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02Apr2015 Pre-Market Commentary: Futures Down, Oil Down, U.S Dollar Drifting Sideways, Last Trading Day Before Weekend

Written by Gary

The dollar fractionally lost ground this morning, the last trading day of the week for many markets ahead of Easter. After disappointing U.S. economic data yesterday raised doubts over the growth outlook ahead of key jobs data due out on Friday, investors are wary. Job cuts have declined, even as falling oil prices have taken a toll. 34% of first quarter cuts are due to falling oil prices

U.S. stock index futures are lower, as investors are holding off on making big bets ahead of a critical payrolls report that will be released on Friday, a market holiday.

By 9 am SP500 futures were down fractionally, but in line where trading was just prior to the last few minutes in yesterday session. The markets are expected to open down and drift lower as today's session progresses.


Here is the current market situation from CNN Money

European markets are mixed today. The CAC 40 is up 0.12% while the FTSE 100 gains 0.08%. The DAX is off 0.06%.

What Is Moving the Markets

Here are the headlines moving the markets.

The "Revolver Raid" Arrives: A Wave Of Shale Bankruptcies Has Just Been Unleashed

Back in early 2007, just as the first cracks of the bursting housing and credit bubble were becoming visible, one of the primary harbingers of impending doom was banks slowly but surely yanking availability (aka dry powder) under secured revolving credit facilities to companies across America. This, in effect, was the first snowflake in what would ultimately become the lack of liquidity avalanche that swept away AIG and unleashed the biggest bailout of capitalism in history. Back then, analysts had a pet name for banks calling CFOs and telling them "so sorry, but your secured credit availability has been cut by 50%, 75% or worse" - revolver raids.

We bring it up because the infamous revolver raids are back, only unlike 7 years ago when they initially focused on retail companies, it should come as no surprise this time the sector hit first and foremost is energy.

As Bloomberg reports, "lenders are preparing to cut the credit lines to a group of junk-rated shale oil companies by as much as 30 percent in the coming days, dealing another blow as they struggle with a slump in crude prices, according to people familiar with the matter.

Sabine Oil & Gas Corp. became one of the first companies to warn investors that it faces a cash shortage from a reduced credit line, saying Tuesday that it raises "substantial doubt" about the company's ability to continue as a going concern.

It's going to get worse: "About 10 firms are having trouble finding backup financing, said the people familiar with the matter, who asked not to be named because the information hasn't been announced."

Why now? Bloomberg expl ...

Oil falls more than 3 percent as Iran, big powers negotiate

LONDON (Reuters) - Oil prices fell more than 3 percent on Thursday as officials from the big global powers stayed locked in nuclear talks with Iran that, if successful, could allow the Islamic state to release more crude oil onto world markets.

The PayPal Mafia's Golden Touch

Alumni from the payments company have established a reputation as the best in Silicon Valley at finding and funding the latest hot product or company.

Oil Glut Is a Boon to Shippers, as Buyers Stock Up

Although petroleum prices are down worldwide, the business of sending supertankers across the seas has never been brisker â€" or more global. Above, a Greek oil tanker at a storage depot in Qingdao, China.

Frontrunning: April 2

Samaras Says He'd Join Alliance to Keep Greece in Euro (BBG)

Tensions with Warren camp could loom over Clinton campaign (Reuters)

Ackman Report on Herbalife in China Figures in Probe (WSJ)

Al Shabaab storms Kenyan university, 14 reported killed (Reuters)

Iraq's Four-Mile Line of Supertankers Fuels Shipping-Rates Surge (BBG)

Menendez's fate could sharpen Republicans' edge in Senate (Reuters)

IRS Chief Chides Ted Cruz Over 'Abolish the IRS' Mantra (BBG)

Yemen Houthi fighters backed by tanks reach central Aden (Reuters)

EU Lays Groundwork for Antitrust Charges Against Google (WSJ)

Patient evaluated for Ebola at Colorado hospital after seeing symptoms (

Doubts over U.S. growth cool dollar rally

LONDON (Reuters) - The dollar lost ground on Thursday, the last trading day of the week for many markets ahead of Easter, after disappointing U.S. economic data on Wednesday raised doubts over the growth outlook ahead of key jobs data due out on Friday.

China knocking on door of IMF's major league, U.S. wavers

BRUSSELS (Reuters) - China is closer to joining the major league of reserve currencies with a deal possible later this year to include the yuan in the International Monetary Fund's unit of account, international finance officials say.

Job Cuts Decline, Even As Oil Prices Take Toll. 34% of First Quarter Cuts Due to Oil Prices

from Challenger Gray and Christmas

Following two consecutive months of job cuts in excess of 50,000, the pace of downsizing slowed significantly in March, as US-based employers announced plans to trim payrolls by 36,594 during the month, The March total was 27.6 percent lower than the 50,579 job cuts in February. It was the lowest monthly total since December, when 32,640 were announced.

Futures, Dollar Drift Lower, Oil Slides Ahead Of "Whisper Miss" Payrolls

Unlike yesterday's vertigo-inducing overnight session, today has been a smooth sea by comparison even if one which has flowed from the top left to the bottom right for now, with futures erasing all of the last minute surge which was HFT programmed to sticksave the S&P just green for the year and then some. It is difficult to pinpoint the catalyst that will be today's market narrative although with NFP in just over 24 hours, falling on a holiday which will allow S&P futures just 45 minutes of trading after the BLS report hits before closing for the day, and with the weak ADP not to mention the 0.0% Atlanta Fed Q1 GDP forecast, the "whisper" expectation is for a NFP print that will be well below consensus, somewhere in the mid-100,000s if not worse now that the bartender hiring spree is over. The fact that March payrolls have missed on 6 of the last 7 reports probably adds to the dollar weakness, even if a huge miss tomorrow may just be the catalyst Yellen needs to launch the QE4 trial balloon.

A quick look at oil, and the energy complex, shows Brent and WTI crude futures were initially seen lower amid profit taking: at last check WTI was approaching $49 to the downside, around yesterday's low and accelerating on hope an Iran deal, which almost certainly is not coming, will be announced at some point today. Earlier today we learned that Iran Foreign Minister Zarif said a joint statement expected today, says no agreement yet.

Progress in Greece continues to remain slow and despite the government submitting an updated â€'list' yesterday, it's looking increasingly likely that the government won't receive any sort of early fund disbursement or mini tranche approval ahead of next week's T-Bill auction and IMF payment. According to Reuters, eurozone officials noted that they received ...

Futures fall as investors await data

NEW YORK (Reuters) - U.S. stock index futures were lower on Thursday, as investors held off on making big bets ahead of a critical payrolls report that will be released on Friday, a market holiday.

GM says Korea labor costs have surged, but has no plans to exit

ILSAN, South Korea (Reuters) - General Motors Co (GM) on Thursday said its labor costs have risen nearly 50 percent over the past five years in South Korea, where it makes nearly one-fifth of its global output, but that it does not plan to shut any of its four plants there.

Pfizer to shutter vaccines sales business in China

SHANGHAI (Reuters) - U.S. drugmaker Pfizer Inc said on Thursday it will cease its vaccines sales operations in China after an import license for one of its top-selling treatments, the only vaccine it sold in the country, was not renewed.

Q2 Investing Strategies: Top Five ETF Buys From Powerhouses With $1 Billion+ In Assets Under Management

If you were stranded on an island in the second quarter and could only take one exchange traded fund with you, what would it be? Our panel of investment strategists whose firms manage more than a billion in assets share their best ETF investing idea for Q2.

JPMorgan Chase on track to pay $9 billion to homeowners as part of settlement

WASHINGTON (Reuters) - JPMorgan Chase & Co is on track to meet its mandate to provide billions of dollars in consumer relief to struggling homeowners as part of a settlement it reached over bad residential mortgage-backed securities it sold before the financial crisis, an independent monitor said on Thursday.

Big bank brokers use decoys, spy tactics to go alone

PITTSBURGH(Reuters) - Secret contracts, covert real-estate deals, scurrying around after nightfall to avoid detection: this is how far big-bank brokers are prepared to go when they plan to go independent.

Ukraine signs new three-month deal to buy Russian gas: energy ministry

KIEV (Reuters) - Ukraine has signed a new agreement to buy Russian gas over the next three months at $248 per thousand cubic meters, the Ukrainian energy ministry said in a statement on Thursday.

America's Most And Least Drugged States

Almost one quarter of Americans regularly "take drugs to affect their mood and help them relax" according to the latest poll by Gallup; but which states are the most (and least) medicated?

click image for large legible version...

As Gallup notes, West Virginians are most likely to report near-daily use of drugs or medications that alter their mood or help them relax, followed by residents of Rhode Island. Southern states make up six of the top 10 highest drug use states, while Alaskans, Wyomingites and Californians are least likely to say they use such drugs almost every day.

Source: Gallup

Meanwhile, when it comes to illegal drug use, the following chart shows drug busts across the country in the three years from 2009-2012...

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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