U.S. stock index futures are fractionally higher and the markets are expected to open flat and trend down marginally until the FMOC meeting this afternoon. I would not look for much action before the 2 pm meeting.
Oil is trading sideways and the U.S. Dollar is trending down fractionally while Wall Street is greeting what is expected to be the worst earnings season since 2009 with a gigantic shrug.
Here is the current market situation from CNN Money
European markets are mixed. The FTSE 100 is higher by 0.35%, while the DAX is leading the CAC 40 lower. They are down 0.37% and 0.04% respectively.
LONDON (Reuters) - Royal Dutch Shell agreed to buy smaller rival BG Group for 47 billion pounds ($70.2 billion) in the first major energy industry merger in more than a decade, closing the gap on market leader U.S. ExxonMobil after a plunge in prices.
WASHINGTON (Reuters) - The effects of the financial crisis are making it hard for the Federal Reserve to measure the level of slack in the U.S. economy, so upcoming rate hikes should proceed at a slow pace as the central bank feels its way back to normal, Fed governor Jerome Powell said on Wednesday.
It had to happen sooner or later... in the new normal of yield-reaching, collateral-shortage-ing, money-printing economalypse, the Swiss government has become the first ever to issue a 10Y sovereign bond at a negative yield. As WSJ notes, while several European countries have sold government debt at negative yields up to five years of maturity - which means investors effectively pay for the privilege of buying it - no other country has previously stretched this out as long as 10 years. Mission Accomplished Central Bankers?
As The Wall Street Journal reports,
The Alpine country sold a total of 377.9 million Swiss francs (about $391 million) of bonds maturing in 2025 and 2049. On the 10-year slice, the yield was -0.055%, compared with 0.011% on its most recent similar bond two months ago.
In the post-issuance secondary market, Swiss bonds maturing up to 11 years in the future already trade with yields under 0%. But such low yields at the initial point of sale "illustrate well the world we live in," said Jan von Gerich, chief strategist at Nordea, referring to collapsing yields on debt amid widespread stimulus from central banks around the world.
NEW YORK (Reuters) - U.S. stock index futures were little changed on Wednesday, with traders eyeing a $70 billion mega-deal in the energy space and ahead of minutes from the most recent meeting of the Federal Reserve's policy-setting committee.
LONDON (Reuters) - Global stocks remained upbeat on Wednesday as a $70 billion mega-deal in the European oil and gas sector stoked the merger and acquisition fever that has gripped investors this week.
While US equity futures are largely unchanged, if only ahead of the now daily pre-open market-wide ramp, things in Asia have continued on their bubbly flurry, where China's Shanghai Composite briefly rose above 4000 for the first time since 2008, but it was the surge in the Hong Kong stock market that showed the Chinese bubble is finally spilling over, in the form of a blistering rally on the Hang Seng which rose nearly 4% on immense volume which at 250 billion Hong Kong dollars ($32 billion) was three times the average daily volume over the past year and nearly 20% more than the previous record volume day in October 2007, at the height of the pre-financial crisis bubble.
According to the WSJ, there were several causes for the surge in cash leaving the mainland for Hong Kong: "China's securities regulator announced at the end of March that mutual funds could access the Stock Connect, which was previously limited to wealthy individual investors. More broadly, mainland investors may suddenly see Hong Kong's stocks as bargains now that their hometown shares have risen so high. Before Wednesday, shares of the exact same company that are dual listed in Hong Kong and Shanghai were trading at an average premium of nearly 35% in Shanghai. Winners Wednesday included companies that trade at a big discount in Hong Kong, such as the major Chinese banks."
The other main event that comes hours after Saudi Arabia announced it would play hardball and instead of leaving its own production flat, it is boosting production quite sharply to claw back market share, leading to an announcement overnight that Shell would agree UK energy producer BP Group PLC in a whopping $70 billion deal, the 14th largest ever corporate takeover. The deal is the the latest sign of how tumbling energy prices are shaking up the global oil-and-gas industry, and shows that even further production surges are likely on the horizon as overheads are cut to allow for lower breakeven prices, m ...
LONDON (Reuters) - Oil prices fell towards $58 a barrel on Wednesday as industry data showed a larger-than-expected weekly increase in U.S. stockpiles and as Saudi Arabia reported record output in March.
SHANGHAI/HONG KONG (Reuters) - Chinese investors, for the first time, used the entire 10.5 billion yuan ($1.7 billion) daily quota in a cross-border program buying Hong Kong stocks, boosting turnover under the Shanghai-Hong Kong Stock Connect to a record.
MOSCOW (Reuters) - Greece has not asked Russia for money to help cope with its debt and financial problems and wants to resolve them within the European Union, a Greek government official said on Wednesday.
Motorola Solutions has failed to find a buyer, according to a recent report by Bloomberg. Several unconfirmed reports had surfaced last month about Motorola Solutions putting itself up for sale. It was reportedly in talks with certain private equity funds and large industrial companies such as Honeywell International and Tyco International, but failed to reach an agreement. There could be several reasons for this, including doubts over the company's technological advantage in the long run, recent lackluster top-line performance, and seemingly limited opportunities for growth. Owing to the niche market in which it operates and dependence on broader government spending for growth, there seems to be limited meaningful upside potential for the company's earnings per share, which declined by 33% (adjusted EPS) last year, in the current scenario. In addition to the limited earnings potential, the fact that there are likely to be very little synergies between any industrial conglomerate and Motorola must be weighing against the latter. The only companies that could show an interest in its acquisition are perhaps defense companies or telecom providers, although the benefits in such cases also are not too obvious.
SAP spent 2 years and considerable resources on the development of S/4HANA, and its success is crucial for the company's future. This is because S/4HANA is SAP's answer to rising competition from rivals Oracle and Salesforce. So far, even in the face of heavy competition from the two biggest cloud computing companies in the world, SAP has managed to maintain largely stable revenues and margins. Whether it is able to hold its ground in the future also to protect its top and bottom lines, will determine the course of the company.
Bad news is even better news in Europe. "Core" Germany saw its powerhouse economy suffer the biggest drop in Factory Orders since June (-1.3% YoY) missing expectations for the 2nd month in a row - the first consecutive drop since may 2013 (despite German business confidence rising for the 5th month in a row) as apparently devaluing the EU's currency is not encouraging business. The result... DAX futures surging, bond yields tumbling and Spanish bond yields to 6 months are now negative...
But that's great news for stocks...
And now Spanish bond yields are negative to 6 months... (3month has been negative for a week)
Because nothing says "liquid and efficient" market like yet another broken market. Just as we saw yesterday afternoon as US equities collapsed into the close, Euronext has broken in the pre-open European markets...
*EURONEXT SAYS EXPERIENCING SOME TECHNICAL ISSUES
*EURONEXT DERIVATIVES MKT STATUS - SYSTEMS AFFECTED: CCG ISSUE
*EURONEXT: CCG NUMBER 10, 11, 12 MAY SEE CONNECTIVITY ISSUE
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