US stock future indexes drift sharply lower on anticipated hawkish speech from Yellen this morning. WTI crude has slipped into the mid 38's, US dollar declines to its high 95 support and gold is volatile in the 1220 area. Markets expected to open lower in what is expected to be another quiet session.
Here is the current market situation from CNN Money
European markets are mixed. The CAC 40 is higher by 0.54%, while the FTSE 100 is leading the DAX lower. They are down 0.17% and 0.11% respectively.
(Reuters) - The U.S. economy remains on track for a gradual path of interest rate hikes and fears over the impact of a slowing global economy and bouts of financial volatility are overdone, San Francisco Federal Reserve President John Williams said on Tuesday.
LONDON, (Reuters) - The Bank of England said on Tuesday that risks around Britain's referendum on the European Union could push up borrowing costs and weaken sterling, and tightened rules for mortgage lending to landlords.
SHANGHAI (Reuters) - Fiat Chrysler Automobiles NV's China unit will recall over 60,000 sport-utility vehicles in the country due to issues related to the cars' anti-skid braking (ABS) systems, a Chinese regulator said in a statement on Tuesday.
LONDON (Reuters) - European shares rose on Tuesday, shrugging off losses in Asia, while the dollar regained its footing as investors looked to a speech by Federal Reserve Chair Janet Yellen for clues to the interest rate outlook following weak U.S. data.
TOKYO (Reuters) - Two tobacco giants are seeing strong demand for their reboots of the e-cigarette in Japan, with Philip Morris International twice postponing a nationwide rollout and Japan Tobacco suspending shipments - both due to supply shortages.
About a decade ago, Christian Leone's Luxor Capital was one of the biggest brand names in the industry, and alongside Harbinger and DB Zwirn, every trader and analyst on Wall Street wanted to work there. Since then things have changed. According to Reuters, Luxor, which had $3.8 billion under management at last check, "has been losing money for months" and on Monday it surprised investors when it announced it would "not be returning exiting investors cash in full, keeping a portion locked up until some illiquid investments can be sold."
Call it the latest hedge fund "gate", only unlike some prominent debt focused names, this one is only partial: "instead of returning all exiting clients' assets in cash, investors will receive 88 percent of their money back while 12 percent of the investments will be held in a so-called special purpose vehicle, Luxor's founder, Christian Leone, wrote in a letter."
The announcement comes before a critical March 31 redemption deadline and aims to treat all investors "fairly," the letter said.
"For those investors in the Fund that have submitted withdrawal requests for March 31, 2016 and for subsequent withdrawal dates, we will transfer a pro rata share of the applicable assets into a special purpose vehicle (SPV)," Leone wrote.
Client subject to the partial gate will be those who asked to get their money out on April 1 and July 1 and as a result; instead of getting all cash they will see a portion of their money put into the SPV and the fund will not charge any fees on these assets.
As Reuters reminds us (for those who have forgotten the gating junk bond funds of late 2015), "special purpose vehicles and side pockets are permitted at hedge funds but they are often viewed as a last resort that sour investors, and they have not been widely used since the 2008 financial crisis ...
With Europe back from Easter break, we are seeing a modest continuation of the dollar strength witnessed every day last week, which in turn is pressuring oil and the commodity complex, and leading to some selling in US equity futures (down 0.2% to 2024) ahead of today's main event which is Janet Yellen's speech as the Economic Club of New York at 12:20pm, an event which judging by risk assets so far is expected to be far more hawkish than dovish: after all the S&P 500 is north of 2,000 for now.
Crude slid below $39 a barrel in New York in a fourth day of losses while commodity currencies such as Russia's ruble and the Norwegian krone weakened. Euro-area sovereign securities climbed as lower energy prices dimmed the outlook for inflation and the European Central Bank prepared to increase its asset-purchase plan by 20 billion euros ($22 billion) a month in April. Treasuries advanced and U.S. equity-index futures dropped before a speech from Federal Reserve Chair Janet Yellen and several key pieces of economic data this week culminating in payrolls figures.
The shaky sentiment was summarized by Pedro Ricardo Santos, a broker at X-Trade Brokers DM SA in Lisbon. who told Bloomberg that "the correction in oil prices is outweighing any optimism about the economy in the markets. Investors will also expect a little more hawkishness from Yellen's speech today. Although the likelihood of a rate increase in April is practically zero, many are looking for two more hikes by the end of the year."
This stock market looks dangerous to some and downright dull to others. But the worst thing you can do is try to fight what's going on. It's an election year and there's other noise that means this strategy is your best option.
Commodities have been among most popular assets in 2016, but natural resources such as oil and copper are at risk of sharp, near-term losses in the absence of any real improvement in the markets, Barclays warns.
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