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11Nov2015 Pre-Market Commentary: US Futures Up Fractionally, Oil Glut Pushing Prices Down, Investors Concerned About Fed's Rate Hike And China's Woes

Written by Gary

U.S. stock future indexes are up fractionally on a light financial reporting day. Crude oil is still actively testing support as the US dollar consolidates before moving higher. Investor worries that they had last week are still here and that include weak global economies, Possible recession, Fed rate hike and China's slowdown. Markets are expected to open fractionally higher and then do the morning dip.


Here is the current market situation from CNN Money

European markets are broadly higher today with shares in Germany leading the region. The DAX is up 1.20% while France's CAC 40 is up 1.00% and London's FTSE 100 is up 0.62%.

What Is Moving the Markets

Here are the headlines moving the markets.

Boeing drops GKN for part of 737MAX plan, delivery on track for 2017

(Reuters) - Boeing Co said it has dropped GKN PLC as a supplier for one component on its 737 MAX jetliner, while it reaffirmed its expectation for delivery of the jet to customers beginning in 2017.

Alibaba says Singles' Day sales surpass last year's $9.3 billion total

BEIJING (Reuters) - Chinese e-commerce giant Alibaba Group Holdings Ltd said on Wednesday the value of merchandise it has sold so far during the Singles' Day online shopping extravaganza had surpassed last year's total of $9.3 billion.

AB InBev launches SAB bid, to sell MillerCoors stake

BRUSSELS/LONDON (Reuters) - Anheuser-Busch InBev , the world's biggest brewer, launched its $100 billion-plus offer for nearest rival SABMiller on Wednesday and agreed to sell the latter's stake in U.S. venture MillerCoors to help win regulatory approval.

Macy's reports lower-than-expected sales, not to form REIT

(Reuters) - Macy's Inc reported lower-than-expected quarterly net sales as customers cut back on expenditure and a strong dollar discouraged tourists from spending at its stores.

UniCredit to cut 18,200 jobs, boost capital

MILAN (Reuters) - UniCredit , Italy biggest bank by assets, plans to slash thousands of jobs and restructure or exit its retail business in Austria and leasing operations in Italy as it moves to bolster its financial strength and avoid a capital increase.

Futures rise as investors look past China factory data

(Reuters) - U.S. stock index futures were higher on Wednesday after mixed economic data out of China suggested that Beijing may need to provide further stimulus to kickstart growth, even as investors brace for a possible rise in U.S. interest rates next month.

Oil prices drop after U.S. inventories rise

LONDON (Reuters) - Crude oil prices fell on Wednesday after industry data showed an increase in U.S. stockpiles, and as analysts said that U.S. output had been surprisingly resilient in the face of lower prices.

Macy's Blames "Tepid Spending" On Revenue Miss: Same Store Sales Tumble; Slashes Guidance

The "unexpected" weakness among US consumption, that segment accountable for 70% of US GDP, continues this morning when moments ago Macy's reported a trifecta of weak data, reporting a miss on Q3 sales which came at $5.87 billion below the $6.1 billion expected, and down from the $6.2 billion a year ago, but also a plunge in comparable store sales which tumbled by 3.9%, far worse than the expected drop of -0.4%, and nearly three times as bad as the 1.4% drop a year ago.

Cash flow plunged: cash provided by operating activities was $278 million in the first three quarters of 2015, compared with $841 million in the first three quarters of 2014.

Finally, M also slashed its full year same store guidance down from flat to -1.8% to -2.2% with sales projected to drop -2.7% to -3.1%, compared to a previous guidance of -1%, as contrary to the propaganda, the discretionary spending of the US consumer is bad and getting worse by the day.

Here is the company's explanation for this debacle:

“We are disappointed that the pace of sales did not improve in the third quarter, as we had expected. Spending by domestic customers remained tepid, especially in key apparel and accessory categories. Simultaneously, the slowdown in buying by international visitors continued to significantly impact Macy’s and Bloomingdale’s stores in tourist centers, which are some of our company’s largest-volume and most profitable locations,†said Terry J. Lundgren, chairman and chief executive officer of Macy’s, Inc.

“Moving forward, we are accelerating steps needed to adapt in response to changing customer shopping preferences so we can restore our annual comparable sales growth on an owned plus licensed basis in the years ahead to the level of 2 percent to 3 percent while re-attaining an EBITDA rate as per ...

Forget Oil, Base Metals Collapse 50% From 2011 Highs

Bloomberg's global commodities index is testing fresh 16 year lows but this is often excused on the basis that it includes crude oil weakness - which will mean-revert higher any day now. Perhaps the bigger, even louder warning signal is directly from the basest of base industrial metals... which are now down 50% from their 2011 "reflate the world" highs.

The index - based on copper, aluminum, zinc, nickel, lead, and tin - is not flashing 'recovery is coming' headlines...

But then again - when has that mattered for stocks...

Charts: Bloomberg

"It's A Bloodbath" - Here Is The Biggest Casualty Of Canada's Recession

In the past year, we have extensively profiled the collapse of ground zero of Canada's oil industry, Calgary, as a result of the plunge in the price of oil, in posts such as the following:


"Canada Crude Contagion: Calgary Home Prices Drop Most In 2 Years"

"Canada's Biggest Oil Casualty To Date: Calgary's Nexen Shutters Oil Trading Desk"

"The Canadian Housing Bubble Has Begun To Burst"

"Canada's Oil Patch Confidence Crashes"

"Canada Mauled by Oil Bust, Job Losses Pile Up â€" Housing Bubble, Banks at Risk"

"The Stage Is Set For A Massive Housing Market Correction in Canada's Oilpatch"

Since then it has only gotten worse for Canada, and as of two it culminated with the first official recession in 7 years.

Additionally, in September we profiled the expected collapse of the Calgary commercial real estate market when we reported that in ...

Coming to a Balance Sheet Near You: $2 Trillion in Leases

Some of America’s best-known companiesâ€"names like AT&T, CVS Health and Delta Air Linesâ€"likely will soon have to effectively boost the debt they report on their balance sheets by tens of billions of dollars.

Global Stocks Shrug Off Mixed China Signals

Global stocks were mostly higher as investors digested mixed readings on China’s economy.

Need to Know: Sheep-like thinking over a Fed move could send investors over a cliff

The “sure-thing†Fed rate increase for December isn’t such a done deal for some strategists. They’re still making the case for no move in December. Are you ready?

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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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