Tuesday November 22 Daily Market Primer

I’m not going to say “I want to party like its 1999”, since I said it once earlier this year.  US stocks closed up yesterday, with the Dow up .5%, the S&P up .75%, the NASDAQ up .9%, and the Russell 2000 up .5%.  All four indices are at new records, as markets have been discounting higher economic growth and inflation since the November 8 election, which seems so long ago now.  The US 10-year yield is at 2.3%. Oil rolled over this morning after a very good week last year, but seems to be trying to head back to $50, and was almost there yesterday.  US stock futures are indicating follow through today.

	LAST	CHANGE	% CHANGE
DJIA	18,956.69	88.76	0.47%
Nasdaq	5,368.86	47.35	0.89%
S&P 500	2,198.18	16.28	0.75%
Russell 2000	1,322.23	6.59	0.50%
Stoxx Europe 600	341.54	1.31	0.85%
Nikkei 225	18,162.94	56.92	0.85%
UK: FTSE 100	6,835.36	57.40	0.85%
CBOE Volatility	12.35	-0.07	-0.56%
Australia: S&P/ASX 200	5,413.30	62.00	1.16%
China: Shanghai Composite	3,248.35	30.20	0.94%
Hong Kong: Hang Seng	22,678.07	320.29	1.43%
India: S&P BSE Sensex	25,960.78	195.64	0.76%
France: CAC 40	4,560.69	31.11	0.69%
Germany: DAX	10,740.15	55.02	0.51%
Italy: FTSE MIB	16,551.22	253.96	1.56%
Spain: IBEX 35	8,655.70	41.10	0.48%
U.S. 3 Month	0.472	1/32
U.S. 2 Year	1.082	15/32
U.S. 5 Year	1.773	-0/32
U.S. 10 Year	2.305	3/32
U.S. 30 Year	2.981	8/32
Germany 2 Year	-0.713	2/32
Germany 10 Year	0.243	10/32
Crude Oil	47.97	-0.27	-0.56%
Brent Crude	48.8	-0.1	-0.20%
Natural Gas	3.085	0.008	0.26%
S&P GSCI	370.26	-0.28	-0.08%
E-mini S&P 500	2197.5	4.5	0.21%

Commodities resumed their strong rally, which took a pause in the middle of last week.  Lots of news from Trump Nation, including the agenda for the first 100 days, starting with killing the never ratified TPP on day 1 as predicted, which has been posted on YouTube.  I haven’t had a chance to watch it yet, so if you want to beat me to it hear it is: http://bit.ly/Trump1st100. Before you know it Mr. Trump will be on Snapchat.  Actually he already has been, using several Snapchat filters to attack Hillary during the debates.  Amazon is moving into sports, looking for one more market to enter and pressure traditional players with low margin pricing.  Maybe they will be able to deliver nachos and beer during the game.

As we head into Thanksgiving, it’s a fairly slow news day, so here’s the news:

Hot metals

Industrial metals are rallying again, with price gains helping to set the Bloomberg Commodity Index up for its biggest three-day gain since May. Copper is climbing for a second day and is headed for its highest close since 2015, while iron ore and steel surged by their daily limits in China. Tin, which is up 40 percent this year, is expected to extend its climb as shortages are set to persist. Gold was also higher this morning.

Oil surge

A barrel of West Texas Intermediate for January delivery was trading at $49.00 at 5:08 a.m. ET. Crude's rise of almost $5 a barrel since Friday's low has been driven by increased optimism on a production-reduction deal being stuck at next week's OPEC meeting in Vienna.

Trump's first days

President-elect Donald Trump outlined some of his policy goals for the start of his presidency in a video posted on Youtube yesterday. Unsurprisingly, he said he would withdraw the United States from the Trans-Pacific Partnership, saying he prefers to do bilateral trade deals with nations. Meanwhile the PEOTUS continues to have meetings with potential administration picks, with a top adviser saying he's in no rush to fill positions.

Markets rise

Overnight, the MSCI Asia Pacific Index added 0.8 percent while Japan's Topix index climbed 0.3 percent as the oil rally outweighed concerns that followed an offshore quake that led to evacuations amid tsunami warnings. In Europe, the Stoxx 600 Index was 0.3 percent higher at 5:19 a.m. ET as commodity producers rallied. S&P 500 futures gained 0.3 percent.

Fed certainty

Death, taxes, and a Fed rate hike in December are life's only certainties — according to the bond market which now has chances of an increase in December at 100 percent. When it comes to central bankers, the only other thing that is certain is that it is best to be Belgian. Stocks are at record highs. Monday marked the first day of the recent rally in which the Dow, the Nasdaq, and the S&P 500 all closed in record territory. The gains are likely to continue early Tuesday, with the S&P 500 set to open near 2,205, up 0.5%. A powerful earthquake rocked northern Japan. The quake was measured at 6.9 and set off a tsunami with waves of up to 3 feet high. The natural disasters hit Fukushima, the same city that was devastated by the 2011 twin disasters. Copper is on fire. The metal has gained more than 20% over the past month amid speculation in a "pick-up in worldwide manufacturing and infrastructure spending," Bloomberg reports. Crude oil nears $50. Oil prices are rallying as the market continues to price in the possibility of a production cut at the November 30 OPEC meeting. West Texas Intermediate crude oil is higher by 0.6% at $48.53 a barrel. The favorite to become the next French president wants Brexit to be "fast." Francois Fillon, the right-center politician who will square off against Alain Juppé in the second round of voting later this week, says the divorce "should be fast" and leave Britain without its financial passport. Investors are ditching bonds at the fastest rate in 3 years. Fears of higher interest rates and the return of inflation have caused investors to sell bonds, concentrated in emerging markets, at the fastest weekly pace since 2013. Amazon is in talks to start streaming sports on Prime. Amazon is in talks with several organizations, including the NFL, the NBA, and MLB, to start a "premium" sports package that will be streamed on Prime, The Wall Street Journal reports. Stock markets around the world are higher. Hong Kong's Hang Seng (+1.5%) led the advance in Asia, and Britain's FTSE (+1.0%) is out front in Europe. Earnings reporting continues. Barnes & Noble, Campbell Soup, and Hormel Foods are among the companies reporting ahead of the opening bell while GameStop, Hewlett Packard Enterprise, and HP highlight the names releasing their quarterly results after markets close. US economic data is light. Existing-home sales will be released at 10 a.m. ET. The US 10-year yield is down 2 basis points at 2.29%. Small Stocks, Big Gains Small companies led a cascade of records for U.S. stock indexes Monday. Investors betting that President-elect Donald Trump will roll back regulations and taxes while pumping money into infrastructure projects drove the Russell 2000 index of small-capitalization stocks to a record with its 12th straight session of gains, its longest winning streak since June 2003. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite Index also closed at records on the same day for the first time since Aug. 15. The last time the four major U.S. stock indexes closed at records on the same day was Dec. 31, 1999. Hopes for a pro-business combination of a Trump presidency and Republican Congress have lifted stocks broadly. But some analysts think smaller companies could benefit even more, because they are less exposed if Mr. Trump takes a more-protectionist approach to trade and if the dollar continues to rise. Global stocks followed the U.S. indexes higher today, continuing the postelection rally. Trump’s To-Do List Mr. Trump said on Monday he has ordered his transition team to draft a list of executive actions he could take “on day one to restore our laws and bring back our jobs.” In a 2½-minute video posted on YouTube, Mr. Trump communicated directly with the public about his agenda for his first days in office for the first time since he won the Nov. 8 election. His video included six calls for action on trade, immigration, energy, regulatory curbs, national security and ethics changes, most of which have already been announced either during the campaign or the transition period. Mr. Trump didn’t mention action on the Affordable Care Act, his proposed wall along the southern border, the tax code or the Iran nuclear deal, all of which were central platforms in his election. Meanwhile, we report that while an abrupt withdrawal from the Nafta trade deal is unlikely, Mr. Trump and his advisers are gunning for big changes. Prime Time Amazon is exploring an ambitious push to infiltrate the last bastion of traditional pay-television: live sports. In recent months, the e-commerce giant has been in talks with heavy hitters like the NBA, MLB and the NFL for the rights to carry live games. It also has talked with soccer, lacrosse and surfing leagues. With at least some leagues, including the NBA, Amazon has floated the idea of creating an exclusive premium sports package available with its Amazon Prime program, though the details are unclear. Such a package could attract new members to the $99-a-year Prime program, as well as to a “skinny bundle” of live online channels that Amazon is pursuing. If Amazon is successful in breaking into the premium-sports market, it could pose a significant threat to traditional pay TV.

Global gasoline demand has all but peaked.

$100 billion Chinese-made city near Singapore 'scares the hell out of everybody.'

In pursuit of a 10,000 percent return.

A tiny ETF could be signaling the start of a big new investing theme.

Why investors shouldn't get overly excited about a Trump fiscal boom.

The curse of Indian cash scrapping. America First? That Puts Emerging Markets Last Farmers’ Grain Bounty, Crop Exports Buoy U.S. Railroads Embattled Democrats, Labor Allies See Nevada as a Beacon Global Competition to Cut Corporate Taxes Heats Up Fidelity Chief Abigail Johnson to Succeed Father as Firm’s Chairman

Ever since the election there's been a huge surge in media interest in the issue of "fake news" on Facebook, and what to do about it. Why this has become a media obsession now is a little bit unclear (though, cynically, one suspects that it has to do with the outcome of the election not going the way many reporters expected or wanted). Nonetheless, misinformation is a real issue. It's interesting that it's mostly politics where it's being debated, but it might not be confined there forever. It's easy to imagine some of the themes from the recent campaign become a bigger part of business. Hackers teaming up with shorts, perhaps, to drive out a CEO? Purely fabricated news to spread misinformation about the state of a business, or the progress of a deal? More aggressive attempts to undermine confidence in government data? It all seems plausible in the not-so distant future.

Source: Bloomberg, BI, WSJ