Financial Markets and Economy
Caution signals are blinking for the Trump bull market (NY Times)
Despite an eight-day losing streak that ended last Tuesday, the stock market has generally been buoyant in the opening weeks of the Trump administration. The bullish mood could be a self-fulfilling prophecy and lead to continuing gains for a while.
US Stocks Fall As Weak Auto Sales Trouble Investors (Associated Press)
U.S. stocks started the second quarter with a thud Monday after car makers reported disappointing March sales, a possible warning about other types of spending. But a late recovery helped stocks avoid bigger losses.
Manufacturing in U.S. Kept Expanding at Robust Pace in March (Bloomberg)
America’s factories continued to expand in March at a robust pace, demonstrating momentum in an industry that struggled for the better part of the last two years, Institute for Supply Management data showed Monday.
South Africa Cut to Junk for the First Time Since 2000 (Bloomberg)
South Africa lost its investment-grade credit rating from S&P Global Ratings for the first time in 17 years in response to a cabinet purge by President Jacob Zuma that’s sparked increasing calls for him to resign. The rand weakened.
Wall Street down on weak auto sales, doubts about Trump agenda (Reuters)
Wall Street closed slightly lower on Monday as March auto sales disappointed and investors questioned whether the Trump administration would deliver on its pro-business economic stimulus.
ECB Rate Increase Debate Silenced as Officials Push Back: Chart (Bloomberg)
It has taken three weeks, and numerous European Central Bank speakers, for the market to completely row back on its expectations for higher interest rates.
Forget humans — not even American robots can find work in American factories (Business Insider)
Numerous critics have asserted that President Trump's promises to bring manufacturing jobs back to the US ignore the looming threat of robotic automation.
Here are the countries hoarding the most oil in case of an emergency (OilPrice.com)
The U.S. is the world’s largest holder of emergency crude stockpiles, but now it’s selling off reserves, while China, the second-largest, is taking advantage of low crude oil prices to fill storage.
US Construction Spending Rose to Nearly 11-Year High (Associated Press)
The Commerce Department says construction spending rose 0.8 percent in February to the highest level since April 2006, after two months of declines.
Loop Sour Crude Oil Benchmark Reflects Imports, Exports Needed By USGC Refiners (S&P Global Platts)
While US crude production is up roughly 70% from 2007, US Gulf Coast refiners are still largely consumers of medium-to-heavy sour crude — much of it imported from the Middle East help fill their needs.
Within Hours, Plans for a Quiet Corner of China Send Home Prices Soaring (NY Times)
Until it became the subject of China’s latest property-buying frenzy, sending shares of construction companies soaring and leading the authorities to close local real estate offices, the area around Xiongxian County was known primarily for its donkey burgers.
The Auto Industry Is About To Drive Off A Cliff — Again! (Matasii)
In the fall of 2015 we released a video study entitled: "The Coming Global Auto Abyss – Too Much Supply, Too Many Brands; Combine with Too Much Credit!". We concluded that low interest rate monetary policy for the auto industry was like handing crack cocaine to a drug addict.
Construction Spending increased in February (Calculated Risk)
Construction spending during February 2017 was estimated at a seasonally adjusted annual rate of $1,192.8 billion, 0.8 percent above the revised January estimate of $1,183.8 billion. The February figure is 3.0 percent above the February 2016 estimate of $1,157.7 billion.
Fund Manager From 'The Big Short' Warns On Subprime Auto Loan Concerns (Benzinga)
Everyone is worried about the subprime auto market, including Neuberger Berman Group Fund Manager Steve Eisman.
'Soft' Data Slammed As Manufacturing PMI Plunges To 6-Month Lows: "Bodes Ill For Second Quarter" (Zero Hedge)
Just as we warned was historical precedent, it appears the hope and hype in 'soft' survey data is catching back down to 'hard' data's reality.
The Best And Worst Performing Assets Of The First Quarter (Zero Hedge)
As part of the usual review of last month and Q1 asset performance, it is worth nothing one surprising element of Q1 we showed over the weekend, namely that the VIX index had its lowest average quarter since Q4 2006.
Gold, Silver Are ‘Absolute Bargains’ (Barron's Asia)
Matterhorn Asset Management’s Egon von Greyerz reckons prices for gold and silver are bargains and investors should be looking to buy given the risks in the global financial system.
Bond Bears Battered As March Saw Biggest Short-Covering In 10Y Futures History (Zero Hedge)
Bond bears covered over 340,000 10Y futures contracts in March – more than $34 billion notional Treasuries – making it the biggest short-squeeze in Treasury Futures history.
Companies
Macy's New CEO Has a Plan to Get the Retailer Winning Again – Here's What It Is (The Street)
Perhaps no one is more surprised than Jeff Gennette, 55, that he ended up working for Macy's (M) , or even a retailer. When he graduated from Stanford University with a major in English, the native San Diegan headed to Macy's simply to gain management experience.
Panera Is Exploring Possible Sale After Receiving Interest (Bloomberg)
Panera Bread Co. is exploring strategic options including a possible sale after receiving takeover interest, people with knowledge of the matter said.
Ford and GM slide after reporting weak March sales (GM, F) (Business Insider)
US automakers are sliding on Monday after reporting weaker than expected March sales numbers.
Ford's stock price is down 2.19% at $11.39 and GM's stock price is lower by 3.25% at $34.21 as of 10:05 AM EST.
Technology
Google Training Ad Placement Computers to Be Offended (NY Times)
Over the years, Google trained computer systems to keep copyrighted content and pornography off its YouTube service. But after seeing ads from Coca-Cola, Procter & Gamble and Wal-Mart appear next to racist, anti-Semitic or terrorist videos, its engineers realized their computer models had a blind spot: They did not understand context.
Amazon launches Amazon Cash, a way to shop its site without a bank card (Tech Crunch)
Amazon this morning announced the launch of Amazon Cash, a new service that allows consumers to add cash to their Amazon.com balance by showing a barcode at a participating retailer, then having the cash applied immediately to their online Amazon account.
Apple Supplier Learns Downside of Living at Juggernaut's Mercy (Bloomberg)
Inside every iPhone and iPad are dozens of small components made by suppliers whose businesses are tied to Apple Inc. As Imagination Technologies Group Plc has now learned, it’s lucrative to be a favorite Apple supplier — until you’re not.
Tesla Has Its Best Quarterly Production And Deliveries. Can It Quintuple Them? (Forbes)
Tesla started 2017 with its best-ever quarterly vehicle production and delivery results, in line with the guidance given to shareholders earlier this year. While that’s a positive development, it’s a drop in the bucket compared to CEO Elon Musk’s goal of quintupling Tesla production to a half million units by 2018.
Politics
Americans’ right to protest is in grave danger under Trump, United Nations warns (The Washington Post)
The right to protest is fundamental to American democracy. The country was born, after all, out of decades of civil disobedience by people angry about taxation without representation.
Trump Aides’ Disclosures Reveal Explosion in Lucrative Political Work (NY Times)
Donald F. McGahn, now President Trump’s White House counsel, made $2.4 million as a lawyer with a client list loaded with deep-pocketed conservative groups, from Americans for Prosperity, backed by the conservative billionaires Charles G. and David H. Koch, to the Citizens United Foundation.
More Flynn omissions as White House discloses Russia Today payment (Politico)
Former national security adviser Michael Flynn reported payments of at least $5,000 for a speaking engagement with the Kremlin-funded English language network RT, new documents released Saturday by the White House show, though Flynn didn’t originally include the payment when he first filed his ethics forms in January.
Democratic Sen. Jon Tester of Montana on Sunday said he would vote against President Donald Trump's nominee for the Supreme Court, complicating Republicans' efforts to confirm the judge without a fundamental Senate rule change.
Dwindling Odds of Coincidence (NY Times)
We are still not conclusively able to connect the dots on the question of whether there was any coordination or collusion between members of Donald Trump’s campaign and the Russians who interfered in our election to benefit him, but those dots do continue to multiply at an alarming rate.
A Le Pen-Led France May Be the Crisis That Draghi Can’t Fix (Bloomberg)
If Marine Le Pen convinces France to embrace her anti-euro stance, Mario Draghi will likely be called on again to be savior of the single currency.
The trouble is that this time he might not be willing, or able, to do whatever it takes.
With Stunning Moral Clarity, Wallace Global Fund Fires Firm That Endorsed Donald Trump’s Kleptocracy (Slate)
Every once in a while, amid the legal and ethical sham of the Trump presidency, the grown-ups do show up to assert themselves. And each time they do, the world briefly makes sense again.
What happens if the EPA is stripped of its power to fight climate change? (Think Progress)
When President Richard Nixon created the Environmental Protection Agency in 1970, it was charged with tackling some of the nation’s most pressing environmental concerns?—?choking smog, toxic air and water pollution, languishing industrial waste sites, and widespread use of the chemical pesticide DDT.
FBI To Create Special Unit To Investigate "Russian Role" In US 2016 Election (Sputnik)
The US Federal Bureau of Investigation (FBI) plans to create a specialized unit that will prioritize the agency’s investigations into claims of Russia’s interference in the 2016 US Presidential election, local media reported.
Trump Will Be A Lame Duck President Early in 2018 (Video) (EconMatters)
We discuss the low approval ratings, and Donald Trump`s poor start to his administration in this video, and lay out what we expect gets done in Washington before Trump essentially becomes one of the quickest lame duck presidents with a two house majority that has ever existed in the modern political scene.
Health and Biotech
The cost of cancer: new drugs show success at a steep price (Reuters)
Newer cancer drugs that enlist the body's immune system are improving the odds of survival, but competition between them is not reining in prices that can now top $250,000 a year.
Life on the Home Planet
Explosion on St. Petersburg Metro Kills 11 as Putin Visits City (NY Times)
It was 2:40 p.m. on Monday, a lull before the evening rush hour in Russia’s second-largest city, St. Petersburg, where the subway normally carries two million people a day. The train had just entered a tunnel between stations, on its way out of a sprawling downtown hub, when the bomb exploded.
Welfare shakeup 'will push a quarter of a million children into poverty' (The Guardian)
A government shakeup of welfare payments being introduced on Thursday will push a quarter of a million children into poverty while wiping thousands of pounds off payments for bereaved families, according to research.
Wealth didn’t matter. Pollution from a coal-fired plant, carried miles by wind, still hurt their babies. (The Washington Post)
Air pollution from power plants has wanderlust. It never stays still. It rides the wind, drifting far from its source, visiting homes miles away with potentially harmful effects.
