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30Dec2015 Pre-Market Commentary: US Futures Fractionally Down, Europe Markets Down, Expecting Low Volume And Volatility Today

Written by Gary

U.S. stock future indexes are down fractionally, quiet and doing very little with low volume and volatility. Watch out for January, the month that is almost always very volatile accompanied by sudden moves and wide swings.

Markets are expected to open lower and watch for oil price volatility this morning at 10:30 when reserve reports are posted.


Here is the current market situation from CNN Money

European markets are lower today as French and British shares fall. The French CAC 40 is off 0.35% while the London FTSE 100 is down 0.63%. The German DAX is not trading.

What Is Moving the Markets

Here are the headlines moving the markets.

Apple to pay Italy 318 million euros, sign tax deal: source

MILAN (Reuters) - U.S. tech giant Apple will pay Italy's tax office 318 million euros ($348 million) to settle a dispute and sign an accord next year on how to manage its tax liabilities from 2015, a source with direct knowledge of the matter said on Wednesday.

Shkreli's former company files for bankruptcy

(Reuters) - KaloBios Pharmaceuticals Inc , which fired chief executive Martin Shkreli earlier this month, filed for Chapter 11 bankruptcy on Tuesday.

Stock futures slightly lower as crude oil retreats

(Reuters) - U.S. stock index futures were marginally lower on Wednesday as crude oil gave up Tuesday's gains after forecasts suggested winter in Europe and the United States would be short-lived.

Puerto Rico faces key test as January 1 deadline on debt payments looms

NEW YORK/SAN JUAN (Reuters) - Puerto Rico faces a Jan. 1 deadline for roughly $1 billion in debt payments and has already signaled some of that amount could lapse into default, opening the door to potential litigation with creditors.

China suspends forex business for some foreign banks: sources

SHANGHAI (Reuters) - China's central bank has suspended at least three foreign banks from conducting some foreign exchange business until the end of March, three sources who had seen the suspension notices told Reuters on Wednesday.

Brent oil prices slide back toward 11-year lows

LONDON (Reuters) - Brent crude oil retreated toward 11-year lows on Wednesday as indications of slowing global energy demand bumped up against record-high inventories.

Julius Baer reaches preliminary deal in U.S. tax case

ZURICH (Reuters) - Julius Baer has reached an agreement in principle with U.S. authorities to settle an investigation into allegations it helped wealthy American clients evade taxes, potentially drawing a line under the Swiss bank's biggest legal issue.

Global growth will be disappointing in 2016: IMF's Lagarde

BERLIN (Reuters) - Global economic growth will be disappointing next year and the outlook for the medium-term has also deteriorated, the head of the International Monetary Fund said in a guest article for German newspaper Handelsblatt published on Wednesday.

Oil rebound fizzles, sending global shares lower

LONDON (Reuters) - Global stock markets fell on Wednesday as oil prices slumped back toward 11-year lows, sapping investors' appetite for risky assets and hurting the shares of mining and energy companies.

Oil Slumps As Saudis "Won't Change" Policy, Russia Rethinks 2016 Price Forecast

On Tuesday, we took a close look at the forecast for the Russian economy given various assumptions about the price of oil in 2016.

While Russia has thus far managed to weather the crude storm relatively well (indeed, Moscow is now pumping more crude than ever before and expects oil exports to rise for the first time in six years in 2015), the numbers do not lie.

The ruble is plunging in the face of the oil price slump and if prices hit $30/bbl, the country's budget deficit is expected to balloon from 3% of GDP to some 4.4% - that would be the second largest deficit in two decades. Indeed, the Russian central bank itself says that in an adverse scenario wherein oil trades at $35/bbl in 2016, GDP will contract by 5% and inflation will run at 7-9%. Say what you will about the country's penchant for resilience, but that isn't a pretty picture. The rumored return of former FinMin Alexei Kudrin to the government is evidence of Moscow's attempts to find a solution sooner rather than later.

The interesting thing about Russia's budget for 2016 is that it's based on oil prices of $50/bbl. It's not entirely clear how realistic that is.

For instance, the Saudis are likely basing their 2016 budget on considerably lower prices.

As we outlined in great detail earlier this week, Riyadh is expected to run a 13% deficit in 2016. That's actually in line with expectations and comes on the heels of a better than expected 2015 when the red ink somewhat inexplicably came in at between 15% and 16% of GDP as opposed to the 20% ...

Turkey Foils New Year's Eve ISIS Suicide Plot

Back on July 20, a suicide bomber detonated in Suruc, Turkey, killing 33 people.

Suruc is a mere stone's throw away from the Syrian border and from Kobani, where many of those killed were planning on assisting in a rebuilding effort.

The attack was quickly attributed to Islamic State. Two days later, two Turkish police officers were killed by the PKK in Ceylanpinar. Kurdish militants said the men had cooperated with ISIS. Their deaths, PKK's Syrian affiliate said, were œin revenge for the massacre in Suruc.

Turkish President Recep Tayyip Erdogan used the death of the officers as an excuse to reignite a longstanding conflict with the PKK. In order to persuade NATO to sanction the crackdown, he cited Suruc on the way to explaining that in addition to the PKK, Ankara would target ISIS. There was widespread suspicion that the government was somehow involved in sparking the violence as a way of undercutting HDP's success at the ballot box in June.

Less than three months later, a suicide attack in Ankara killed 102 people. It was the worst attack in Turkey's history. It too was attributed to ISIS.

œAlthough intelligence reports have claimed that ISIL militants Abdurrahman Alagoz, Yunus Emre Alagoz and Omer Deniz Dundar were preparing suicide attacks, they were not captured,

Martin Shkreli's KaloBios Files Chapter 11: Full Bankruptcy Filing

Over a month ago, when observing (from as far away as possible) the farce of Marti Shkreli's attempt to squeeze KBIO shorts in the context of the infamous Joe Campbell who was short KaloBios only to suffer a $100K margin call overnight when Martin Shkreli bought a 70% stake in the company, we wrote:

Which brings us back to Joe Campbell and his now famous margin call: did he liquidate enough other assets to cover the margin call? What about the hundreds of other shorts who piggybacked and shorted at the close yesterday only to wake up with comparable massive margin calls?

And what happens if Shkreli's plan is indeed to rerun the "Volkswagen" scenario and unleash an epic short squeeze that sends the price of the company into the stratosphere, unlinked from any fundamentals, but merely soaring ever higher as desperate shorts pay any price just to get out.

We hope to find out, as suddenly this until recently bankrupt company whose price has exploded in the past two days, has become not only a poster child for everything broken and manipulated with the market (think 2014's CYNK one year forward) but has the market following with morbid fascination to find out how the tragicomedy of "Shkreli vs the Shorters" concludes.

We now know how the story ends: less than two months after KaloBios had commenced liquidation proceedings, only to be saved in the last moment by a Martin Shkreli liquidity injection, the company is right back in bankruptcy court having just filed for Chapter 11 creditor relief in Delaware bankruptcy court. This takes place

The Market's Latest Comeback Story: Biotech Stocks

After an autumn selloff, the Nasdaq Biotechnology Index has rallied 18% from its 2015 low in September, and is now up 13% for the year.

Oil Prices Tumble on Oversupply Fears

Oil prices tumbled ahead of data expected to show an increase in U.S. crude stockpiles, adding to the continuing glut of crude.

Global Stocks Dip

Global stocks dipped on Wednesday along with oil prices. The S&P 500 was on track to eke out a small gain for 2015.

Apprenticeships And Their Potential In The U.S.

from the Philadelphia Fed

-- this post authored by Keith L. Rolland

Government, foundation, and workforce leaders are displaying keen interest in apprenticeships as a way to give job seekers skills, credentials, and access to careers. This increased interest is also part of the greater attention to workforce development strategies that engage employers.Apprenticeships have a long history with roots in ancient times. The Code of Hammurabi of Babylon, which dates back to the 18th century bce, required artisans to teach their crafts to the next generation. By the 13th century, a type of apprenticeship emerged in Western Europe in the form of craft guilds.[1] In the colonial U.S., now-famous apprentices included George Washington (surveyor), Benjamin Franklin (printer), and Paul Revere (silversmith).

International Economic Update: Deflation Remains Concern, Stock Markets Mostly Improve

from the Dallas Fed

-- this post authored by Kelvin Virdi

Global output growth has been weak so far in the second half but is expected to moderately accelerate in 2016, especially for emerging-market countries. Deflationary pressures have decreased but inflation remains low in the euro area. The European Central Bank (ECB) has committed to continuing its quantitative easing program to help fight deflation, but its announced measures were short of market expectations. The turmoil recently experienced by emerging markets has largely subsided as stock prices and exchange rates level out and begin to improve.

The Wall Street Journal: Twitter hires new head of diversity from Apple

Move comes amid criticism of Silicon Valley companies for their male, mostly white staff.

Need to Know: Here's what could trigger one more big round of market fireworks for 2015

The bears may not be through mauling oil this year, at least what's left of it. Watch for some potential fireworks in the last 48 hours of 2015.

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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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