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30May2016 Pre-Market Commentary: US And London Markets Closed For The Holidays, Gold Slides While Crude Creeps Up

Written by Gary

European stock markets are in the green, but stuck largely near the flat line this morning, in the absence of trading in the U.S. and London. Gold slid below $1,200/ounce on Yellen comments Friday and today's WTI crude futures are slowly climbing back up, but remain in the low 49's. Financial markets in the U.S. are for the observance of Memorial Day, in honor of men and women who died while serving in the U.S. military.


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 0.12% while the DAX is up 0.40%. The British FTSE 100 is closed.

What Is Moving the Markets

Here are the headlines moving the markets.

European shares hit one-month high, dollar firms on Yellen's hike hint

LONDON (Reuters) - European shares hit one-month highs on Monday, while the dollar index rose to a two-month peak after Federal Reserve Chair Janet Yellen suggested that an interest rate hike in the United States may be around the corner.

U.S. union say Verizon to add 1,300 jobs, provide 10.9 percent pay hikes

(Reuters) - Verizon Communications Inc has agreed to add 1,300 new jobs on the U.S. East Coast and provide 10.9 percent in pay raises over four years under a tentative deal between the company and unions, the Communications Workers of America said on Monday.

Fed's Bullard says global markets seem well-prepared for summer rate hike

SEOUL (Reuters) - St. Louis Federal Reserve President James Bullard said on Monday global markets appear to be "well-prepared" for a summer interest rate hike from the Fed, although he did not specify a date for the policy move.

Boeing set to win $2.9 billion contract from UK MoD: the Telegraph

(Reuters) - Boeing Co is set to win a 2-billion-pound ($2.92 billion) contract from the UK Ministry of Defence (MoD) for new Apache helicopters, the Telegraph reported.

Alibaba tells vendors to halt drug sales online, cites government rule change

SHANGHAI (Reuters) - Chinese e-commerce firm Alibaba Group Holding Ltd has told vendors on its Tmall website to stop selling medicine, saying a local regulator has issued an "urgent" directive halting drug sales via third-party platforms.

Data analysis from Paris raid on Google will take months, possibly years: prosecutor

PARIS (Reuters) - Analysis of data seized by investigators in last week's raid of Google's Paris headquarters could possibly take years, French financial prosecutor Eliane Houlette said on Sunday.

Oil prices slip as Iraq raises exports

LONDON (Reuters) - Oil prices edged lower toward $49 a barrel on Monday as Iraq raised its crude exports target ahead of an OPEC meeting while Canadian production was set to restart after huge wildfires.

How Wellcome and Gates charities profit from helping biotech

LONDON (Reuters) - The Wellcome Trust medical charity is to profit from U.S. approval of a new diagnostic cancer test, the first commercial product funded by the organization since the sale of its pharmaceuticals business to Glaxo in 1995.

Bourbon maker Brown-Forman shares seen expensive

NEW YORK (Reuters) - Shares of Brown-Forman , which makes Jack Daniel's and other liquors, are seen as pricey as the world's top bourbon seller faces slowing growth in an increasingly crowded field, Barron's said in its latest online edition.

Never Forget

As the barbeque-bonanza and shopping-fest, that Memorial Day has become for many, takes shape, we thought a little reflection was necessary on the deeper meaning behind this important celebration honoring those who fell in the armed services of America during its wars.

Memorial Day Quotes

"Ask not what your country can do for you - ask what you can do for your country."

— John F. Kennedy

"I have long believed that sacrifice is the pinnacle of patriotism."

— Bob Riley

"Liberty, when it begins to take root, is a plant of rapid growth."

— George Washington

"The legacy of heroes is the memory of a great name and the inheritance of a great example."

-Benjamin Disraeli

"It doesn't take a hero to order men into battle. It takes a hero to be one of those men who goes into battle."

— H. Norman Schwarzkopf

"They hover as a cloud of witnesses above this Nation. ...

Trickle-Down Crash? Trophy Assets Suddenly Tanking

Submitted by John Rubino via DollarCollapse.com,

One of the defining traits of the past few years' "recovery" has been the torrent of money flowing from big banks to favored clients, and from there into trophy properties like high-end real estate, superyachts, and fine art. This might be the first financial bubble to completely bypass the 99%.

And now it's ending. Falling oil prices and negative interest rates (rich people own a lot of government bonds) seem to have sucked the animal spirits out of the 1%, leading to stories like this:

A Worrisome Pileup of $100 Million Homes

(New York Times) - One of the latest symbols of the overinflated luxury housing market is a pink mansion perched above the Mediterranean on the French Riviera.

The 13,000-square-foot property, built and owned by the fashion magnate Pierre Cardin, is composed of giant terra cotta orbs arranged in a sprawling hive. The home's name befits its price. "Le Palais Bulles," or "the Bubble Palace," is being offered for sale at approximately $450 million.

The listing is part of a global pileup of homes listed for $100 million or more. A record 27 properties with nine-figure prices are officially for sale, according to Christie's International Real Estate. That is up from 19 last year and about a dozen in 2014.

If you add in high-priced "whisper listings" that are offered privately, brokers say the actual number of nine-figure listings worldwide could easily top 40 ...

Why This Friday's Payrolls Report Could See A Big Miss

When the main economic event this week hits this Friday at 8:30 am EDT, when the BLS releases the May payrolls report, Wall Street consensus wil be expecting a 160,000 print, a number which will have a big impact on market expectations for a Fed rate hike at the June or July FOMC meeting. However, consensus may be disappointed for one reason: the Verizon strike could chop off as much as 35,000 workers from the headline payrolls print.

As DB's Joe LaVorgna explains, the May Nonfarm payrolls (+135k forecast vs. +160k previously) should show a substantial impact from 35k striking Verizon workers during the survey period. Private payrolls are likely to increase by only 125k (vs. 171k). This is one reason why the unemployment rate should remain steady at 5.0% for the third consecutive month. Average hourly earnings (+0.1% vs. +0.3%) could also be impacted by the Verizon workers as there is historical evidence that strikes of similar magnitude have distorted AHEs and hours worked.

Andrew Zatlin of Southbay Research, once called the "Moneyball of Economics", likewise lowered its NFP forecast by 20K to account for the Verizon strike:

On Friday (yesterday) the BLS released the Strike Report in which 35K Verizon strikers were identified. It can be found here: http://www.bls.gov/ces/cesstrk.htm

WHY INCLUDE NOW

The original SouthBay forecast did not include the Verizon strike because I was not sure if the BLS would include it. That may sound strange given that the strike met all the criteria for being included in the payroll figures (for example, it lasted the entire period under coverage). But one never knows with the BLS. ...

Former Morgan Stanley Chief Asia Economist: "Don't Listen To The Ruling Elite, The World Economy Is In Real Trouble"

Authored by Andy Xie, the former Morgan Stanley chief Asia-Pacific economist, originally posted Op-Ed at The South China Morning Post,

Andy Xie says the world's elite that are attending the G7, G20, Davos and other wasteful meetings are wrong to try to pin the blame for the turmoil on people's psychology; all signs point to a prolonged period of global stagnation and instability.

Before the current G7 meetings waste of time, The G20 working group meeting in Shanghai didn't come up with any constructive proposals for reviving the global economy and, instead, complained that the recent market turmoil didn't reflect the "underlying fundamentals of the global economy". The oil price has declined by 70 per cent since June 2014, while the Brazilian real has halved, and the Russian rouble is down by 60 per cent. The global economy is on the cusp of another recession, and these important people blamed it all on some sort of psychological problem of the people.

Over the past two decades, the global economy has been blessed with the entry and participation of 800 million hard-working Chinese, plus the information revolution. The pie should have increased enough in size to make most people happier. Yet, the opposite has happened. The world has gone from one crisis to another. People are complaining everywhere. This is due to mismanagement by the very people who attend the G20 meetings, the Davos boondoggle, and so many other global meetings that waste taxpayers' money and put inept leaders in the limelight.

One major complaint that people have is that the system is rigged - that is, the rising income concentration is not due to free market competition, but a rigged system that favours the politically p ...

Noble Group: Why Big Moves Don't Signal New Chapter

Noble Group bids farewell to its CEO and one of its best-performing businesses, hardly signs things are getting back to normal.

Dalian Wanda: An Offer That Makes Shareholders Want to Move On

Dalian Wanda Commercial's plan to delist so soon after its IPO reeks of expedience, rather than long-term value creation. Investors may have little choice but to move on.

The Economy vs. Earnings: Companies Aren't Winning

The U.S. economy isn't as weak as the GDP report suggests. As that becomes clear, companies will need to find another excuse.

Europe Markets: Europe stocks inch into positive territory, but U.S., London holidays keep volumes low

European stock markets stuck largely to the flat line on Monday, in the absence of trading in the U.s. and London, which are both closed for holidays.

Currencies: Dollar climbs atop ¥111 after Fed's Yellen fuels rate-hike fever

Yellen, speaking at an event at Harvard University, said it would be appropriate for the Fed to raise rates œgradually and cautiously if the economy and the labor market continued to improve.

Market Snapshot: Stock futures rise in shortened trading day as investors brush aside Yellen comments

Stock futures are rising in a muted session, thinned by the Memorial Day holiday, as investors look ahead to the week's data, including nonfarm payrolls.

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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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