, "I would really suggest you go find yourself a good bankruptcy lawyer and not an army of Washington lobbyists, because I won't be returning your," phone call.
- Banks' hopes of changing the debit-card swipe fee rule just faded. Rep. Jeb Hensarling (R., Texas) decides to remove the repeal of the Durbin amendment from the Financial Choice Act, according to a House Financial Services committee spokeswoman, after a whip count in which Republicans weighed the act's chances of getting through the House with or without repeal. The amendment capped the fees merchants pay large card issuers when consumers shop with their debit cards and has remained a controversial issue between banks and merchants since then. Hensarling acknowledges Durbin repeal is contentious among Republicans in an emailed statement. He thinks "it belongs in the Financial Choice Act" but "we won't let this one provision hinder passage of an important priority bill that will end bank bailouts and help renew healthy economic growth for all Americans." But Molly Wilkinson, executive director of the Electronic Payments Coalition, calls the amendment "a crony handout that has generated unearned billions for the Big Box retailers."
- Colombian officials sought to quell the massive protests in the Pacific city of Buenaventura, which have halted several hundred thousand tons of cargo in the country's largest Pacific port this week. Colombian President Juan Manuel Santos sent a special commission to meet with community leaders of the port city, where residents are demanding better services since many of them lack basics like running water and sewage systems. So far the protests have halted some 25,000 containers and 229,000 tons of cargo. They have also blocked roads and prevented perishable goods like coffee beans from arriving to port. The government expressed optimism it would be able to reach an agreement by Thursday.
- According to the minutes of the May 2-3 FOMC meeting, several officials "expressed concerns that a possible easing of regulatory standards could increase risks to financial stability." The comments come amid the Trump administration's plans to scale back the Dodd-Frank financial-overhaul law put in place in the wake of the financial crisis. At the most recent FOMC meeting, policy makers also noted that real estate values were elevated in some sectors of the commercial real estate market, and that "a sharp decline in such valuations could pose risks to financial stability, and that potential reforms in the housing finance sector could have implications for such valuations."
- USDA's Sonny Perdue is in the hot seat again over the administration's commitment to rural development. Addressing the agriculture secretary a day after President Trump unveiled a budget proposal eliminating the agency's rural development program, House appropriators on both sides of the aisle expressed concern over losing funding for rural housing, clean drinking water and small business development. "Many of us feel the president made a lot of promises to farms and rural Americans and that the budget is a betrayal of that," says Congresswoman Chellie Pingree. Perdue tries to reassure Congress--again--over his own commitment to rural America, calling his recent move to do away with USDA's undersecretary for rural development "essentially a nomenclature issue."
- US steel executives argue their sales of commercial-grade steel have been so weakened by cut-rate imports that their ability to supply steel for military programs and homeland security infrastructure is being undermined. "Commercial viability is a prerequisite for national security," Tom Gibson, president of American Iron and Steel Institute, says at a Commerce Department hearing. The Trump Administration is considering broad-based duties on foreign steel on national security grounds, though the defense industry accounts for about 3% of US steel demand.
- House appropriators wade into thorny debates over food stamps as USDA Secretary Sonny Perdue appears before them after the Trump administration proposed slashing $193B from the SNAP program over a decade. Congresswoman Rosa DeLauro calls the proposed cuts "cruel and inhumane," and questions whether Perdue's previous statements about having no proposed changes to SNAP himself still hold true. Perdue says they do, but says SNAP is something Congress will "deal with and have a legislative stamp on." The secretary also says the key to eradicating hunger is "turning the economy around with good job dignity."
- Some 21,000 people gathered in front of Brazil's congress in the early afternoon, police say, an indication demonstrations against President Temer today could be among the largest in recent years in the capital. The protest is organized by labor unions and other groups. They want Congress to vote down labor and pension reform Temer sponsors as a way, he says, to rekindle a moribund economy. But since the president became the target of a corruption investigation last week, calls for his ousting have increased. The demonstrators want him out and new elections to be called as soon as possible. Temer has vowed not to resign and his allies in Congress are promising to move economic reform for a vote later this year.
- Federal Deposit Insurance Corp. Chairman Martin Gruenberg pushes back on efforts by congressional Republicans to repeal the Orderly Liquidation Authority, a bank resolution mechanism for systemically important financial institutions that is part of the Dodd-Frank Act. "If we didn't have that authority, there would be potentially broader consequences" in the event of a large firm failure, he says at a press conference. Trump issued an executive order last month to review OLA, and its repeal was included in the administration's FY18 budget proposal that was released this week.
- In the wake of President Trump's proposal to sell down America's emergency oil stockpile, some argue that the hoard of crude known as the Strategic Petroleum Reserve is outdated and point to its dilapidated infrastructure, which weighs on efficiency and will be costly to repair or upgrade. The SPR currently contains roughly 688M barrels of oil held in 60 underground caverns located at four sites along the Texas and Louisiana coasts. It is run by a vast network that includes 5,435 valves and 172.5 miles of offsite crude pipeline owned by the Energy Department, as well as other pipelines for things like brine disposal. Many of those assets, officials have said, are beyond their design life.
- The Trump administration aims to decide by the end of next month whether to go forward with sweeping protection of the American steel industry against imports in the name of "national security," Commerce Secretary Wilbur Ross says--a much faster timetable than required by law. Trump announced April 20 his administration was dusting off a little-used 1962 trade law to consider whether to apply new protections on US-made steel if a formal investigation shows imports pose a national security threat. The law requires a conclusion within 270 days, which would push a conclusion to January. But Ross says at a public hearing on the probe that "we have no intention of taking 270 days. Our hope would be to complete the report by the end of June."

May 25 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices rose by one percent ahead of an OPEC meeting that is expected to extend output cuts into 2018, adding at least nine months to an initial six-month cut in the first half of this year.Gold held steady to keep most of its gains from the previous session, with the dollar slipping after minutes of the U.S. Federal Reserve's last policy meeting downplayed the chance of more aggressive interest rate hikes.
- Copper was trading flat, steadying a day after dropping on concerns that slowing economic growth in China could hit demand from the world's top metals consumer.
- Chicago wheat futures rose for a second straight session with short-covering by funds and concerns over excessive moisture in the U.S. grain growing areas underpinning the market.
- According to the minutes of the May 2-3 FOMC meeting, several officials "expressed concerns that a possible easing of regulatory standards could increase risks to financial stability." The comments come amid the Trump administration's plans to scale back the Dodd-Frank financial-overhaul law put in place in the wake of the financial crisis. At the most recent FOMC meeting, policy makers also noted that real estate values were elevated in some sectors of the commercial real estate market, and that "a sharp decline in such valuations could pose risks to financial stability, and that potential reforms in the housing finance sector could have implications for such valuations."
- USDA's Sonny Perdue is in the hot seat again over the administration's commitment to rural development. Addressing the agriculture secretary a day after President Trump unveiled a budget proposal eliminating the agency's rural development program, House appropriators on both sides of the aisle expressed concern over losing funding for rural housing, clean drinking water and small business development. "Many of us feel the president made a lot of promises to farms and rural Americans and that the budget is a betrayal of that," says Congresswoman Chellie Pingree. Perdue tries to reassure Congress--again--over his own commitment to rural America, calling his recent move to do away with USDA's undersecretary for rural development "essentially a nomenclature issue."
- US steel executives argue their sales of commercial-grade steel have been so weakened by cut-rate imports that their ability to supply steel for military programs and homeland security infrastructure is being undermined. "Commercial viability is a prerequisite for national security," Tom Gibson, president of American Iron and Steel Institute, says at a Commerce Department hearing. The Trump Administration is considering broad-based duties on foreign steel on national security grounds, though the defense industry accounts for about 3% of US steel demand.
- House appropriators wade into thorny debates over food stamps as USDA Secretary Sonny Perdue appears before them after the Trump administration proposed slashing $193B from the SNAP program over a decade. Congresswoman Rosa DeLauro calls the proposed cuts "cruel and inhumane," and questions whether Perdue's previous statements about having no proposed changes to SNAP himself still hold true. Perdue says they do, but says SNAP is something Congress will "deal with and have a legislative stamp on." The secretary also says the key to eradicating hunger is "turning the economy around with good job dignity."
- Some 21,000 people gathered in front of Brazil's congress in the early afternoon, police say, an indication demonstrations against President Temer today could be among the largest in recent years in the capital. The protest is organized by labor unions and other groups. They want Congress to vote down labor and pension reform Temer sponsors as a way, he says, to rekindle a moribund economy. But since the president became the target of a corruption investigation last week, calls for his ousting have increased. The demonstrators want him out and new elections to be called as soon as possible. Temer has vowed not to resign and his allies in Congress are promising to move economic reform for a vote later this year.
- Federal Deposit Insurance Corp. Chairman Martin Gruenberg pushes back on efforts by congressional Republicans to repeal the Orderly Liquidation Authority, a bank resolution mechanism for systemically important financial institutions that is part of the Dodd-Frank Act. "If we didn't have that authority, there would be potentially broader consequences" in the event of a large firm failure, he says at a press conference. Trump issued an executive order last month to review OLA, and its repeal was included in the administration's FY18 budget proposal that was released this week.
- In the wake of President Trump's proposal to sell down America's emergency oil stockpile, some argue that the hoard of crude known as the Strategic Petroleum Reserve is outdated and point to its dilapidated infrastructure, which weighs on efficiency and will be costly to repair or upgrade. The SPR currently contains roughly 688M barrels of oil held in 60 underground caverns located at four sites along the Texas and Louisiana coasts. It is run by a vast network that includes 5,435 valves and 172.5 miles of offsite crude pipeline owned by the Energy Department, as well as other pipelines for things like brine disposal. Many of those assets, officials have said, are beyond their design life.
- The Trump administration aims to decide by the end of next month whether to go forward with sweeping protection of the American steel industry against imports in the name of "national security," Commerce Secretary Wilbur Ross says--a much faster timetable than required by law. Trump announced April 20 his administration was dusting off a little-used 1962 trade law to consider whether to apply new protections on US-made steel if a formal investigation shows imports pose a national security threat. The law requires a conclusion within 270 days, which would push a conclusion to January. But Ross says at a public hearing on the probe that "we have no intention of taking 270 days. Our hope would be to complete the report by the end of June."
- USDA Secretary Sonny Perdue faces skeptical lawmakers on the House Appropriations Committee, who worry about the Trump administration's proposed deep cuts to the agency's budget, including for farm, nutrition, and rural development programs. "You can't squeeze blood from a turnip and the budget submitted yesterday attempts to do just that," said Congressman Sanford Bishop (D., Ga.), noting Perdue had previously pledged to support rural America. "We both know this budget does the exact opposite of that." Perdue tells committee members they shared "similar priorities," and vowed to make the agency's final budget "go as far and be as beneficial to American citizens as possible."
- Opposition continues to grow louder against a Republican proposal to repeal "Orderly Liquidation Authority," the authority in Dodd-Frank for the government to take over a failing financial firm. Large banks have spoken out against it, and on Tuesday about 120 academics signed a letter decrying the repeal as a "grave mistake". Rep. Jeb Hensarling's "Financial CHOICE Act" bill, set for a vote in the house sometime this summer, repeals the authority. He calls it a taxpayer bailout.
- The federal stockpile of crude known as the Strategic Petroleum Reserve doesn't often get much attention. But the Trump administration's proposal to sell 270 million barrels of oil from the SPR over the next decade has brought out a lot of opinions. Analysts at Bernstein have come out on the side of keeping the crude. Selling down the stockpile, they said, leaves the risk of a 4 million barrel per day disruption within the next decade "at a coin toss." The sales could also lead to more price volatility upon their completion, Bernstein analysts said. They ultimately predict rational minds will prevail.
- Trump administration proposals can spark controversy, and plans to keep slashing the government's Strategic Petroleum Reserves are no exception. Critics pilloried the proposal as short-sighted, even if a doubling of US oil production might suggest giant, emergency stockpiles aren't needed anymore. But JBC Energy suggest the debate is a tempest in a teapot. The plan's volume targets seem to be set in terms of money raised from the sales, it says, with targets rising gradually over 10 years. "Taking our 2018 Brent price forecast of $52.72/bbl, this would mean next year's sales would be roughly 25,000 this would actually imply a reduction in SPR sales from current levels" of 75k bpd.

May 24 - Top banks' Q1 commodity revenue slides 29 pct to 11-year low 

Commodities-related revenue at the 12 biggest investment banks fell 29 percent year-on-year in the first quarter of 2017 to its lowest in more than a decade, mainly due to weakness in the energy sector, a consultancy said on Wednesday.Revenue from commodity trading, selling derivatives to investors and other activities in the sector fell to $800,000 million in the first three months of the year, financial industry analytics firm Coalition said in a report. Click here to read full stories.

May 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices were stable, supported by confidence that an OPEC-led output cut aimed at tightening supply would be extended to all of 2017 and the first quarter of next year.
- Gold held steady, after slipping in the previous session, as investors awaited cues on the U.S. Federal Reserve's rate hike stance from the minutes of its last meeting.
- London copper edged lower after credit ratings agency Moody's downgraded China due to its massive debt, with muted trade expected ahead of minutes of a Federal Reserve meeting later in the session.
- Chicago soybean futures slid for a second session while corn edged up after closing lower the previous day, with easing concerns over planting delays in the U.S. grain belt adding pressure to grains markets.
- The dollar held firm, having rebounded from 6-1/2-month lows against its major peers helped by a rise in U.S. Treasury yields, while the yuan eased after Moody's cut its sovereign rating on China due to concerns over the country's soaring debt.

- The Trump administration has set an aggressive timetable to complete renegotiations of Nafta, eyeing completion by end of December. Canadian Foreign Minister Chrystia Freeland tells reporters on a conference call Canada's negotiators won't be rushed. "We will take the time it needs to take," she says. History shows it can take years before trade pacts are finalized, as was the case for the EU-Canada trade pact. Even the predecessor to Nafta, the US-Canada free-trade deal, took over a year from start to finish. From Canada's perspective, talks need to proceed "with great care and great attention to detail," Freeland says, "with the principle that we do no harm."
- Trump's budget proposal includes a provision for future revenues in the Arctic National Wildlife Refuge, but opening the area for development isn't a sure thing. "Congress has to approve so nothing here is etched in stone," Tudor Pickering says. Still, environmental groups are worried. The budget item means Trump's administration has "declared war on one of the last pristine, untouched wild landscapes in America" and is "prioritizing the oil lobby," says Lydia Weiss, director of government relations at the Wilderness Society.
- Trump unveils a largely status-quo 2018 budget proposal for NASA, with one glaring exception. The $19.1B spending plan trims nearly $60M from commercial cargo and crew transportation, a move that prompted strong blowback from proponents of those programs. The Commercial Spaceflight Federation, the primary trade association for that segment of the industry, contends that congressional approval of such a cut could have significant programmatic and symbolic consequences. The group worries it could reduce safety studies of proposed commercial crew taxis, or potentially shift a future cargo mission to an Orion deep-space capsule.
- USD recovered overnight supported by the Trump administration's budget. Trump's blueprint for fiscal year 2018 proposes spending cuts of US$3.6T and aims to balance the budget by 2027. The USD rallied and US 10-year Treasury yields rose by roughly 5bps to 2.29% because Trump's budget proposal includes an infrastructure plan to support US$1T in private/public infrastructure investment. According to the budget blueprint, the infrastructure plan will be met with a combination of new Federal funding and incentivized non-Federal funding. If approved by Congress, this massive infrastructure spending plan is pro-growth and may force the Fed to increase the pace of interest rate hikes which in turn would bode well for the USD, says CBA.
- Brazilian senator Paulo Bauer, a staunch ally of President Temer's, says there's still hope the embattled leader will remain in power through the end of his term, which ends Dec. 31, 2018, even after Temer was put under investigation for corruption last weak. He denies wrongdoing. Bauer said most lawmakers still want to pass economic reform, and only reluctantly acknowledged it's getting hard to move up an agenda associated with the struggling president. "It's been a contretemps," he says.
- Ecuador's President-elect Lenin Moreno names his cabinet, which includes some business executives--a change from the cabinets of outgoing President Rafael Correa. Carlos Perez, an executive at Halliburton, will become the hydrocarbons minister and real estate businessman Pablo Campana will be the trade minister. The finance minister will be Carlos Alberto de la Torre, an economist at Catholic University. Moreno's cabinet has a number of holdovers from
Correa's administration, including Cesar Navas as interior minister and Maria Fernanda Espinosa as foreign relations minister. Moreno takes office on Wednesday.
- The Pentagon's request of $434M in its 2018 budget towards developing replacement jets for Air Force One, represents a drop--though officials didn't quantify it--from the original expectation. The request reflects cost reduction efforts by Boeing, the prime contractor, which was lambasted by now-President Trump last December about the price of the planes. Air Force officials say there's been no change in the content of the aircraft, though the revised budget estimate does reflect recently-agreed changes in requirements.
- Trump's proposed FY18 budget contains about $608M for the Bureau of Labor Statistics, which produces closely watched reports on US economic activity including the monthly jobs report. That's little changed from the current year, and Labor Department officials said this afternoon no BLS programs or surveys are expected to be cut.
- Amazon will continue to engage in politics when an issue impacts the company, CEO Jeff Bezos says. "It's very important that Amazon in my opinion not oppose or favor any president or elected official, that's not our job," he says. He points to the immigration ban, which affected a large number of his employees. When it's time, "we'll engage with the president, we'll engage with congress ... and we'll engage with the courts," he says. Bezos has had one
of the more publicly fraught relationships with President Donald Trump, in part due to his ownership of the Washington Post, and AMZN being one of the first companies to participate in a court case opposing Trump's original executive order on immigration.
- Trump budget proposes to boost the solvency requirements for states' unemployment-insurance funds. Nearly eight years after the recession ended, fewer than half of states have sufficient reserves to weather a single year of recession, budget documents said. When states run out of unemployment insurance funds, as was common in the recession, they typically borrow from the federal government. The budget proposes to impose a penalty on states that don't have 6 months of necessary reserves. Currently such penalties, called credit reductions, only occur when states borrow. Better solvency of unemployment funds would save the federal government $12.9B over ten years, the budget estimated. It's possible stiffer requirements could encourage states to offer less generous benefits.
- US defense stocks reverse early losses to reach modest session highs -- up around 0.5% - in the wake of the formal roll-out of a 2018 Pentagon budget request. Much of it is unlikely to survive in its current form because of Congressional changes and the need for compensating non-military spending cuts. For example, it calls for 70 F-35 combat jets -- in line with what the Obama administration sought -- but Congress has in recent years boosted the request, a lift for main contractors Lockheed Martin, Northrop Grumman and United Technologies.
What's really missing is the five-year outlook for spending, which the Pentagon has yet to formulate, something particularly important for long-life programs like the Columbia submarine being developed by General Dynamics.
- "There's no sugarcoating what we will face," USDA Secretary Sonny Perdue tells USDA staff in a video message after the Trump administration unveiled a budget proposal that would slash the agency's budget by around 21%, alongside reductions in Farm Bill program funding. "Such budgetary restrictions could possibly mean a reduction in staff," Perdue warns the USDA's roughly 100,000 employees, saying any reductions would initially come through "normal
attrition, early retirements, and other least-disruptive means." Perdue says Trump is following through on campaign pledges to realign government spending, and advises USDA rank and file that "when you get in a bind, don't whine."

May 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices fell after U.S. President Donald Trump proposed the sale of half the country's strategic oil reserves, even as producer club OPEC and its allies cut output to tighten the market.
- Gold was steady with investors staying on the sidelines following an explosion in the English city of Manchester that left at least 19 people dead and over 50 injured.
- London copper held near its highest in three weeks as the dollar fell, with focus shifting to an upcoming monthly breakdown of China trade data.
- Chicago corn futures ticked lower as the market took a breather after climbing to a three-week high in the last session on concerns over wet weather delaying U.S. planting.
- The pound slipped against the yen after a suspected terrorist attack at a concert in Britain's city of Manchester, while the euro hovered near a six-month high against the dollar after German Chancellor Angela Merkel said the currency was "too weak."

- A forensic expert hired by the lawyers of Brazil's President Michel Temer says recordings prosecutors are using as evidence of corruption can't be taken as authentic. Ricardo Molina says the recordings contain "more than 50" points at which there could have been some sort of illegal editing, but stopped short of labeling the tape adulterated. He says, however, that it has enough problems, including too much noise, to be discarded as evidence. The recordings are at the core of recent graft accusations fueling calls for Temer's ousting. Temer's defense declined to comment how exactly they will use Molina's findings.
- Food-industry officials and advocates are bracing for the Trump administration to unveil a proposal Tuesday to cut food-stamp program spending by $193B over a decade. "The program still plays an important role in providing a safety net to those in need, including families with children, the elderly, and disabled," says Greg Ferrara of the National Grocers Association, which represents more than 1,300 independent grocers. The SNAP cuts would represent a 29% reduction in funding from levels estimated in January by the Congressional Budget Office. The US spent nearly $71B on SNAP last year.
- Banks surveyed by Banamex raise their growth forecast for Mexico this year to 1.9% from 1.8%, according to the median estimate of 24 banks surveyed. Despite President Donald Trump's protectionist rhetoric, Mexico's economy has shown a remarkable resilience in 1Q, as manufacturing exports benefited from a weak peso and domestic consumption was steady. In the January-March period, Mexico expanded at an annualized rate of 2.8%, higher than expected, the national statistics agency says. Banks are almost unanimous--19 out of 24--in expecting the Bank of Mexico will raise interest rates again in June, after six consecutive hikes.
- Visa CEO Al Kelly says at a conference that he met with House Financial Services Committee chairman Jeb Hensarling about a month ago to discuss the efforts to repeal the Durbin amendment, which in 2011 placed price caps on the fees merchants pay large card issuers when consumers shop with their debit cards. The repeal is included in Hensarling's Financial Choice Act. Kelly said "it's more likely than not that the repeal comes out of the bill" but suggested the company is reviewing the upside on the off chance that Durbin gets repealed. "We've kind of been playing it out and doing our own game theory on it," he said. "Every member of the House is being pressured big time by every community bank in their district to repeal, and they're being inundated by merchants in their district to have Durbin stand."
- Mark Zuckerberg might look like he's on a politician's listening tour, but the Facebook CEO says he isn't running for public office. Zuckerberg and his wife are traveling throughout the US this year, meeting small-town mayors, community activists and entrepreneurs--and sparking debate about his intentions. Sunday, Zuckerberg attempted to end that speculation: "Some of you have asked if this challenge means I'm running for public office. I'm not." Instead, he says, he's trying to gain a "broader perspective" to build products for FB's nearly 2B monthly users and inform his work at the Chan Zuckerberg Initiative. The denial may not work since being coy is a textbook political move.
- Brazil's economy would suffer more if embattled President Michel Temer is impeached, than if he resigns, writes Alfredo Coutino, Director at Moody's Analytics in a note. "The worst case scenario for the country would be that of an impeachment, mainly because the length of the process would increase uncertainty and volatility for markets and the economy," he writes. Given that the impeachment last year of Temer's predecessor Dilma Rousseff took eight months, Temer's impeachment would likely only be concluded next year. "The country would be put [under] tremendous stress."
- A new paper published today by the NBER finds that the nationalistic rhetoric of the Donald Trump presidential campaign had a clear impact coarsening the nation's political dialogue. The paper's authors write "we identify the causal effect of Donald Trump's rise in political popularity on individuals' willingness to publicly express xenophobic views." They found that "increases in participants' perceptions of Trump's popularity... eliminate the wedge between private and public behavior," and emboldened study participants to give public voice to otherwise controversial or ugly ideas.
- More US cities and states are reducing their reliance on cash bail, rejecting the longstanding notion that money should determine whether arrested individuals are locked up until trial. The movement is upending a cornerstone of the American criminal-justice system and threatening to deal the most severe blow to the multibillion-dollar bail-bonds industry since it began in the late 1800s. New Jersey began a statewide bail system that essentially eliminates cash bail, compelling judges to detain or release defendants before trial based on their risk to public safety. Voters in New Mexico passed a similar amendment to the state constitution late last year. In California and Texas, lawmakers have introduced bills that would significantly change their bail systems. And starting July 1, judges in Maryland will have to consider alternatives to cash bail for nonviolent defendants.
- One concern from President Trump's pledge to boost the US energy industry by reducing regulations so oil production can surge is that it would anger rival producers like Saudi Arabia. But Phil Flynn at Price Futures says Trump's weekend energy deals in the kingdom proved the opposite. "Instead of a production war, Trump's pro-energy agenda has warmed the Saudis' heart. The state oil major, Saudi Aramco, signed contracts with a dozen US energy firms including Schlumberger, Halliburton," and others to develop local production, Flynn says. Such agreement could help balance his efforts on US soil that focus more on jobs. "Put one in the win column for all."
- Bundesbank President Jens Weidmann urges a return to more normal monetary-policy conditions, but only when the time is right. "It's decisive that the central bank tightens the reins on monetary policy at the right time, when it is necessary with a view to price stability," he says according to a copy of his speech, which will be delivered in Bochum, Germany. "We cannot put off policy normalization out of consideration of finances of some states or because of possible losses of individual market participants." He says, however, that currently, there was no dispute that an expansive monetary policy was appropriate.
- A new study by PwC commissioned by the National Association of Realtors says comprehensive tax reform could have wide-reaching consequences for the housing market. Homeowners with incomes between $50,000 and $200,000 could see an average annual tax increase of $815, while nonhomeowners would see a reduction of $516. Home prices nationwide would fall 10% in the short term, the study says. Republicans aren't proposing to eliminate the mortgage-interest deduction, but to double the standard deduction and eliminate deductions for state and local taxes, which mean that many moderate-income households will be less likely to itemize.
- Nordic markets close little-changed with Sweden's OMXS30 index ending the day flat, and the pan-Nordic OMXN40 index and Oslo's oil-heavy OBX index less than 0.1% higher. "European stocks logged modest gains aided in part by a merger deal in the chemicals industry," Saxo Bank says. "Relative calm on the US political front helped as well, after troubles there last week weighed on regional benchmarks." Also on the radar later in the European session was the start of a meeting between eurozone finance ministers and the International Monetary Fund, with investors watching whether they can agree to provide debt relief to Greece after the country agreed to new austerity measures, it added.

May 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices rose, supported by reports that an OPEC-led supply cut may not only be extended into next year but might also be deepened to tighten the market and prop up prices.
- Gold prices edged lower as Asian stocks gained, although political worries surrounding U.S. President Donald Trump are expected to keep supporting appetite for the metal as a so-called safe-haven asset.
- Shanghai zinc and nickel surged on the back of a sustained crackdown in China's polluting steel industry, which fuelled worries about steel supply and lifted the prices of its raw materials.
- Chicago corn futures rose for a second straight session, climbing to their highest since May 10, while soybeans gained more ground with cold and wet weather expected to delay planting in parts of the U.S. Midwest.
- Canadian bond-prices edge down aided by solid economic data and a broader move to riskier assets following the large flight-to-quality trade earlier in the week. Canadian retail sales rose 0.7% in March, beating the consensus forecast of 0.3%. Investors also tried to move past a series of damaging reports related to President Trump following his decision to fire FBI Director James Comey last week. The yield on the Canadian 10-year bond is 1.474% vs. 1.446% Thursday, while the two-year yield is 0.684% vs. 0.674%.
- Hedge funds and other speculative investors had rebuilt some bullish dollar positions before this week's political turmoil sent the US currency tumbling. Investors were holding a net $14.3B in bullish dollar positions as of Tuesday, compared to $11.8B the week earlier, CFTC data show. On Wednesday, the dollar plunged on reports Trump asked then-FBI Director James Comey to back off an investigation into Russian ties. Bullish bets on the dollar had swelled above $28B after Trump's election. Investors now fear the political upheaval will derail administration policies seen as pro-growth and expected to support the dollar.
- Canada PM Justin Trudeau says Ottawa is "making it clearly known" to Trump administration its displeasure over Commerce Department probe of alleged subsidies and unfair discounts of passenger jets at Montreal's Bombardier. In response to the probe, which could lead to tariffs on Bombardier's CSeries aircraft, Canada says it will review defense deals with Boeing, chief among them a plan to acquire up to 18 of company's F/A-18 Super Hornet jets. "We will always be resolute and firm in how we stand up for Canadian interests," he tells reporters in suburban Vancouver. He described Commerce's decision to launch a probe into Bombardier following the BA complaint as an "unfortunate" threat, and isn't contributing to stronger US-Canada ties. Trudeau says CSeries production is benefiting US producers of aerospace components used in CSeries manufacturing.
- The National Association for Fixed Annuities is continuing "its full-court press" on President Donald Trump's administration to further delay the fiduciary rule, and is indifferent to what method the administration uses, it says. NAFA is talking with members of Congress and coordinating with industry trade groups, and more than 2,200 of its members have written to the White House urging Trump to stop the rule from taking effect, it said. A lawsuit brought by the trade association to challenge the rule is on appeal, and it's urging the Labor Department to consider invoking a provision of the Administrative Procedure Act which allows the delay of any administrative action that's being challenged in court, it said.
- Shares of Pilgrim's Pride decline as S&P puts the US poultry processor's credit rating on watch with negative implications amid heightened corruption concerns in Brazil. Here's the connection: Brazilian media reported Brazilian President Michel Temer was taped encouraging Joesley Batista, chairman of Brazilian meat company JBS, to bribe a potential witness to a corruption scheme. JBS is the majority owner of PPC. S&P, which has placed JBS's own credit ratings on a similar watch, says PPC's access to financing could be weakened by "reputational risks." PPC down 0.4% while the Dow zooms higher.
- President Trump has garnered much public support for his infrastructure-spending promise "to fix our inner cities and rebuild our highways, bridges, tunnels." Regular people see it as a plain-and-simple, fair way to spend taxpayer money on things the general population needs, while creating good-paying, government jobs in the process. But comments from Carlyle Group President Glenn Youngkin suggest Trump's infrastructure plans may have more to do with PPPs, or public-private partnerships. "It's a new way to think about infrastructure," the executive tells CNBC, using the example of his firm's winning bid to invest $180M in 23 fancy, roadside service plazas in Connecticut, because the old, roadside gas stations "were scary."
- It will soon be cheaper to buy insurance against defaults by European investment-grade companies than comparable US firms as political risk reverses, German bank LBBW writes in a note. Fears of surging populism in Europe dropped further after centrist Emmanuel Macron won the French presidential election and now the market's focus is on the Trump administration's woes. Both the iTraxx Europe and the CDX index of North American credit default swaps trade at a spread of around 63 bps currently, according to Tradeweb. But LBBW expects the European CDS tracker to end up trading tighter due to elevated political uncertainty in the US.
- Investors poured $90B into the US equity funds tracked by EPFR Global between the second week of November and the third week of March as enthusiasm for a Donald Trump presidency grew, but those flows reversed late in the first quarter as a string of missteps by Trump and his administration sapped investor faith in Trump's reflationary promises, the fund tracker says. Investors pulled $8.9B from US equity funds in the week ending May 17 amid the political fallout from Trump's abrupt firing of FBI Director James Comey, marking the seventh time in the past nine weeks that investors have pulled money from the funds, EPFR Global says.
- Political risks surrounding the Trump administration keep German government-bond yields within the range that has persisted since November, but once investor focus turns back to the economy, yields could break through the upper end of the range, RBC Capital Markets says. Bund yields have fluctuated between 0.15% and 0.5% ever since Trump won the US presidential election. But the European recovery is getting stronger, justifying a less accommodative stance by the European Central Bank and giving investors fewer reasons to hold on to haven assets, like bunds.
- Bank of Nova Scotia economist Derek Holt suggests Canadian economic growth could hit close to 5% annualized in 1Q. The call comes after reviewing retail-sales data for March, which suggested sales volume surged 1.2% in month. That means volumes rose 8% annualized in 1Q. "In all humility I'm amazed at the strength of the consumer, not least of which because it is occurring despite falling inflation-adjusted wages," he says. Were it not for weak inflation,
trade-policy uncertainty in Washington, and worries about whether debt-laden consumers can keep up the pace, rate "hawks would be having a field day," Holt adds. Even with strong data, Scotiabank expects BoC to remain on hold until mid-2018.
- Economists at Goldman Sachs believe President Donald Trump's myriad problems mean the $1.75 trillion tax cut they expected will likely be smaller and hit $1 trillion instead. The firm expects some sort of tax cut to still happen, despite Mr. Trump's scandals, simply as a matter of Republicans' "political self-preservation" and desire to have a least one policy victory going into the 2018 election.
- Former US Rep. Anthony Weiner, whose history of exchanging sexually explicit messages ended his political career, is expected to plead guilty today to a single count of transferring obscene material to a minor, according to people familiar with the matter. Weiner, a New York Democrat, turned himself in this morning to federal authorities and will enter a plea in Manhattan federal court around 11:00 AM, a person familiar with the matter said. The charge has no mandatory minimum prison sentence, but carries a sentence of up to 10 years. It is unclear whether he will be added to the sex offender registry, the person familiar said.

May 20 - CYBER ATTACK .WNCRY ( continued )
- as you may already know, our servers have been attacked by WannaCRY last Friday, May 12th ( as some 300,000 PCs worldwide )
- despite our best efforts, the serveur hosting all our swap calculators cannot be cleaned, and therefore will be discarded. We already bought a new one, from OVH Private Cloud. Full installation and setting-up and tests might take a week.
- ALL physical Cash Energy & Freight calculator including Oil Products / Natgas / LPG / Power / Emissions / Coal / Tanker and Dry Bulk prices/rates were restored on dedicated PCs, enabling us to update on demand ( 3 to 4 times a day )
- ALL physical Cash Agri / Softs / Metals pages have not been affected therefore running as usual.
- once again we apology for all inconvenience.

May 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil futures rose to the highest in nearly a month on growing optimism that big producing countries will extend output cuts to curb a persistent glut in crude, with key benchmarks heading for a second week of gains.
- Gold prices edged up and were on track for their biggest weekly gain since mid-April as the dollar eased and Asian stocks weakened amid ongoing political turbulence in the United States.
- London copper was set for a slightly higher close as dollar weakness cushioned prices, but the outlook was tainted by investors in China cutting exposure to metals which has hurt demand.
- Chicago soybeans were on track for their biggest weekly decline since late March, with a steep fall in Brazil's currency encouraging farmers there to boost sales of this year's record crop.
- The White House's inability to-date to proceed on tax reform has investors worried since it's the key policy that's "really priced in" to markets, says Kyoya Okazawa, head of global markets for BNP Paribas in Japan. Although market fundamentals haven't changed, politics has started to play a bigger role--almost as much as economic policy. "We used to say markets is policy-driven, but it is a politically driven market now." This week's developments in the US, as well as Brazil, threaten reforms those countries. "Compared to fundamentals like economic policy, politics is more difficult to predict," he adds, noting tail risk is Trump being unable to implement corporate-tax cuts.
- Brazil's most recent scandal--President Temer allegedly caught on tape condoning bribery--didn't surprise Council of the Americas' Brian Winter. "It was always possible that [the graft probe] Car Wash would end with the collapse of the entire political establishment," he said, moments before Temer took to the airwaves to deny the allegations and vow not to resign. Winter adds that Temer's economic reform, which markets cherish, is at risk. "It was always the danger of Brazil's political establishment relying on Temer to push the reform," he said, and that the now increased likelihood Temer is ousted bodes well for the left wing. "The great irony is [former President] Lula emerges from all of this stronger."
- Executives are bracing for changes to their workplaces due to immigration reform. Some 63% of 1,229 C-suite executives, human resources professionals and in-house counsel polled in February and March by law firm Littler Mendelson report they expect immigration reform to affect their workplaces. Some 40% said the same in a 2016 poll. A majority of participants in the survey also says they're increasing their use of contingent workers. Over a third say they've done so to adjust staffing levels based on projects, contracts and seasonal hiring; 30% cited having trouble finding qualified full-time candidates. One out of 10 say their business model is based on using contingent workers.
- Iran's presidential election is tomorrow, just six days before OPEC's meeting to decide on extending production cuts, and Stratas Advisors warns of several potential ramifications if hardliner Raisi wins. "In a nutshell...Rouhani [the incumbent moderate] could lose re-election, complicating prospects for an OPEC-cut extension and increasing tensions between the US, Israel, Saudi Arabia vs. Iran." Stratas adds that a Raisi win would make foreign investors wary of long-term investments just when Iran really needs such investments since its aging oil fields are seeing a drop in recovery rates.
- Bank of Canada should keep its main interest rate unchanged at 0.50% at its May 24 policy decision, and hold it there over the next 6 months, according to the monetary-policy council at Toronto think tank CD Howe Institute. The think tank says Trump's "erratic behavior" dominated discussion among council voting members, who are economists from private-sector firms and academia. The political storm in Washington raises prospect that US economic and tax policy changes could lose momentum. The threat of trade protectionism also hovers, it adds. Members also said new housing measures in Ontario would reduce pressure on BoC to raise rates to restrain housing exuberance.
- Early signs suggest the nascent turnaround in user growth that Twitter posted in 1Q is not on track to continue in 2Q. Aegis Capital's Victor Anthony expects the number of TWTR's monthly users to decline 2%-3% in May from April. TWTR's CFO and COO Anthony Noto said on the earnings call in April that TWTR benefited from users following more political news.
- Many farm groups are cautiously optimistic as the Trump administration notifies Congress that it will reopen Nafta, which they constantly note has hugely boosted US food exports. But the National Farmers Union is gunning for an overhaul. "Nafta installed, and has since cemented, a set of trade parameters that have benefited corporate America and damaged rural American communities and economies," says Roger Johnson, the group's president. NFU says Nafta introduced rules, such as an arbitration procedure enabling foreign companies to sue governments in international tribunals, that have given big companies too much power when dealing with US crops and meat.
- Some investors say they are not freaking out on this week's political drama. "This is just a distraction and noise," says Eric Souza, senior portfolio manager at SVB Asset Management. The political news this week hasn't changed the growth picture, nor would it stop the Fed from normalizing interest rates as soon as June, he says. "For sure we are monitoring the developments," he says. But "I don't think anyone dramatically changes their investment strategy. It just generated a little bit of volatility in the markets." He expects the Fed to raise rates in June and September--matching the Fed's projections of three rate hikes this year.
- The economic-policy agenda pushed by Brazil's President Temer suffers its first concrete setback in the wake of fresh corruption allegations involving the nation's leader. Newspaper O Globo has reported prosecutors got hold of recordings in which Temer condones the payment of bribes to public officials, something he denies. The reports haven't been confirmed, but the country's simmering political turmoil came to a fast boil. As a result, Sen. Ricardo Ferraco, who is handling a labor reform approved after intense debate in the Lower House, says he is halting the process until the dust settles. Temer is expected to address the nation later today.
- The 7.375% 2027 bond of Petroleo Brasileiro, or Petrobras, is among the most heavily traded corporate bonds in Europe today as Brazil is engulfed in a political scandal. Trading volume on the US dollar-denominated bond amounts to $92.7M Thursday afternoon, based on data by Trax, a MarketAxess subsidiary. Bid yields on the majority state-owned firm's bonds are rising sharply to 6.8% from 6.02%, having touched intraday highs of 7.3%, according to Tradeweb. A Brazilian newspaper reported Wednesday President Michel Temer encouraged a top businessman to buy the silence of a jailed former congressional leader. Temer's office denied the report.
- Treasury Secretary Steven Mnuchin tells lawmakers he could support an ongoing role for the mortgage-finance companies Fannie Mae and Freddie Mac, as long as any explicit guarantee of the companies is "paid for" with fees and "would hopefully never be hit." Though that position reflects a consensus view among the housing industry on the need for a continued government role in backstopping the companies, it is at odds with conservative Republicans like House Financial Services Committee Chairman Jeb Hensarling (R., Texas), who have repeatedly called for liquidating Fannie and Freddie and oppose a government role in the mortgage market.
- Wondering whether the Trump administration's political scandals are distracting from policy debates on Capitol Hill? The top Democrat on the Senate Banking Committee warn Treasury Secretary Steven Mnuchin "honesty is critical," and brought up reports that President Donald Trump urged then-FBI Director James Comey to back off an investigation of a top aide. Sen Sherrod Brown (D, Ohio) noted that lawmakers felt compelled earlier this week to ask several candidates for positions at Treasury whether they would put the law and Constitution over loyalty to the president. "You can't lead if we don't believe you," he said.

May 18 - CYBER ATTACK .WNCRY continue
- we are displeased to announce to our customers that our servers have been contaminated with WNCRY, following last week Cyber attack everybody heard about.
- despite our best efforts, the serveur hosting all our swap calculators cannot be cleaned, and therefore will be discarded. We shall have to buy a new one, this time from OVH Private Cloud. Full installation and setting-up and test might take a week.
- physical Cash Energy calculator including oil products / Natgas / LPG / Power / Emissions and Coal prices has been restored in a separate PC, updating 3 to 4 times a day.
- physical Cash Freight calculator including Tanker and Dry Bulk rates has been restored also in a separate PC, updating once per day.
- physical Cash Agri / Softs / Metals pages are safe and do run today as usual.
- once again we apology for all inconvenience, the less to say ? that WannaCRY has really made us cry !

May 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices dipped, weighed down by plentiful supply despite ongoing efforts led by OPEC to tighten the market by cutting production.
- Gold prices held steady after touching an over two week high, buoyed by political turmoil in the United States and tempered expectations for an aggressive string of U.S. interest rate hikes.
- London copper fell after political uncertainty in the United States hit hopes that President Donald Trump would be able to boost infrastructure spending.
- The dollar wallowed near six-month lows against a basket of major currencies as the U.S. political crisis appeared to deepen, and likely to delay any efforts by President Donald Trump to carry out his economic stimulus plans.
- Chicago soybeans slid 1 percent, down a second session as pressure from a weaker Brazilian real is likely to prompt farmers to sell their freshly harvested record crop.
- Frankfurt stocks are expected to open flat Thursday, amid mounting questions over the political and economic agenda of U.S. President Donald Trump. Lang & Schwarz expects the DAX opening at 12629, essentially unchanged from 12631.61. Merck KGaA's 1Q earnings, out this morning, are likely to get investor attention as the company beat estimates but the guidance remained too cautious, according to some market watchers. Shareholders will also follow Deutsche Bank's annual general meeting, starting 0800 GMT.
- Political turbulence in Washington D.C, is good reason for investors to seek the safety of German bonds, pushing yields lower, but this doesn't hide the fact that bund valuations look expensive at yields below 0.4%, Commerzbank strategists say. After all, the "crucial" European Central Bank monetary policy meeting is three weeks away. Analysts expect the ECB to give at least hints of a hawkish turn later this year. Yields on 10-year German government bonds are trading at 0.38% Thursday morning, based on Tradeweb data.
- South Korean stocks have mostly shrugged off North Korean provocations of late. But this time is different, Hong Kong-based Citi Research analyst Johanna Chua tells clients. She argues a more-unpredictable North Korea on the brink of major technical breakthroughs in its nuclear and missile program, combined with uncertainties in the White House, create a potent situation. "Financial markets need to care." Chua advises clients to prepare for the possibility of a crisis, which she said would trigger a steep stock drop and a rush into the yen, at least in the short-term. "Risks are higher now than in past episodes," she adds. "There are clear risks to supply chains and to global confidence, as well as implications for capital flows that could upset market equilibria."
- More declines are on top for Asian stocks Wednesday after U.S. equities logged their biggest drop overnight since last summer following weakness in Asia yesterday. Stoking the selling has been increasing concerns about the White House's ability to get its policies in place, which for investors has been focused in areas like taxes and infrastructure. Rate-sensitive financial and yen-sensitive exporter stocks are especially vulnerable to the changing tide. Nikkei futures opened down 255 points at 19515 on SGX.
- Australian shares are bracing for a wave of selling as investors increasingly question President Donald Trump's ability to carry out his economic agenda. Futures point to a drop of 62 points at the bell for the ASX 200, building on Wednesday's 64.5 drop to 5786. Wall Street cracked overnight, with the Dow industrials losing 1.8% as fresh troubles roil the White House and stir investor unease. Locally, the spotlight will be on the major banks, which carry a big weight in the market and have been under pressure the last few weeks. Fairfax Media will also draw attention after attracting a second private-equity takeover offer.
- It's been a period of risk-off emanating from the US and the Twittersphere going into overdrive over speculation around whether President Trump pressured James Comey--then FBI Director--to drop his investigation into Mike Flynn, former National Security Adviser, with Russia in the mix, NAB says. This news isn't going to go away, with the Democrats agitating for copies of memos. This all comes on the heels of the sharp dive in the US Economic Surprise Index, last week's further softness in US inflation, and now politics intervening to add more noise into a market already wondering whether the US economy is slowing or not, NAB adds.
- Treasury Secretary Steven Mnuchin will tell the Senate Banking Committee Thursday his department's forthcoming report on financial regulation will include relief for small lenders, according to a copy of the testimony viewed by WSJ. "Our initial report will contain recommendations to provide relief for community banks and make regulations more efficient, effective and appropriately tailored," the testimony says. Mnuchin is set to report to the White House on financial regulatory matters in early June.
- Apple lost $27B in market value today as shares fell 3.4%, reducing its market cap below the $800B threshold for the first time since May 11. Shares of Apple had risen 34% since the start of the year before today's market sell off. One of the big driver's of Apple's gains has been the promise of tax reform under the Trump administration and the potential for a one-time tax holiday that would allow AAPL to repatriate nearly $250B in cash held overseas. But potential for tax reform has been thrown in doubt by recent turmoil in Washington, D.C.
- USD has fallen sharply overnight as impeachment concerns lifted against US President Donald Trump. The SP500 fell 1.8%, and US 10-year Treasury yields declined 11 basis points to 2.22%. There was a similar, albeit not as large reaction across European markets. The yen strengthens the most against the USD, with USD/JPY down 1.5% overnight, and some 2.5% since early Wednesday. CBA says market participants figure that there is virtually no chance of any US company tax cuts getting through Congress while Trump is defending the allegations of obstruction of justice.
- EUR/USD has reached its highest level since the day of the US presidential election, blasting up to around 1.1150. The big move in EUR over the past month (+5%) has been driven initially by the market-friendly French presidential election result, followed by growing expectations of the ECB changing its policy guidance and now Trump's political woes have complicated the outlook for ECB policy. The governing committee will no doubt be factoring in EUR strength when it considers the inflation outlook and policy guidance next month.
- With no top tier data to focus on this week, it was inevitable that US President Donald Trump would regain the spotlight, BNZ says. And so it is, with the revelations of Trump allegedly asking FBI Director James Comey to drop a probe of his former national-security advisor--an impeachable offence, according to some. This follows the recent firing of Comey and reports of Trump passing on secret intelligence to Russia. "All this adds further distraction to Trump's pro-growth policy agenda, which has yet to, and may never, get off the ground," BNZ adds.
- Canadian bonds rise strongly amid investor concerns about the Trump administration that spilled over into Canada's financial markets. Canada's two-year bonds were yielding at 0.660% from 0.699% on Tuesday, according to electronic trading platform CanDeal. The 10-year bond was yielding at 1.457% from 1.570%. Canada's bond market actually shrugged off a disappointing manufacturing sales report early Wednesday as investors flooded into safe-haven investments. Canada's bond market should continued to be influenced by US activity in the absence of any major domestic drivers on Thursday.

May 17 - CYBER ATTACK .WNCRY continue
- we are displeased to announce to our customers that our servers have been contaminated with WNCRY, following last week Cyber attack.
- despite our best efforts, all our calculators were not fully cleaned this morning, and consequently ALL our SWAP pages are being discontinued until further notice ( and hopefully not more than a further day )
- physical Cash Energy calculator ( including oil products cash prices ) have been stopped too.
- physical Cash Agri / Soft / Metals pages are safe and shld run as usual today.
- we are making our best efforts to restore cleaned version on all our servers, hopefully before End of this Day.

May 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices fell after data showed an increase in U.S. crude inventories, stoking concerns that markets remain oversupplied despite efforts by top producers Saudi Arabia and Russia to extend output cuts.
- Gold hit a two-week high as Asian stocks slipped and the dollar fell amid political uncertainty after a source said U.S. President Donald Trump asked the FBI to end a probe into his former security adviser.
- London copper traded flat, stymied by expectations of slowing growth in the economy of top metals consumer China.
- Chicago wheat futures edged lower, falling for three out of four sessions as storms in the United States caused little damage and global supplies remain ample.
- USD fell across the board in US trading to near a six-month low, retracing almost all of its post-Trump election gains. CBA says growing doubts about the Trump administration's ability to pass an aggressive fiscal stimulus package through the US Congress anytime soon undermined USD. US Senate Majority leader Mitch McConnell warned overnight that any tax reform plan will have to be revenue neutral. In its current form, the Trump administration's tax reform package is not revenue neutral. Second-tier US economic data released overnight was mixed and weighed on the USD and US 10-year Treasury yields.
- The Canadian dollar extended gains the US dollar following a broad retreat away from the greenback as investors mulled reports that President Trump may have disclosed classified information to Russian diplomats. USD is now trading around C$1.3586 from C$1.3633 late Monday, according to CQG. It was another quiet day for the loonie, which reacted alongside its major FX peers amid new headlines that threaten the US's growth agenda. Scotiabank said the Canadian dollar's influence to external drivers is "likely to remain dominant in the absence of domestic releases, with limited near-term risk ahead of Wednesday's manufacturing sales". Economists expect Canada to show a 1.2% monthly gain in April factory sales on Wednesday, rebounding from a 0.2% decline in the prior month.
- Lockheed Martin and Northrop Grumman lose all of their earlier gains in afternoon trading in the wake of a report that the 2018 Pentagon budget proposal due next week won't boost the number of F-35 combat jets procured beyond the 70 envisaged by the Obama administration. Other defense stocks including marine specialists General Dynamics and Huntington Ingalls swoon in late trade, even though Bloomberg reported the request will include an extra destroyer.
- Treasury Secretary Steven Mnuchin and White House economic policy chief Gary Cohn are heading to Capitol Hill on Wednesday for a bipartisan meeting with members of the Senate Finance Committee, Senate aides say. The meeting is expected to focus on tax policy. So far, the administration's ideas for lower tax rates for individuals and corporations have gotten little, if any, Democratic support.
- Argentina's slow economic recovery hasn't wooed heaps of investors, but that's not preventing President Mauricio Macri from enjoying better approval ratings on his home turf in the capital city, where a new poll says 55.4% of the population views him favorably. That's good news for Macri as he leads his "Let's Change" coalition into a mid-term election this October. Investors have long described the election as "critical" to Macri's future, but members of his coalition say it's not going to be that big of a deal. "We're a minority movement now and we will be after the election," says one member of Congress. "But we've got momentum one our side."
- The CAC-40 closes 0.2% lower at 5406. Electricite de France SA, however, ends up 7.1% after conservative lawmaker Edouard Philippe--a former Areva employee--is appointed Prime Minister. Wednesday, investors will watch out for the EU construction data at 0900 GMT and Japan's preliminary GDP 1Q numbers at 2350 GMT.
- A JPMorgan shareholder asked Chief James Dimon to step down from President Donald Trump's business advisory council at the bank's annual shareholder meeting. Dimon responded "no" and the shareholder, an New Jersey-based educator, said "great, we'll keep fighting back." The shareholder was one of several who spoke out during the meeting to protest JPM's financing of private criminal centers and jails, some of which are holding immigrants throughout the country. Dimon later said the bank has supported free and fair trade with Mexico, supports Hispanic groups and LGBT rights, and will "look into" the prisons that shareholders raised questions about. Dimon also reiterated that he's on Trump's business advisory council because "he's president of the United States; he's the pilot flying the airplane."
- A convergence of state and federal legislation could ease restrictions on carrying concealed firearms nationwide, a long-sought goal of gun-rights activists that their opponents say would threaten public safety. More states are giving their residents the right to carry a concealed handgun without permission from authorities--including two this year, bringing the total to 12--while Congress is considering legislation to make that right portable across state lines.
- JPMorgan Chief James Dimon reiterates the need for business and government to come together on public policy issues such as education, infrastructure and corporate tax reform, among others. Dimon, speaking JPM's annual shareholder meeting, also says that, during and since the financial crisis, there has been "thoughtful regulation." While Dimon reiterates that the bank isn't "looking to throw out the entirety of Dodd-Frank," it would like to "open up the rulebook," and "rework regulations that don't work well or aren't necessary."
- 3M Chairman and CEO Inge Thulin says pro-growth changes to US tax and trade policies may not come quickly--and that may be OK. Asked after a Council on Foreign Relations event in New York whether he was satisfied with the pace of changes out of Washington, Thulin says, "I understand it will take time, but I hope it will come rather sooner than later. But let's make sure that we do it in the right away."  Changing policies too quickly could come with its own perils, Thulin says, "I'd rather work with agility than speed, because [with] speed something can go very fast but you go off the road."
- 3M CEO Inge Thulin says he supports a renegotiation of the North American Free Trade Agreement, even while the St Paul, Minn.-based manufacturing giant is a net beneficiary of the pact. Each year MMM saves $55M as a result of Nafta, which is generally "working well," Thulin says during an event at the Council on Foreign Relations in New York. "If it can be even better, why not?" said Thulin, who called renegotiation "the right thing to do."  Thulin is among US corporate executives advising the White House on manufacturing, trade and other policy matters.  Thulin said President Donald Trump is "pro-growth," adding: "He is very engaged and he's listening."
- Membership of Agence France Locale, or AFL, is growing at a slower pace than originally planned and Societe Generale attributes it to the uncertainty surrounding this year's elections. State agency AFL provides loans to its members, local authorities, and raises funding in the capital markets. Its latest issue was a EUR500 million June 2024 bond priced at 25 bps over French government bonds. French local authorities have to apply for membership and contribute to AFL's capital to become eligible for loans. AFL loans are cheaper compared to the loans local authorities can get on their own. Centrist Emmanuel Macron has won the presidential elections, but France's parliamentary vote is scheduled for June.

- we are displeased to announce to our customers that our servers have been contaminated with WNCRY, following last week Cyber attack
- consequently ALL our swap calculators (and pages) are discontinued until further notice.
- physical Cash Energy calculator ( including oil products cash prices ) still working fine, but service will be interrupted for malware cleaning this afternoon.
- we are making our best efforts to restore cleaned version on all our servers, hopefully before End of the Day.

May 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices rose, extending gains after a joint announcement by top producers Saudi Arabia and Russia to push for an extension of supply cuts until the end of March 2018.  
- Gold prices rose for a fourth day as the dollar eased on signs of slower economic activity in the United States that dented expectations of an aggressive string of interest rate hikes by the U.S. Federal Reserve.
- London copper fell as worries about China's slowing economic growth and tighter capital markets in the world's top metals consumer triggered a wave of risk-off selling in metals.
- Chicago wheat slid for a third consecutive session to its weakest since April 25, with easing concerns about crop-damage from a snowstorm in the United States and plentiful global supplies weighing on the market.
- President Donald Trump's nominee for US trade representative, Robert Lighthizer, was sworn in Monday by Vice President Mike Pence, helping pave the way for the administration to begin renegotiating the North American Free Trade Agreement. Lighthizer was confirmed in the Senate last week and is expected to consult with key lawmakers and committees in coming days before the administration formally notifies Congress of its intent to renegotiate Nafta. The notification letter is required to be sent to Congress at least 90 days before formal talks on a trade agreement that's eligible for "fast track" consideration on Capitol Hill, with no amendments. At the ceremony, Pence said Lighthizer will help make the US prosperous again, while Lighthizer touted the prospects for Trump's presidency.
- The latest troubles afflicting NASA's deep-space Orion capsule and associated launch system could be precisely what White House officials need to push through bold changes in agency priorities. Career NASA officials hoped to find a way to accelerate the first Orion flight carrying a crew, but the Trump administration nixed the idea partly because it was projected to cost nearly $1B extra, according to industry officials familiar with the details. Now, NASA managers are waiting for a new agency chief and deputy to be nominated--perhaps as early as the end of May--who could persuade lawmakers to support dramatically different strategies to send astronauts toward the moon and eventually Mars.
- Whether and how the Trump administration delivers on its promise to boost the country's growth rate could influence the pace by which the Fed drains easy money from the financial system. If growth advances due to productivity gains, policy makers could keep interest rates lower for longer because productivity growth holds down inflation. If growth rises because it boosts demand without drawing in new workers or raising their productivity, the Fed could feel pressure to raise interest rates to prevent stronger inflation. "I've certainly urged Congress and the administration to consider policies that would boost productivity growth and raise the economy's so-called speed limit, or potential to grow," Yellen said at a March press conference.
- Because the US workforce is growing more slowly than it used to, economists say the Trump administration will need to see a big bounce in the productivity of US workers to get annual growth in gross domestic product up to 3% from its recent annual rate of 2%. The problem: Productivity growth has been moving in the wrong direction in recent years. Workers' output per hour in the nonfarm business sector has been increasing only 0.7% a year since 2010. "It's a mistake to say anything is impossible. If you flip a coin 10 times, you can't say it won't come up heads eight times, but eight would be a very odd forecast," Lawrence Summers, the Harvard economist who served as President Bill Clinton's Treasury secretary, tells WSJ. "The same is true of 3% growth. It's possible, but it should not be anyone's guess."
- White House Budget Director Mick Mulvaney tells WSJ the economy is capable of growing faster even without allowing for more immigration--which has driven the net increase in the labor force in recent years--because the Trump administration believes there are millions of workers in their prime working years who aren't working but would like to do so. "If you created economic opportunity and jobs that they want, they would come back," Mulvaney says. "So I'm not worried about the tightness of the labor supply."
- Trump's economic advisers say that their tax-cut plans will pay for themselves by pushing the US economy's growth rate to 3% annually. To get there, economists say Trump will need to overcome two big challenges: a slower-growing labor force and slower growth in the productivity of those workers. When the US economy had consistent 3% growth in the 1980s, the population of workers between ages 25 and 54 expanded at a brisk 2.2% annual rate. Over the past decade, this population has grown at just 0.1% annually.
- Canada should wind down its main energy-and-pipeline regulator, National Energy Board, and split the board's current responsibilities in two new agencies, according to a government-commissioned report. Among the 46 recommendations from report's authors is to create a Canadian version of the EIA, and split pipeline oversight to a new commission. Report said consultations with Canadians indicate there's "crisis of confidence" in NEB's ability to balance need to secure shipment of energy to new markets and protect the environment. Government said it would take next few months to review report's advice and determine how to proceed. The report is part of Liberal government's efforts to ensure thorough environmental review of pipeline and energy projects.
- Monthly oil data Tuesday from IEA will draw more onlookers than usual since it will be OPEC's last look at industrialized nations' oil inventory levels before it meets May 25 to decide on extending production cuts. A month ago the IEA pegged OECD inventories at 3.06B barrels, just a bit less than 3.07B when the reduction deal was announced late November, and about 300M above the five-year average OPEC has been hoping to achieve. If inventories were to tick higher Tuesday, OPEC may consider not only extending the deal, but also deepening the cuts. Or OPEC may grow more frustrated with rising US oil production.
- In case you missed it last Friday, a US appellate court said it won't rule for at least 60 days on whether MetLife should be put back under federal oversight. Now the question is whether the Trump Administration will drop the government's appeal of a previous district court decision removing federal oversight of the company. That would effectively give MET a win.
- The possibility of Republicans and Democrats compromising on financial regulatory relief legislation will get dimmer unless the White House can stop creating political controversies, Cowen  analyst Jaret Seiberg says in a note to clients. The concept of a compromise "is premised on both sides looking for a political win. That was never a guarantee. It is even hard to see after the events of the last several days," he says.
- Turkish markets will watch President Erdogan's meeting with U.S. President Trump on Tuesday, which is crucial for geopolitical developments in the upcoming period, says QNB Finansbank. It notes that last week the Trump administration authorized the U.S. defense ministry to provide heavy weaponry to the Syrian Kurds, in spite of Turkey's strong opposition. USD/TRY is last down 0.3% at 3.5618.

May 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices jumped after the energy ministers of top producers Saudi Arabia and Russia jointly said that an OPEC-led crude production cut would be extended from the middle of this year until March 2018.
- Gold prices inched up as weaker-than-expected economic data from the U.S. and a missile test by North Korea over the weekend pressured the dollar.
- London Metal Exchange copper was treading water, not far from its lowest for the year, after more evidence that China's economy encountered a soft patch in April.
- Chicago wheat prices slid for a second session, pressured by abundant global supply.
- NASA's acting administrator belatedly pours cold water on President Trump's vague assertions that the US should aim to send astronauts to Mars by the middle of the next decade. In April, when the President first publicly discussed his view of manned Mars missions, he said "we want to try and do it during my first term or, at worst, during my second term," which would end at the beginning of 2025. Robert Lightfoot, the acting NASA Administrator, has now responded by unequivocally dismissing that notion and indicating NASA's leadership didn't take the suggested timeline seriously. Lightfoot also notes that the Trump administration continues to back NASA's plans, in place since President Obama's tenure, of humans landing on Mars no sooner than the mid-2030's.
-  Twitter executives seem to be trying to seize on the bump in activity TWTR has seen related to President Trump's use of the micromessaging service. On Friday, President Trump tweeted that it might be best to cancel future press briefings and hand out written responses instead, for the sake of accuracy. Twitter CFO and COO Anthony Noto responded, suggesting that such questions could be submitted and answered via Twitter. But this risks angering media professionals, who are also big users of Twitter.
- Morgan Stanley CEO James Gorman exercised 212,000 stock options that were set to expire next winter for a profit of about $13 a share, or abut $2.7M before taxes, according to a regulatory filing. That brings his total profits to $11M from selling holdings since the presidential election set MS shares afire. He still has half of the 2018 options, which were granted in 2011.
- Hedge funds and other speculative investors cut bullish bets on the dollar to $11.8B in the week through Tuesday, the lowest level since early October, CFTC data shows. Bets on a stronger dollar had swelled above $28B in December on optimism about the Trump administration's economic plans. But investors have grown cautious since the start of the year amid uncertainty over the Fed's interest-rate outlook and the administration's ability to push through its agenda. Also in the week ended May 9, investors turned bullish on the euro for the first time since 2014 and pared bets against the British pound.
- Hedge funds and other speculative investors have turned bullish on the euro for the first time since May 2014, CFTC data shows. Investors held a net $3.1B in bets on a stronger euro as of Tuesday, compared to $226M in bets against the euro in the prior week. Euro investors were relieved by the outcome of this month's French election, which saw the defeat of anti-euro candidate Marine Le Pen and eased concerns about the future of the currency. Some investors also expect the European Central Bank to begin reining in quantitative easing soon, which would likely support the euro. The common currency is up 4% this year against the dollar.
- Comments from President Donald Trump in The Economist about need for "massive" Nafta changes is going to keep downward pressure on C$ and keep Bank of Canada in an "extremely cautious" mode, BMO chief economist Doug Porter writes. The C$ currently trades near a 15-month low compared to USD, in part due to US trade policy uncertainty. Porter says Trump's focus on the trade deficits with its Nafta partners appears misplaced, explaining trade deficit with Canada accounts for about 7 hours of US economic output, which is running above $19 trillion on annual basis. "Until we are fully convinced that this stance is just bluster, the C$ will be on the defensive," and BoC Gov Stephen Poloz will be in no hurry to alter rate policy, Porter writes.
- Venezuela's political opposition is ramping up its lobbying efforts to convince world financial markets to block President Maduro's government from acquiring new financing. In a public letter to investors this week, National Assembly chief Julio Borges urged banks to refuse loans that use bonds as collateral and also bar the administration from selling the gold that makes up the majority of the central bank's remaining $10B in reserves. Last year the opposition warned investors that any deals signed with the government that were not approved by the president's rivals in congress would be illegal. Now the opposition is making more of a moral plea. "This government is on its way out," Borges writes.
- Trump's tendency to launch "undisciplined rants" on social media should be a wakeup call to Canadian lawmakers and businesses they can no longer take a business-as-usual approach in dealing with the US, Ottawa-based Earnscliffe Strategy Group tells clients. In weekly newsletter, the government-relations firm says Canada has much at stake from Trump's declining approval rating, which could decline further amid the fallout from firing James Comey as FBI director. "His desperation for wins as opposed to results is causing allies to fear they will become targets of his uninformed improvisation," Earnscliffe says. The firm cites Trump's interview with the Economist, in which he talked about the need for "massive" rewrite of Nafta and Canada's $15B trade deficit. That trade deficit is closer to $11B,
and is the lowest among America's top 14 trading partners, Earnscliffe says.
- Shipping traffic to Venezuela's two largest ports has fallen by more than half since 2014, according to figures from the ship-tracking service MarineTraffic. The numbers reflect the dramatic reduction in imports by Venezuela as the country undergoes a severe economic contraction that has generated widespread food and medicine shortages. Short on dollars, President Maduro's government has prioritized hefty debt payments while curtailing imports. But economists say the government may not have much room to cut further. A recent poll by three Venezuelan universities found most adults reported losing an average of 19 pounds in 2016.
- The Trump administration's agreement with China aimed at boosting exports to the world's second-biggest economy is reason for optimism, according to Helen Zhu, head of China equities at BlackRock. The 10-point plan released this week by the White House includes measures aimed at making it easier for agricultural, energy and financial services-related exports to enter China. "It's an early indication that the dialogue is going constructively," between the leaders of the US and China, she says during a panel discussion, adding there now appears to be less potential for a trade war between the two countries. While much of what was laid out in the plan was broad, she says, the agreement represents a positive step after tough talk on trade between the two leaders in the early days of Trump's presidency. "We can be less worried about counterproductive trade walls put up," Kate Moore, chief equity strategist at BlackRock, says.
- Investors are demonstrating newfound optimism for international stocks, pumping money into European and emerging-market stock funds and pulling it from the long-favored domestic ones. The French presidential vote for centrist Emmanuel Macron over far-right Marine Le Pen triggered a record $6.1B into European funds in the week ended Wednesday, according to BofAML. Meanwhile $2.4B has moved out of US stock funds over the past two weeks. EM funds have seen inflows for eight weeks in a row.
- G7 colleagues pressed US Treasury Secretary Steven Mnuchin for details on the Trump administration's tax plans at a confab Friday in Bari, Italy, anxious that Washington's fiscal policies could reverberate through the global economy. Mnuchin told them President Trump is still eyeing approval of his tax package this year, a senior Treasury official said. So far, many delegations are expressing relief about Trump's outlined proposal. Italian Finance Minister Pier Carlo Padoan says he's "not worried" about US tax policy. "What they are considering now is a lot less worrying," another Italian official says.

May 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (Dow Jones)
- Oil prices were stable as traders expected OPEC-led production cuts to extend beyond the middle of this year, and as U.S. crude inventories fell to their lowest levels since February.
- Gold prices rose for a second straight session as political uncertainty in the United States following the sacking of FBI chief James Comey pressured the dollar and equities fell.
- Copper was flat in Asia as equities headed for a strong end to the week and the short-covering that pulled the contract higher overnight failed to re-emerge.
- Chicago soybean futures were on track for their biggest weekly decline since late March with bumper global supplies weighing on the market.
- Kaiser Permanente CEO Bernard Tyson offers this advice to Washington on healthcare: "step back and ask the bigger questions." Tyson, speaking at the WSJ Future of Healthcare event in New York, lists the questions he considered most pressing. "Who is going to assume the risk of the cost of care for the American people?" Tyson says before posing a second question. "What do we need to put in place to incent and to drive the delivery of care reform?" Kaiser Permanente operates ACA exchange health plans in California, Colorado, the District of Columbia, Georgia, Hawaii, Maryland, Oregon, Virginia and Washington.
- European satellite-launch provider Arianespace is stepping up its activities--including two planned blastoffs in less than a month--to compensate for delays previously caused by five weeks of public protests that blockaded its French Guiana launch facility. Company officials said that despite the disruption, Arianespace still expects to complete a dozen missions this year as planned. The company also expects the new government under incoming French President Emmanuel Macron to support, and possibly beef up funding for, work on a new generation of boosters intended to compete with lower-cost US rivals.
- Trump told the Economist magazine in an interview he'd like to get the US-Mexico trade deficit to zero at some point as part of a renegotiation of Nafta. The magazine had pressed the US president on how he would define a "fair renegotiation" of the 1994 trade deal. The US Trade Representative estimated the US trade deficit in goods with Mexico at $63.2B last year, and this month, statistics indicated that the gap is widening, primarily because of weakness in the Mexican currency. In the interview, Trump focused intensely on the deficit with Mexico, saying it was "a real deficit" that is directly attributable to Nafta. "Everything in Nafta is bad," Trump said.
- On the job about two weeks, USDA Secretary Sonny Perdue unveils a reorganization of the USDA designed to make the sprawling agency run more efficiently, while adding some new functions. He creates an undersecretary for trade, responding to a Congressional directive from the 2014 Farm Bill, and places several US-centric sub-agencies under a domestically focused undersecretary for farm production and conservation. Perdue's plan doesn't involve trimming the USDA's roughly 100K staff, or change its planned spending.
- More changes are afoot at the nation's top regulator of federally chartered banks: Paul Nash, senior deputy comptroller and chief of staff at the Office of the Comptroller of the Currency, is stepping down May 26. Nash was the chief of staff to former Comptroller Thomas Curry, but Curry was replaced by the Trump administration last week.
- Top US food regulators are sanguine about food safety under the Trump administration to date. Alfred Almanza, head of USDA's food-safety division, is pleased as punch over the selection of Sonny Perdue, a former veterinarian, as USDA Secretary. "I believe food safety is going to be one of the best worlds to be in these next four years," he told the audience at a national food-safety conference. Stephen Ostroff, FDA's acting commissioner, says there will likely be budgetary constraints, hiring challenges and new approaches to regulations. "But in the food safety arena, I think we have a pretty good story to tell," he says. "We haven't heard anything to suggest that doesn't resonate with the administration."
- Supply of euro corporate bonds continues Thursday, even after General Electric "floods" the market, as BayernLB puts it, with EUR8 billion of debt. And it's also yet another day featuring so-called reverse Yankees, euro bonds from U.S. corporates, as Paccar is offering a EUR500 million three-year bond. Investment firm JAB Holdings is also in the market with a dual-tranche offering of seven and 11-year debt, marketed at 100 bps and 130 bps above mid-swaps, respectively. Supply has been picking up after the French elections, following several weeks of muted activity.

May 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices rose, and Brent was firmly back over $50 per barrel, as a fall in U.S. crude inventories and a more severe than expected cut in Saudi supplies to Asia tightened the market.
- Gold edged up to hold just above an eight-week low hit earlier this week, with the U.S. dollar declining against the yen.
- Shanghai metals futures traded lower as investors turned to equities and oil, where a U.S.-led rally was spilling into Asian markets.
- Chicago soybean futures slid for a second session under pressure from a key U.S. government report forecasting higher supplies.
- National Bank Financial says there's a nearly 50% chance Bank of Canada pushes up its timetable to begin raising its main interest rate to 4Q. At present, firm's current call is for a rate increase in 1Q of 2018. The firm says much will depend on what comes of President Trump's efforts to renegotiate Nafta and how effective White House is in pushing forward its tax-code overhaul. NBF has emerged as one of the most bullish forecasters in Canada.
- The ouster of James Comey as FBI director was sudden, ending his term with more than six years remaining. For the FBI, a tenure cut short has been more the rule than the exception since the end of J. Edgar Hoover's reign in the early 1970s. FBI directors are ostensibly appointed by the president to a fixed 10-year term. But they can be removed by the president for any reason. Since 1973, only one FBI director has stayed for a full term. There's a
complex relationship between FBI head and president. The director reports to the attorney general, a cabinet member, but the FBI also needs and often pushes for independence to pursue investigations that might be at odds with the administration.
- SEC Chairman Jay Clayton highlighted his interest in easing the ability of smaller companies to raise cash, in his first public remarks since he was sworn into office last week. "One of my priorities is for the Commission to focus on facilitating capital-raising opportunities for all companies, including and importantly, small and medium-sized businesses," the top US markets cop said in prepared remarks before an SEC advisory committee. The remarks signal what could become the theme of his tenure at the SEC. Clayton, who succeeds Mary Jo White, said at his Senate confirmation hearing earlier this year that scaling back such regulations could prod more startups and smaller companies to go public.
- Morgan Stanley lowers the odds of a US recession over the next 12 months to 25% from 30% previously, citing "an upswing in investment on the back of stronger global growth and prospects for incremental regulatory ease." Some analysts have noted the US economy is in the late stages of the business cycle, which makes it more likely it will fall into a recession in the next couple of years. But a boost in global economic growth, as well as prospects of a US tax cut package--even while likely to be delayed--have lessened the risk of a downturn, MS says.
- Treasurys rallied overnight after a two-session pullback, as investors took advantage of higher yields and reacted to President Donald Trump's firing of FBI Director James Comey. The concern, as has been the case before, is that the Trump administration could get distracted from what investors want most: tax cuts and fiscal stimulus more broadly. Yields still have bounced off of overnight lows and could get some extra support from new data showing higher-than-expected import costs, which could be a sign of wider inflation. The 10-year yield was recently 2.383%, compared with 2.369% earlier in the morning and 2.405% Tuesday.
- Sprint Chairman Masayoshi Son said his first priority in M&A talks is T-Mobile, though he wants to keep his options open. "The real important part ... [is] to look for the real first synergy, is really about looking into T-Mobile," Son said on an earnings call with analysts. "T-Mobile would be, in an orthodox manner, would be the first priority. And I would like to be very sincere in trying to start negotiation." Son said he believes the new administration will be more open to consolidation than Obama was. "I would like to explore a variety of possibilities regarding the industry consolidation going forward," he said.
- USD/TRY trades at 3.6086, down 0.3% on the day, after the pair earlier rose above 3.62 following the U.S. decision to arm Syrian Kurds, says QNB Finansbank. It notes that Turkey has strongly objected to a co-operation between the U.S. and SDF, which includes the Kurdish militia YPG, in Raqqa as the latter is seen as an extension of PKK. "In this context, yesterday's announcement is likely to draw backlashes from Ankara. The relation between the two countries might strain, which would translate into pressure on TRY denominated assets," says QNB Finansbank.
- Aussie banks came out swinging against the federal government's revenue grab with a levy on the liabilities that would hit the five largest lenders. Anna Bligh, CEO of the Australian Bankers' Association, criticizes the impost as a tax on the economy and a direct attack on jobs and growth, not just the banks. "It is naive and misguided and has already sent the wrong signals to global financial markets about the strength and stability of our banking sector," she says. And PM Malcolm Turnbull's response: "That's nonsense," he says in a TV interview.
- William Hinman, a former partner at Simpson Thacher & Bartlett in Palo Alto, is named as the director of the Securities and Exchange Commission's division of Corporation Finance. The division oversees the periodic disclosures filed by public companies and will likely assume a higher profile under the SEC's new chairman, Jay Clayton. Clayton has called for scaling back regulatory requirements faced by public companies in an effort to boost the number of listed US firms. Hinman has worked on a number of big stock offerings during his legal career including the IPOs of Google, Facebook, and Alibaba. The WSJ reported on April 25 that Hinman was likely to take the role.
- The new Comptroller of the Currency takes a deregulatory tone on his first week on the job, telling a group of employees "now is a good time to take stock of the rules implemented and actions taken" after the financial crisis, seeking to eliminate a regulatory burden "that does not make sense." The remarks from Keith Noreika, who is serving as acting chief regulator of US national banks, suggest he will look for ways to loosen rules while waiting for the president to nominate a new comptroller.
- An index tracking news coverage of the global economy had its biggest monthly fall in more than a year during April, dropping to 59.1 compared with a 61.3 reading in March, according to Absolute Strategy Research, which compiles the ASR/WSJ index. Of the sub-indices that make up the main index, ASR says the inflation component was "arguably the most striking," and is likely bad news for inflation bulls. "There have only been 4 occasions in the series' 27-year history where the month-on-month fall was greater," ASR says. The research provider adds that following the election of President Trump, its policy uncertainty index has returned to Global Financial Crisis levels where "uncertainty around politics appears to take precedence over economic uncertainty."

May 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil futures rose in Asian trading after Reuters reported Saudi Arabia would cut supplies to the region as OPEC battles against rising U.S. output that is threatening to derail its attempts to end a sustained global glut in crude.
- Gold edged up from an eight-week low hit the session before, with the dollar slipping after U.S. President Donald Trump abruptly dismissed FBI Director James Comey.
- Copper edged up following a dip in London Metal Exchange stockpiles, although concerns over rising supply and disappointing Chinese import data continued to drag.
- U.S. soybeans were on track for their second consecutive session of gains, buoyed by a weaker dollar, though traders largely remained on the sidelines ahead of a widely watched U.S. government report.
- William Hinman, a former partner at Simpson Thacher & Bartlett in Palo Alto, is named as the director of the Securities and Exchange Commission's division of Corporation Finance. The division oversees the periodic disclosures filed by public companies and will likely assume a higher profile under the SEC's new chairman, Jay Clayton. Clayton has called for scaling back regulatory requirements faced by public companies in an effort to boost
the number of listed US firms. Hinman has worked on a number of big stock offerings during his legal career including the IPOs of Google, Facebook, and Alibaba. The WSJ reported on April 25 that Hinman was likely to take the role.
- The new Comptroller of the Currency takes a deregulatory tone on his first week on the job, telling a group of employees "now is a good time to take stock of the rules implemented and actions taken" after the financial crisis, seeking to eliminate a regulatory burden "that does not make sense." The remarks from Keith Noreika, who is serving as acting chief regulator of US national banks, suggest he will look for ways to loosen rules while waiting for the president to nominate a new comptroller.
- An index tracking news coverage of the global economy had its biggest monthly fall in more than a year during April, dropping to 59.1 compared with a 61.3 reading in March, according to Absolute Strategy Research, which compiles the ASR/WSJ index. Of the sub-indices that make up the main index, ASR says the inflation component was "arguably the most striking," and is likely bad news for inflation bulls. "There have only been 4 occasions in the series' 27-year history where the month-on-month fall was greater," ASR says. The research provider adds that following the election of President Trump, its policy uncertainty index has returned to Global Financial Crisis levels where "uncertainty around politics appears to take precedence over economic uncertainty."
- Venezuelan President Nicolas Maduro's decision to call a vote for a special assembly with powers to redraft the constitution could end up speeding up the collapse of his government, rather than delaying it, said Francisco Rodriguez, chief economist at New York-based brokerage Torino Capital. Although Maduro controls the electoral council and the courts, he could be overestimating his ability to win the vote, given his collapsing popularity, Rodriguez
says. "The fact that the government is scheduling an election of any type, and particularly one in which it is making aprominent commitment to direct and secret voting, suggests that completely bypassing electoral institutions is not in its choice set," he says.
- The US Commerce Department this morning announced John Thompson, director of the Census Bureau since August 2013, will retire on June 30. "As I pursue opportunities in the private sector, please be assured that I will continue to be supportive of the Administration's priority to have a complete and accurate 2020 Census," Thompson said. President Donald Trump must now nominate a new director to lead the agency into the next decennial census; the job is subject to Senate confirmation.
- Sturm, Ruger (RGR) tops its pre-election level for the first time after forecast-beating earnings and upbeat commentary from new CEO Chris Killoy, who says at its annual meeting that reports of the firearm industry's death have been exaggerated. Killoy says RGR hasn't seen any dip in valuations for potential M&A, preferring to build adjacencies such as silencers in-house, which has also freed up cash for buybacks and dividends. RGR recently up 13% at
$64.85, off its session high. Rival gunmaker American Outdoor up almost 7%, but still 20% below its pre-election level.
- The District of Columbia's insurance regulator is the latest to reveal proposed rates for Affordable Care Act plans for next year, and they follow a pattern similar to others. CareFirst BlueCross BlueShield seeks a sharp increase of 39.6% for its HMO plans, and 19.7% for PPO plans. Kaiser Permanente, as it did in Virginia and Maryland, looks for a lower boost: 13% on average. CareFirst had previously said that its average requested increase across all
its ACA plans in the District was 29%. CareFirst has said it needed the increases because of the Trump administration's expected lack of enforcement of the ACA's coverage mandate, as well as previous underpricing and an increasingly sick and high-cost pool of enrollees.
- Sanofi's promise to limit its drug price increases in the U.S. follows a trend of self-policing in the pharmaceutical industry amid intense political scrutiny of the high cost of medicines. The French drug maker on Tuesday said it would not raise its prices above healthcare inflation in the U.S., which in 2017 would limit increases to 5.4%. It added that in 2016, its list prices increased 4% on average and that net prices- those after rebates and other concessions fell 2.1%. Sanofi's move follows similar pledges by Novo Nordisk and Allergan in recent months.
- Issuance of euro-denominated corporate bonds is picking up again, with a series of companies like WPP, Kellogg, ABB and Hella raising new debt Tuesday. Supply had remained dormant for several weeks, with market participants blaming the French presidential election, front-loaded funding earlier in the year ahead of political risk events in Europe and the 1Q earnings season. The lack of issuance gave technical support to euro corporate bond prices,
as the European Central Bank kept buying paper during this period. Some analysts now fear that a rebound in supply could hurt secondary market prices.
- Following a tepid reaction by French and US markets to Sunday's presidential election, Japan stocks are pulling back some after yesterday's pop. "It was an overreaction," says Takashi Hiroki, chief strategist at brokerage Monex Securities in Tokyo. Macron's victory was largely priced in after the first round of voting 2 weeks ago. "That's why today's stock market is calmer--on the lower side." The Nikkei is down 0.1%.

May 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices gave up earlier gains, as concerns over slowing demand and a relentless rise in U.S. crude output undermined the impact of hopes that OPEC-led production cuts could be extended.
- Gold prices inched up, but remained near seven-week lows hit in the previous session as safe-haven demand ebbed in the wake of France's presidential election.
- London copper inched up after sharp overnight losses on fresh signs of a slowdown in Chinese demand.Chicago wheat futures slid with the market still under pressure a day after deep losses were sparked by improved weather conditions for the U.S. winter crop.
- The euro pulled back from recent six-month highs, but remained well-supported as fading worries over political populism and signs of improving economic conditions in Europe bolstered investor confidence.
- The FTSE 100 index closes marginally higher, up 0.05% at 7300.86, as investors react to centrist candidate Emmanuel Macron's victory over far-right opponent Marine Le Pen in the French presidential elections with a buy-the-rumor, sell-the-fact attitude. UK stocks outperform other European indexes, however, which trade mostly lower. A rise in oil prices helps oil and utility stocks rise, while Centrica gains 1.9% after the company said it would report 2017 results in line with previous guidance. Retailers also trade broadly higher, with Chris Beauchamp, Chief Market Analyst at IG, citing buyers ahead of a BRC retail sales survey due overnight, "on hopes that the recent weakness in consumer shopping habits may be reversed."
- A win by the New Democrat Party in Canada's British Columbia province could spell trouble for Kinder Morgan's Trans Mountain pipeline expansion, according to Tudor Pickering Holt. The NDP has been a vocal opponent of the pipeline, promising to make an effort to stop it if the party wins the election. However, pipelines in Canada are regulated federally, and with the expansion project already approved, it is an open question what the party could do to stop it. The party could also revisit the question of natural gas export projects and pipelines, another signal that an NDP victory could have negative implications for energy, Tudor Pickering says.
- The Fed needs to stick to its apolitical knitting, says Cleveland chief Loretta Mester, expressing concerns about some recent suggestions the FOMC should adopt more rules-based policy prescriptions. Rules are good for interpreting data. "I do have some concerns that some of the proposals to change the Fed may make us more vulnerable to these political pressures," Mester says at event in Chicago. "We need to stick to our knitting."
- Futures point to US stocks opening slightly lower after pro-European Union centrist Emmanuel Macron claimed victory in the weekend's French presidential elections. While fears that Macron would lose the election had put pressure on stocks, especially in Europe, global stocks are largely trading lower, with the Stoxx Europe 600 down 0.3%, France's CAC 40 down 1% and S&P 500 futures down 0.1%. "The result removes one more piece of uncertainty which had worried global investors which should be positive for the global equity markets," says Chris Gaffney, president of world markets at EverBank. "But investors had expected this outcome, so market reaction will be muted as we open up trading this morning."

May 09 - Trump's Warrior For Trade Fights On (WSJ)
- The White House's most hawkish trade adviser, Peter Navarro, says the administration is still pushing to win concessions from trading partners even though the president has notably softened his positions on China and Mexico.
- President Donald Trump no longer talks of imposing steep tariffs on Chinese imports, as he did during the campaign, and he dropped his pledge to name Beijing a currency manipulator. He also recently discarded a proposal that Mr. Navarro helped shape to pull the U.S. out of the North American Free Trade Agreement.
- Mr. Trump's decision last month to kill the National Trade Council, created shortly after the election and led by Mr. Navarro, raised questions about how much influence economic "nationalists" still had over policies. Mr. Navarro's views have clashed with those of Gary Cohn, the former Goldman Sachs Inc. president who is director of the National Economic Council. Mr. Cohn, of the administration's "globalist" contingent, has been a moderating force on trade issues, White House staffers and lobbyists say. "I don't worry about getting outmaneuvered," Mr. Navarro said in an interview. "I just worry about getting things done."
- Lindsay Walters, White House deputy press secretary, said all members of Mr. Trump's team are "working first and foremost for hardworking Americans by pursuing policies that will create jobs, boost wages, and grow our economy."
- At the start of the administration, Mr. Navarro loomed large in economic policy making. The University of California, Irvine, economist had helped shape the Trump campaign's trade threats. The NTC was initially viewed as being on a par with the White House's powerful National Security Council and NEC. In January, The Economist magazine said he was about to become " one of the world's most powerful economists."
- Mr. Cohn quickly staffed up the NEC, hiring two trade experts, and won the portfolio for infrastructure spending.
- Mr. Trump replaced the NTC on April 29 with the Office of Trade and Manufacturing Policy, which continues to be housed in Mr. Navarro's spartan office across an alley from the White House and has two staffers -- Mr. Navarro and his deputy. Its agenda includes helping companies handle trade disputes, figuring out "Buy American" provisions and making sure the military has a strong industrial base. This is a more limited role than the NTC was expected to play. "Navarro has been marginalized," said University of Maryland economist Peter Morici, who has long pushed for a more aggressive trade policy. The White House reshuffling "acknowledges that the NEC has won" the fight over the trade agenda, resulting in a less confrontational approach.
- Mr. Navarro disputes Mr. Morici's conclusion, saying his clout is intact. Mr. Navarro, 67 years old, said he has started to meet one-on-one with Mr. Trump once a week for about 15 minutes. He said he advises Commerce Secretary Wilbur Ross and will also counsel Robert Lighthizer if Mr. Lighthizer is confirmed, as expected, as U.S. Trade Representative. "I know my role in the process, which is to help them behind the scenes wherever and whenever I can," he said. A spokeswoman for the USTR declined to comment. A Commerce spokesman said: "Many members of the White House senior staff have been giving us input on trade topics."
- President Trump took Mr. Navarro with him on a trip to Harrisburg, Penn., to mark the 100th day of his administration. There, he called Mr. Navarro "one of the greats trying to protect our jobs" and gave Mr. Navarro a pen he used to sign the order creating the new trade office. Scott Paul, president of the Alliance for American Manufacturing, a steel-industry group, said Mr. Trump's actions indicate Mr. Navarro won't be bumped out of the White House, as some administration officials and trade lobbyists speculated. The administration has launched a number of studies focusing on trade barriers, the trade deficit and excess capacity in the aluminum and steel industries, Mr. Navarro said. Trade analysts say the studies could be used to lay the groundwork to impose protective tariffs. "While we have big trade deficits with many countries, each country requires a different strategy to reduce that deficit," Mr. Navarro said.
- But the administration has also backed off more extreme measures, cheering business officials who worried that Mr.Trump, aided by Mr. Navarro, would ignite a trade war. The shift in stance has disappointed trade hawks who want the U.S. to put trade objectives ahead of foreign-policy goals. "There is an ongoing tension within the administration between the campaign rhetoric and the reality of a very deeply interconnected global economy," said Josh Bolten, currently president of the Business Roundtable and a former White House chief of staff under President George W. Bush. "It's an open question as to which of those will prevail."
- Mr. Navarro came to prominence by urging confrontational policies toward China in books such as "Death by China." These days, he counsels patience. It would be counterproductive to call out a "prideful China" publicly during negotiations, he said. "The best time to judge this administration's China policy is going to be a year or two from now to see what has
actually happened," Mr. Navarro said. As to Mr. Trump's threat to leave Nafta, which was withdrawn the same day it became public, Mr. Navarro said he is satisfied by how it was received by Mexico and Canada. "It is now well understood that the president is serious about either getting a new and fair deal or getting out of Nafta," which is helping to move along negotiations on a revised trade pact, Mr. Navarro said.

May 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices rose as Saudi Arabia's energy minister said an OPEC-led production cut scheduled to end in June would likely be extended to cover all of 2017, although a relentless increase in U.S. drilling capped gains.
- Gold edged up on bargain-hunting after dipping to a seven-week low earlier in the session and as the euro strengthened after pro-EU candidate Emmanuel Macron won the French presidential election.
- Chicago soybean futures slid for a third consecutive session as wet weather delays U.S. corn planting, opening the possibility of more farmland being used to sow the oilseed crop.
- The euro pulled away from highs hit early in the Asian session as investors took profits from its gains after centrist Emmanuel Macron's victory over the far-right Marine Le Pen in France's presidential election.
- Brexit, protectionism? German companies are currently unimpressed by a possible fallout from the U.K.'s decision to leave the European Union and rise in protectionism under President Donald Trump, according to a survey published Monday. The poll of nearly 2,700 German companies conducted by IW economic institute in March and April showed that nearly half of the enterprises see their output growing this year and 40% want to hire new staff. IW also raises its German economic outlook to 1.5% compared with 1% predicted previously for 2017, adding that the slowdown from 2016's 1.9% growth is a result of fewer working days this year. It also predicted the economy to grow by 1.75% in 2018.
- Macron's victory gives markets a "much-deserved breather" from European politics, says Bill Street, head of investments for EMEA at State Street Global Advisors. But he contends the next notable leg higher is liable to not come absent accelerated ECB policy normalization unless Macron gets a working parliament and builds a partnership with Germany to launch meaningful reform. "That would deliver a substantial boost to markets by year-end" as such a scenario "is currently not priced in."
- The French election result sends a "loud signal" to investors that political risks in France and across Europe are receding--which is "undoubtedly" supportive of European equities and the euro, says Neil Wilson, senior market analyst at ETX Capital. But he adds that political risk in Europe is rather like a balloon: Squeeze one place and it pops up somewhere else. The next big political risk comes from Italy, says Wilson, while Greece remains an "open sore" on the eurozone. Meanwhile, he notes investors will look for what reforms Macron can enact to "supercharge" France's "sclerotic" economy, saying there's a lot of doubt on that front.
- The euro has given up the initial gains following Macron's win in France. He beat Le Pen, who ran on a plan to pull the country out of the euro but was seen as having scant chance of victory. But memories of the Brexit vote and the US presidential election made some participants wary of another possible surprise. The euro got as high as Y124.83 and $1.1040 but is now around Y123.85 and $1.0985, espectively. It stood late Friday in New York at Y124 and $1.10.

May 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices fell by as much as a further 3 percent, after prices had crashed to five-month lows in the previous session, as concerns about  global oversupply wiped out all of the price gains since OPEC's move to cut output.
- Gold inched up as the euro rose against the dollar, but was on track for its biggest weekly fall since November on receding political risks  in France and expectations of a U.S. rate rise as early as June.
- London copper edged higher after a second session of losses, but remained vulnerable to further sell downs amid concerns about rising  inventories and weakening consumption.
- Chicago wheat futures edged higher as the market took a breather following last session's deep losses, which were triggered by a crop tour forecasting above-average yields despite last weekend's snowstorm.
- German finance takes a skeptical view of Donald Trump, with little expectation of good news from his presidency, a survey by Frankfurt's finance groups shows. The survey by the Center for Financial Studies shows Mr. Trump's comments on protectionism and deregulation have rattled German financiers. "This uncertainty alone is damaging to global growth," CFS Managing Director Volker Bruehl says. German bankers are also worried financial deregulation will put U.S. banks at an advantage over more tightly-regulated German competitors.
- The two trade-groups representing prescription-drug companies react cautiously to the American Health Care Act's narrow passage in the House, a sign of the legislation's less-than-certain prospects in the Senate as well as the industry's fragile position in Washington. Both the Pharmaceutical and Research Manufacturers of America and Biotechnology Industry Organization say their priority was making sure patients "have access to the medicines they need," while the biotech group also reiterates that it never took a position on the health-overhaul that the AHCA seeks to repeal.
- Bank of Canada Gov. Stephen Poloz heard firsthand from Mexicans how much they are counting on Canada to stick with Mexico when Nafta renegotiations begin in earnest. "It's important you stay together with us and do the trilateral thing," says a man in attendance at his Mexico City speech. "You have to be our wingman. Don't leave the formation." Poloz once again used an opportunity at the podium to warn on the perils of protectionism, and how uncertainty over US trade policy is holding back growth. He cited the example of North America's integrated auto-parts makers as a sector that has thrived under Nafta. All together, Poloz says Canadian auto-parts producers employ roughly 167,000 workers in Canada, US and Mexico. "It is hard to imagine how interfering with open trade or implementing other protectionist policies would benefit these people."
- After a speech in Mexico City warning once again about risk posed by US protectionism to growth, Bank of Canada Gov. Stephen Poloz gets peppered with questions from the audience about another hot-button Canadian issue--real estate. He reiterates comments from previous weeks: that one-year house price gains in Toronto of 30% are fueled by speculative behavior and not sustainable; series of policies introduced in recent weeks and months will hopefully cool activity; and growth in household debt from mortgage borrowing remains a top financial-stability concern. Meanwhile, he was also pressed on the fate of Home Capital Group, a mortgage lender facing an exodus of deposits over allegations firm's executives didn't properly disclose extent of a mortgage-fraud problem back in 2014. He says he would "never comment" about individual lenders.
- Colombian President Juan Manuel Santos finally cinched a meeting with Trump, set for May 18, during which the two heads of state will discuss efforts to combat narcotrafficking, the deteriorating political situation in Venezuela, and Colombia's peace process with Marxist rebels. The announcement comes a month after President Santos's main critic and leader of the country's opposition, former President Alvaro Uribe, managed to meet with Trump first--an embarrassment for Santos, the sitting president. In that meeting, Uribe blasted the peace deal and direction of the country. Now, it is up to Santos to defend his agenda.
- A group representing mostly non-profit providers of mental-health and substance-abuse treatment expressed "outrage" at the House's passage of the GOP health bill, saying it "puts the lives of those who rely on Medicaid for lifesaving addiction and mental health care in jeopardy." The National Council for Behavioral Health, based in Washington, DC, said the bill eliminates $880B from Medicaid funding over the next ten years. Medicaid, it notes, is "one of the most important payers of addiction and mental health services in the US, and states' most critical tool to tackle the opioid epidemic." The council has spent several months lobbying Republican senators in states hit hard by addiction against legislative changes that would undermine treatment coverage.
- The pharmaceutical industry's top lobbying group in the US takes a neutral tone in response to  House passage of the GOP health bill. "Ensuring patients have access to the medicines they need is our top priority. As Congress considers reforms to our health care system, we look forward to continuing to work with them to enhance the competitive market, ensure patients have access to affordable health care and foster the continued development of new innovative medicines," the Pharmaceutical Research and Manufacturers of America says in an emailed statement.
- Big food companies are applauding $3M in funding tucked into the pending federal budget bill that will promote products with ingredients using genetically-modified crops as safe for public consumption. The funding "will help counter the misinformation about agricultural biotechnology in social media and the public domain," the Grocery Manufacturers Association says in a statement. Pushback over GMOs have been a headache for the food industry, with companies trying to delay labeling provisions passed during the past administration.
- Oracle co-CEO Mark Hurd says he'd welcome political action on the issue of repatriating corporate cash from foreign countries, a move many tech companies also seek. At the end of the last quarter, ORCL held $52.2B overseas, money Hurd says had been taxed by the countries in which it was made. "We want that ability not to pay taxes for our earnings twice," Hurd says during a meeting with journalists at ORCL headquarters. He believes the US would benefit from that cash being reinvested domestically. "The opportunity to bring it back and invest it in this country is a big opportunity," Hurd says.
- Oracle co-CEO Mark Hurd says the giant software company welcomes trained immigrants to its workforce. In a meeting with journalists at ORCL headquarters, Hurd says he doesn't want "the company to become political." While co-CEO Safra Catz served on President Trump's transition committee, Hurd notes that ORCL was not involved in politics during the election. He says it makes no sense to welcome immigrants to American universities, but then turn away those US educated workers when they want a job. "We've been very supportive of hiring trained, immigrant labor," Hurd says. "We need talented people."
- AARP, the group representing 38m Americans aged 50 and over, sharply criticizes House passage of the GOP health care bill and promises to continue campaigning against it. "AARP will continue to oppose this bill as it moves to the Senate because it includes an age tax on older Americans, eliminates critical protections for those with pre-existing conditions, puts coverage at risk for millions, cuts the life of Medicare, erodes seniors' ability to live independently, and gives sweetheart deals to big drug and insurance companies while doing nothing to lower the cost of prescriptions," the group says in a statement. It adds it will use email, social media and other communications to inform its members 'how their elected Representative voted."
- The American Medical Association, which represents more than 200,000 doctors, slams the House's passage of the American Health Care Act. "The bill passed by the House today will result in millions of Americans losing access to quality, affordable health insurance and those with pre-existing health conditions face the possibility of going back to the time when insurers could charge them premiums that made access to coverage out of the question," the group says in a statement. It adds, however, that "action is needed to improve the current health care insurance system," and it urges the Senate and White House to seek "bipartisan solutions."

May 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Crude oil lost ground, falling for a third out of four sessions and trading near its lowest since late March after data showed a lower than expected decline in U.S. inventories.
- Gold inched up, but the yellow metal held near a six-week low hit in the previous session as the dollar remained firm on expectations that the U.S. Federal Reserve may raise interest rates as early as June.
- London copper fell after a big build-up in exchange stocks and as traders priced in two U.S. interest rate rises expected this year that could curb interest in dollar-denominated metals.
- Chicago corn futures were unchanged, holding on to last session's gains as recent wet weather across key growing regions raised fears that some farmers may need to re-plant recently seeded crops.
- Treasury Secretary Steven Mnuchin is scheduled to testify before the Senate Banking Committee on May 18 to deliver a "domestic and international policy update," the panel says. It will be Mnuchin's first visit to Capitol Hill since his January confirmation hearing, which was before the Senate Finance Committee. On May 16, Senate Banking will also consider a handful of Treasury nominations: Sigal Mandelker, the nominee to be under secretary for terrorism and financial crimes; Marshall Billingslea, to be assistant secretary for terrorist financing; and Heath Tarbert, to be assistant secretary for international markets and development.
- Delphi Automotive's move to spin off its engine-parts operations is designed to unlock value, but the move may expose the auto supplier to increased trade-policy risk, its CEO says. The advanced electronics business, which accounts for about three-quarters of Delphi's current market cap, would be hurt more by the higher US tariffs on imports Trump has championed than the engine-parts supplying business, CEO Kevin Clark tells WSJ. The engine-parts business is highly automated and would easier to relocate than the electronics business, which includes labor-intensive wire harnesses mostly imported to the US from Mexico, Clark says. "A border tax would not be good for this industry," the CEO says, adding it would be "virtually impossible" to shift wire harness operations to the US without substantially increasing supply chain costs.
- Trump's election win may have put a damper on Tinder swiping in 1Q. In North America, Match Group dating properties saw muted activity starting in November and continuing through February, in what is typically one of the strongest seasons for online dating. Activity started to pick back up again in March and April, CEO of Tinder and its parent MTCH Greg Blatt says on his company's earnings call. "The best thing we can point to was that it was sort of a--the postelection was weird, and there was a lot of weirdness," Blatt says.
- Puerto Rico's request to enter a court-supervised bankruptcy-like process puts an end to attempts to work out a compromise, but it will still likely be years before bondholders know how much they'll get, says Matt Fabian, a partner with Municipal Market Analytics. The move to a court-supervised process "means bondholders will get to a solution sooner but it's still going to be a long road," Fabian says. Unlike in a US bankruptcy court, investors can sue over almost any decision by the board, and could dispute the payout the court allocates them, as well as whether the process was conducted correctly. "You name it, they could file on it and they probably will," Fabian says.
- In the IPO paperwork filed by ShotSpotter are a pair of potential federal measures that the gunfire-detection company says could harm its business. The company warns that the push to cut federal funding to so-called "sanctuary cities" would leave some cities--ShotSpotter's primary customers--with less money to buy its systems. Separately, it said a bill to make it easier for people to buy and sell silencers could make its technology less reliable.
- The New York Times adds 348K new subscribers in its 1Q, which it says was the best quarter for subscriber growth in its history. The newspaper company says total digital-only subscriptions rose 62% to 2.2M at the end of its 1Q. Still, the company expects growth in paid digital-only subscriptions to its news products to slow in 2Q than the prior two quarters. NYT, like others in the industry, has been working to offset declines in print circulation revenue with digital subscriptions. NYT said in February it saw a significant increase in the number of digital-only subscriptions following the 2016 presidential election, in which it often drew the ire of Donald Trump for its reporting and editorial positions. Shares are up 9.8% to $15.70.
- All the water-cooler talk about politics is affecting the workplace even more than before the 2016 election, according to a new survey released by the American Psychological Association. Among the 1,300 full and part-time workers surveyed in recent months, 26% said political chatter at work made them feel more stressed and tense, compared with 17% of those polled in September. More than half of respondents said they had discussed politics at work since the November election. For 40% of workers, it had caused at least one negative outcome--such as lower productivity or poorer work quality. About one in six said they had experienced strained relationships at work since the election because of political discussions with co-workers.
- Earnings expectations are picking up. The US posted the biggest improvement in its revision ratio--which measures the ratio of upward and downward earnings estimates by analysts--of all regions in April, according to Bank of America Merrill Lynch. Analysts have also gotten more optimistic about multinational firms after ramping up expectations for more domestically-focused companies immediately after the election. "This likely reflects the improving trend in global growth and increasing skepticism with regard to domestic stimulus and tax reform," BofA says.
- Voters in New Mexico's capital city rejected a 2-cent-per-ounce tax on sugary drinks in a special election Tuesday, handing a win to the beverage industry after losses last year in Pennsylvania, Colorado, California and Illinois. Santa Fe's proposed tax to fund early childhood education would have applied to sugar-sweetened beverages including soda, iced tea and sports drinks. Outside groups spent more than $3M on the election, according to the Associated Press. They included the American Beverage Association, an industry group that fought the tax, and former New York Mayor Michael Bloomberg, who supported it.
- The Trump team will "shortly" name someone to the job of Federal Reserve vice chair in charge of bank oversight, Treasury Secretary Steven Mnuchin says, adding that the administration is not necessarily going to pair it with nominees for two other Fed vacancies. Officials have said the appointment is coming soon before: "Let's get them filled as soon as we can." One candidate under consideration is former Treasury official and private equity executive Randal Quarles.
- The dollar firms ahead of a U.S. Federal Reserve policy decision later in the day. Rabobank says markets will look for "clues about the timing of the next [interest-rate] hike and on how and when the Fed will shrink its balance sheet." EUR/USD down 0.15% at $1.0911, GBP/USD down 0.1% at $1.2925. Both the euro and sterling, however, remain within sight of key levels of $1.10 and $1.30, respectively. Weakness in U.S. ADP payrolls data on Wednesday, or a less hawkish tone from the Fed could help push them towards those markers. On the other hand, a TV debate later between French presidential candidates could pose risks to the euro if far-right candidate Marine Le Pen does well enough to diminish the prospects of her centrist rival and favorite in the polls, Emmanuel Macron. USD/JPY up 0.2% at 112.21.

May 03 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Crude oil prices bounced back as a decline in U.S. inventories underpinned the market, although a dip in compliance with OPEC efforts to reduce output and near record supplies capped gains.
- Gold prices were near a three-week low hit in the previous session as investors sought higher returns from riskier assets and the dollar firmed as markets waited for cues that the United States may raise interest rates.
- London copper dropped from a three-week high hit the session before as the dollar ticked higher on expectations the Federal Reserve will signal a June rate rise later in the session.
- Chicago wheat futures slid for a second day, retreating further from a two-month high reached in the last session as abundant global supplies weighed on prices.

- Apple's cash pile rising to $256.8B in the most recent quarter. The total, most of which is held overseas, has soared on the back of the sale of more than 1B iPhones since 2007. Investors have been watching it closely to see what AAPL will do with it if the Trump administration moves forward with tax reform that offers a repatriation holiday. During an interview, Tim Cook declined to address tax reform. Investor Brian Fox, senior vice president at Boston-based Standard Life Investments, which counts AAPL among the $350B in assets it manages, said he would like to see some of that money used for M&A that boosts AAPL's services business.
- American Airlines (AAL) SVP Kerry Philipovitch grabs a lawmaker's softball at the DC airline hearing around regulatory changes she'd like to see. She flags changing carriers' ties with the big global distribution systems that still handle a big chunk of airline bookings made by travel agents. Timely, as AAL remains embroiled in a lawsuit with Sabre, one of the big GDS operators, over a six-year old contact. SABR reported 1Q profits Tuesday. Analysts reckon airlines would like to cut most ties with the GDS operators and just deal directly with all customers.
- Big question still hanging from lawmakers grilling airline executives is what they actually want to see changed? Rep Grace Napolitano (D, Ca) focuses on airlines' efforts at self-regulation, eliciting United CEO Oscar Munoz to pledge "a constant stream" of new initiatives to improve customer service. Alaska, Southwest and American chime in with comments on how customer service is constantly reviewed, with executive and staff pay tied to outcomes. Given dark threats of "one-size-fits-all" actions by Congress if airlines don't step up, hearing doesn't provide specific guidance beyond making things "better." Airline stocks off session highs, but all except Allegiant in positive territory.
- Greek stocks trade higher as the Greek government reaches a deal with the country's international creditors, keeping its bailout program going and paving the way for debt talks. The Athens General Stocks Index gained 3.1% to 733.93. On the banking sector, National Bank of Greece gained 5.9%, Piraeus Bank traded 11% higher, Eurobank Ergasias was up 13% and Alpha Bank gained 6.2%.
- Rep. Duncan Hunter (R., Calif.) weighs into airlines at congressional hearing, questioning the level of competition and taking an extra dig at United (UAL), which he flies on to and from San Diego. Executives are a bit hesitant in defending industry structure, especially market share at their dominant hubs. Remember, of course, that almost all of the industry consolidation in recent years has been waved through.
- Shareholder advocates and an accounting-industry group are pushing back against a provision of the proposed Financial Choice Act they say would weaken protections for investors. The bill, which the House Financial Services Committee is marking up Tuesday, would exempt many more companies from an existing Sarbanes-Oxley rule requiring companies to have auditors weigh in on their "internal controls," their policies and procedures designed to prevent financial error or fraud. Opponents of the requirement think it's too burdensome for smaller companies, but in a letter to the committee Monday, the Center for Audit Quality, the Council for Institutional Investors and the CFA Institute argued auditor inspections help reassure investors that companies' financial statements are accurate, and thus helps those companies raise money in capital markets. Softening the rule, they said, "could have the unintended consequence of eroding investor confidence and the quality of public company financial reporting."
- Foreign investors bought a net $20.6B in emerging-market assets in April, a slowdown from inflows of about $30B in both February and March, IIF data shows. Investors have poured into emerging-market currencies, stocks and bonds this year, as worries over higher US interest rates diminished and growth in developing economies picked up. Last month, appetite for riskier assets was dented by the French election and escalating geopolitical tensions with North Korea. Still, flows into EM assets have been positive for five straight months. Developing Asian economies received roughly 80% of April's inflows, IIF data shows. Foreign investors bought a net $13.8B in debt and only $6.8B in equities.
- Martin Marietta Materials shares jump as the company expresses optimism about a "busy 2017" particularly in residential construction and infrastructure work. MLM says it's ramping up its labor force, increasing production and performing maintenance in anticipation of additional projects funded by the FAST Act, an Obama-era transportation-spending law, and state and local initiatives. While disagreement among Congress and the Trump administration poses a risk to its outlook, CEO Ward Nye says MLM's outlook doesn't "include any benefit that may accrue to us from the enactment of what could be record federal infrastructure spending that both Congress and the president have each said is a high priority." Trump's plan to inject $1T into overhauling American infrastructure has yet to materialize. MLM says 1Q net sales, which exclude freight and delivery revenue, rose 8% to $792M, while EPS fell 2c to 67c. MLM gains 9% to $242.95.
- House lawmakers grilling airline executives move on from overbooking to the vexed issue of ticket change fees, a big revenue earner for carriers. Executives from United and American avoid a direct answer when asked how much it costs an airline to change a booking. While carriers don't disclose the financial benefits of overbooking, they do provide data on fees from change fees, which can run into hundreds of millions of dollars a year. Airline stocks continue to rise in morning trade, led by a 4% rise at Delta following its upbeat April traffic report.
- Mexico and Canada are critical markets for US farm products ranging from soybean meal to corn syrup, and Archer Daniels Midland (ADM) is "deeply involved" in trade discussions on both the US and Mexico side as jockeying around Nafta ratchets up, according to the grain conglomerate's top executive. "We don't believe both countries are going into a trade war," CEO Juan Luciano says. "We think there's going to be a negotiation." ADM is "helping with data and our opinion" in both the US and Mexico, he says. ADM falls 7.7% to $42.24.
- Dismal gasoline demand is casting a shadow over oil prices even as many analysts expect OPEC to extend production cuts at the May meeting. 1Q gasoline demand declined, impacting earnings at filling stations at the beginning of 2017. This could influence the oil market even more than OPEC's plans for production if the decline continues, Commerzbank says. Another potentially bearish sign for gasoline emerged this week as analysts noted President Trump's comments he would consider raising taxes on gasoline. "If the demand outlook in the US were to deteriorate, we believe that this would weigh significantly more heavily on oil prices in the longer term than for example any failure of OPEC to agree on production cuts," Commerzbank says.
- Pfizer (PFE) CEO Ian Read says political uncertainty in the US and Europe may be deterring big dealmaking in big pharma. Read lists on an earnings call a variety of developments contributing to uncertainty in the industry, including the shape of tax reform and a health-care overhaul in the US and elections in France and the United Kingdom. Read says he expects the pharmaceutical industry to consolidate over time, but "the current market needs to stabilize to be an advantageous market for big deals."