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13Apr2015 Pre-Market Commentary: U.S. Futures Weaker This Morning, Oils Ar Up, U.S. Dollar Trending Down, Possible Volatility Today

Written by Gary

Premarket down fractionally as Brent rose towards $59 a barrel today in a volatile market, continuing gains after a strong end to last week as financial traders increased bets on higher prices amid a slowdown in U.S. drilling.

However, U.S. stock index futures have pulled back after three straight days of gains, as the corporate earnings season is poised to kick into high gear with a slew of reports this week.

The U.S. Dollar has been trading above 100.00 earlier and has been trending down moderately that could be preview of a volatile market today.


Here is the current market situation from CNN Money

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street Reacts To China's Shocking Trade Data

Everyone was shocked by yesterday's Chinese March trade update which showed that while imports slid largely as expected, it was the 15% drop in exports, the largest in over a year, that prompted many to wonder just how big the global trade slump really is, masked by what has now become pervasive, global QE. This was the worst performance, exports and imports combined, since late 2009.

Based on the released breakdown, the weakness in exports was broadly based on all destinations: exports to the US went down 8% yoy in Mar (Jan-Feb avg. at +21% yoy); exports to Japan contracted 24.8% yoy (Jan-Feb avg. at -4.4% yoy); exports to the Euro area fell 19.1% yoy (Jan-Feb avg. at 12.6% yoy); and exports to ASEAN declined 9.3% yoy (Jan-Feb avg. 38.2% yoy). Exports to HK was down 18.3% yoy in Mar, (January to February on average, exports to HK contracted 5.6 % yoy). Breakdown by commodity also showed broad weakness: agriculture product export went down 18.1% yoy in March

As Bloomberg's Richard Breslow put it "they were open for business and nobody came to shop." The usual explanations didn't cut it - "didn't we all know that Chinese New Year came late this year? Actually, it was right on time, but lunar calendars don't remain static to solar ones. Whether you look at regions or products, the data were weak across the board."

Indeed, even Goldman admits that "when the Chinese New Year is very late as it was the case this year, February exports data would be distorted on the upside and vice versa for March data. But analysis of historical data suggests a fall from 48.3% in February to around 0% in March would be expected because of ...

Futures dip after three days of gains; eyes on earnings

(Reuters) - U.S. stock index futures pulled back after three straight days of gains, as the corporate earnings season was poised to kick into high gear with a slew of reports this week.

Amazon, Google and More Are Drawn to Home Services Market

Bringing the efficiency of the web to common household tasks has opened a new door to the home services industry, which is estimated to be worth more than $800 billion.

Frontrunning: April 13


As reported here first a month ago: The $9 Trillion Short That May Send the Dollar Even Higher (BBG)

As an instant target for foes, Clinton may struggle to get message heard (Reuters)

Emerging Stocks Rally 11th Day as Aussie Weakens on China (BBG)

Puerto Rico, Investors Enlist Ex-IMF Officials (WSJ)

Dollar's Rise Reshuffles Global Economy (BBG)

Indonesia eyes regular navy exercises with U.S. in South China Sea (Reuters)

Banca Monte dei Paschi Breaches Exposure Limits to Nomura (WSJ)

European Bond Buyers Find Negative Doesn't Necessarily Mean Bad (BBG)

Saudi Arabia's Plan to Extend the Age of Oil (

Apple likely to boost watch production quickly: analysts

(Reuters) - Apple Inc is likely to quickly ramp production of the Apple Watch after strong pre-orders outstripped limited supply in the first weekend following its launch, some Wall Street analysts said.

The New Health Care: Why Survival Rate Is Not the Best Way to Judge Cancer Spending

For many cancers in the United States, we've made little headway in mortality rates, which is a different measure altogether.

China Stocks Soar To 7 Year High After Collapse In Exports; US Futures Slip On Continuing Dollar Surge

If there was any doubt that global trade is stalling, it was promptly wiped out following the latest abysmal Chinese trade data which saw exports tumble by 15% - the most in over a year - on expectations of a 8% rebound, with the trade surplus coming in at CNY18.2 billion, far below the lowest estimate. While unnecessary, with the Chinese GDP growth rate this Wednesday already expect to print at a record low, this was further evidence of weak demand both at home and abroad. Weakness was seen in most key markets, and the strength of China's currency was partly to blame, which again brings up China's CNY devaluation and ultimately QE, which as we wrote some time ago, is the ultimate endgame in the global reflation trade which, at least for now until the CBs begin active money paradropping to everyone not just the 0.01%, is only leading to inflation in stocks and deflation in everything else.

This is what the "market" also promptly realized because just as the Chinese economy is stalling fast and landing hard, its stock market rose by another 2.2%, a fresh 7 year high, while the now amusing Hang Seng surged by 2.7%, rising above 28,000 as the local Chinese stock bubble has spilled over in full force in neighboring Hong Kong where the average P/E is now best described as an excel calculation error.

As such, Asian stocks trade mostly mixed with Chinese bourses outperforming underpinned by poor trade balance data which prompted speculation of further stimulus measures. The headline reading printed its smallest surplus in 13-months in CNY terms and a 2-yr low in USD terms (CNY) (Mar) M/M 18.1bln vs Exp. 250.00bln (Prev. 350.50bln). S ...

Brazil's iPhone investment falls short on promises of jobs, lower prices

ITU, Brazil (Reuters) - The Brazilian iPhone was meant to mark a new era.

Oil rises towards $59, supported by U.S. drilling slowdown

LONDON (Reuters) - Brent rose towards $59 a barrel on Monday in a volatile market, continuing gains after a strong end to last week as financial traders increased bets on higher prices amid a slowdown in U.S. drilling.

China's March exports shrink 15 percent year-on-year in shock fall

BEIJING (Reuters) - China's export sales contracted 15 percent in March, a shock outcome that deepens concern about sputtering Chinese economic growth.

Weak China trade data hammers Aussie, weighs on Europe shares

LONDON (Reuters) - A shock fall in Chinese exports hammered the Australian dollar on Monday, though expectations of fresh economic stimulus from Beijing helped Asian stocks higher

Yum's upmarket China diner seeks recipe for revival

SHANGHAI (Reuters) - Dimmed lights and colonial-style balconies give little indication that trendy Shanghai eatery Atto Primo is part of global fast-food giant Yum Brands Inc , owner of the KFC and Pizza Hut brands.

Bits Blog: Trade Groups Seek China's Written Assurance on Tech Policy

A letter from trade groups in the United States, Europe and Japan to Chinese officials appears to reflect renewed tensions over technology policies being rolled out by Beijing.

Retailers Scrutinized for Schedules and Staffing

The New York attorney general's office is investigating 13 large retailers over whether increasingly unpredictable and on-call work schedules violate the state's labor laws.

China Investors Shun Hong Kong Stalwarts

A surge of cash from mainland China into Hong Kong stocks has mostly found its way into companies little known to global investors, a development already starting to alter the city's market.

India Stymied in Push to Resume Iron-Ore Mining

The collapse in the price of iron ore has thwarted India's effort to reopen mines in the state of Goa, where at one time the industry employed more than 100,000 people.

Meet The Secretive Group That Runs The World

Over the centuries there have been many stories, some based on loose facts, others based on hearsay, conjecture, speculation and outright lies, about groups of people who "control the world." Some of these are partially accurate, others are wildly hyperbolic, but when it comes to the historic record, nothing comes closer to the stereotypical, secretive group determining the fate of over 7 billion people, than the Bank of International Settlements, which hides in such plain sight, that few have ever paid much attention.

This is their story.

First unofficial meeting of the BIS Board of Directors in Basel, April 1930

* * *

The following is an excerpt from TOWER OF BASEL: The Shadowy History of the Secret Bank that Runs the World by Adam LeBor. Reprinted with permission from PublicAffairs.

The world's most exclusive club has eighteen members. They gather every other month on a Sunday evening at 7 p.m. in conference room E in a circular tower block whose tinted windows overlook the central Basel railway station. Their discussion lasts for one hour, perhaps an hour and a half. Some of those present bring a colleague with them, but the aides rarely speak d ...

How NSA Surveillance Was Birthed From The Pre 9/11 Drug War

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Screen Shot 2015-04-08 at 12.31.01 PM

The now-discontinued operation, carried out by the DEA's intelligence arm, was the government's first known effort to gather data on Americans in bulk, sweeping up records of telephone calls made by millions of U.S. citizens regardless of whether they were suspected of a crime. It was a model for the massive phone surveillance system the NSA launched to identify terrorists after the Sept. 11 attacks. That dragnet drew sharp criticism that the government had intruded too deeply into Americans' privacy after former NSA contractor Edward Snowden leaked it to the news media two years ago.

The similarities between the NSA program and the DEA operation established a decade earlier are striking - too much so to have been a coincidence, people familiar with the programs said. Former NSA general counsel Stewart Baker said, "It's very hard to see (the DEA operation) as anything other than the precursor" to the NSA's terrorist surveillance.

The extent of that surveillance alarmed privacy advocates, who questioned its legality. "This was aimed squarely at Americans," said Mark Rumold, an attorney with the Electronic Frontier Foundation. "That's very significant from a constitutional perspective."

China Trade Surplus Crashes As Exports & Imports Collapse In March

Forget the weather, it must be the smog. China just announced total carnage in its trade data for March:



CHINA'S MARCH IMPORTS FALL 12.3% Y/Y IN YUAN TERMS; EST. -11.3%

CHINA'S MARCH EXPORTS FALL 14.6% Y/Y IN YUAN TERMS; EST. +8.2%

CHINA'S MARCH TRADE SURPLUS 18.16 BILLION YUAN; EST 250B YUAN

So what exactly was the Chinese stock market 'discounting'?

Trade Surplus collapses... (economists knew about year-end and forecast +250bn!!!)

As Exports crash and Imports continues to slide for the 5th month...

In US Dollars the picture is worse...


*CHINA'S MARCH EXPORTS FALL 15.0% FROM YEAR EARLIER

*CHINA'S MARCH IMPORTS FALL 12.7% FROM YEAR EARLIER

*CHINA'S MARCH TRADE SURPLUS $3.08 BILLION

While year-end shenanigans will likely be blamed (and sure enough...)


*CHINA 1Q TRADE VOLATILITY MAINLY DUE TO SPRING FESTIVAL: HUANG

*UNCERTAINTIES EXIST IN CHINA'S 2Q EXPORTS MOMENTUM: HUANG

Which is odd that all the data massively missed expectations which we assume Economists were aware of the calendar?

...

One Of These Chinese Things Is Not Like The Other

China (and Hong Kong) stock markets opened gap higher and kept going (China Merchants Bank up over 20%) as The China Securities Depositary and Clearing Co. (CSDC) announced that investors will no longer be restricted to only one stock account in China's A-share market and each can have up to 20 accounts from Monday. Which makes perfect sense because what every elementary-school-educated housewife speculator needs is 19 more places to speculate in.

As Xinhua reports,

The reform means investors no longer face complicated procedures if they want to transfer their accounts to other brokerage firms.

All they need to do is to open new accounts with other firms and the information will be transferred under a new system launched by the CSDC in October.

* * *

Which leaves us with one question... WTF!!??

Is this just some giant Big Lie distraction designed to draw the "peoples' attention away from the crashing real estate market.

Gold-Backed SDR "Is Quite Likely To Happen", LSE's Lord Desai Warns

As many are increasingly coming to terms with the 'obvious failure of fiat currency', the inevitavble question arises "what next?" Earlier this year, we discussed the possibility of a Chinese- or Russian-currency backed by gold, amid the increasing calls (domestically and abroad) for an end to USD Reserve hegemony; but this weekend, as Bloomberg reports, Lord Meghnad Desai, chairman of The Official Monetary and Financial Institutions Forum, stated that IMF Special Drawing Rights (SDR) should contain some gold to help stabilize the currency.

As Bloomberg reports,

"A bit of gold" could help stabilize SDRs, Lord Meghnad Desai, chairman of Official Monetary and Financial Institutions Forum, says at precious metals conference in Dubai.

"We could ask that gold be nominated as part of the SDR. That is one thing I think is quite likely to happen"

This will be easier if China increases its official gold holdings.

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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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