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02May2016 Pre-Market Commentary: US Futures Higher, Crude Prices Slip Off Friday's Highs, US Dollar Continues Its Fall Below 93, Markets To Open Higher, But May Not Stay There

Written by Gary

US stock future indexes are up fractionally this morning after Japanese stocks fell more than 3% overnight. Oil prices have fallen from Friday's highs as rising production in the Middle East outweighed a decline in U.S. output. Factory activity in China also fell in April, signaling a modest weakening of momentum for the world's second-largest economy despite easy-credit policies. Markets are expected to open higher, but may not be able to continue the opening momentum.


Here is the current market situation from CNN Money

European markets are higher today as French and German shares show gains. The CAC 40 is up 0.55% while the DAX is up 0.98%. The British FTSE 100 is closed.

What Is Moving the Markets

Here are the headlines moving the markets.

Halliburton and Baker Hughes scrap $28 billion merger

(Reuters) - Oilfield services provider Halliburton Co and smaller rival Baker Hughes Inc announced the termination of their $28 billion merger deal on Sunday after opposition from U.S. and European antitrust regulators.

Tokyo slide keeps mood downbeat

LONDON (Reuters) - A 3-percent drop in Japanese shares and weakness in the banking sector kept financial markets on edge on Monday, although stock markets in both Europe and the United States were on track for some minimal gains.

Big bargains entice Warren Buffett fans on Berkshire weekend

OMAHA (Reuters) - Warren Buffett, the CEO of Berkshire Hathaway Inc, is known for his keen eye for a bargain.

Oil prices slip from 2016 highs on OPEC output boost

LONDON (Reuters) - Oil prices edged back from 2016 highs on Monday as rising production in the Middle East outweighed a decline in U.S. output and a sliding dollar.

Sluggish factory activity sets global tone for second quarter

BENGALURU/SYDNEY (Reuters) - Asian factories barely grew in April and those in the euro zone did little better despite heavy discounting, setting a sluggish tone on Monday for the global economy in the second quarter.

Goldman targets 'mass affluent' borrowers with unusual lending plan

NEW YORK (Reuters) - Goldman Sachs Group Inc , the banking gold standard for the world's elite, sees a future in less prosperous investors.

U.S. companies starting to see relief from pains of strong dollar

NEW YORK (Reuters) - The sluggish U.S. economy is proving to be a relief for U.S.-based companies struggling under the weight of the strong dollar and could lead to more positive earnings surprises in the weeks ahead.

Oracle to buy utility software maker Opower

(Reuters) - Oracle Corp will buy Opower Inc , a maker of software for utilities, for about $548 million in cash.

Australian tells BBC he created bitcoin, but some skeptical

SYDNEY/SINGAPORE (Reuters) - Australian tech entrepreneur Craig Wright told the BBC that he was the creator of controversial digital currency bitcoin, but some scepticism remained about the identity of a person who until now has gone by the name of Satoshi Nakamoto.

Gold Surges To Jan 2015 Highs, Tops $1300 As Euro Hits 9-Month High

A lack of intervention in the Yen and strength in EUR have combined to weigh on the US dollar. Bloomberg's USD Index is back at one-year lows as, while overnight chaos sent stocks higher, it has driven investors into the safety of bonds (Treasury yields down 2-3bps) and precious metals. Gold topped $1300 and Silver $18 as EURUSD pushes above 1.1500...

USD Index getting clubbed..

On the back of EUR strength...Topping 1.15 for the first time since August

Gold tops $1300...

And Silver hovers at $18...

The Best And Worst Performing Assets In April

Following what was one of the most volatile Q1's on record, Q2 kick started the second quarter on a positive note in April. According to DB (whose stock has failed to meaningfully rebound from recent lows) while performance didn't quite match those lofty gains made in March, in the face of a number of key central bank meetings and also the commencement of earnings season in the US and Europe " for which expectations were low " risk assets in particular have shown a reasonable degree of resilience on the whole.

According to DB's Jim Reid, traders would be hard pressed to find many assets which had a negative total return month. Looking across the asset sample, its sovereign bond markets which were the standout underperformers with Treasuries, Bunds, Gilts, BTP's and Spanish Bonds sitting in the 0% to -1% range. At the other end of the scale there is a clear theme and that's the performance for commodity markets.

Indeed despite the Kuwait Oil producers meeting ending in a blank, it was another strong month for both WTI (+20%) and Brent (+16%) which resulted in both marching to the highest level this year. Silver (+16%) and Corn (+11%) were the other big performers in the commodity complex this month. In fact, the commodity market index rounds off the top 5 with an +8% return during the month. Brazilian equities (+8%) get another honourable mention this month with markets reacting positively to the latest political developments there, while it won't be much of a surprise to see the Yen (+6%) also creep into the top ten following the BoJ disappointment at the end of the month.

In terms of equity markets, European banks (+6%) were the standout performer despite a weak last day of the month, although the sector is still well down on a YTD basis. European equities (+2%) had a reasonably solid performance on the whole, with Spanish (+4%) and Italian (+3%) markets leading the charge. Across the pond the S&P 500 (+0.4%) just s ...

Venezuela, That Sinking Feeling

Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

Venezuela has been burdened by government corruption and incompetence for years. For an excellent primer, which documents these endemic problems in the pre-Chavez era, I recommend Moises Naim's book, Paper Tigers & Minotaurs: The Politics of Venezuela's Reforms. Washington, D.C.: The Carnegie Endowment for Peace, 1993.

Ever since Hugo Chavez injected his brand of socialism into Venezuela's arteries in 1999, corruption and incompetence has been on steroids.

Two charts tell the tale of Venezuela's woes. First, take a look at Venezuela's oil production post-Chavez: it's been sagging, and not because of dwindling resources.

Second, while oil production has slumped, Venezuela's implied annual inflation rate has soared, according to my calculations at the Cato Institute's Troubled Currencies Project. At present, Venezuela's annual inflation rate is 304 percent, the world's h ...

Frontrunning: May 2



Puerto Rico Development Bank Won't Make Most of a Debt Payment Monday (WSJ)

Why the jump in futures? Tokyo slide keeps mood downbeat (Reuters)

Indiana to test Donald Trump's staying power with evangelicals (Reuters)

Gold Rallies Above $1,300 for First Time Since January 2015 (BBG)

This Tech Bubble Is Bursting (WSJ)

Valeant's CEO Was Key Force on Pricing (WSJ)

US banks sound caution on commercial property loans (FT)

As oil plows through $45 a barrel, U.S. producers rush to lock in prices (Reuters)

Why So Many Chinese Students Come to the U.S. (WSJ)

Big bargains entice Warren Buffett fans on Berkshire weekend (Reuters)

Halliburton, Baker Hughes Calls Off $28 Billion Deal (BBG)

Goldman targets 'mass affluent' borrowers with unusual lending plan (

From Apple to Facebook: What Tech Investors Want Now

Yield-hungry investors still want to see growth in their tech portfolios.

Mobile-Payments War: Profits May Suffer Collateral Damage

As the multisided battle for control of mobile payments accelerates, profits will come under pressure.

Chinese Water Company Makes Wrong Kind of Splash

Beijing Enterprises Water took a risky dip into rival Sound Global, buying a stake just after regulators suspended the company's shares from trading.

Conrad de Aenlle's Funds For Thought: Slumping buyback-linked ETFs could be telling stock investors to sell

ETFs tied to buybacks have lagged the market, which could be an early warning sign for investors, writes Conrad de Aenlle.

The Wall Street Journal: Valeant's departing CEO Michael Pearson was key force on pricing

Documents collected for a Senate investigation provide insight into how Valeant arrived at sharp price increases.

Jeff Reeves's Strength in Numbers: 3 tech stocks to ride booming new media trends

Facebook, Netflix, and Apple will reshape the ways consumers are entertained in a digital age, writes Jeff Reeves:

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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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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