..“It cost me millions to learn that another dangerous enemy to a trader is his susceptibility to the urgings of a magnetic personality when plausibly expressed by a brilliant mind.”… Jesse Livermore

1. Oil Makes A Series of Lower Highs & Lower Lows So Far This Summer — the commodity has been under steady pressure, with a series of lower highs and lower lows since making its high in May. Normally, prices tend to rally in the early months of the year, then peak and level off around Memorial Day, before a late-year decline post Labor Day. Chart is courtesy of BIG.

2. Terror Attacks Weigh on Europe’s Travel Companies — a series of terrorist attacks in Europe is driving away tourists at the height of the summer rush, casting a pall over hotel chains, airline companies and luxury retailers that are already grappling with Britain’s vote to leave the EU. Germany was the latest country to get hit by a series of violent incidents over the last weekend, including a suicide bombing and stabbing by two Syrian refugees and a German-Iranian teenager that shot and killed nine people at a mall in Munich.
3. Fed Appears More Willing to Lift Interest Rates In September — the Federal Reserve on last Wed. meeting opened the door a crack to lifting interest rates at its next meeting in September. The statement said “Near-term risks to the economic outlook have diminished,”. The Fed kept its benchmark fed-funds rate unchanged in a range between 0.25 and 0.5%.
4. Crude Nears Fresh Bear Market — since crude prices hit a year-high above $52 a barrel in June they have slipped almost 20%, leaving them on the cusp of a new bear market. The latest EIA data unexpectedly showed a 1.7M barrel rise in U.S. crude inventories vs. what had been steady declines in previous weeks. “The improvement in oil fundamentals remains fragile and continues to feature large offsetting forces,” Goldman Sachs said in a research note overnight, but predicted oil prices to remain in the $45-$50 range until mid-2017.
5. US Q2 Prelim GDP 1.2% vs 2.6% Expected –U.S. economic growth sputtered this spring—growing a meager 1.2% in the second quarter—with cautious business investment largely offsetting more robust consumer spending. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 4.2 percent rate. That was the fastest pace since the fourth quarter of 2014. Inventory accumulation by businesses fell $8.1 billion in the second quarter, the first drop since the third quarter of 2011.

The week ahead — Economic data from Econoday.com:

“The essence of portfolio management is the management of risks, not the management of returns. All good portfolio management begins and ends with this premise.” — Benjamin Graham

1. Singapore Confirms Locally Transmitted Zika Cases — Singapore authorities have identified 41 Zika cases that were transmitted locally, and cautioned that they expect to find more. The cases appear to be the largest single beachhead the virus has made in Asia in the current epidemic, which has also been detected in countries like Bangladesh, Malaysia and the Philippines. Also, China added the U.S. to a list of Zika-infected countries, worrying U.S. exporters, who fear they will be required to fumigate containers destined for Chinese ports. Furthermore, the FDA has issued an Emergency Use Authorization for Roche’s (OTCQX:RHHBY) “Lightmix Zika” test, a quick diagnostic check that allows healthcare professionals to quickly detect the virus.
2. Apple Received $14.5B In Illegal Irish Tax Benefits — EU antitrust regulators have ordered Apple (NASDAQ:AAPL) to pay up to €13B ($14.5B) in taxes to the Irish government after ruling that a special scheme to route profits through the country was illegal state aid. Apple and Ireland said they would appeal the decision.
3. U.S. Banks Log the Most Profitable Quarter Ever — according to figures from SNL Financial and S&P Global Market Intelligence, U.S. banking industry just logged its most profitable quarter ever Despite an increasing regulatory burden and lackluster share performance. Earnings for the three-month period totaled $43.6B, compared to the $43.01B in Q2 of 2015, a 1.4% beat. On a sequential basis, the April-to-June period topped the previous quarter by $4.56B, an 11.7% rise.
4. Job Report – US created 151,000 jobs in August vs. 180,000 jobs expected — Nonfarm payrolls increased just 151,000 for the month as Wall Street economists were expecting the nonfarm payrolls report to show a gain of 180,000 in August, with the unemployment rate ticking down one-tenth to 4.8 percent. Wage growth slowed and the probability of a September hike drops from 27 percent to 12 percent.
5. World Leaders Prepare for G20 Summit — World leaders descended upon Hangzhou for the G20 summit to reaffirm their dedication to global growth. Developing an open financial system, promoting an economic recovery and coordinating monetary policies are among the main topics to be discussed under this year’s theme of “building an innovative, invigorated, interconnected and inclusive world economy.”

The week ahead — Economic data from Econoday.com: