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23Sep2015 Pre-Market Commentary: U.S. Futures Up, Asian Closed Down On Weak Growth, U.S. Markets To Open Fractionally Higher

Written by Gary

U.S. stock futures indexes are up fractionally after Asian markets ended down after a tough day. The Shanghai Composite Index fell 2.19% and the Hang Seng Index was off 2.28% after manufacturing data from China rekindled concerns on weak growth in the region.

Markets are expected to open fractionally higher, but may make a 'normal' morning decent after the opening bell.


Here is the current market situation from CNN Money

European markets are broadly higher today with shares in London leading the region. The FTSE 100 is up 1.90% while France's CAC 40 is up 0.98% and Germany's DAX is up 0.97%.

All eyes are on Germany, where one in six jobs is dependent upon the automobile industry in some way. Economists are busy trying to estimate the broad impact of the Volkswagen (OTCQX:VLKAY) scandal on German GDP.

What Is Moving the Markets

Here are the headlines moving the markets.

The Cost Of Denying Funds To Planned Parenthood

from the Congressional Budget Office

CBO has estimated the effect on direct spending of legislation that would permanently prohibit Planned Parenthood from receiving federal funds. CBO estimates that implementing such a bill would increase direct spending by $130 million over the 2016-2025 period. The difference in the estimated costs reflects the different time periods over which use of federal funds would be prohibited.

Oil nears $50 as U.S. stock-draw balances China data

LONDON (Reuters) - Brent crude oil rose toward $50 a barrel on Wednesday as a drawdown in U.S. crude oil stocks outweighed the negative impact of weak economic manufacturing data from China.

Volkswagen chief faces grilling by board over diesel scandal

BERLIN (Reuters) - Volkswagen Chief Executive Martin Winterkorn faces a reckoning with his board on Wednesday, summoned to explain the falsification of U.S. emissions tests in the biggest scandal in the 78-year history of the world's largest carmaker.

Bill Gross urges Fed to 'get off zero and get off quick' on rates

NEW YORK (Reuters) - Bond guru Bill Gross, who has long called for the Federal Reserve to raise interest rates, urged the U.S. central bank on Wednesday to "get off zero and get off quick" as zero-bound levels are harming the real economy and destroying insurance company balance sheets and pension funds.

Europe's resilience trumps another China slump

LONDON (Reuters) - European shares rose on Wednesday after business activity data pointed to steady growth across the continent, contrasting starkly with figures that showed the biggest contraction in China's manufacturing sector since the global financial crisis.

Futures rise as commodities recover some ground

(Reuters) - U.S. stock index futures were slightly higher on Wednesday as commodity prices recovered some ground and positive economic data from Europe helped negate the impact of weak manufacturing data out of China.

Special Report: Why RBS may pay small firms it allegedly ruined

LONDON (Reuters) - One morning in May, the chief executive of Royal Bank of Scotland, one of Britain's biggest banks, called together his senior executives for an urgent briefing. Ross McEwan had just attended a meeting with officials at the financial regulator and had important news.Â

23 Sep - China May Delay Japan 2% Inflation Tgt

Follow The Market Madness with Voice and Text on FinancialJuice


EMOTION MOVING MARKETS NOW: 29/100 FEAR

PREVIOUS CLOSE: 29/100 FEAR

ONE WEEK AGO: 16/100 EXTREME FEAR

ONE MONTH AGO: 5/100 EXTREME FEAR

ONE YEAR AGO: 24/100 EXTREME FEAR

How Much Do Inflation Expectations Matter For Inflation Dynamics?

from Liberty Street Economics

-- this post authored by Argia Sbordone and Sara Shahanaghi

Inflation dynamics are often described by some form of the Phillips curve. Named after A. W. Phillips, the British economist whose study of U.K. wage and unemployment data laid the groundwork, the Phillips curve denotes an inverse relationship between inflation and some measure of economic slack. A much-discussed issue in the literature is how forward-looking this relationship is. In this post, we address this question using a flexible version of the New Keynesian Phillips curve (NKPC) to illustrate the key role that expectations play in inflation dynamics.

Euro Jumps After ECB Members, Leaks Confirm No QE Boost In Near Term

In the aftermath of Yellen's "hung hold" decision, which left the world confused if the economy is getting better or worse, global equity markets proceeded to take both Europe and Japan to task, trying to push one of the last two remaining central banks to boost their QE. And until this morning it was unclear who was going to take the lead. Then, following comments over the past several hours from ECB governing council members Ewald Nowotny and Bostjan Jazbec, as well as a well-directed leak via Market News, we got confirmation that anyone hoping for Mario Draghi to blink first may be disappointed this time around.

First it was Nowotny who said that he is wary of increasing central-bank stimulus any time soon even as policy makers struggle to boost inflation. The question of whether more easing is needed "deserves a much more thorough examination," he said in a Bloomberg Television interview in Vienna on Wednesday. "Monetary policy should be a steady-hand policy. We shouldn't act in a too-active way."

On the option of new asset classes, "I personally wouldn't look at them but there's a discussion about what those classes would be," Nowotny said. "A prolongation of the program has certain signaling effects, not a very direct effect."

ECB policy makers have expressed concern about the impact of the U.S. Federal Reserve's decision this month to wait before making its first interest-rate increase since the financial crisis. Benoit Coeure, the ECB's markets chief, noted that there had been "a significant appreciation" of the euro against the currencies of the bloc's major trading partners. He said the Fed nevertheless confirmed the ECB's diagnosis "of the existence of risks in the global economy."

As Bloomberg adds, the Frankfurt-based ECB has already committed to pump more than 1.1 trillion euros ($1.2 trillion) into the 19-nation currency bloc, buying an average of 60 billion euros a ...

Deeper China downturn, weak Europe dents global growth outlook

(Reuters) - The outlook for the global economy became bleaker on Wednesday as signs of a deeper downturn in China emerged, despite massive policy stimulus, coupled with weak growth at best in Europe.

US Futures Surge Nearly 30 Points To Overnight Highs After Tumbling On Worst Chinese Data In 6 Years

In many ways, the overnight market has so far been a reversal of yesterday, when a stable Asia session (with China stocks rising) gave way to a European tumble which in turn dragged the US lower.

So far, we have seen Asian markets trade lower following the lacklustre performance of its global counterparts, while weak Chinese manufacturing PMI data, which as we reported earlier printed at levels not seen since March 2009 - further exacerbated losses.

The Hang Seng (-2.3%) led declines while the Shanghai Comp. (-2.2%) saw brokerages come under pressure after industry giant Citic Securities were suspected of illegally profiting from the stock market rescue. As Bloomberg reports, "a Chinese probe found evidence that Citic Securities Co., the nation's biggest brokerage, engaged in insider trading connected to the government's rescue of the stock market, people familiar with the matter said. Investigators suspect that the brokerage used advance knowledge of government-orchestrated stock purchases to execute trades that benefited the firm, said the people, who asked not to be identified because the matter is private. A Citic Securities spokeswoman said the company hasn't received any formal notification regarding the nature of the investigation. The China Securities Regulatory Commission didn't immediately respond to a request for comment."

In other words, after making selling illegal, China just made the only credible reason for buying - doing so to frontrun the central bank on leaked inside information - also illegal.

The result: Citic Securities' shares fell as much as 8% in Hong Kong, ...

Boeing to sell 300 jets to China firms, set up China plant: Xinhua

BEIJING (Reuters) - Boeing Co has signed deals to sell 300 aircraft to three Chinese firms and set up an aircraft plant in China, becoming the first U.S. firm to clinch a business tie-up in the country since Chinese president Xi Jinping began a U.S. state visit, the official Xinhua news agency said.

Total cuts capital spending and output target, reassures on dividend

LONDON (Reuters) - French oil major Total has cut its capital and operating expenses again in response to low oil prices and trimmed its ambitious output growth targets but reassured the market that its dividend was safe.

BBA Aviation proposes to buy Landmark Aviation for $2.07 billion

(Reuters) - British aircraft services company BBA Aviation Plc said it proposed to buy U.S. competitor Landmark Aviation [LNDAV.UL] for $2.065 billion, a deal that would make the combined entity the biggest fixed-base operator in the world.

Retailer Esprit swings to loss as China, weak euro weigh

HONG KONG (Reuters) - Clothing retailer Esprit Holdings Ltd swung to a loss for the year ended June, weighed down by a slowdown in China and a weak euro, and said its retail sales area may shrink this year due to store closures or downsizing of unprofitable outlets.

Glencore's Zambian unit plans to cut more than 3,800 jobs: government sources

LUSAKA (Reuters) - Glencore's Zambian unit Mopani Copper Mines (MCM) has notified the government that it plans to lay off more than 3,800 workers due to lower metal prices and high production costs, government sources said.

Early Headlines: China MFG PMI Drops Deeper, Stocks Headed Lower Globally, Capital Flight From China, Arctic Dinosaurs And More

Written by John Lounsbury

Early Bird Headlines 23 September 2015

Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.

early-bird-301-180

Volkswagen needs to explain away software to avoid criminal charges, experts say

NEW YORK/WASHINGTON (Reuters) - Volkswagen AG will probably have to show there was some legitimate reason to install software that led to false vehicle emissions tests if it is to avoid U.S. criminal charges, lawyers said on Tuesday.

Fed delay could spur more debt issues to fund share buybacks

NEW YORK (Reuters) - A record year for debt-funded stock buybacks may soon become even more rewarding for shareholders.

Boeing plans 737 plant in China, pledges no U.S. layoffs

SEATTLE (Reuters) - Boeing Co Chief Executive Dennis Muilenburg said on Tuesday he sees scope for additional 737 work going to China as the company continues to increase production rates of the single-aisle jetliner, though any changes would not come at the expense of U.S. jobs.

Repealing the 26th Amendment!

Written by Frank Li

I believe I have the most accurate diagnosis for America (Diagnosis for America (Version 3)) as well as the best solution (Solution for America (Version 3)).

One key component of my solution is to restore the minimum voting age of 21 (from 18), by repealing the Twenty-sixth Amendment!

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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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