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16Jul2015 Pre-Market Commentary: U.S. Futures Up, WTI Oil Lower, U.S. Dollar Testing Resistance And Greek Bailout Delayed

Written by Gary

U.S. stock index futures rose this morning as investors welcomed Greek parliamentary approval of a bailout plan and on strong results from Netflix and Intel overnight.

WTI oil is again testing it support and is currently rallying as the U.S. dollar fails at its resistance and is sliding.

Today's session is going to be interesting. Markets are expected to open up a half percentage point.

Here is the current market situation from CNN Money

European markets are broadly higher today with shares in France leading the region. The CAC 40 is up 2.07% while Germany's DAX is up 1.67% and London's FTSE 100 is up 0.57%.

What Is Moving the Markets

Here are the headlines moving the markets.

11 July 2015 Initial Unemployment Claims Rolling Average Continues to Marginally Worsen

Weekly Initial Unemployment Claims

The market was expecting the weekly initial unemployment claims at 265,000 to 295,000 (consensus 282,000) vs the 281,000 reported. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 279,250 (reported last week as 279,500) to 282,500. The rolling averages generally have been equal to or under 300,000 since August 2014.

BB&T's Profit Rises

BB&T Corp. said its profit grew 7.1% in the second quarter as its revenue and average total loans edged higher, though a key measure of lending profitability narrowed.

EBay Reports Sale of Enterprise Unit as Earnings Beat Estimates

The company said it had sold the unit for $925 million, and its operating earnings had risen 9 percent, well above the average estimate of analysts.

Investors Get Caught in Oil's Slippery Wake

The value of shares sold by U.S. and Canadian exploration-and-production companies this year in follow-on offerings has declined, as falling crude prices have pressured energy firms.

U.S. jobless claims resume downward trend

WASHINGTON (Reuters) - The number of Americans filing new applications for unemployment benefits fell more than expected last week, pointing to a solid labor market.

UnitedHealth Tops Street 2Q Forecasts, Raises Forecasts

UnitedHealth juiced up its business outside health insurance in a better-than-expected second quarter while key competitors scrambled to add enrollment in a wave of mega-mergers sweeping the sector.

Goldman profit plunges on weak bond trading, legal provisions

(Reuters) - Goldman Sachs Group Inc reported its smallest quarterly profit in nearly four years on Thursday as litigation provisions soared and investors pulled back from bond trading.

Citi posts highest profit in 8 years as costs plunge

(Reuters) - Citigroup Inc, the third biggest U.S. bank by assets, reported its highest quarterly profit in eight years as restructuring and cost cuts paid off and legal expenses plunged.

Greece licks wounds after bailout vote, ECB move expected

ATHENS (Reuters) - Greece awoke with a political hangover on Thursday after parliament approved a stringent bailout program, thanks to the votes of the pro-European opposition, amid the worst protest violence this year.

"Global Carry Trade" On - EURUSD Plunges To 1.08 Handle, 2-Month Lows

A 3rd Greek bailout "Fix", an unchanged ECB with Draghi preparing to reiterate "whatever it takes" - apart from for Greece, and The Fed appearing more hawkishly tilted to a September liftoff (no matter what happens in Greece).... The result - EURUSD is collapsing...

In other words - the "carry trade" is back on.

Charts: Bloomberg

Blackstone Earnings Slide, but Payouts Still Healthy

Blackstone Group said its second-quarter profit declined 74% as the pace of asset sales slowed, yet remained abundant enough to enable the firm to pay out its third-highest-ever quarterly dividend.

Ebay revenue jumps 7 percent in last push from PayPal

(Reuters) - E-commerce company eBay Inc reported a 7 percent jump in net revenue, boosted by higher demand in the PayPal Holdings Inc payments business it plans to spin off on Friday.

Investors in Greek Banks Face Recapitalization Wipeout

Investors in Greek banks face the prospect of their holdings being wiped out under the terms of a $27.25-billion recapitalization plan.

ECB to delay Greek funding boost as Europe mulls bridge loan

FRANKFURT (Reuters) - The European Central Bank was set to hold emergency funding to Greek banks steady on Thursday, delaying an increase that would have allowed banks to partially reopen as it waits for European leaders to finalize a financial backstop.

ECB Preview: Draghi To Address Greece, China, Reiterate QE Commitment in "Holding Pattern" Presser

By all accounts, Mario Draghi should remain "largely on message" in Thursday's ECB presser, with the deal struck in Brussels last weekend having spared him the inconvenience of convening a tense discussion about imminent Grexit.

Draghi (who may or may not have personally helped orchestrate the currency swaps with Goldman in 2001 that are largely responsible for Greece's current predicament) should reiterate the central bank's commitment to implement PSPP in full and the market will no doubt be looking for any color the ECB cares to add about the event risks surrounding the implementation of a third Greek program and the recent turmoil in Chinese equity markets.

Wildcards for today's press conference include: completely unexpected, market destabilizing commentary about persistent volatility and of course, glitter.

More from the sellside below.

* * *

Deutsche Bank:

Thursday should be a holding-pattern press conference with Mario Draghi largely repeating the policy message from the last meeting, that is, that the ECB is fully committed to its QE programme through to September 2016 and the risks are tilted to more QE, not less.

There is some potential for a mildly more dovish message on inflation given the decline in oil prices over the last couple of months, but this should not affect the medium-term view. We would be a little less surprised by this than a more positive message on the recovery.

The first message we would expect is a repeat of the Council's "prudent optimism" on the economic recovery and the chances of inflation returning sustainably to ...

Shell expects oil price recovery to take several years

LONDON (Reuters) - Royal Dutch Shell expects oil prices to recover gradually over the next five years, with progress slowed by persistent global oversupply and receding Chinese demand growth.

Futures rise after Greek vote; Intel, Netflix results

(Reuters) - U.S. stock index futures rose on Thursday as investors welcomed Greek parliamentary approval of a bailout plan and on strong results from Netflix and Intel overnight.

Frontrunning: July 16

Greece licks wounds after bailout vote, ECB move expected (Reuters)

Lose-Lose: Pushing Greece Out of Euro Is Costlier Than Write-Off (BBG)

EMU brutality in Greece has destroyed the trust of Europe's Left (Telegraph)

Schaeuble Shrugs Off Greek Vote Saying Euro Exit Is Best (BBG)

Merkel's tough tactics prompt criticism in Germany and abroad (FT)

Investors Get Caught in Oil's Slippery Wake (WSJ)

Obama Girds for Battle With Congress on Iran Deal (WSJ)

Icahn Flips Script on BlackRock's Fink, a Longtime Critic (WSJ)

Rice - Iran cannot avoid inspections of suspicious sites (Reuters)

Drought Is the Mother of Invention on the Farm (

Global Stocks Jump After Greeks Vote Themselves Into Even More Austerity

And so the 2015 season of the Greek drama is coming to a close following last night's vote in Greek parliament to vote the country into even more austerity than was the case before Syriza was voted into power with promises of removing all austerity, even with Europe - which formally admits Greece is unsustainable in its current debt configuration - now terminally split on how to proceed, with Germany's finmin still calling for a "temporary Grexit", the IMF demanding massive debt haircuts, while the rest of Europe (and not so happy if one is Finnish or Dutch) just happy to kick the can for the third time.

The following tweet probably best captures the surreal nature of the "deal":

They all disagree to agree that this unsustainable deal is sustainable.

â€" Olivier Drot (@OlivierDrot) July 16, 2015

Which means that nothing is really fixed, Greece will remain a pass-through vehicle for the Troika to pay into so it can repay itself, while the Greek economy continues to disintegrate, and this whole theater will repeat itself in X months, just with a different set of players.

For, stocks, however kicking the can is the best possible news as it means even more debt will be layered, which will force the ECB to keep rates at zero and/or negative for longer, and nowhere is this seen better than in European equities, currently at 6 week highs, and US futures, both of which are surging this morning with Europe in the green across the board: Eurostoxx 50 +1.2%, FTSE 100 +0.5%, CAC 40 +1.4%, DAX +1.5%, IBEX +1.3%, FTSEMIB +1.2%, SMI +1%.

European equities trade in the green (Euro Stoxx: +1.5%) as exporters outperform amid the weaker EUR. In company specific news, Bloomberg sources suggest Volkswagen's (+2.4%) Audi abandoned their plans to sell 600,000 cars in China thi ...

Investors welcome Greek bailout approval

LONDON, (Reuters) - Stocks rose and euro zone bond yields fell on Thursday as investors welcomed Greek parliamentary approval of a bailout plan, while the dollar hit a six-week high after Federal Reserve Chair Janet Yellen reinforced expectations for a U.S. rate hike.

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