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01Oct2015 Pre-Market Commentary: U.S. Stock Future Indexes Fractionally Higher, Oil Slipping Off Highs, China's PMI Not So Good

Written by Gary

U.S. futures were fractionally higher despite 'not so good' manufacturing PMI data out of China and Europe. Basically, global equities are continuing where they left off yesterday, still in a downward trend in a sideways channel started August 25th.

Markets are expected to open fractionally higher and may end the day higher without breaking any resistance lines.

Here is the current market situation from CNN Money

European markets are mixed today. The FTSE 100 is up 0.72% while the CAC 40 gains 0.27%. The DAX is off 0.45%.

What Is Moving the Markets

Here are the headlines moving the markets.

Volkswagen seeks to boost finances to meet emission scandal costs

BERLIN (Reuters) - Volkswagen is looking at ways to cut costs and boost cash flow and could sell more shares if the price of clearing up a scandal over its rigging of diesel emissions tests puts its credit rating at risk.

HP board approves split, expects completion on Nov. 1

(Reuters) - Hewlett-Packard Co said its board on Wednesday approved the previously announced split of the company into two separate entities - Hewlett Packard Enterprise Co and HP Inc.

Alliance Trust CEO steps down as Elliott forces overhaul

LONDON (Reuters) - Katherine Garrett-Cox, one of the City of London's most high profile women CEOs, is to step down from the board of Alliance Trust in an overhaul of the fund manager which has faced pressure from activist investor Elliott to make changes.

USDJPY Tumbles, Drags Futures Lower, After BOJ Said To See "Little Immediate Need" For More QE

And it was going so well overnight: with the USDJPY surging as high as 120.25 overnight, before finding its prefered equilibrium spot at 120, the Yen carry was doing its centrally-planned and mandated job of supporting market... and then a Bloomberg headline yanked the carpet from underneath it:



More details from Bloomberg:

Bank of Japan officials see little need for an immediate expansion of monetary stimulus and would prefer to hold off to get a clearer picture of the economic outlook, according to people familiar with their deliberations.

Board members who gather for Oct. 6-7 policy meeting want opportunity to observe further economic data and developments in financial markets at home and abroad, according to the people, who asked not to be named because talks are private

Needless to say this is a problem for liquidity-addicted algos: with the ECB last week making a solid case against more easing any time soon, all hopes were on the BOJ's October meeting to boost QE.

The BOJ, however, realized there are little incremental debt sellers that it can monetize debt from, as explained here on September 4 in "The IMF Just Confirmed The Nightmare Scenario For Central Banks Is Now In Play", and a result suddenly there is virtually nothing propping up the USDJPY which is about 200 pips rich relative to the Nikkei.

Which is why said most important carry trade for global risk markets, the USDJPY, suddenly took a 30 pip move lower, and dragged US equity futures down with it.

September 2015 Job Cuts High In Computer Sector. Q3 Job Cuts Heaviest Since 2009.

from Challenger Gray and Christmas

The third quarter ended with a surge in job cuts, as U.S.-based employers announced plans to shed 58,877 in September, a 43 percent increase from the previous month.

Frontrunning: October 1

After Rough Quarter, Investors Buckle Up (WSJ)

From heroes to bystanders? Central banks' growth challenge (Reuters)

Russian Airstrike in Syria Targeted CIA-Backed Rebels, U.S. Officials Say (WSJ)

Kremlin says Syria air strikes target list of groups, not just Islamic State (Reuters)

That's information warfare? Russia accused of killing civilians in Syria (RT)

Euro zone factory growth eases in August despite modest price rises (Reuters)

How Glencore's Crazy Month Makes Greek Banks Look Tame (BBG)

China Begins Disclosing Reserves to IMF (WSJ)

Hurricane Joaquin to bring storm surge to Bahamas: U.S. monitor (Reuters)

Ousted Brookings economist lashes back at Warren (Hill)

BOE Says Market May Be Underpricing Risks of ...

Futures rise as investors await host of data

(Reuters) - U.S. stock index futures started the last quarter of the year on a positive note on Thursday as weak data from China raised hopes of more stimulus measures from Beijing and investors awaited a slew of U.S. data.

Global economy loses steam as Chinese, European factories falter

BENGALURU/SYDNEY (Reuters) - The world economy lost momentum in September, with China's vast factory sector shrinking again and euro zone manufacturing growth weakening slightly, both casualties of waning global demand.

Economics 101 Strikes Again As Wal-Mart Wage Hikes Prompt Breadwinner Layoffs At Headquarters

In late July we suggested that Wal-Mart may be ready to fire as many as 1,000 employees at its home office in Bentonville. Our suspicions arose from an internal memo circulated at local staffing firm Cameron Smith & Associates. Here's what it said:

"Please remember, these people are our neighbors and friends. You have a skill that will be very much in need when this goes down. You are experts in the job market and you know what it takes to get hired. This is a time for us to step up and do what we can to help."

This, as we pointed out at the time, is economics 101. When your business lives and dies by the idea of "everyday low prices" - indeed, when low prices become something of a religion, passing on rising labor costs to consumers simply isn't an option and when Wal-Mart committed earlier this year to spend around $1 billion to boost the wages of its lowest paid employees it was only a matter of time before the job cuts started rolling in.

Of course Wal-Mart tried to avoid this by squeezing the supply chain, first with requests that suppliers cut back on marketing, then with the imposition of storage fees, and finally with demands that suppliers pass along savings from th ...

Glencore tells investors debt cutting on track

LONDON (Reuters) - Glencore has told investors it is on track to cut debt and shown new data about its secretive trading unit in a fresh attempt to dispel the market worries over its finances which knocked 30 percent off its share price on Monday.

Fourth Quarter Begins With Global Stock Rally As Bad Economic News Is Again Good

The bad economic news started with Japan's Large Manufacturing Tankan missing expectations of +13, printing at +12 while, as Goldman summarized, "outlook DIs show across-the-board deterioration in both manufacturing and non-manufacturing industries" once again bringing up the question whether the BOJ will boost QE later this month.

Then it was China's official and Caixin PMIs which as we reported, confirmed the economy remains in contraction, even if it is no longer in freefall mode. The Markit final September print was 47.2, the lowest since March 2009 while the Composite PMI was the lowest ever. And since Chinese stocks were closed for the next week, it was up to S&P futures to set the mood, which they did by soaring as soon as the disappointing PMI numbers hit:

Then it was Europe's turn, where disappointing PMI came fast and furious. The final Euro area manufacturing PMI came in at 52.0 in September, in line with the flash. Between August and September, the Euro area manufacturing PMI fell by 0.3pt from 52.3 to 52.0

On a country basis, German manufacturing PMI fell on the month (53.3 to 52.3), as did the Italian (53.8 to 52.7) and Spanish prints (53.2 to 51.7). Ironically the only rebound was in what many suggest is core Europe's worst performing economy, France, where the manufacturing PMI strengthened from 48.3 to 50.6.

According to Goldman, "The PMI breakdown across subcomponents in September was weak. Both manufacturing output and employment fell, by 0.4pt and 0.5pt respectively. The order-to-stock differ ...

UniCredit appoints Mingrone as group CFO

MILAN (Reuters) - Italy's biggest bank by assets, UniCredit , appointed Bernardo Mingrone as its new group chief financial officer, it said on Thursday.

Global stocks fight back after third quarter beating

LONDON (Reuters) - World stocks and commodities got 2015's final leg off to a solid start on Thursday after a bruising third quarter, as surveys of Chinese factory activity proved sounder than many global investors had feared.

Cruise-Liner Shares Leave Many Stocks in Their Wake

Lower energy prices and higher consumer spending have helped turn the tide for cruise liners such as Carnival, Royal Caribbean and Norwegian; their shares have outperformed the S&P 500 since 2012.

Toshiba may axe TV & PC workers, seek partner for nuclear operations-CEO

TOKYO (Reuters) - Toshiba Corp may lay off staff in its underperforming home appliances, TV and PC businesses and seek a partner for its nuclear operations to overhaul the company after a $1.3 billion accounting scandal, its chief executive said on Thursday.

Slide in Manufacturing Continued in China Last Month

Some economists say the Chinese economy may be more resilient than it seems, while manufacturing activity in Europe was found holding steady at low-level growth.

Early Headlines: Japan Recession, Japan Bubble, China Mfg Still Contracting, EU Deflation, Afghan Army Recaptures City And More

Written by John Lounsbury

Early Bird Headlines 01 October 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.


After Rough Quarter, Investors Buckle Up

Investors are bracing for more large price swings across stocks, bonds and commodities heading into a month that is associated with market tumult.

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