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08Feb2016 Pre-Market Commentary: Oil Prices Falling, SPY Down One Percent, US Futures Sliding, European Also Trading Down

Written by Gary

US stock future indexes are down sharply this morning as they test the 'major' supports. Most global equity markets are posting big losses as traders fret about a recession following Friday's disappointing U.S. jobs report. Although major Asian markets are closed this week for the Lunar New Year holiday, China kicked off the celebration by reporting a $99.5B foreign currency reserve drop in January to $3.23T. Oil prices are about to head south say some analysts.

Here is the current market situation from CNN Money

European markets are sharply lower today with shares in France off the most. The CAC 40 is down 2.83% while Germany's DAX is off 2.61% and London's FTSE 100 is lower by 1.92%.

What Is Moving the Markets

Here are the headlines moving the markets.

Brixmor Property's top executives exit after accounting review

(Reuters) - Shopping center operator Brixmor Property Group Inc said three of its top officers, including its chief executive, had resigned after an internal accounting review showed discrepancies in the company's financial statements.

India introduces net neutrality rules barring Facebook's free Internet

NEW DELHI/MUMBAI (Reuters) - India introduced new rules on Monday to prevent Internet service providers from having different pricing policies for accessing different parts of the web, in a setback to Facebook Inc's plan to roll out a pared-back free Internet service to the masses.

Futures drop on mounting concerns over global slowdown

(Reuters) - U.S. stock index futures were lower on Monday, with the Dow Jones industrial average slipping nearly 200 points, as fears of a global economic slowdown worsening rattle investors.

Oil prices slide, supply overhang in focus

LONDON (Reuters) - Crude oil prices fell on Monday because of lingering concerns over a supply overhang and after a Saudi-Venezuela meeting showed few signs that steps would be taken to boost prices.

Volkswagen says is open to listing trucks business

FRANKFURT (Reuters) - Volkswagen AG's trucks business may pursue acquisitions or even a public listing, the company said on Monday, only days after the parent company was forced to delay publishing earnings in the wake of a diesel emissions scandal.

Credit Suisse's Thiam wants his bonus to be cut up to 50 percent: report

ZURICH (Reuters) - Credit Suisse Chief Executive Officer Tidjane Thiam has asked the bank's board to cut his 2015 bonus by between 25 percent and 50 percent, the Financial Times reported on Monday, after the bank posted a 2.94 billion Swiss franc ($2.96 billion) loss last year.

European stocks plunge as Lunar New Year offers no cheer

LONDON (Reuters) - European shares plunged to 16-month lows on Monday, extending a aggressive sell-off, while bond yields and oil also fell as investors shed risky assets on persistent concern over the pace of global growth.

CEOs, venture backers lose big as LinkedIn, Tableau shares tumble

NEW YORK (Reuters) - LinkedIn Corp Executive Chairman Reid Hoffman lost almost half his $2.8 billion fortune on paper Friday as shares of his social media company suffered their largest drop on record. He was not alone in taking heavy losses.

Celgene, Gilead Sciences shares could rise 30 percent: Barron's

NEW YORK (Reuters) - The tumble in share prices for biotechnology stocks has created some buying opportunities, with drugmakers Celgene Corp and Gilead Sciences poised for a 30 percent rise over the next year, Barron's said.

Gold Surges To 4-Month Highs

Gold is now up over 13% from its pre-Fed rate-hike lows, having surged through its 200-day moving average by the most in 2 years. As bank risk spikes globally, it appears bonds & bullion are the investment of choice once again in the face of systemic fragility concerns. At 4-month highs, gold is nearing a crucial breakout point...

After the heavy volume puke in gold after the jobs data, buyers have stepped back in size...

Pushing the precious metal furthest above it 200DMA in 2 years to 4-month highs..

Is This The Reason For Europe's Sudden Bloodbath

While the ongoing slaughter in European bank credit, and mostly counterparty risk, is troubling, it is nothing new: we have been showing it for over a month, most recently on Friday in "European Bank Risk Soars To 3 Year Highs, US Risk Rising."

And yet there is a new element to the latest European selloff, one which turned vicious just minutes after Europe opened for trading this morning with not just commercial banks (who are now all subject to bail-ins courtesy of the BRRD) being dumped with the Deutsche Bank water, but peripheral spreads and equity markets have all joined in.

Case in point: Spanish, Portuguese and Italian yields and spreads to Germany are blowing out...

... while the Athens stock market just dropped to the lowest level since 1990, as the Greek banking index just crashed over 21% to a new all time low.


Germany Shuts Down Canadian Bank Tied To Money Laundering

For the first time since 2012, Bafin - Germany's banking regulator, which for a minute looked like it might actually accuse Anshu Jain of lying about LIBOR - has closed a bank.

All financial transactions by Maple Bank of Canada's German subsidiary have been halted on the grounds the operation has too much debt or, as BaFin put it, there's œa prohibition on transfer of ownership and payment, due to imminent over indebtedness.

Maple - which describes itself as having expertise in "equity and fixed income trading, repos and securities lending, deposits, structured products and institutional sale" - has obligations of around ‚¬2.6 billion and assets of ‚¬5 billion meaning it œhas no systemic relevance - to quote BaFin again.

It is however, œrelevant for National Bank - Canada's sixth largest financial institution which has a 24.9% stake in Maple. National will now take a full reserve against that stake, the carrying value of which is CAD165 million. œThat means National Bank's CET 1 capital ratio will take a 13-basis-point hit, WSJ notes, adding that œthis isn't the first time that National Bank has seen its regulatory capital level dented in recent months.

No, it's not, and this œisn't the first time that Maple Bank has been under the microscope.

As The New York Times reminds us, Maple œplayed a prominent role in attempts by the Porsche family to take over Volkswagen several years ago [b ...

Frontrunning: February 8

European stocks plunge as Lunar New Year offers no cheer (Reuters)

European Stocks Fall, Credit Weakens as Signs of Distress Abound (BBG)

Management trouble at world's biggest hedge fund: Bridgewater succession plan in flux as heir Greg Jensen steps back (FT)

U.S. athletes should consider not attending Olympics if fear Zika - officials (Reuters)

Geithner Gets JPMorgan Credit Line to Invest With Warburg Pincus (BBG)

Top Clinton Donor Wants a Law Against $1 Million Gifts Like His (BBG)

Private equity groups under pressure to buy own stock (FT)

Before New Hampshire primary, Trump campaign shows mellower side (Reuters)

Big Companies Pull Back After Rough Quarter (WSJ)

A Dying Breed: Currency Traders Are Left Out of New Wall Street (BBG)

Bill Clinton Launches Attack on Bernie Sanders in New Hampshire (

Global Stocks Fall as Brief Oil Rally Fades

Investors sold global stocks and plowed into government bonds as oil prices resumed their downward trend.

China's Forex Reserves Plunge to More-Than-Three-Year Low

China's foreign-exchange reserves fell to the lowest level in more than three years in January, even as the central bank escalated a battle to defend the yuan and stanch the flow of capital leaving the country.

Bridgewater Heir Apparent in Talks to Give Up Co-CEO Role

The presumed heir apparent to Bridgewater Associates founder Ray Dalio is discussing giving up his job as co-chief executive of the world's biggest hedge fund, creating uncertainty about the future leadership of the firm.

Has MBS Market Liquidity Deteriorated? - Part Two Of Eleven

from Liberty Street Economics

--this post authored by Rich Podjasek, Linsey Molloy, Michael Fleming, and Andreas Fuster

Mortgage-backed securities guaranteed by the government-backed entities Fannie Mae, Freddie Mac, and Ginnie Mae, or so-called "agency MBS," are the primary funding source for U.S. residential housing. A significant deterioration in the liquidity of the MBS market could lead investors to demand a premium for transacting in this important market, ultimately raising borrowing costs for U.S. homeowners. This post looks for evidence of changes in agency MBS market liquidity, complementing similar posts studying liquidity in U.S. Treasury and corporate bond markets.

Continuing The Conversation On Liquidity - Part One Of Eleven

from Liberty Street Economics

-- this post authored by Tobias Adrian, Michael Fleming, and Ernst Schaumburg

Market participants and policymakers have raised concerns about market liquidity - the ability to buy and sell securities quickly, at any time, at minimal cost. Market liquidity supports the efficient allocation of financial capital, which is a catalyst for sustainable economic growth. Any possible decline in market liquidity, whether due to regulation or otherwise, is of interest to policymakers and market participants alike.

The Wall Street Journal: White House to ask for Zika research funding

The White House plans to request about $1.8 billion in new funding from Congress in response to the Zika virus.

Earnings Outlook: What to look for in Disney's earnings

Walt Disney Co. will report earnings for the first quarter of 2016 on Tuesday.

Jonathan Burton's Life Savings: How small-cap international stocks help your portfolio in big ways

Some experts recommend that investors make small-cap funds the only international portion of their stock portfolio, writes Jonathan Burton.

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