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09Feb2016 Pre-Market Commentary: SPY Down 1.7%, Markets Headed For Another Ugly Session As Major Test Of Support Is Underway, Possible Stocks Rebounding

Written by Gary

US stock future indexes seem to be looking towards a depressing trading day as Japan decided to make headlines, marking the first time a G7 nation's 10-year yields have turned negative. Investors are looking to seek safer assets as crude looks to slide further. Red Volume today might tell if we have stalled and are about to climb higher.


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 2.23% while Germany's DAX is off 1.75% and London's FTSE 100 is lower by 1.38%.

What Is Moving the Markets

Here are the headlines moving the markets.

Viacom's quarterly revenue misses estimates on weak ad sales

(Reuters) - Viacom Inc , the owner of MTV, Comedy Central, Nickelodeon and movie studio Paramount, reported a steeper-than-expected drop in quarterly revenue, hurt by lower advertising sales in the United States and few hit movie releases in the period.

Cost cuts help Coca-Cola beat profit expectations

(Reuters) - Coca-Cola Co reported a better-than-expected quarterly profit, helped mainly by aggressive cost-cutting.

Futures lower as investors shy away from risk

(Reuters) - U.S. stock index futures were lower on Tuesday, as cautious investors doubled down on safer assets amid increasing concerns of a sustained slowdown in global economic growth.

Facebook's India stumble could embolden other regulators

SINGAPORE/MUMBAI (Reuters) - India's decision to effectively ban Facebook's pared-back free Internet service is a major blow to the social network's plans, and may prompt other regulators to demand equal online access for their users.

Global stocks hit the rocks after Asian markets slump

LONDON (Reuters) - A drop in bank shares kept European shares under pressure on Tuesday, after losses in Asian markets sent investors scurrying for safe havens.

IEA sees global oil glut worsening, OPEC deal unlikely

LONDON (Reuters) - The world will store unwanted oil for most of 2016 as declines in U.S. output take time and OPEC is unlikely to cut a deal with other producers to reduce ballooning output, the International Energy Agency said.

Viacom extends ad deal with Snapchat

(Reuters) - Viacom Inc and Snapchat have extended a deal that will allow Viacom to sell advertising on the mobile app's behalf.

Google CEO Pichai receives stock grant worth about $199 million

(Reuters) - Google Chief Executive Sundar Pichai received restricted stock worth about $199 million, according to a regulatory filing by Google parent company Alphabet Inc .

Now it is Tesla's turn to confront the bears

SAN FRANCISCO (Reuters) - Tesla Motors Inc faces a pivotal moment Wednesday in its fight to convince skeptical investors that it can still win against traditional auto makers in the competition to reshape the auto business.

A Confused Deutsche Bank Takes To Twitter Seeking Answers For Market Crash

Just when we said DB should probably keep its mouth shut, the bank that everyone is suddenly very focused on decided to take to Twitter with the following rhetorical question:

#DAX dropped below 9,000 points yesterday - worst start to a year ever: are the markets overreacting? #DrStephan

" Deutsche Bank (@DeutscheBank) February 9, 2016

Well, judging by this...

... the markets are probably underreacting.

European Sovereign Risk Soars As Bank Contagion Spreads

The ECB's "whatever it takes" ponzi strategy of keeping the dream alive in Europe's financial system has finally been caught as rapid collapse in the banking system is contagiously spreading to peripheral sovereigns once again. Portugal risk spreads are up 120bps in the last 3 weeks and Spain and Italy are soaring over 35 and 50bps respectively as the almost self-dealing nature of banks buying "risk-free" EU bonds and repoing for cash via The ECB comes home to roost...

And now The ECB is cornered as any more NIRP will merely exacerbate the stress in the financial system and lead to a vicious circle in sovereign risk.

Deutsche Bank Selling Resumes After CEO Assures Employees Bank Is "Absolutely Rock Solid"

Yesterday's desperate scramble by Deutsche Bank to comfort markets about its liquidity position worked, for about three hours. And then, the bank which really should just keep its mouth shut, did the opposite and reminded an already panicked market just how "serious" things are, in the parlance of Jean-Claude Junkcer, when in an internal memo, the CEO assured his workers that:



DEUTSCHE BANK CEO: CAP STRENGTH, RISK POSITIONS 'ROCK SOLID'

That was the good news. The bad news:



DEUTSCHE BANK TO INFORM STAFF IN COMING WEEKS ABOUT COST CUTS

Here is the full note released from DB CEO Cryan:

Dear Colleagues,

When I first became your colleague and Co-CEO seven months ago, I promised to increase communication from the Management Board to you. I made clear that when we had something to communicate, I wanted you to hear about it first from us. That is why I am writing to you today.

Last week, at one of our scheduled off-sites, the Management Board talked about progress on our strategy, and how recent market volatility and forecasts for slowing economic growth might impact our clients and us. Volatility in the fourth quarter impacted the earnings of most major banks, especially those in Europe, and clients may ask you about how the market-wide volatility is impacting Deutsche Bank.

You can tell them that Deutsche Bank remains absolutely rock-solid, given our strong capital and risk position. On Monday, we took advantage of this strength to reassure the market of our capacity and commitment to pay coupons to investors who hold our Additional Tier 1 capital. This type of ins ...

Global Markets Fall; Japanese Stocks Sink 5.4%

Global investors remained cautious after recent turmoil in financial markets rippled across Asia.

Japan Markets Shaken as Investors Seek Shelter

Japanese stocks tumbled and the benchmark government bond yield fell into negative territory for the first time, as a global flight to safety threatened to unravel the delicate market balance that Prime Minister Shinzo Abe and the Bank of Japan have tried to build.

IEA Warns Oil Prices Could Fall

Crude-oil prices could fall even further as the world's vast oversupply of petroleum only got worse in January with a surge in production from OPEC, a top global energy monitor said.

Corporate Bond Market Liquidity Redux: More Price-Based Evidence - Part Three Of Eleven

from Liberty Street Economics

-- this post by Tobias Adrian, Michael Fleming, Erik Vogt, and Zachary Wojtowicz

In a recent post, we presented some preliminary evidence suggesting that corporate bond market liquidity is ample. That evidence relied on bid-ask spread and price impact measures. The findings generated significant discussion, with some market participants wondering about the magnitudes of our estimates, their robustness, and whether such measures adequately capture recent changes in liquidity. In this post, we revisit these measures to more thoroughly document how they have varied over time and the importance of particular estimation approaches, trade size, trade frequency, and the dichotomy between investment-grade and high-yield bonds.

Economic Report: NFIB survey suggests wage gains may be fleeting

There was good and bad news on worker pay in the latest small-business survey from the National Federation of Independent Business.

Market Snapshot: Losses for U.S. stock futures build as oil gains melt

Losses for U.S. stock futures accelerated Tuesday as oil prices turned lower, adding to a global selloff that hit Japanese stocks particularly hard.

Need to Know: Don't bet your investments on a recession " there's a third way

Here's a new twist. Instead of bracing for recession or gearing all up for a recovery, why not the cautious recovery play? Plus the bank chart that has lots of people nervous.

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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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