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15Dec2015 Pre-Market Commentary: US Futures Fractionally In The Green, Oil Above 36 And Slipping, Investors Nervous Ahead Of FOMC Rate Decision

Written by Gary

US stock future indexes are up fractionally, Europe is solidly in the green and Asia closed lower. Investors jitters over the Fed's interest rate hike tomorrow, China's woes and falling oil prices look to have temporally subsided.

The high-yield bond market has also plunged drastically due to its ties to crude prices. Markets are expected to open higher, watch for a morning dip.


Here is the current market situation from CNN Money

European markets are sharply higher today with shares in Germany leading the region. The DAX is up 2.23% while France's CAC 40 is up 1.98% and London's FTSE 100 is up 1.66%.

What Is Moving the Markets

Here are the headlines moving the markets.

Qualcomm to maintain current corporate structure

(Reuters) - Qualcomm Inc has decided not to separate its chipmaking and technology licensing businesses, concluding a six-month strategic review pushed by hedge fund Jana Partners.

Stock futures higher as oil edges up; Fed in focus

(Reuters) - U.S. stock index futures were higher on Tuesday, ahead of a widely expected increase in interest rates later in the week, as crude oil prices clawed back some losses.

Dow, DuPont eye big tax savings in rare merger of equals

NEW YORK (Reuters) - The tax-free treatment of the spin-offs Dow Chemical Co and DuPont plan to carry out after they merge their businesses is a prime driver of the deal, potentially saving tens of billions of dollars, industry experts said.

Oil edges up as multi-year lows trigger buying

LONDON (Reuters) - Oil prices edged higher on Tuesday as a slump to near 11-year lows in the previous session triggered investors' buying appetite.

Global stocks rise but oil, Fed keep investors nervous

LONDON (Reuters) - Stocks rose in Europe and Asia on Tuesday, though volatile oil prices kept investors cautious before a widely anticipated increase in U.S. interest rates later in the week.

SMFG agrees to buy GE's Japan leasing business for $4.8 billion

TOKYO (Reuters) - Sumitomo Mitsui Financial Group Inc (SMFG) agreed to buy General Electric's Japanese leasing business for $4.8 billion, the two companies said on Tuesday.

Janet Yellen: An orthodox economist for unorthodox times

WASHINGTON (Reuters) - Janet Yellen is guiding the Federal Reserve towards its first rate rise in a decade armed with traditional economic models that some economists worry could fail her in a world of massive money printing and near zero rates.

Hong Kong watchdog fines JPMorgan for dark pool, control failures

HONG KONG (Reuters) - Hong Kong's securities watchdog said on Tuesday it had fined JPMorgan HK$30 million ($3.87 million) for a range of control failures, including breaches in its dark pool business.

China ready to moderate sharp offshore yuan falls: sources

BEIJING (Reuters) - China's central bank is on guard against a sudden attack on the yuan in offshore markets, and is ready to intervene if the gap between offshore and onshore exchange rates becomes destabilizing, sources involved in policy discussions say.

Empire Manufacturing Contracts For 5th Month As Workweek Crashes Near Record Lows

While Empire Fed Manufacturing survey modestly beat expectations (-4.6 vs -7 exp), it has been in contraction for 5 straght months. The biggest driver of the 'beat' was a massive surge in 'hope' (six month outlook surged from 20 to 38.5 - its biggest percentage gain since Nov 2011). At the same time as hope soars, employment tumbles to 6 year lows and average workweek collapses to its lowest since the peak of the crisis in 2009.

5th straight month of contraction...

As Hope surges and Average workweek collapses...

And Employment hits 6 year lows...

Time to raise rates!!

Charts: Bloomberg

Russia Sees No Oil Price Recovery In The Coming 7 Years

Oil has given up all the overnight gains as we head towards the open and algos wake up to the reality that Russia's deputy FinMin believes...

Submitted by Andy Tully via OilPrice.com,

"Lower for longer" is becoming the catch phrase of the global oil industry, as an increasing number of energy executives and government officials alike see no opportunity for prices to rebound to their levels of mid-2014.

The latest such forecast came from Maxim Oreshkin, Russia's deputy finance minister, who says he expects oil to sell for no more than $40 to $60 per barrel for the next seven years, and that Moscow is adjusting its budget planning accordingly, given that half the country's annual budget relies on revenues from oil and gas sales.

"In our estimates, one should hardly expect any serious growth of the oil price above $50," Oreshkin told a breakfast forum hosted by Russian newspaper Vedomosti on Friday. "The oil industry is changing structurally and it may happen that ... the global economy will not need that much oil."

"Therefore we see a range from $40 to $60 somewhere for the next seven years," Oreshkin said. "And these are the prices we should base our macroeconomic policy on." They also must take into account the pressure on Russia's economy brought by Western sanctio ...

"Dark" Days Ahead: Main Power Supplier For Brazil Olympic Games Pulls Out

Back in July, we asked if Olympians at the upcoming summer games in Rio would be swimming in feces. œExtreme water pollution is common in Brazil, where the majority of sewage is not treated. Raw waste runs through open-air ditches to streams and rivers that feed the Olympic water sites, AP explained. œAs a result, Olympic athletes are almost certain to come into contact with disease-causing viruses that in some tests measured up to 1.7 million times the level of what would be considered hazardous on a Southern California beach.

Obviously, spending billions on modernizing the country's basic sanitation infrastructure isn't in the cards now that the government is mired in a fiscal crisis and desperately needs to cut spending in order to hit what certainly look like unrealistic primary surplus targets.

We've long predicted that the country's economic and political strife would end up having an adverse impact on the games and sure enough, we found out earlier this month that athletes in Olympic village will be asked to pay for their own air conditioning and will not have televisions in their rooms. In short, organizers can no longer depend on the government (and who knows what the government will look like by the time the games commence) to fund cost overruns. That means spending only as much as Brazil expects to take in from sponsorships, ticket sales, and a grant from the International Olympic Committee.

Apparently, the games were already some $520 million over budget. The government was supposed to cover that (and more) but obviously that's out of the question given Brazil's worsening fiscal crisis. œBy the time the Games begin, the committee plans to have 500 fewer pai ...

Frontrunning: December 15



Global stocks rise but oil, Fed keep investors nervous (Reuters)

Janet Yellen: An orthodox economist for unorthodox times (Reuters)

House Democrats Said to Be Open to Lifting Oil Export Ban (BBG)

Don't Count on an Oil Rally If U.S. Crude Export Ban Is Lifted (BBG)

Germany welcomes 34-state Islamic military alliance against terrorism (Reuters)

U.S. soldier Bergdahl may face life sentence in court-martial over desertion (Reuters)

Newell Rubbermaid to Acquire Jarden for $15 Billion (WSJ)

Qualcomm Rejects Split After Completing Strategic Review (BBG)

Shareholder names former Yahoo executives among potential Mayer replacements (Reuters)

U.S. Corporations Increasingly Adjust to Mind the GAAP (WSJ)

Baltimore braces for trouble as jury deliberates in man's death (Reuters)

Summers: Most Plausible Bubbles No Longer ...

Markets Rise Ahead of Fed Decision

Global stocks climbed, rebounding from recent losses just one day before the Federal Reserve is expected to raise interest rates for the first time since 2006.

Natural Gas Sinks to 14-Year Low

Natural-gas prices plunged to a 14-year low Monday and continued to slowly slide Tuesday, as an unusually warm winter saps demand and deals another blow to struggling energy companies.

SEC Reviewing Third Avenue's Move to Bar Redemptions From Fund

U.S. securities regulators are scrutinizing Third Avenue Management LLC's unusual legal strategy to halt shareholder redemptions from a high-yield fund without first obtaining a green-light from the agency.

Seeking Venezuela's Future In Barrio 23 De Enero

from STRATFOR

-- this post authored by Reva Bhalla

The heart of Venezuela beats loudly in Barrio 23 de Enero. In this low-income neighborhood of Caracas, long concrete superblocks containing thousands of housing units tower above the streets, their peeling facades of teal, yellow, orange and blue speckling the skyline. In the mid-20th century, when Venezuela's oil economy drove rapid urbanization and European postwar modernist architects extolled the virtues of class-neutral social housing, the military dictatorship of Gen. Marcos Perez Jimenez commissioned architect Carlos Raul Villanueva to address Venezuela's growing housing challenge.

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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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