(JPM on equity outlook) The SPX pullback has put it back at pre-tax reform levels despite stronger fundamentals and favorable flows. Based on consensus EPS estimate for next twelve months, S&P 500 now trades at only ~16x (ex-cash ~15x), which is below 30- year median (valuations are even more compelling considering current levels of interest rates). We remain constructive on equities and reiterate our S&P 500 price target of 3,000. We are also taking the market sell-off to upgrade Technology to Neutral on more favorable technicals, continued strong organic growth, lower USD, rising shareholder payouts, and cheaper valuation.
(Reuters) White House officials are asking China for 1) lower tariffs on imported cars; 2) easing ownership rules in financial services; and 3) increased purchases of US semiconductor products.
(Reuters) Oil and gas companies are gathering in Mexico and Brazil this week for what may be two of their last chances to compete for some of the world’s biggest reserves ahead of elections that could dial back energy reforms in both countries. An auction of rights to explore and produce oil from shallow waters off Mexico and an onshore and offshore auction round in Brazil are taking place months before presidential elections in Latin America’s top two economies. Leftist contenders have pledged to reverse or slow the flow of private money into the oil industry in both countries.
(Reuters) Mexican state oil company Pemex said on Monday it had signed a contract with U.S. firm Lewis Energy for the exploration and extraction of a shale gas deposit in the north of the country, in the Eagle Ford formation.