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09Dec2015 Pre-Market Commentary: US Futures Down Fractionally, China's Woes And Oil Glut Front And Center In Investors Concerns As Oil Inventories Are Reported This Morning

Written by Gary

U.S. stock future indexes are set for a third day down and are expected to open fractionally lower. Oil inventory reports are due out at 10 am and could send the already weak crude prices tumbling into territory not seen since 2003. Euroasia markets are fractionally down with the Nikkei closing down almost one percentage point.


Here is the current market situation from CNN Money

European markets are mixed. The FTSE 100 is higher by 0.02%, while the CAC 40 is leading the DAX lower. They are down 0.87% and 0.39% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

Scams, ignorance burn foreign buyers of Detroit properties

DETROIT (Reuters) - Buying a property in Detroit a few years ago seemed like a steal for overseas investors " as little as a few thousand dollars would get them a house in a city that had hit rock bottom and could only see better times.

Lawmakers worry AB InBev beer deal will hurt craft brewers

WASHINGTON (Reuters) - Anheuser-Busch InBev , the world's biggest brewer, faced tough questions on Tuesday from U.S. lawmakers unhappy over its plan to buy SABMiller due to concerns the deal will hurt the fast-growing U.S. craft beer industry.

Adidas expects big rise in cost of sourcing products by 2020

BERLIN (Reuters) - German sportwear firm Adidas expects a significant rise in the cost of sourcing products by 2020 due to increasing labor and material costs, but should be able to compensate by lifting prices and cutting overheads, it said on Wednesday.

Dow Chemical, DuPont in merger talks: sources

(Reuters) - Dow Chemical Co and DuPont are in talks to merge, creating a chemicals giant with a market value of more than $120 billion that could then break up into different businesses, people familiar with the matter said on Tuesday.

Yahoo shelves plan to spin off Alibaba stake

(Reuters) - Yahoo Inc said it shelved a plan to spin off its stake in Alibaba Group Holding Ltd, citing tax concerns, and instead will create a company to hold all of its assets excluding its stake in the Chinese e-commerce giant.

Futures little changed as commodity prices stabilize

(Reuters) - U.S. stock index futures were little changed on Wednesday after China's consumer inflation rose slightly but remained under the government's 3 percent target for the year and commodity prices stabilized.

VW's CO2 cheating affects far fewer cars than feared

BERLIN (Reuters) - The number of cars whose carbon emissions Volkswagen understated is far fewer than feared, it said on Wednesday, providing some relief for the automaker as it battles a wider diesel-emissions scandal affecting 11 million cars worldwide.

Philips in lighting partnerships with Cisco, SAP and Bosch

AMSTERDAM (Reuters) - Philips has entered strategic partnerships with Cisco , SAP and Bosch [ROBG.UL] under which the Dutch company will become their preferred supplier for networked lighting.

Yogawear retailer Lululemon's quarterly profit falls 12 pct

(Reuters) - Canadian yogawear retailer Lululemon Athletica Inc reported a 12 percent fall in third-quarter profit as costs soared.

Freeport McMoRan, World's Second Largest Copper Miner, Suspends Dividend

They are dropping like flies. A day after Kinder Morgan announced it would slash its dividend by a more than expected 74% overnight to reflect collapsing commodity prices and a debt-heavy balance sheet, moments ago Freeport McMoRan, the world's second largest copper miner behind Codelco and one of the world's biggest producers of gold, just announced it too would suspend its dividend of $0.20, an action expected to save some $240 million per year.

This follows a comparable dividend cut announced in March of 2015 when the company slashed the bulk of its dividend by 84%, from $0.3125 to $0.05 quarterly.

This however may not be sufficient to stem the bleeding and prevent further turmoil for the company which has seen its stock price drop to the lowest level in over a decade, and as a result the company is also slashing its CapEx guidance from $2 billion for 2016 and 2017 to just $1.2 and $1.8 billion respectively.

The headlines:

FREEPORT-MCMORAN SUSPENSION OF STOCK DIV

FCX IN PACT W/ BANK GROUP TO AMEND LEVERAGE RATIO ON TERM LOAN

FCX IN PACT W/ BANK GROUP TO AMEND LEVERAGE RATIO ON REVOLVER

FCX EVALUATING SALE OF MINORITY INTERESTS IN SOME MINING ASSETS

FREEPORT-MCMORAN NOW SEES '17 CAPEX $1.2B, SAW $2.0B

FREEPORT-MCMORAN NOW SEES '16 CAPEX $1.8B, SAW $2.0B

From the release:

Freeport-McMoRan Inc. (FCX) today announced additional actions in response to market conditions, including further revisions to its oil and gas capital spending plans, additional curtailments in copper and molybdenum production and the suspension of its common stock dividend.

Oil & Gas Review. As previously reported on August 5, 2015, Freeport-McMoRan Oil & Gas (FM O&G) is deferring investments in several long-term projects in response to oil and gas market conditions. Following an ongoing review, capital expenditures for 2016 and 2017 have been reduced furth ...

Iraq Seeks To Cancel Security Agreement With US, Will Invite Russia To Fight ISIS

Most Iraqis, be they civilians, military personnel, or government officials, do not trust Americans.

At a base level, that makes all kinds of sense. After all, the US did launch what amounted to a unilateral invasion of the country just a little over a decade ago, and when it was all said and done, a dictator was deposed but it's not entirely clear that Iraqis are better off for it.

ISIS controls key cities including the Mosul, the country's second largest, and security is a daily concern for the populace. The Americans are still seen - rightly - as occupiers, and Washington's unwillingness inability to effectively counter ISIS has created a culture of suspicion in which most Iraqis believe the US is in cahoots with the militants for what WaPo described as œa variety of pernicious reasons that have to do with asserting U.S. control over Iraq, the wider Middle East and, perhaps, its oil.

Some of the distrust, the US contends, is fostered by Iran. Tehran wields considerable influence both within the Iraqi military and in political circles in Baghdad. When Ash Carter announced that the US was set to send an œexpeditionary targeting force to the country to assist in raids on Islamic State targets, PM Haider al-Abadi flatly rejected the proposal, saying that œIraq does not need foreign ground combat forces on Iraqi land." Abadi rejected a similar Pentagon trial balloon involving Apaches helicopters last month.

Frontrunning: December 9



Gloomy mood prevails despite calmer commodities (Reuters)

A Strong Dollar Hurts China More Than the U.S. (BBG)

China Sets Yuan at Four-Year Low in 'Stress Test' (WSJ)

Dow Chemical and DuPont Are in Advanced Talks to Merge (WSJ)

Yahoo scraps plan to spin off Alibaba stake (Reuters)

Electrolux Downsizes Small Appliances Unit, Cuts Jobs (WSJ)

House Votes to Require Visas for Iraq, Syria Travelers (BBG)

It's All Gone Wrong for One of World's Biggest Mining Companies (BBG)

U.S. conducting 'serious review' of alleged Iran missile test (Reuters)

Citigroup Sued by Failed Hedge Fund Over 2008 Crisis Trades (BBG)

Volkwagen Finds No Illegal Changes in Carbon-Dioxide Probe (

Yahoo Shelves Plans to Spin Off Alibaba Stake

Yahoo shelved plans to spin off its stake in Alibaba, dealing a blow to CEO Marissa Mayer's turnaround effort and prolonging uncertainty surrounding the company.

Less Than Zero: Living With Negative Interest Rates

There is some good and bad in the upside-down world of negative interest rates, in which banks impose a levy on customers to hold their money. How this scenario will play out is anyone's guess.

China Sets Yuan at Weakest Level Since 2011

Facing currency outflows and a weakening economy, Beijing guided the yuan to its weakest level against the dollar in more than four years.

Turkey's Time Has Come

from STRATFOR

-- this post authored by Reva Bhalla

With the Turkish downing of a Russian fighter jet still fresh on his mind, Russian President Vladimir Putin had some choice words for his erstwhile ally Turkish President Recep Tayyip Erdogan when he delivered his state of the nation speech to the Russian Federal Assembly on Dec. 3. Putin angrily lamented "we were prepared to cooperate with Turkey on most sensitive issues and go further than their allies. Allah knows why they did it. Apparently Allah decided to punish the ruling elite in Turkey by taking their sanity."

Craig Stephen's This Week in China: Luxury brands could be hit as China tries to keep money at home

China's government is likely to limit Chinese from spending their money abroad, says Craig Stephen.

Mark Hulbert: This is what it will take for gold to become a 'buy'

Contrarian investors are waiting until there's excessive bearishness, writes Mark Hulbert.

Forget e-books, this may be the real future of reading

Audiobooks racked up $1.5 billion in sales last year, and remain the fastest-growing segment of the book publishing industry.

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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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