Market Morning Roundup: Intel Goes Self Drive, Japan Threatens Tariffs, Oil Nears $80

Futures Down, Wal-Mart Earnings On Tap

Stock futures are back down again today after a respectable rebound yesterday. The S&P 500 would have to go above 2,742 to confirm a higher high, and above 2,730 to confirm a  higher closing high. Nasdaq futures are down farther, about 0.4%, nearly erasing gains of 0.6% from yesterday. The biggest earnings report to watch today comes from Wal-Mart Stores (NYSE:WMT), whose stock is down 13% this year but way off of lows reached in 2015. The decline may not be a bad sign for America’s largest retailer, as shares rose a phenomenal 86% over 26 months and looks to be now consolidating those gains.

Intel’s Mobileye Inks Deal For 8 Million Cars With Self-Driving Tech

Nobody knows for how much or with whom, but Mobileye, Intel’s (NASDAQ:INTC) Israeli self-driving car unit, will be outfitting a whole lot of cars with self-driving technology for a European automaker. The deal won’t go into affect until 2021, and the cars to be outfitted won’t be entirely self-driving, more like assisted driving on highways and automatic emergency breaking features and other odds and ends.

In a separate development, Intel and Mobileye have begun testing a 100-vehicle autonomous driving fleet of cars on the streets of Jerusalem, one of the more challenging cities to drive in given the amount of busses, restricted bus lanes, pedestrians often running into the streets without warning, and many one-way roads with suboptimal signage. If the fleet can successfully navigate the streets of Jerusalem, maybe Mideast peace is, indeed, possible.

Japan Threatens to Fight Trump Tariffs With More Tariffs

Sunrise Land is not happy with Trump tariff policy. Japan was the only US ally not to receive an exemption from newly announced Trump tariffs earlier this year. Japan is reportedly considering slapping tariffs on $409 billion worth of US imports to the island nation. The $409 billion would equal the value of the goods that the US is imposing tariffs on in the other direction. Japan is also the second biggest foreign holder of Treasuries, so slapping tariffs on it could be dangerous from that direction. Treasuries have been in sharp decline since 2016 and have continued to fall of late, interest rates pushing past 3.1% today.

A Japanese official who was not authorized to speak to the media, spoke to the media, saying “Nothing has been decided on what specific response we should take. We’re scrutinizing the impact of US tariffs on Japanese companies, and calling for Washington to offer Japan an exemption.”

Oil Nears $80 in Brent Form

Brent crude oil, which commands a premium over West Texas Intermediate (NYSEARCA:USO), now stands at $79.82 a barrel. WTI is close behind at $72.12. This, despite the International Energy Agency (IEA) on Wednesday lowering its estimate for global oil demand growth for 2018 to 1.4 million bpd, down from 1.5 million. Meanwhile, the United States may be about to overtake Russia as the world’s top producer of crude supplies. US output has increased 27% in two years, within 300,000 bpd of Russia. The increased output has not stalled the oil rally however, indicating possible systemic weakness in the US dollar (NYSEARCA:UUP).

Alphabet Goes Streaming Music With YouTube on May 22

Alphabet Inc’s (NASDAQ:GOOG) will be making another move into the streaming music business on May 22nd with YouTube Music. It will include personal playlists based on history, and a new premium subscription service for original shows. YouTube Music will be free on the ad-supported version, and to get rid of the ads, users will have to pay $9.99 a month. Countries that will get to enjoy this new service include the United States, Australia, New Zealand, Mexico, and South Korea, followed by other countries TBA in the coming weeks.

 

 

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