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16Feb2016 Pre-Market Commentary: US Futures Higher, DOW Futures Up 200 Points, Crude Headed Lower, US Manufacturing Remains In Contraction

Written by Gary

U.S. stock index futures are higher this morning as crude oil prices hit a 12-day high after four of the world's largest producers agreed to freeze output. (Which means absolutely nothing BTW) WTI has fallen off the highs to the mid-29's and appears to be heading south again. The New York Federal Reserve's gauge of manufacturing activity in the region remained rooted in contraction territory in February.

Here is the current market situation from CNN Money

European markets are mixed today. The FTSE 100 is up 0.44% while the CAC 40 gains 0.11%. The DAX is off 0.72%.

What Is Moving the Markets

Here are the headlines moving the markets.

Saudis and Russia agree to oil output freeze, Iran still an obstacle

DOHA (Reuters) - Top oil exporters Russia and Saudi Arabia agreed on Tuesday to freeze output levels but said the deal was contingent on other producers joining in - a major sticking point with Iran absent from the talks and determined to raise production.

Oil eases off highs after output freeze agreement

LONDON (Reuters) - Oil prices slipped off session highs on Tuesday after four of the world's largest producers agreed to freeze output at January levels if other major exporters joined the pact, dashing hopes among the price bulls for an outright cut to supply.

Vodafone ties up with Liberty in Dutch deal to take on KPN

AMSTERDAM/LONDON (Reuters) - Mobile telecoms network operator Vodafone and cable company Liberty Global have agreed to combine their Dutch operations to create a stronger package of TV, broadband Internet and mobile, aiming to better take on former incumbent KPN .

Amazon acquires Indian payments processor Emvantage

MUMBAI (Reuters) - Inc said it has acquired Indian payments processor Emvantage Payments Pvt Ltd for an undisclosed sum.

Medical device maker Stryker to buy Physio-Control for $1.28 bln

(Reuters) - Medical device maker Stryker Corp said it would buy Physio-Control International Inc for $1.28 billion in cash to expand its emergency medical services business.

Futures rise as oil prices stabilize

(Reuters) - U.S. stock index futures were higher on Tuesday as Brent crude oil prices hit a 12-day high after four of the world's largest producers agreed to freeze output.

Apollo Global to buy security services company ADT for $7 billion

(Reuters) - Electronic security services provider ADT Corp said it had agreed to be acquired by funds affiliated with private equity firm Apollo Global Management LLC for $7 billion.

Apollo Global to buy security services provider ADT Corp

(Reuters) - Electronic security services provider ADT Corp said it had agreed to be acquired by funds affiliated with private equity firm Apollo Global Management LLC for $7 billion.

Pratt & Whitney head says jet engine output risks easing

SINGAPORE (Reuters) - Pratt & Whitney's new chief says the performance of suppliers is much better than year ago, easing concerns over its ability to execute a $10 billion gamble on a new engine as it seeks to reclaim a once revered status in the jet industry.

WTI Crude Plunges Back Below $30 - Gives Up All "Production Cut" Hype Gains

As traders slowly (and then quickly) woke up to the fact that a "freeze" at record levels of production is not a "cut", WTI Crude has collapsed over 5% from its hope-stricken illiquid highs of early trading - now back below $30.

As Barclays warns:


And the reaction to reality...

And this is taking the shine off the equity market exuberance...

As we said last night, the market can now re-focus on the real underlying dynamics: not only excess supply but clearly slowing global demand...

... and U.S. oil land storage, which as we and the market have been warning, is about to overflow. This perhaps explains why after surging in the aftermath of the headlines from the non-deal hitting the tape, WTI is back under $30. As attention now shifts to nearly full land storage, an ...

China Created More Debt In January Than The GDP Of Norway, Austria Or The UAE

The world let out a collective gasp of shock last night when the PBOC announced that in January, China had created an absolutely gargantuan CNY3.4 trillion in new total debt (Total Social Financing) - or about $520 billion - more than 50% higher than expected, of which CNY2.1 trillion was in the form of new loans.

The breakdown of that massive number is shown in the table below:

What happened? Here is Goldman's explanation:

January's credit data was exceedingly strong. Part of the demand for new RMB loans is from demand to borrow RMB and pay down USD debt, though banks may have also started to behave differently amid profit pressures. The temporary suspension of local government bond issuance also directed more borrowing to bank loans and other channels. Strong mortgage loan growth also contributed (household medium to long term loans increased RMB 478.3bn in January, vs RMB 292.4bn in December). The window guidance meeting held by the central bank around mid-January to rein in rapid credit growth apparently did not have much effect on the behavior of commercial banks. (January loan supply tends to be very front-loaded; one would have expected there to be a more significant deceleration of credit supply if the central bank was sending a really tough message, hence market expectations were only RMB 1.9 tn even when they knew it was already RMB1.7 tn in the first half of the month.) The pace of January credit growth is likely above the comfort zone of the central bank. Should the lending continue to be as strong in February,

Frontrunning: February 16

Oil eases off highs after output freeze agreement (Reuters)

Saudis and Russia agree to oil output freeze, Iran still an obstacle (Reuters)

China Loses Control of the Economic Story Line (WSJ)

Obama starts work to pick Supreme Court justice amid political 'bluster' (Reuters)

The Never-Ending Story: Europe's Banks Face a Frightening Future (BBG)

Apollo Global to buy security services company ADT for $7 billion (Reuters)

Anglo Hastens Retreat From Coal, Iron Ore as Losses Double (BBG)

Markets Putting Faith in QE4 (WSJ)

Technology stocks selloff may turn IPO chill into IPO freeze (Reuters)

Goldman Channels FDR's `Nothing to Fear' With Sell Gold Call (BBG)

Not in my backyard? Mainstream Scandinavia warily eyes record immigration (Reuters)

Japan's Banks Brace for Bleeding in Core Business as Negative Rates Kick In (

Saudi, Russia, Qatar, Venezuela Agree to Freeze Oil Output

Saudi Arabia, Russia, Qatar and Venezuela said they wouldn't increase crude-oil output above January's levels but the agreement came with a significant caveat: Iran and Iraq must also halt production increases.

Global Stock Rally Starts to Fade

A rally in global stocks showed signs of fading Tuesday amid sharp swings in oil prices and a fresh slide in banking shares.

Wall Street's Hidden Gem Is in Public Storage

Public Storage, a real-estate investment trust, should benefit from favorable conditions when it reports fourth-quarter results on Tuesday.

The Wall Street Journal: Restaurant Brands reports earnings beat, same-store sales growth

Restaurant Brands Inc. said earnings for the fourth quarter exceeded analyst expectations.

Howard Gold's No-Nonsense Investing: 4 tough questions that Trump and Sanders need to answer

The candidates are enjoying voters' rebellion against establishment rivals, but little has been said of their specific plans, writes Howard Gold.

Market Snapshot: Dow futures leap more than 200 points

U.S. stock futures leap higher, fueled by a stabilization in oil prices and hopes that Japanese and European central banks will continue to ease policy.

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