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15Feb2016 Pre-Market Commentary: US Markets Closed For Presidents Day, DOW Futures Up 200 Points, European Markets Strongly In The Green And Gold Drops As Investors See Risk On

Written by Gary

U.S. markets are closed today in observance of the 'Presidents Day' Holiday. The Asian Markets closed mixed with the Shanghai Composite Closing down -0.63% and the Nikkei skyrocketing to a plus +7.16%. The European markets are in the Green with the French CAC 40 up nearly 4%. WTI crude is trading in the high 29's, gold trading sideways at the low 1200 level and the US dollar is melting higher currently at the mid 96 level.


Here is the current market situation from CNN Money

European markets are sharply higher today with shares in France leading the region. The CAC 40 is up 3.52% while Germany's DAX is up 3.07% and London's FTSE 100 is up 2.33%.

U.S. stock futures move sharply higher on Monday, mirroring solid gains in Asia where weak data spur hopes that central banks will launch more easing measures. Other headlines read:

Oil prices rally, building on largest gain in 7 years

Dow futures rally more than 200 points as analysts call market bottom

European stocks rally for second day as banks jump

Japan stocks post biggest gains since September, while China slips

Gold drops nearly $30 as investor appetite for riskier assets grows

What Is Moving the Markets

Here are the headlines moving the markets.

Shell pursues transition plan after sealing $53 billion BG deal

LONDON (Reuters) - Royal Dutch Shell on Monday sealed the $53 billion (36 billion pounds) acquisition of British rival BG Group to form the world's top liquefied natural gas company, even as slumping oil prices cast a shadow on the upcoming years of transition.

Global shares climb as firmer Chinese yuan eases deflation fears

LONDON (Reuters) - World stocks rose sharply on Monday as China's central bank fixed the yuan at a much stronger rate and oil cemented recent gains, easing fears of global deflation.

Oil extends rally on prospects OPEC could act to counter low prices

LONDON (Reuters) - Oil prices rose on Monday, extending a rally triggered last week by speculation that OPEC might agree to cut production to reduce a supply glut that has pushed prices to the lowest in over a decade.

EU regulators to examine lawmakers' report on IKEA taxes

BRUSSELS - European Union state aid regulators will examine a report by a group of EU lawmakers accusing Swedish furniture retailer IKEA [IKEA.UL] of avoiding paying at least 1 billion euros ($1.1 billion) in taxes over a six-year period.

Russia says better Iran-Saudi Arabia ties would help oil prices: RIA

MOSCOW (Reuters) - Russia wants to see improved relations between Iran and Saudi Arabia at a time when joint action is needed to influence global oil prices, the RIA news agency on Monday quoted Zamir Kabulov, a senior official at Russia's Foreign Ministry, as saying.

'Brexit' could lead to HSBC moving 1,000 jobs to Paris: Sky

HONG KONG (Reuters) - HSBC Holdings could move around 1,000 employees from London to Paris in the event that Britain votes to leave the European Union, the bank's Chief Executive Stuart Gulliver was quoted saying by Sky News on Monday.

SoftBank to repurchase up to $4.4 billion of own shares in biggest buyback

TOKYO (Reuters) - Japanese telecoms conglomerate SoftBank Group on Monday announced its biggest ever buyback in a bid to boost investor confidence, saying it will purchase up to 500 billion yen ($4.4 billion) worth or as much as 14.2 percent of its own shares.

HSBC keeps headquarters in London, rejects move to Hong Kong

LONDON/HONG KONG (Reuters) - Banking group HSBC Holdings has decided to keep its headquarters in Britain, rejecting the option of shifting its center of gravity back to its main profit-generating hub Hong Kong after a 10-month review.

Boeing sees new aircraft demand worth $550 billion in Southeast Asia over 20 years

SINGAPORE (Reuters) - Southeast Asia requires 3,750 new aircraft worth $550 billion in 20 years from 2015, a senior Boeing executive told a press conference ahead of the Singapore Airshow that starts on Tuesday.

Frontrunning: February 15



China's Yuan Makes Largest Gain Since 2005 on PBOC Cue (WSJ)

Japan's Nikkei soars over 7%, for its biggest gain since 2008 (BBG)

Global shares rise as firmer Chinese yuan eases deflation fears (Reuters)

Banks' Surge Takes Europe's Stock Rally Into 2nd Day; HSBC Rises (BBG)

Oil extends rally on prospects OPEC could act to counter low prices (Reuters)

Europe's Higher-Yielding Bonds Benefit as Global Turmoil Eases (BBG)

Republicans gear up for Supreme Court battle after Scalia's death (Reuters)

Indian-American judge who could replace Scalia worked on controversial cases for business (Reuters)

ECB now officially everyone's "toxic bank": ECB in talks with Italy over buying bundles of bad loans (Reuters)

Soaring Chinese Imports From Hong Kong Renew Fake Trade Concerns (BBG)

Oil Speculators Shrug Off Huge Stockpiles to Bet on Price Climb (

Global Stocks Soar On Stimulus Hopes After Miserable Chinese, Japanese Data; Short Squeeze

Bad news is once again good news... for stocks that is.

After a month and a half of markets unable to decide if they should buy or sell on ugly data, over the weekend, People's Bank of China Governor Zhou Xiaochuan expressed faith in the economy, and said there is no basis for further Yuan devaluation, something the PBOC has consistently implied over the past year, despite two sharp devaluation episodes. That said, for Xiaochuan to break a very long silence, shows i) just how serious the threat of devaluation for China is and ii) how eager the PBOC also is to jawbone risk higher.

And while further devaluation is guaranteed, for now traders decided to take advantage of this verbal intervention and ignore the worst Japanese GDP data in over a year, when as reported last night, the country's economy contracted at a -1.4% annualized rate, far worse than expected -0.8%...

... as well as to ignore the worst Chinese trade data, with both exports and imports coming below the lowest Wall Street estimate, since August...

... when just days after the trade report the PBOC proceeded with its first devaluation. The data was so bad it managed to push the Shanghai Composite nearly into
the green after opening down nearly 3% on a delayed cat ...

Don't Panic! "Experts" Agree - This Is Not 2008

Submitted by Pater Tenebrarum via Acting-Man.com,

Experts Agree: It Is Not 2008

If someone were to ask us what year it was, we would probably politely answer that it was 2016, curious to find out whether the inquirer was a) very confused, b) had only recently awoken from a coma and was still unsure of his when-abouts, or c) was a time traveler who got temporarily lost.

In the unlikely case that we should find ourselves unable to remember the year with sufficient precision to ensure a reliable answer, we'd probably consult a calendar. We recently found out that a great many people actually seem to be uncertain about what year it is. Or at least many mainstream media appear to think so, as they have launched an intense awareness campaign.

Specifically, numerous people seem to think it is still 2008. Wish that it were so - we'd be eight years younger. It all started on 24 August 2015, when two publications apparently discovered independently of each other that is was no longer 2008 and decided that this information should be urgently imparted to the rest of humanity. It all started with marketplace.org admonishing its readers to engage in mnemonic exercises so as not to forget:

1-Marketplace-dot-org-Aug-24-2015

If you repeat it often enough, remembering it will eventually become second nature...

On the very same day,

Stocks Rise as Banking Shares Rally

Stocks in Europe and Japan rallied Monday as investors bought shares in the recently battered financial sector, while haven assets extended their declines.

Hong Kong Looks for Answers After HSBC Opts to Stay in London

HSBC's decision to keep its headquarters in the U.K. rather than move to Hong Kong is prompting soul-searching in this former British colony about its perception on the world stage.

Yuan Makes Biggest Jump Since 2005 on PBOC Cue

China's currency hit its strongest level this year and posted its biggest gain since 2005, when the currency's peg to the dollar ended.

Unemployment By Industry: Duration Must Be Considered, Too

from the St Louis Fed

-- this post authored by YiLi Chien and Paul Morris

To better understand unemployment in key industries, not only the unemployment rate but the duration of unemployment in those industries needs to be examined. Focusing only on the former could lead to misguided efforts to assist the unemployed. This article investigates the behavior of both the unemployment rate and the duration of unemployment across industries from 2005 through 2014, a period that includes the Great Recession (2007-09).

Crisis Chronicles: The Long Depression And The Panic Of 1873

from Liberty Street Economics

-- this post authored by Thomas Klitgaard and James Narron

It always seemed to come down to railroads in the 1800s. Railroads fueled much of the economic growth in the United States at that time, but they required that a great deal of upfront capital be devoted to risky projects. The panics of 1837 and 1857 can both be pinned on railroad investments that went awry, creating enough doubt about the banking system to cause pervasive bank runs.

The Margin: Kanye West wants $1 billion from Facebook's Mark Zuckerberg

Rapper Kanye West goes on a tweetstorm early Monday as he asks for investment help from Facebook's Mark Zuckerberg and Google's Larry Page.

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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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