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06Oct2015 Pre-Market Commentary: U.S. Futures Down Fractionally, Investors Continued To Be Worried About A Global Slowdown And The Fed Not Raising Rates This Year

Written by Gary

U.S. stock futures indexes are fractionally lower this morning trending down from yesterday's close. Volatility is expected for the remainder of the week as investors digest global economy news. Markets are expected to open fractionally lower.

Here is the current market situation from CNN Money

European markets are higher today with shares in Germany leading the region. The DAX is up 0.43% while France's CAC 40 is up 0.35% and London's FTSE 100 is up 0.19%.

What Is Moving the Markets

Here are the headlines moving the markets.

Futures fall after S&P 500's five-day rally

(Reuters) - U.S. stock index futures fell slightly on Tuesday after a rally spurred by fading expectations of an interest rate hike this year saw the S&P 500 post its fifth advance in a row.

Volkswagen says eight million cars in EU affected by cheat software: letter

BERLIN (Reuters) - Volkswagen said 8 million diesel vehicles in the European Union were fitted with software capable of cheating vehicle emissions tests, according to a copy of the letter sent to German lawmakers and seen by Reuters.

French PM calls for severe punishment after violence at Air France

PARIS (Reuters) - The people who attacked managers at Air France on Monday, when the human resources chief's shirt was ripped off in images that went around the world, must be severely punished, Prime Minister Manuel Valls said on Tuesday.

Big U.S. firms hold $2.1 trillion overseas to avoid taxes: study

WASHINGTON (Reuters) - The 500 largest American companies hold more than $2.1 trillion in accumulated profits offshore to avoid U.S. taxes and would collectively owe an estimated $620 billion in U.S. taxes if they repatriated the funds, according to a study released on Tuesday.

Shell CEO sees first signs of oil price recovery

LONDON (Reuters) - Oil markets are beginning to recover but the scale of global oversupply means prices may rise only slowly, the chief executive of Royal Dutch Shell Plc said on Tuesday.

Air France fracas makes mockery of France, no to nationalization: minister

PARIS (Reuters) - Air France is in a fragile financial condition but its renationalization is not on the agenda, Transport Minister Alain Vidalies said on Tuesday, a day after violence by employees interrupted a meeting about drastic cost cuts.

Historic Pacific trade deal faces skeptics in U.S. Congress

ATLANTA (Reuters) - Twelve Pacific Rim countries on Monday reached the most ambitious trade pact in a generation, aiming to liberalize commerce in 40 percent of the world's economy in a deal that faces skepticism from U.S. lawmakers.

Gold to double in price and surpass its inflation-adjusted high of $2,500 per ounce in the next 3 to 5 years

The bullish outlook for gold prices was covered by Dow Jones Marketwatch yesterday.

“Gold prices may be ready to make a significant move higher as holdings of the precious metal in the SPDR Gold Trust exchange-traded fund climb to their highest level in more than two months.â€

GoldCore believes that gold may have “bottomed in the summer, and could climb to as high as $1,300 an ounce by the end of this year. Longer term, Byrne expects gold to double in price and surpass its inflation-adjusted high of $2,500 per ounce in the next 3 to 5 years.â€

The metal remains undervalued when compared to assets such as stocks, bonds and property "all of which have surged in recent years", he said.

The full article from Marketwatch can be read here Gold may be on verge of a breakout higher as ETF holdings rise.

Read more on the blog

Today’s Gold Prices: USD 1136.90, EUR ...

Yuan Rising: China Surpasses Japan To Claim Number Four Spot In Most Used Global Currencies

Bungled efforts to mark a “managed†transition to a new currency regime notwithstanding, China seems generally to be doing a decent job of gradually paving the way for a world in which the yuan plays a far greater role in global trade and investment.

That is, if we look beyond the recent FX market turmoil, the picture that emerges is one in which China has managed to convince Russia to settle oil imports in renminbi and in which the AIIB and Silk Road funds are set to help establish the yuan as the funding currency for billions in development projects.

While we may still be years away from the fabled “yuan hegemony,†we got still more evidence on Tuesday that despite the currency’s rather uncertain medium-term trajectory and despite a still closed capital account, China is moving ever closer to establishing the RMB as a reserve currency. Here's WSJ:

In August, for the first time, the yuan moved ahead of Japan’s yen for fourth place in a league table of the most-used currencies for cross-border payments compiled by Swift, the international payments provider.

A “substantial†increase in usage of the currency in the final week of August was triggered by market volatility caused by concerns about the Chinese economy and Beijing’s devaluation of the yuan, Swift said in a report.

the Chinese currency has been gaining traction. As recently as August 2012, the yuan was ranked No. 12 on Swift’s list with just a fraction of its current share of the global payments market.

World's Largest Sovereign Wealth Fund Is Forced To Begin Liquidating Assets

One of the biggest stories of this summer, as previewed originally here in November of 2014, has been the dramatic shift in the direction of capital flow from toward emerging markets (and China), to away from emerging markets (and China). The reason for this has been the double whammy of the soaring dollar, and the collapse in oil prices which as we said one year ago, would lead to the first negative global petrodollar export balance in 18 years...

... a topic which the IIF finally picked up and expanded on last week when it likewise calculated that capital outflows from emerging markets are on track to exceed inflows this year for the first time since 1988.

We first dubbed this phenomenon Reverse QE, a name which Deutsche Bank subsequently "reverse-engineering" into Quantitative Tightening, a different name f ...

Frontrunning: October 6

Asian shares rise on fading Fed rate views (Reuters)

U.S. Equity Futures Fall, Risking S&P 500 Rally as Copper Slides (BBG)

More biotech pain, this time from the WSJ: For Prescription Drug Makers, Price Increases Drive Revenue (WSJ)

VW Will Delay or Cancel Non-Essential Investments Due to Scandal (BBG)

Russia Rejects No-Fly Zone Over Syria as Clerics Urge Reprisals (BBG)

Historic Pacific trade deal faces skeptics in U.S. Congress (Reuters)

German Factory Orders Unexpectedly Fall Amid Economic Risks (BBG)

U.S. Probes Alleged U.N. Bribe Scheme (WSJ)

Fuel Prices Fall, but FedEx and UPS Boost Surcharges (WSJ)

Yuan Overtakes Yen as World's Fourth Most-Used Payments Currency (BBG)

Trans-Atlantic Data Pact Struck Down by EU's Highest Court (

Yield of 0% a First at 3-Month T-Bill Sale

The U.S. Treasury sold a new government security maturing in three months at a yield of zero for the first time on record amid the highest demand since June.

Bad Bets Take Down a Pair of Hedge Funds

Hedge fund MeehanCombs is closing after soured bets on junk bonds and a European recovery. Another fund, Armored Wolf, is returning client money, the latest fallout of a messy quarter in markets.

August 2015 CoreLogic Home Prices Year-over-Year Growth Rate Now 6.9%.

CoreLogic's Home Price Index (HPI) shows that home prices in the USA are up 6.9% year-over-year year-over-year (reported up 1.2% month-over-month). There is considerable backward revision in this index which makes monthly reporting problematic. CoreLogic HPI is used in the Federal Reserves's Flow of Funds to calculate the values of residential real estate.

Has Liquidity Risk In The Corporate Bond Market Increased? Second In A Six-part Series.

from Liberty Street Economics

-- this post authored by Tobias Adrian, Michael Fleming, Or Shachar, Daniel Stackman, and Erik Vogt

Recent commentary suggests concern among market participants about corporate bond market liquidity. However, we showed in our previous post that liquidity in the corporate bond market remains ample. One interpretation is that liquidity risk might have increased, even as the average level of liquidity remains sanguine. In this post, we propose a measure of liquidity risk in the corporate bond market and analyze its evolution over time.

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