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30Mar2016 Pre-Market Commentary: Stock Futures Are Higher, Gold Is Creeping Higher, Investors Remain Nervous Of Market Climbing Higher

Written by Gary

US stock future indexes are higher this morning a day after comments by Fed's Janet Yellen allayed concerns that the central bank would take an aggressive approach to raising interest rates this year. Markets are expected to open higher, but investor and analysts concerns alike are nervous.


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 1.93% while Germany's DAX is up 1.56% and London's FTSE 100 is up 1.52%.

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. private sector adds 200,000 jobs in March: ADP

NEW YORK (Reuters) - U.S. private employers added 200,000 jobs in March, above economists' expectations, a report by a payrolls processor showed on Wednesday.

Citigroup says being audited in Germany over dividend trades

FRANKFURT (Reuters) - (The story was refiled to correct this March 22, 2016 story to read audited, not investigated, in the headline and paragraph 1)

Foxconn agrees to buy Sharp after slashing original offer

TOKYO/TAIPEI (Reuters) - Taiwan's Foxconn agreed to acquire Japan's Sharp Corp at a big discount to its original offer, capping a month of wrangling that sowed more doubt over whether the two companies can work well together and fend off fierce competition from rivals.

Central banks 'running out of time' to reflate economies: Bill Gross

NEW YORK (Reuters) - Bond manager Bill Gross, who runs the Janus Global Unconstrained Bond Fund, said central banks are "running out of time" to reflate global economies as their aggressive policies including quantitative easing and low, even negative, interest rates are losing their effectiveness.

Valeant seeks waiver from lenders related to filing annual report

(Reuters) - Valeant Pharmaceuticals International Inc said it had asked its lenders to agree to waive a condition of its credit facility that would put it in breach of covenants if the company did not file its annual report by April 29, as planned.

Futures higher as Yellen soothes nerves over rates

(Reuters) - U.S. stock index futures were higher on Wednesday, a day after comments by Federal Reserve Chair Janet Yellen allayed concerns that the central bank would take an aggressive approach to raising interest rates this year.

Thousands of jobs at risk as India's Tata Steel seeks British exit

LONDON/MUMBAI (Reuters) - India's Tata Steel is seeking to sell Britain's biggest steelmaking business, putting thousands of jobs at risk in an industry that once dominated Britain but has been brought low by falling prices, high costs and Chinese competition.

Investors tiptoe back into emerging markets as storm clouds linger

LONDON (Reuters) - Emerging markets may well appear cheap again after years of attrition, but there's considerable trepidation about venturing back out to the developing world until the financial and political storms have finally lifted.

Wells Fargo plans quiet assault on Wall Street from glass tower

NEW YORK (Reuters) - As Wall Street remakes itself on a former rail yard in the far west of Midtown Manhattan, one surprising name is leading the way.

Dear Mark Zandi... Please Explain This (Again)

Against expectations of a 195k gain, ADP reported 200k (from a downwardly revised 205k -was 214k - in Feb). While manufacturing has been weak, Services sector job gains have been the pillar of this 'recovery' so with ISM Services Employment plumbing 2-year low depths, we simply ask Mark Zandi to explain how ADP sees such strength in that same sector. Services added 191k, goods added 9k as small businesses gained 86k jobs (the most of the cohorts)... as Zandi explains "the econmy is doing very well, ignore GDP."

All looks normal, right - steady recovery...

Dear Mark Zandi, explain this...

The Breakdown...

"The economy is doing well, pay no attention to GDP"

Goods-producing employment rose by 9,000 jobs in March, up from a downwardly revised 2,000 in February. The construction industry added 17,000 jobs, which was down from February's 24,000. Meanwhile, manufacturing added 3,000 jobs after losing 9,000 the previous month.

...

Gartman Remains Bearish "Of Stocks"

Two weeks ago, in our latest warning to shorts just after Gartman decided to short the market by going long the VIX (just ahead of its Yellen-inspired clobbering) we said we have "bad news for the bear: Gartman will be long the VIX until the S&P hits 2,118." This is what the regular CNBC Fast Money guest said:

Short One Unit of the US stock market via the VIX: Yesterday ¦ Wednesday, March 17th ¦ we œpunted on the short side of the equity market, but this time doing so by buying volatility; that is, we bought the VXX volatility index ETF listed on the NYSE upon the market's opening. We're giving this a rather wide birth and are willing to allow the equity market to move 5% against us before exiting the trade and that means a move by the S&P to and through 2118, but we intend to move that stop down sharply in the next day or two.

To which we said: "in other words, Gartman has basically doomed the market to soar back to its all time highs. Sorry bears."

The S&P just closed at fresh 2016 highs, and is about 70 points, o3 3%, away from all time highs. It likely will get back there very soon just as Q1 earning season is set to unveil a -8.5% drop in S&P500 EPS, the biggest plunge since the crisis.

This was probably confirmed by the latest overnight Gartman note, in which we had hoped that the newsletter writer would flopflop and go long, thus ending the rally. No such luck, in fact, Gartman continues to be short.

SHARE PRICES ARE SHARPLY HIGHER as 8 of the 10 markets comprising our International Index have risen ¦ two, the markets in Hong Kong and Shanghai, having risen by mor ...

Boeing Will Terminate More Than 4,500 Workers

Now that Yellen has taken us back to square one where the worse the news, the better for assets, the latest announcement by Boeing, which overnight announced it will eliminate about 4,000 jobs in its commercial airplanes division by the middle of this year and another roughly 550 jobs in a division that conducts flight and lab tests, should help push the iconic ExIm bank-supported company's shares to new 2016 highs.

According to Reuters, the planemaker will reduce 1,600 positions in the commercial airplanes division through voluntary layoffs, while the rest of the cuts are expected to be completed by leaving open positions unfilled, spokesman Doug Alder said.

"While there is no employment reduction target, the more we can control costs as a whole the less impact there will be to employment," Alder said.

The job cuts, which will include hundreds at executive and managerial positions, will not done through involuntary layoffs, Alder said.
Boeing will also cut about 10 percent of the approximately 5,700 jobs in its test and evaluation division, which conducts flight and lab tests, spokeswoman Sandra Angers told Reuters. The company had a total of 161,400 employees as of Dec. 31.

Reuters had reported last month that Boeing was considering offering voluntary layoffs to its professional engineers and technical workers.

In February, Ray Conner, chief executive of Boeing's airplane business, warned employees that job cuts were necessary to "win in the market, fund our growth and operate as a healthy business."

The Seattle Times had earlier reported that Boeing has taken steps to reduce its workforce.

And now we await president Obama to threaten 4,500 soon to be former Boeing workers to ignore the fiction peddlers and instead focus on daytrading the stock market, or better yet, the dollar: that 50x FX leverage should come in very handy ...

Frontrunning: March 30



Bad News Is Great News: Cautious Yellen drives world stocks near 2016 peaks (Reuters)

Yellen Spurs Global Stock Rally as Oil Rebounds, Dollar Tumbles (BBG)

Trump drops pledge to back Republican presidential nominee other than himself (Reuters)

Second judge says Clinton email setup may have been in 'bad faith' (Reuters)

Brussels Airport Remains Shut as Police Hunt Third Attacker (BBG)

Europe Traders Aren't Waiting Around to See If Rebound Holds (BBG)

Western Digital Bond Sale Is Test for Junk Market (WSJ)

Owe Back Taxes? Lose Your Passport (BBG)

Most Americans support torture against terror suspects (Reuters)

Europe's Bond Shortage Means Draghi Is About to Shock the Market (BBG)

Tata confirms plan to sell UK steel businesses (FT)

Corporate Bond Yields Touch Record Lows in Europe's Periphery (

Google: Scaling Ahead of Cloud Burst

Signs of spending discipline help ahead of what could be an expensive push into the cloud business.

Why the World's Top Pork Stock Is Getting Tastier

WH Group's profits will increase as its U.S. and Chinese arms keep integrating.

Paychex Gives Sneak Peek at Jobs Report

Payroll-services firm Paychex's quarterly report and views on the economy will offer a glimpse into Friday's jobs report.

March 2016 ADP Job Growth at 200,000 - At Expectations

Written by Steven Hansen

ADP reported non-farm private jobs growth at 200,000. The rolling averages of year-over-year jobs growth rate remains strong but the rate of growth continues in a downtrend (although unchanged this month).

The Effect Of Exchange Rate Shocks On Domestic Prices

from Liberty Street Economics

-- this post authored by Mary Amiti, Oleg Itskhoki, and Jozef Konings

Changes in exchange rates directly affect import prices. Since the beginning of 2014, the U.S. dollar has strengthened by 17 percent against the currencies of its major trading partners while import prices have fallen by 4 percent. The pass-through from exchange rates into import prices in the United States is estimated to be quite low, at around 30 percent, and this is often attributed to the fact that imports are mostly invoiced in U.S. dollars. In addition to this direct impact of exchange rates on import prices, there can also be an effect on domestic prices.

Economic Report: ADP reports 200,000 private sector jobs added in March

The private sector added 200,000 jobs in March, ADP reported Wednesday.

Need to Know: Lumber is crushing stocks, oil and even gold right now

Rather than obsessing over when rates might rise from diddly-squat to squat, you could instead focus on what's actually soaring. Lumber futures have shot up 22% this month, as shown in our chart of the day.

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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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