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05Oct2015 Pre-Market Commentary: Futures Fractionally Higher, Saudis Cut Oil Prices, Crude Up 1.6%, Global Markets Off To Strong Start

Written by Gary

U.S. stock Futures indexes are set to open fractionally higher partially due to Saudi Arabia cutting prices on oil sales over the weekend. Continuing the bull rally on Friday is meeting with skepticism from some strategists and investors too.


Here is the current market situation from CNN Money

European markets are sharply higher today with shares in France leading the region. The CAC 40 is up 3.30% while Germany's DAX is up 2.47% and London's FTSE 100 is up 2.16%.

Bearamageddon' fears: Still, some strategists doubt U.S. stocks can keep making gains. Michael O'Rourke, chief market strategist at JonesTrading, said in a note that momentum and short covering were likely the only reasons the market rallied on Friday.

"The problem is that absent a change in the fundamental drivers behind the weekend, momentum and short covering only takes the market so far," he wrote. And when the S&P 500 is rallying alongside the dollar index, continued O'Rourke, investors should "question the validity of the move."

Jones said any further deterioration of economic data should put investors on "Bearmageddon watch—looking for indications the economy is rolling over while Fed policy is trapped at the zero bound."

What Is Moving the Markets

Here are the headlines moving the markets.

US services firms likely grew at a slower pace in September, economists forecast

WASHINGTON (AP) — The Institute for Supply Management reports on September growth at U.S. service firms at 10 a.m. Eastern. SLOWDOWN LIKELY: Economists believe that the ISM index fell to 57.5 in September from 59 in August, according to a survey by FactSet.

That would be the second straight drop, after the index reached a 10-year high in July of 60.3. Any reading over 50 shows that services firms are expanding. The ISM is a trade group of purchasing managers. Its services survey covers businesses that employ 90 percent of workers, including retail, construction, health care and financial services companies.

ECONOMY SLOWING?: Steady hiring in the past three years has added 8 million jobs to the U.S. economy, boosting Americans' ability to spend. Consumers have shopped more, spent more money at restaurants and taken more vacations.

Lower incomes and higher debts for the college educated weigh on family budgets

WASHINGTON (AP) — America's $1.2 trillion in student debt is having consequences in far-reaching ways. College dropouts and students who borrowed to attend for-profit colleges are at risk of default. Many Generation X parents — ages 35 to 50 — are still repaying their debt even as their children prepare to enter college and begin a second generation of family debt.

Some millennial's are delaying marriage and home ownership until their loans become less burdensome. Three trends show how the pressures from student debt are compounding: — FALLING INCOMES For people with college degrees but no graduate school education, incomes, after accounting for inflation, have declined, thereby reducing their ability to repay their loans. For a 23-to-29-year-old with a college degree, median . . .

What We Read Today 04 October 2015

Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.

This feature is published every day late afternoon New York time. For early morning review of headlines see "The Early Bird" published every day in the early am at GEI News (membership not required for access to "The Early Bird".).

BECOME A GEI MEMBER - IT's FREE!

Every day most of this column ("What We Read Today") is available only to GEI members.

To become a GEI Member simply subscribe to our FREE daily newsletter.

Wall Street set to stay in rally mode, taking a cue from global gains

Stock futures pointed to a Monday rally for Wall Street, continuing action seen late last week, in the week of disappointing U.S. jobs growth as global markets joined in with gains.

Meanwhile, a Federal Reserve official said an interest-rate increase could still happen this year even as the labor-market weakness spurred speculation the U.S. central bank won't hike until 2016.

Extending earlier gains, futures for the Dow industrials YMZ5, +0.62% rose 112 points, or 0.7%, to 16,490 on Monday, while those for the S&P 500 index ESZ5, +0.67% added 15.9 points, or 0.8%, to 1,959. Futures for the Nasdaq-100 index NQZ5, +0.63% rose 34 points, or 0.8%, to 4,295.

Twitter names Jack Dorsey permanent CEO

(Reuters) - Twitter Inc named co-founder and interim Chief Executive Jack Dorsey as its permanent CEO, ending months of speculation about who would take the reins at the company.

Pacific trade negotiators reach landmark deal, fight for approval to follow

ATLANTA (Reuters) - Pacific trade ministers have reached a deal on the most sweeping trade liberalization pact in a generation that will cut trade barriers and set common standards for 12 countries, an official familiar with the talks said on Monday.

Air France managers flee as staff storm meeting on job cuts

ROISSY, France (Reuters) - Air France managers fled a meeting on Monday about mass job cuts after angry staff waving banners and flags stormed the room, according to Reuters journalists at the scene.

U.S. to announce resolution over 2010 BP oil spill: statement

WASHINGTON (Reuters) - The United States on Monday will announce its resolution of federal and state claims against BP PLC over the its deadly Gulf of Mexico oil spill five years ago, the U.S. Department of Justice said in a statement.

American Apparel files for bankruptcy, operations to continue

(Reuters) - American Apparel Inc, known as much for its sexually charged advertising and controversial founder as for its fashion offerings, filed for Chapter 11 bankruptcy protection on Monday.

Tanker Rates Soar As China Hoards Saudi's "Cheap" Oil Amid Biggest Price Cut Since 2012

Oil up as Russia mulls OPEC talks, rig count drops

LONDON (Reuters) - Oil rose on Monday after Russia said it was ready to meet other producers to discuss the market, where prices have more than halved from last year's highs due to a supply glut.

Futures rise on fading chances of rate hike this year

(Reuters) - U.S. stock index futures rose on Monday, after Friday's tepid U.S. jobs data raised fresh doubts if the economy was strong enough to absorb an interest rate increase this year.

Legal troubles, market realities threaten Uber's global push

PARIS/SINGAPORE (Reuters) - Uber Inc's aggressive global expansion is looking costlier and riskier than ever as the company struggles with regulatory and competitive obstacles in major markets.

Nelson Peltz's Trian Fund takes $2.5 billion stake in GE

(Reuters) - Nelson Peltz's Trian Fund Management said it bought $2.5 billion in shares of General Electric Co since May, making it one of the top 10 shareholders in the industrial conglomerate.

Child Nutrition Programs: Spending And Policy Options

from the Congressional Budget Office

Several federal programs support children's nutritional needs. In 2014, the federal government spent about $20 billion to reimburse schools, child care centers, and after-school programs for children's meals. Those programs benefit mainly school-age children from low-income households. Other nutrition programs provide benefits directly to such households: the Supplemental Nutrition Assistance Program (SNAP; formerly the Food Stamp program) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).

Gundlach Explains Why The Market Hasn't Crashed Yet: "People Are Holding And Hoping"

Emerging Market Meltdown May Plunge Global Economy Into Recession

Early Headlines: Unprofitable Coal, TPP Charade, Varoufakis Cut Off Russian TV, Grand China Plans Stymied, 1.5 Mln Refugees For Germany And More

Written by John Lounsbury

Early Bird Headlines 05 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.

early-bird-301-180

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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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