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19May2016 Pre-Market Commentary: Futures Lower, Crude Drips Below 48, US Dollar Stronger, Higher Interest Rates Possibly Next Month

Written by Gary

US stock future indexes are lower this morning, sovereign bonds slumped and the dollar held gains after minutes of the Fed's last meeting yesterday. Crude is under pressure from the financial movement, in addition to EIA data published on Wednesday showing a build in U.S. crude inventories, as well as surging output from Iran to Europe and Asia. Weekly jobless claims fell by 16,000 to 278,000 last week. That came in higher than the estimate for 275,000. The prior week was unchanged at 294,000.

Here is the current market situation from CNN Money

What Is Moving the Markets

Here are the headlines moving the markets.

Wal-Mart profit beats expectations; stock jumps

(Reuters) - Wal-Mart Stores Inc on Thursday reported a higher-than-expected quarterly profit as sales in the U.S. market rose, an improvement the retailer attributed in part to its increasing wages, and its shares jumped nearly 8 percent.

Futures down as June rate hike looms

(Reuters) - U.S. stock index futures were lower on Thursday as investors digested the possibility of the Federal Reserve raising interest rates as early as next month.

Fed signals interest rate hike firmly on the table for June

WASHINGTON (Reuters) - Federal Reserve officials felt the U.S. economy could be ready for another interest rate increase in June, according to the minutes from the central bank's April policy meeting released on Wednesday.

Oil drops below $48 on Fed hike speculation, fading support from outages

LONDON (Reuters) - Oil fell below $48 a barrel on Thursday, pressured by a stronger dollar and as a surprise increase in U.S. crude inventories served as a reminder that supply remains ample despite output problems.

Widening U.S. money fund spread sets stage for $400 billion shift

BOSTON (Reuters) - The difference in yield between prime and government money market funds has widened by 6 basis points since January, according to data released on Wednesday, in a trend expected to accelerate as investors prepare for new rules being rolled out this autumn.

Bayer makes move for Monsanto in global agrichemicals shakeout

NEW YORK/FRANKFURT (Reuters) - German drugs and chemicals group Bayer has made an unsolicited takeover proposal to U.S. seeds company Monsanto, aiming to create the world's biggest agricultural supplier and take advantage of converging pesticides and seeds markets.

Now or later? Euro zone, IMF at odds over when Greece should get debt relief

BRUSSELS (Reuters) - The euro zone and International Monetary are struggling with Greece's debt crisis - not with Athens this time, but with each other over when to give Greece a break on its future massive debt repayments.

In meeting with Apple's Cook, China regulator stresses security

BEIJING (Reuters) - The head of China's industry and technology regulator stressed Chinese users' security in a meeting with Apple Inc's chief executive in Beijing, as the U.S. tech titan stumbles in its biggest offshore market.

Bangladesh Bank official's computer was hacked to carry out $81 million heist: diplomat

MANILA (Reuters) - A Bangladeshi central bank official's computer was used by unidentified hackers to make payments via SWIFT, and carry out one of the biggest-ever cyber heists, a Bangladeshi diplomat said on Thursday at the end of a Philippine Senate inquiry.

Iceland's Biggest Political Party Is Now The "Pirate Party"

Submitted by Michaela Whitton via,

Iceland's anti-establishment Pirate Party continues to lead nationwide polls as the most popular choice for the next elections. The party — whose policies include internet freedom, drug decriminalisation, and open democracy — has consistently led the polls for the last year and, as a result, has secured more funding than any of its rivals.

The 2008 financial crisis hit Iceland hard. The following year, the krona was devalued by around 50%, unemployment doubled, and capital controls were introduce. Miraculously, the country rose from the ashes to become one of Europe's top performers in terms of growth. More recently, the political establishment has been in turmoil since three government ministers were implicated in the global Panama Papers scandal.

Despite their struggle, or perhaps because of it, the list of reasons to admire Icelanders keeps on growing. Whether it's the sentencing of senior bankers — or the mass outrage at the offshore leak, which propelled 10% of the population to the streets and

Elizabeth Holmes Admits Theranos' "Technology" Is A Fraud: Restates, Voids Years Of Test Results

The billion dollar baby has now, officially, gone bye bye.

Just when you thought that the biggest ever "multi-billion" private company that also happens to be an utter fraud, would quietly disappear before it risked attracting even more unwarranted attention from regulators, enforcers, and criminal investigators which could potentially lead to prison time for "billionaire" Elizabeth Holmes, here she comes again reminding everyone of her fallen from grace presence, in this case with what should be the terminal news for this company, namely that as the WSJ reports (and as the company confirms) Theranos has told federal health regulators that the company voided and revised two years of results from its Edison blood-testing devices and has issued tens of thousands of corrected reports to doctors and patients.

As a reminder, the basis for Theranos ludicrous $9 billion valuation which it appears was achieved without anyone doing any actual due diligence, were the "Edison" machines which were touted as revolutionary - not just by Holmes but by the fawning media and even the Clintons. Theranos has now told regulators that it threw out all Edison test results from 2014 and 2015, effectively confirming it has no proprietary technology, and also validating that its valuation should be zero.

Worse, Theranos has told regulators that it used the Edison for 12 types of tests out of more than 200 offered to consumers and stopped using the devices altogether in late June 2015. In other words, Theranos' insane "valuation" was achieved on the basis of doing only 6% of blood tests in house (all of them erroneously we now learn), and outsourcing 94% to companies whose products actually worked and many of whom ...

Frontrunning: May 19

Fed Puts June Rate Increase on Table Provided Economy Says Go (BBG)

European shares drop as mining stocks weaken, airlines fall (Reuters)

Oil drops below $48 on Fed hike speculation, fading support from outages (Reuters)

Violent Struggle Over Oil and Money Rattles Global Energy Market (BBG)

Bayer Proposes to Acquire Monsanto (WSJ)

How Wall Street Led LendingClub Into Crisis (BBG)

Fewer Shareholders Pay U.S. Taxes on Dividends (WSJ)

Turkey to miss end-June deadline for EU visa-free travel (Reuters)

Trading Floors 'Quiet' as Revenue Drops, JPMorgan Analysts Say (BBG)

Netanyahu pulls off coalition surprise to upend Israeli politics (Reuters)

Najib's Stepson Bought House in London With 1MDB Funds (BBG)

EU to compile comm ...

Time to Put China's Currency Back on Worry List

The factors supporting a stable yuan "a weakening dollar and a stabilizing Chinese economy "are reversing.

Global Markets: Is the Calm After the Storm Over?

The U.S. Federal Reserve's renewed appetite for rate increases challenges the status quo in markets.

How Google's Dreams Power Its Reality

Home automation and virtual reality seem far from Google's core, but the company needs to keep expanding its platform.

14 May 2016 Initial Unemployment Claims Rolling Average Again Worsened. Now Rolling Averages Are Higher Than Levels One Year Ago.

Weekly Initial Unemployment Claims

The market expectations for weekly initial unemployment claims (from Bloomberg) were 261,000 to 280,000 (consensus 275,000), and the Department of Labor reported 278,000 new claims. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 268,250 (reported last week as 268,250) to 275,750. The rolling averages generally have been equal to or under 300,000 since August 2014.

Economic Report: Jobless claims sink 16,000 to 278,000

The number of Americans who applied for unemployment benefits in mid-May fell by 16,000 to 278,000 " with most of the drop concentrated in New York " in a reassuring sign the labor market is still fairly healthy.

Need to Know: The Fed won't raise interest rates if this happens

The Fed's hawkish signals aren't going down so well with stock futures " could the market itself keep the Fed from moving? Plus, what the past year has meant for the S&P since it hit that record closing high.

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