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29Jul2015 Pre-Market Commentary: U.S. Futures Flat, Oil Off Lows, FMOC Minutes This Afternoon May Jolt Markets With Volatility

Written by Gary

U.S. stock futures are flat ahead of the opening bell and may slide fractionally as we approach the release of the FMOC minutes this afternoon.

Global stock markets have all risen slightly today, but investors are remaining cautious ahead of a policy statement from the Federal Reserve that could offer clues on the path of U.S. interest rates.

Markets are expected to open flat to fractionally lower.


Here is the current market situation from CNN Money

European markets are higher today with shares in London leading the region. The FTSE 100 is up 0.65% while France's CAC 40 is up 0.09% and Germany's DAX is up 0.02%.

What Is Moving the Markets

Here are the headlines moving the markets.

It's Bounce Or Else For This Key Stock Market Gauge

Via Dana Lyons' Tumblr,

We've used much of the space here in the past several weeks pointing out the deteriorating breadth conditions in the U.S. equity market. The trend has been so profound it has now reached the point where it could potentially shift from one of short or intermediate-term relevance to something that might impact the longer-term cyclical bull market. One example of this dynamic can be seen in the differential between the NYSE New Highs and New Lows.

This series reached an extremely skewed -462 yesterday (18 New Highs minus 480 New Lows). If this reading gets any worse, it will be one indication that the uptrend since 2009 is in jeopardy. Here's why:

image

Note how since bottoming in October 2008 at -1,751 (an all-time low, btw), NYSE New Highs-New Lows has made a series of higher lows. Those higher lows, in October 2011 at -1,175 and October 2014 at -584 line up almost precisely with one another, forming a very distinct UP trendline. That trendline is currently right in the vicinity of the -462 level reached yesterday. Is this just random? We don't think so.

Note how in the previous two cyclical market cycles, this New High-Low series formed similar trendlines.

image

In September 2001 and July 2007, cyclical UP trendlines were broken. Of course, these breaks ushered in much more weakness in the stock market over the subsequent 18-20 months.

This is not ...

MasterCard's quarterly profit falls as costs rise

(Reuters) - Credit and debit card issuer MasterCard Inc's quarterly profit fell 1.1 percent, hurt by higher expenses.

Greek PM says will not implement measures beyond those set at summit

ATHENS (Reuters) - Greek Prime Minister Alexis Tsipras said on Wednesday that his government would not implement reform measures beyond what was agreed with lenders at a euro zone summit earlier this month.

Russell Napier: What Happens When Markets Realize China Is A Forced Seller Of Treasuries

One week ago, our post "China's Record Dumping Of US Treasuries Leaves Goldman Speechless" which revealed an unexpected plunge in China's foreign exchange reserves or, said otherwise, a historic sale of US Treasurys held by official and unofficial Chinese accounts, was met with unprecedented public interest, having been read over 400,000 times (a record for coverage of a nuanced, technical subject) and even forced Goldman to follow up admitting its "estimation" of Chinese reserve outflows may have been too high.

By then the cat was out of the bag, and now what is surely the biggest Chinese wildcard, not what happens to itts manipulated stock market, just how much more capital outflows will Beijing suffer before it is forced to finally end the Renminbi's peg with the dollar, is finally being appreciated by the general public.

Which leads us to today's most recent article by ERI-C's Russell Napier titled "The Great Reset - Act II", in which the former CLSA strategist, asks a simple question:

"how US Treasury bulls in the private sector would react if they knew in advance that the second largest owner of Treasuries, the PBOC, was a forced seller of Treasuries. Such compelled selling would be obvious before US markets opened each morning as downward pressure on the RMB exchange rate in Asia forced the PBOC to liquidate foreign currency assets to defend the fixed exchange rate. Would even Treasury bulls stand in the way of such a large and predictable liquidation? If they didn't then the second phase of The Great Reset would come to pass and the decline of EM external deficits woul ...

Health insurer Anthem's profit beats as Medicaid memberships rise

(Reuters) - Health insurer Anthem Inc reported a better-than-expected quarterly profit, driven by strong enrollments in its government business, particularly Medicaid.

August 2015 Economic Forecast: Weakest Growth Since April 2010

Written by Steven Hansen

Econintersect's Economic Index declined to the lowest level since April 2010. The tracked sectors of the economy remain relatively soft with most expanding at the lower end of the range seen since the end of the Great Recession. Our economic index has been in a long term decline since late 2014.

Microsoft launches Windows 10 with an eye on mobile market

(Reuters) - Microsoft Corp launched its much-awaited Windows 10 operating system at midnight on Wednesday.

Thomson Reuters profit beats, currency weighs on revenue

(Reuters) - Thomson Reuters Corp on Wednesday reported a higher-than-expected quarterly profit even as currency weighed on its revenues.

GlaxoSmithKline beats profit forecasts despite Advair hit, lower margins

LONDON (Reuters) - A further slide in sales of lung drug Advair and lower profit margins following a business overhaul hit GlaxoSmithKline in the second quarter, although core earnings per share fell by a less than expected 9 percent.

U.S. stock futures higher ahead of Fed statement

(Reuters) - U.S. stock index futures rose on Wednesday on hopes that Beijing could stem the rout in its markets and ahead of a statement from the U.S. Federal Reserve that could give clues regarding the timing of a rate hike.

Frontrunning: July 29



Fed expected to push ahead with rate hike plan (Reuters)

Upbeat earnings lift European stocks ahead of Fed (Reuters)

Chevron to Cut 1,500 Jobs (Rigzone)

Can Windows 10 Revive PC Sales? (WSJ)

U.S. Junk-Bond Buyers Left in Dark as Private Deals Become Norm (BBG)

Jeb Bush Drawing Big Bucks From GOP Establishment (WSJ)

Myriad of Greek Risks Means Money Managers in No Hurry to Return (BBG)

Gas production at Gazprom set to hit post-Soviet low (FT)

China-Tied Hackers That Hit U.S. Said to Breach United Airlines (BBG)

China Pushes to Rewrite Rules of Global Internet (WSJ)

In Hideaway for Brazil's Rich and Famous, a New Scandal Emerges (

Greek PM says may have to call early election

ATHENS (Reuters) - Greek Prime Minister Alexis Tsipras said on Wednesday he may be forced to call an early election if he does not have a working parliamentary majority.

U.S. mortgage applications edged up last week: MBA

SAN FRANCISCO (Reuters) - Applications for U.S. home mortgages edged up last week while borrowing rates moved lower, an industry group said on Wednesday.

Going for Gold(man): UK bank analyst pay tops out at 71,000 pounds

LONDON (Reuters) - Goldman Sachs and Morgan Stanley are offering the fattest bonuses to their London analysts, but if it's a high base salary you're after then head to Deutsche Bank , according to a survey on Wednesday.

UPS Agrees to Buy 46 Million Gallons of Renewable Diesel

The package delivery giant wants to displace 12 percent of the petroleum-based fuels in its ground fleet by 2017 and hopes to stimulate investment.

Belgium's Solvay to buy U.S. peer Cytec for $5.5 billion

BRUSSELS (Reuters) - Belgian chemical group Solvay has agreed to buy U.S. peer Cytec for $5.5 billion, giving it a bigger presence in the lightweight materials business where demand from the aerospace industry is booming.

Violent Government Buying Spree Sends Chinese Stocks Soaring At Close Of Trading; Yellen On Deck

China is slowly learning.

On a day when market participants will care about only one thing - how hawkish (or dovish) the FOMC sounds at 2:00 pm (no Yellen press conference today) - Chinese stocks provided the usual dramatic sideshow and traded unchanged or modestly negative for most of the day despite the latest $100 billion injection, the close of trading on Wednesday was a mirror image of what happened in the last hour on Monday, as various Chinese "plunge-protection" mechanism went into a furious buying frenzy and government-backed funds rushed to buy anything that trades in the last 60 minutes of trading in what may be the most glaring example of banging the close yet, something which the Fed and Citadel have shown is the most efficient way of "setting" market expectations and getting the most bang for your manipulating buck.

BREAKING: Shanghai benchmark index ended 3.44% up as gov-backed funds rushed to buy stocks in last 30 mins of trading pic.twitter.com/urppX8GUvI

George Chen (@george_chen) July 29, 2015

As a reminder, "banging the close" is illegal if it sends the price lower. When it pushes prices higher, it is perfectly accetable.

What was the reason for this latest blatant intervention when according to SCMP's George Chen, about 400 stocks hit 10% daily limit today, "mostly in last 30 mins of trading." Alas nobody knows such answers in centrally planned markets: "No clear reason to explain why the magical bullish last 30mins trading happened; Rumors say Gov is keen t ...

Is It Time To Switch Industries? 5 Under-the-Radar Industries To Consider.

by Challenger Gray and Christmas

A new survey shows that, on average, three in ten job seekers finding employment in the first half of 2015 changed industries. While that was down slightly from a year ago, the fact that nearly one-third of successful job seekers switched industries indicates that this is a viable strategy for those who continue to seek employment.

Carlyle Group's Profit Jumps

Carlyle Group on Wednesday said its second-quarter profit rose 55%, as it continued to sell stakes in the companies it owns. But it saw a decline in another key profitability measure.

Going for Gold(man): UK bank analyst pay tops out at 71,000 pounds

LONDON (Reuters) - Goldman Sachs and Morgan Stanley are offering the fattest bonuses to their London analysts, but if it's a high base salary you're after then head to Deutsche Bank , according to a survey on Wednesday.

R.B.S. Sells $2.2 Billion in Shares of Citizens Financial Group

R.B.S. sold a larger-than-expected 16 percent stake in Citizens Financial as it looks to divest itself of all its holding in the lender.

As China's Stock Market Boils, Yuan Will Stay Cool

A weaker yuan may make economic sense, but Beijing can hardly afford a bout of currency weakness on top of everything else.

Smaller Chinese Cities Miss Housing Recovery

Housing markets in some big Chinese cities are starting to heat up, but smaller markets like Changchun in northeastern China show few signs of thawing.

GM to invest $1 billion in India, double market share by 2020

NEW DELHI (Reuters) - General Motors Co will invest $1 billion in the next few years to turn operations in India into a new global auto manufacturing and export hub aimed at boosting sales in fast-growing emerging markets, top executives said on Wednesday.

Earnings Summary for Today

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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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