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19Feb2016 Pre-Market Commentary: May Be A Down Day For The Markets

Written by Gary

Global markets today are in the red, and currently the USA futures are in the same color. Part of the reason is the oil price rally has faultered.

Here is the current market situation from CNN Money

European markets are lower today with shares in France off the most. The CAC 40 is down 0.56% while Germany's DAX is off 0.54% and London's FTSE 100 is lower by 0.36%.

What Is Moving the Markets

Here are the headlines moving the markets.

Oil prices set to end week higher on output freeze talk, but stocks build

LONDON (Reuters) - Oil prices fell on Friday but are set for their first weekly increase this month as talk of a coordinated plan by producers to freeze output levels was tempered by a record build in U.S. crude inventories.

Google accounts show 11 billion euros moved via low tax 'Dutch sandwich' in 2014

AMSTERDAM/LONDON (Reuters) - Google moved 10.7 billion euros ($12 billion) through the Netherlands to Bermuda in 2014, as part of a structure which allows it to earn most of its foreign income tax free.

Futures lower as oil rally falters

(Reuters) - U.S. stock index futures were lower on Friday after a rally in oil prices fizzled out.

Citigroup to exit retail banking in Brazil, Argentina

(Reuters) - Citigroup Inc said it plans to exit its retail banking and credit card operations in Brazil, Argentina and Colombia as it looks to focus on institutional clients in these countries.

Stocks knocked back as oil rally falters

LONDON (Reuters) - A faltering oil price rally pushed back European stocks and sent benchmark German Bund yields below 0.20 percent on Friday as worries about the global economic outlook returned to prominence.

Market volatility stalling IPOs - Nasdaq president

PARIS (Reuters) - Sharp stock market swings in recent weeks are for now giving companies cold feet about going public with initial public offerings (IPOs), Nasdaq President and Chief Operating Officer Adena Friedman said on Friday.

Amazon to open parcel locker network across Europe

BERLIN, Feb 19 (Reuters) - Inc AMZN.O wants to set up a network of parcel lockers across Europe to enable people to pick up their own orders as it seeks to widen delivery options and cut costs.

Helicopter makers target emergency services as oil slumps

SINGAPORE (Reuters) - Helicopter makers are scrambling for new sources of demand after being hit by a severe downturn in their biggest non-military clientele - oil and gas producers. One promising area is public emergency services, executives said at the Singapore Airshow.

Worldwide M&A activity falls 23 pct, but U.S. has a flurry

LONDON (Reuters) - Worldwide mergers and acquisitions deals have fallen 23 percent to $336 billion so far this year compared with last year, but cross-border activity by amount targeting U.S.-based companies reached a record high, Thomson Reuters data shows.

"Brexit" Looms As Cameron Pushes For Reforms In All-Nighter

"I was here till 5 o'clock this morning working through this and we've made some progress but there's still no deal.

That's from British PM David Cameron, who was apparently up all night in an effort to understand why his country should stay in the EU. Unless Cameron hears what he wants to hear, he will not campaign for the UK to remain in the bloc ahead of an expected referendum on membership in June.

Cameron is seeking changes that will reduce his country's financial burden as it relates to refugees and other EU nations. "As I have said, I would only do a deal if we get what Britain needs, so we are going to get back in there," he said, after marathon talks.

"Paris has pushed for amendments to ensure Britain cannot veto actions by the euro zone countries or give City of London banks competitive advantage through regulation," Reuters goes on to note. "A group of east European states chaired by the Czechs is trying to hold back how far their citizens can be denied welfare benefits in Britain or have family allowances reduced."

Frontrunning: February 19

Stocks knocked back as oil rally falters (Reuters)

Still no deal for Britain on EU reforms after all-night talks (Reuters)

Oil Falls Near $30 as Rising U.S. Crude Stockpiles Expand Glut (BBG)

PBOC to Raise Reserve Ratios for Banks That Don't Meet Criteria (BBG)

China's Top Securities Regulator to Step Down (WSJ)

Excessive loosening of China's monetary policy would increase yuan pressure (Reuters)

Tough road for Venezuela after dire data, inadequate measures (Reuters)

Secret Memo Details U.S.'s Broader Strategy to Crack Phones (BBG)

U.S. Clash With Apple Was Months in the Making (WSJ)

Big banks see the need to shrink but face a path full of obstacles (Reuters)

Credit Suisse Said to Be Probed in Italy for Money Laundering (BBG)

Standard Chartered CEO Braces for More ...

Deere In Headlights After Guidance Cut: Sees 10% Sales Drop Due To "Downturn In Global Farm Economy"

It is not just Caterpillar that continues to post horrendous numbers, and has now recorded 38 consecutive months of declining Y/Y sales, double the length of the contraction of the great financial crisis. Moments ago heavy farm equipment maker Deere likewise shocked its investors with a round of terrible numbers, when at first it reported a revenue and EPS beat, announced it had earned $0.80 EPS in Q4, above the $0.71 estimate, on $5.53BN in revenue, well above the $4.90BN expected, however it was the unprecedented drop in the forecast that was the punchline.

According to the company's announcement, equipment sales are projected to decrease about 10% for fiscal 2016 and to be down about 8 percent for the second quarter compared with the same period a year ago.

Here is how CEO Samuel Allen tried to spin the cut in guidance which DE had previously seen at just -7%: "Although Deere expects another challenging year in 2016, our forecast represents a level of performance much better than we have experienced in previous downturns," Allen said.

Downturn? We thought the Fed was hiking because of the "strong recovery."

China's Top Securities Regulator to Step Down

China's top securities regulator, Xiao Gang, is stepping down and will be replaced by Liu Shiyu, current chairman of the Agricultural Bank of China and a former deputy governor of the Chinese central bank.

Global Stocks Pause for Breath

Global stocks took a break from a recent rally but remained on track to end the week with solid gains.

IPO Market Dries Up as Investors Retreat

The IPO market is foundering. Of the almost 175 companies that made their U.S. stock-market debuts in 2015, more than 70% are now trading below their IPO prices.

Are Asset Managers Vulnerable To Fire Sales? - Part Nine Of Eleven

from Liberty Street Economics

-- this post authored by Nicola Cetorelli, Fernando Duarte, and Thomas Eisenbach

According to conventional wisdom, an open-ended investment fund that has a floating net asset value (NAV) and no leverage will never experience a run and hence never have to fire-sell assets. In that view, a decline in the value of the fund's assets will just lead to a commensurate and automatic decline in the fund's equity - end of story.

Fed's Balance Sheet 17 February 2016 Insignificantly Declined

Total Fed Balance Sheet:

Fed's Balance Sheet week ending balance sheet was $4,445 trillion..

The Tell: Here's why oil rout is hurting the global economy instead of helping

Saudi Arabia and other Gulf oil producers saw their credit ratings downgraded this week. Here,s what that says about cheap oil and the global economy.

Capitol Report: Donald Trump's pope attack could help him in South Carolina

Donald Trump's feud with the pope could help him in South Carolina; Trump's lead narrows in a poll of South Carolina Republicans; Bernie Sanders gets the backing of a Nevada African-American group; and more.

London Markets: FTSE 100 falls as risk-aversion returns, but weekly gain looks likely

U.K. blue-chip stocks fall Friday, led by a slump in the embattled oil and mining sectors.

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