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22Apr2015 Pre-Market Commentary: U.S. Futures Fall, U.S. Dollar Rising, WTI Oil Off Morning Lows

Written by Gary

U.S. stock index futures fell this morning as investors are wary of the effect of a strong U.S. dollar on earnings and ahead of housing sector data. Earnings are showing profit as revenue falls and that has helped spook investors.

Several reasons why today's session might continue to fall!

Here is the current market situation from CNN Money

European markets are lower today with shares in London off the most. The FTSE 100 is down 0.71% while Germany's DAX is off 0.64% and France's CAC 40 is lower by 0.17%.

  • WTI oil prices dipped under $55 a barrel after industry data showed a build in U.S. crude inventories for the 15th straight week, adding to concerns of a global supply glut.

  • European stocks fell, failing to extend an overnight rally in Asia as investors looked to Greece's debt crisis and lurch towards possible default as an excuse to cash in gains chalked up earlier in the week.

  • The European Central Bank will continue to fund Greek banks as long as they stay solvent and have enough collateral, but is this enough to save Greece?

What Is Moving the Markets

Here are the headlines moving the markets.

McDonald's revenue falls 11 percent

(Reuters) - McDonald's Corp , the world's biggest restaurant chain, reported an 11 percent fall in quarterly revenue as it fights to recover from food scandals in China and Japan and faces tough competition at home in the United States.

Coke reports revenue growth for first time in nine quarters

(Reuters) - Coca-Cola Co reported a rise in revenue for the first time in nine quarters, helped by a 6 percent rise in North America, its biggest market.

Peugeot, IBM agree to expanded 'connected car' partnership deal

FRANKFURT (Reuters) - PSA Peugeot Citroën, Europe's second largest carmaker, and computer services supplier IBM, said on Wednesday they agreed to a partnership deal for connected car services that go beyond current navigation and infotainment offerings.

UK trader accused of 'flash crash' role opposes extradition to U.S.

LONDON (Reuters) - A British futures trader accused by U.S. authorities of an illegal role in the Wall Street "flash crash" that briefly wiped out nearly $1 trillion in market value five years ago, told a London court on Wednesday he opposed being extradited to the United States.

Leading Index Review: February 2015 Philly Fed Leading Index Growth Rate Statistically Unchanged

Econintersect: This leading index is now forecasting growth at 1.5% over the next 6 months - statistically the same as January (which was released at the same time as February). Note that this index has not been published since December 2014 as parts of its methodology were revised. A review of all major leading indicators follows - and no leading index is particularily strong.

Boeing profit jumps 38 percent on higher jet deliveries

(Reuters) - Boeing Co reported a 38 percent increase in quarterly profit, helped by rising demand for commercial aircraft.

Greek cash seen lasting into June, no EU deal imminent

ATHENS/BRUSSELS (Reuters) - Greece can scrape together enough cash to meet its payment obligations until June, euro zone and Greek officials said on Wednesday, playing down fears of an imminent default as hopes receded of a deal with its creditors to release fresh aid.

UK "Flash Crasher" Refuses To Be Broken Market Scapegoat, Will Fight Extradition Request Facing Decades In Prison

While we eagerly await for the SEC to retract its official 104 page report summarizing the "Findings regarding the market events of May 6, 2010" in light of "recent developments", and as we follow the shift in the official narrative to the outright bizarre, in which the entire Flash Crash is now blamed on just one man (as opposed to just Waddell & Reed as per the previous narrative), we learn that the latest scapegoat for a broken, fragmented and manipulated market, Navinder Sarao, is not quite so eager to go to minimum security prison in the US for doing what leads to a slap on the wrist when someone like Citadel or Virtu does it, and will challenge the CFTC's attempt to pin everything on him.

Bloomberg reports that Sarao, 36, was in London court earlier today following his after by British police for being charged in Chicago with 22 criminal counts including fraud and market manipulation and said he will fight an extradition request by U.S. prosecutors over his role in the 2010 flash crash.

As previoisly reported, Sarao engaged in what every other HFT firms on a daily basis: namely spoofing. However, because he is a foreigner, he was easy prey for the US "justice" system, and as a result it is he that has been picked as a scapegoat (perhaps because the official investigation into Virtu, Citadel and the other HFT firms revealed something so dramatic it needed an easy and available cover up).

In the US he faces up to several decades in prison: wire fraud is punishable in the U.S. by a maximum prison term of 20 years, commodities fraud by a sentence of as long as 25 years, and commodities manipulation and spoofing by terms of as long as 10 years, or a $1 million fine.

The strategy "virtually ensured" that his orders wou ...

Futures fall with eyes on earnings, dollar

(Reuters) - U.S. stock index futures fell on Wednesday with investors wary of the effect of a strong U.S. dollar on earnings and ahead of housing sector data.

ECB to fund Greek banks as long as they stay solvent: Coeure

ATHENS (Reuters) - The European Central Bank will continue to fund Greek banks as long as they stay solvent and have enough collateral, Executive Board Member Benoit Coeure told a newspaper on Wednesday, dismissing talk that Athens might ditch the euro.

Frontrunning: April 22

Because it just gets funnier: UK speed trader arrested over role in 2010 'flash crash' (Reuters)

... and funnier: Mystery Trader Armed With Algorithms Rewrites Flash Crash Story (BBG)

Presidential hopeful Rubio reaches out to gay Republicans (Reuters)

Varoufakis Sees Differences Narrowing in Creditor Talks (BBG)

China Debt Mess Brings Out the Yin and Yang in Policy Makers (BBG)

Hedge Fund That Made 18% on Dollar Strength Now Bets on Drop (BBG)

Whistleblower Jim Marchese Scores Millions in Payout Again (WSJ)

Release of Benghazi Report on Hillary Clinton Likely Pushed to Election Season (BBG)

Meredith Corp. Lays Off About 100 Employees (

EU charges Russia's Gazprom, alleging price gouging

BRUSSELS (Reuters) - The European Union launched a legal attack on Gazprom on Wednesday, stoking tensions with Moscow as it accused the Russian gas giant of overcharging buyers in Eastern Europe and hindering competition.

Rolls-Royce appoints acclaimed technology executive as CEO

LONDON (Reuters) - Aircraft engine maker Rolls-Royce has turned to one of Britain's most successful technology executives, Warren East, to restore its fortunes after a year marred by falling profit, job cuts and canceled orders.

Exclusive: UBS, BNP among bidders for China's Postal Savings Bank's pre-IPO stake - sources

HONG KONG (Reuters) - UBS , Singapore's Temasek Holdings [TEM.UL] and French bank BNP Paribas are among half a dozen preliminary bidders to buy up to a 10 percent stake in state-owned Postal Savings Bank of China (PSBC) for at least $3 billion, people familiar with the matter told Reuters on Wednesday.

Mortgage applications rose in latest week: MBA

NEW YORK (Reuters) - Applications for U.S. home mortgages rose last week as interest rates declined, an industry group said on Wednesday.

Asian Euphoria Sends Nikkei Above 20,000, Fizzles In Europe On More Greek Fears; US Futures Down

Whether it is in sympathy with the now relentless surge in the Shanghai Composite which tacked on another 2.44% overnight to close at a fresh multi-year high just shy of 4400, well more than double from a year ago, or because Mrs Watanabe was unable to read the latest Japan trade data whose first trade surplus in 3 years hinted that there will be no new easing by the BOJ any time soon, but overnight the Nikkei closed above 20,000 for the first time in 15 years, with "makers of chocolate, mayonnaise, potato chips and household appliances" helping lift the Tokyo market according to the WSJ.

The now daily Asian euphoria however did not last long in the European session, and after opening higher, the Stoxx Europe 600 slipped into negative territory just an hour into trading, and was down 0.4% by midmorning, lead by a near 1% decline on Athens' mains stock index, which has since recouped losses stemming from the overnight report that the ECB is considering an up to 50% haircut on Greek bank collateral, a move that would wipe out the Greek financial sector with ease.

As the WSJ notes, Greek Prime Minister Alexis Tsipras is expected to meet with German Chancellor Angela Merkel at a summit in Brussels on Thursday, before eurozone finance ministers meet in Riga, Latvia, on Friday. However, a deal on fresh aid - having been delayed for weeks and weeks - will be delayed once more, and is unlikely to be agreed before the Eurogroup meeting on May 11, a day before Greece must pay €780 million ($838 million) due to the International Monetary Fund.

"Given ...

Volvo ousts CEO and turns to rival Scania for replacement

STOCKHOLM (Reuters) - Swedish truckmaker Volvo named Martin Lundstedt, the head of rival Volkswagen-owned Scania as its chief executive on Wednesday, replacing embattled Olof Persson who has led a sweeping efficiency drive.

German state premier calls on Deutsche Bank to safeguard Postbank

FRANKFURT (Reuters) - A senior German politician on Wednesday urged Deutsche Bank to protect jobs and preserve Postbank as a stand-alone business in any sell-off plan.

E.U. Charges Russian Energy Giant Gazprom With Abusing Its Dominance

The move is a challenge to a strategy of President Vladimir V. Putin by potentially limiting Russia's ability to set prices favoring some customers and penalizing others.

Oil prices dip below $62 on U.S. stock build

LONDON (Reuters) - Oil prices dipped under $62 a barrel on Wednesday after industry data showed a build in U.S. crude inventories for the 15th straight week, adding to concerns of a global supply glut.

UK watchdog fines BoA's Merrill Lynch $20 million for reporting failures

LONDON (Reuters) - Britain's markets regulator has fined Bank of America Merrill Lynch a record 13.2 million pounds ($20 million) for failing to report transactions properly over seven years.

Tesco Counts Cost of Decline With Record Loss

Tesco revealed the cost of its spectacular decline on Wednesday with an annual loss of 6.4 billion pounds ($9.5 billion), one of the biggest in British corporate history, and warned that there could be more pain to come.

South Korea seeks bigger role in global arms bazaar

SEOUL (Reuters) - When South Korean president Park Geun-hye stopped off in Peru this week, her diplomatic tasks included drumming up interest in her country's home-grown light fighter jets.

British Retailer Tesco Posts $9.5 Billion Pretax Loss

The retail giant has steadily lost market share in recent years to discount retailers, and faced pricing wars with its British rivals.

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