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28Apr2016 Pre-Market Commentary: Futures Down Fractionally, WTI Crude Testing Mid 45's, US Dollar Trading Sideways Above Support, US GDP Annualized Rate Down

Written by Gary

US stock future indexes are fractionally lower with SPY down 0.6%. As of today the bull market that has been mocked as fake, doomed and history's most-hated just earned a new title: the second-longest ever. That is the good news. The bad news is the U.S. economic growth has likely stalled in the first quarter as domestic demand cooled and a strong dollar continued to undercut exports.

The first reading on first-quarter gross domestic product showed the U.S. economy grew at an annualized pace of 0.5%, down from the fourth-quarter's final reading of 1.4%


Here is the current market situation from CNN Money

European markets are sharply lower today with shares in France off the most. The CAC 40 is down 1.39% while Germany's DAX is off 1.19% and London's FTSE 100 is lower by 1.06%.

What Is Moving the Markets

Here are the headlines moving the markets.

Japanese stimulus inaction sends yen soaring

LONDON (Reuters) - A lack of fresh stimulus from the Bank of Japan sent the yen soaring and world stocks into the red on Thursday, half a day after the U.S. Federal Reserve signaled it too was hitting the policy pause button.

Ford Motor sets records for profit, operating margins

DETROIT (Reuters) - Ford Motor Co reported a 113 percent surge in quarterly net income and records for global and North American operating margins, thanks to robust pricing of its F-150 pickup trucks in North America and improved profit in Europe.

Dow Chemical profit beats as margins rise to decade-high

(Reuters) - Dow Chemical Co reported a higher-than-expected quarterly adjusted profit as margins rose to their highest level in more than a decade.

Abbott to buy St. Jude Medical for $25 billion

(Reuters) - Abbott Laboratories said it agreed to buy medical device maker St. Jude Medical Inc for $25 billion to add heft to its heart and neurological devices business.

MasterCard profit falls 6 percent on higher operating costs

(Reuters) - MasterCard Inc , operator of the world's second-largest payments network, reported a 6 percent fall in quarterly profit as operating costs rose.

Weak consumer spending, trade seen hurting U.S. first quarter growth

WASHINGTON (Reuters) - U.S. economic growth likely stalled in the first quarter as domestic demand cooled and a strong dollar continued to undercut exports, but a pick-up in activity is anticipated given a buoyant labor market.

Volkswagen says may have to sell assets to pay for emissions scandal

WOLFSBURG, Germany (Reuters) - Volkswagen could face "further significant financial liabilities" beyond the 16.2 billion euros ($18.4 billion) it has provisioned for its diesel emissions scandal and may need to sell assets as a result, it said in its annual report.

AbbVie to buy Stemcentrx to boost cancer drug portfolio

(Reuters) - AbbVie Inc said it would buy privately held oncology company Stemcentrx in a deal valued at $5.8 billion to expand its portfolio of drugs to treat cancer.

Facebook revenue smashes expectations as mobile ad sales surge

(Reuters) - Facebook Inc's quarterly revenue rose more than 50 percent, handily beating Wall Street expectations as its wildly popular mobile app and a push into live video lured new advertisers and encouraged existing ones to boost spending.

Priceline CEO Resigns After Revelation Of Inappropriate "Personal Relationship With An Employee"

Every several years, a CEO is forced to "resign" after an "inappropriate personal relationship" with a coworker is uncovered (usually at the behest of the coworker). Three years ago it cost the job of Lockheed Martin's income CEO. Moments ago it took down Darren Huston, the CEO of Priceline who has resigned from the Company, effective immediately.

This was the reason for the resignation, according to the press release:

Mr. Huston resigned following an investigation overseen by independent members of the Board of Directors of the facts and circumstances surrounding a personal relationship that Mr. Huston had with an employee of the Company who was not under his direct supervision. The investigation determined that Mr. Huston had acted contrary to the Company's Code of Conduct and had engaged in activities inconsistent with the Board's expectations for executive conduct, which Mr. Huston acknowledged and for which he expressed regret.

This traditionally is the press release equivalent of being accused of and caught cheating.

The Company also announced that current Booking.com President and Chief Operating Officer Gillian Tans has been named Chief Executive Officer of Booking.com, a Priceline Group subsidiary, replacing Mr. Huston who also served as CEO of this business unit. Ms. Tans has been a leader at the company since 2002, most recently serving as Booking.com's President since January 2015 and Chief Operating Officer since September 2011, responsible for leading the development and execution of Booking.com's business strategy and directly overseeing all aspects of the brand's operations.

What else:

2.607 Days Later, The "Most Hated Bull Market Ever" Is Now The Second Longest In History

It's official: as of today the bull market that has been mocked as fake, doomed and history's most-hated just earned a new title: the second-longest ever. And it only took $14 trillion in central bank liquidity, a global, coordinated central bank "put", central banks purchases of Treasuries, MBS, ETFs and corporate bonds, and nearly 700 rate cuts in the past 7 years to achieve it.

The stock market advance that started seven weeks after Barack Obama's first inauguration, and specifically with Obama's historic March 3, 2009 remark in which he said that "what you're now seeing is, profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long term perspective on it," has now lasted 2,607 days.

Since then it has dodged and waved through three 10% drops in the last 19 months while avoiding the 20% decline that denotes a bear market. That matches a rally from 1949 to 1956 which straddled the presidencies of Harry Truman and Dwight D. Eisenhower. Only the dot-com bubble of the 1990s lasted longer at 3,452 days.

That means if central banks wish to inject another $14 trillion or so in liquidity to extend the duration of this "most fate, most hated" bull "market", they will need to last another 845 days, or roughly another two and a half years, to make the current rally the longe ...

Global Stocks Plunge After Bank Of Japan "Shock"

It is very fitting that on today's April 28th anniversary of the bull market, the day that officially makes this the second-longest "bull market" in history, the market got a stark reminder of just how it got there: through constant and relentless central bank intervention, which has been "beneficial" to stocks for the most part, however last night was anything but.

Less than one week after the BOJ floated a trial balloon using Bloomberg, that it would reduce the rate it charged some banks which set off the biggest USDJPY rally since October 2014, we are back where we started following last night's "completely unexpected" (for everyone else: we wrote "What If The BOJ Disappoints Tonight: How To Trade It" hours before said "shock") shocking announcement out of the BOJ which did absolutely... nothing.

"It's a total shock, Nader Naeimi, Sydney- based head of dynamic markets at AMP Capital Investors told Bloomberg. "From currencies to equities to everything -- you can see the reaction in the markets. I can't believe this. It's very disappointing."

As we reported last night, the yen surged the most in 8 months, or since August's market meltdown and Japanese equities plunged after the Bank of Japan refrained from adding to its monetary stimulus. Bonds jumped around the world and gold rallied as the Federal Reserve signaled no h ...

Frontrunning: April 28



Markets Get the Worst Kind of Kuroda Surprise as BOJ Stands Pat (BBG)

Bank of Japan brushes aside calls for more easing despite price falls (WSJ)

Ford Profit Surges to Record as Sales of SUVs, F-150 Gain Speed (BBG)

Valeant Pharmaceuticals to Make Sweeping Changes to Board (WSJ)

Trump breaks taboos, attacks Clinton on gender issue (Reuters)

Donald Trump Mocks Cruz: 'What's He Doing Picking Vice Presidents? (WSJ)

Wealthy, educated voters fuel Trump's East Coast sweep (Reuters)

Dow Chemical Beats Profit Estimates as Margins Widen on Cuts (BBG)

ECB should raise rates 'the second inflation rises again': BuBa (Reuters)

ECB's Nowotny can't say exactly when inflation will pick up (Reuters)

Puerto Rico Risks Historic Default as Congress Chooses Inaction (

Why the Bank of Japan Held Fire for Another Day

The Bank of Japan's lack of action caught markets by surprise. But that doesn't mean it is done easing.

Deutsche Bank: Why 2016 Could Still Hold a Nasty Surprise

The German lender's markets business appears to have found its feet in spite of the stormy start to the year, but capital is still under pressure.

Facebook Results: Investors Like Living in Zuckerberg's World

Facebook's new class of shares is a reminder of Mark Zuckerberg's control, but the company's strong results mean investors don't mind.

Economic Report: Economy grows in first quarter at slowest pace in two years

The U.S. economy sputtered in the first quarter to the lowest growth in two years, expanding just 0.5% as business slashed investment by the steepest rate since the Great Recession.

Economic Report: U.S. jobless claims climb 9,000 to 257,00

The number of Americans who applied for unemployment benefits last week rose by 9,000 to 257,000, but initial claims continued to cling near a four-decade low.

Outside the Box: This is far more toxic to your money than a mediocre stock fund

Beating the stock market is hard. But there's a bigger issue than underperforming actively managed funds, says Ben Carlson.

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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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