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03Jun2016 Pre-Market Commentary: Bad News Is Good News

Written by Gary

Expect a good start to USA markets as the BLS jobs report disappoints and will throw a wrench into the Fed's touching the federal funds rate. Global markets are generally up.


Here is the current market situation from CNN Money

European markets are higher today with shares in London leading the region. The FTSE 100 is up 0.93% while France's CAC 40 is up 0.56% and Germany's DAX is up 0.51%.

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. job gains in May likely dented by Verizon strike

WASHINGTON (Reuters) - A strike by Verizon workers likely crimped U.S. job gains in May, but employment growth should still be strong enough to confirm a tightening labor market and push the Federal Reserve closer to raising interest rates soon.

Sumner Redstone has capacity to make trust decisions, says doctor

(Reuters) - A psychiatrist who examined Sumner Redstone twice last month found the 93-year-old retained the mental capacity needed to remove Viacom Inc Chief Executive Philippe Dauman from the trust that will eventually control the company, according to a spokesman for the media mogul.

World stocks edge toward one-month high; U.S. jobs data eyed for Fed clues

LONDON (Reuters) - World shares advanced toward their highest level in a month on Friday, although investor wariness over the rising prospects of a near-term interest rate hike by the Federal Reserve subdued activity as traders awaited U.S. jobs data later in the day.

Falih charm offensive slowly wins back OPEC for Saudis

VIENNA (Reuters) - Russian oil billionaire Vagit Alekperov isn't easily swayed, but Saudi Arabia's new Energy Minister Khalid al-Falih achieved it this week.

Brent crude oil holds above $50 on signs of rebalance

LONDON (Reuters) - Brent crude prices held around $50 a barrel on Friday on signs the market was moving back to more balanced supply and demand, and on an OPEC meeting viewed as supportive.

Iraq SOMO head says so far, so good for OPEC's strategy

VIENNA (Reuters) - OPEC's strategy of letting the oil market balance itself is working as investment in the industry is falling and any recovery will take time to bring new supplies, a senior Iraqi oil official said on Friday.

Amid SEC probe, Jack Ma says hard for U.S. to understand Alibaba: media

BEIJING (Reuters) - Alibaba Group Holding Ltd, whose accounting practices are under investigation by U.S. regulators, is a difficult company for the United States to understand, Executive Chairman Jack Ma said in an interview to Chinese media on Friday.

Valeant gets another default notice from bondholders

(Reuters) - Troubled Canadian drugmaker Valeant Pharmaceuticals International Inc said it received another notice of default from bondholders for the delay in filing its first-quarter report.

Fed likely to avoid rate hike before Britain votes on leaving EU

WASHINGTON (Reuters) - The U.S. Federal Reserve may be forced to delay a rate hike at its June meeting because of mounting concern over the economic fallout from Britain's vote on whether to leave the European Union.

The Structure Of Collapse: 2016-2019

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Leaders face a no-win dilemma: any change of course will crash the system, but maintaining the current course will also crash the system.

The end-state of unsustainable systems is collapse. Though collapse may appear to be sudden and chaotic, we can discern key structures that guide the processes of collapse.

Though the subject is complex enough to justify an entire shelf of books, these six dynamics are sufficient to illuminate the inevitable collapse of the status quo..

Your Last Minute Payrolls Preview: What Wall Street Expects

In less than an hour, the BLS will report the latest, May, non-farm payrolls and unemployment data. Here is what consensus expects:



US Change in Nonfarm Payrolls (May) M/M Exp. 160K (Low 90K, High 215K, Prey. 160K, March. 208K)

US Unemployment Rate (May) M/M Exp. 4.9% (Low 4.9%, High 5.1%, Prey. 5.0%, March. 5.0%)

US Average Hourly Earnings (May) M/M Exp. 0.2% (Low 0.1%, High 0.4%, Prey. 0.3%, March. 0.2%)

The NFP breakdown by bank is as follows:



BNP 110K

Deutsche Bank 135K

Citigroup 140K

SocGen 140K

Morgan Stanley 140K

Jefferies 155K

Nomura 160K

Goldman Sachs 165K

Deutsche Bank 170K

Raymond James 175K

Scotiabank 185K

Lloyds 195K

As RanSquawk notes, the NFP report at 8:30 am will be under intense scrutiny as it is the final jobs report before the June rate decision by the FOMC. The market has increased the probability of a hike at the June meeting significantly in recent weeks and a strong labour market has always been a key pillar on which Fed members say they would begin normalization. Of note, FFR futures currently price in a 22% chance of a hike in June.

Expectations are for a reading of 160K and although this is below the speculative benchmark of 200k, as we approach full employment the number of jobs the economy is able to create per month is diminished. That represents a marked slowdown from last year's average monthly growth of 229,000 jobs.

Trump Supporters "Terrorized" In Massive San Jose Street Brawl As Police "Lose Control"

Shocking scenes are occuring on the streets of San Jose as Trump supporters are chased, punched, kicked, and, as ABC News' Tom Llamas reports "terrorized" as the local police "appears to have lost control." Mobs of protestors, many carrying mexican flags, took over the streets ahead of a Trump rally branding tire irons and burning American flags.

Protestors made up mostly of young ppl. Some throwing up gang signs. There were ppl who came to demonstrate & some who just wanted to brawl

— Tom Llamas (@TomLlamasABC) June 3, 2016

Full video of the chaotic situation...

This @Timcast video from the #Trump protest in San Jose is really disturbing. https://t.co/wTp8idVvJH

— Blogs of War (@BlogsofWar) June 3, 2016

Social media is awash with videos of the events...

Our video of Trump supporter who says he was beaten up coming out of @realDonaldTrump rally. pic.twitter.com/PQSxjXfonl

— Tom Llamas (@TomLlamasABC) June 3, 2016

Frontrunning: June 3



World stocks edge toward one-month high; U.S. jobs data eyed for Fed clues (Reuters)

Commodities Stand on Brink of Bull Market After Oil's Recovery (BBG)

Brent crude oil holds above $50 on signs of rebalance (Reuters)

Clinton attacks Trump's foreign policy as a threat to U.S. safety (Reuters)

Trump strikes back at Clinton's 'phony' speech (Hill)

"We want food!', Venezuelans cry at protest near presidency (Reuters)

Employers in U.S. Moderating the Pace of Hiring (BBG)

Falluja is a 'tough nut to crack': Iraqi finance minister (Reuters)

Germany is investigating 180 suspects with Syrian militant links (Reuters)

Why Finding a New Subaru May Take Some Time (WSJ)

U.S.-based stock funds post fifth straight week of withdrawals (Reuters)

JPMorgan CEO Dimon May Have to Cut U.K. Jobs in Event of Brexit (

Noble Group Raises Cash But Hopes Still Dashed

Noble's founder Richard Elman is leaving the scene and only partly participating in the company's cash call.

OPEC: This Is No Way to Run an Oil Cartel

OPEC failed to act on output at its meeting Thursday. That is becoming par for a cartel that is a shadow of its former self.

Stressing Over the Bigger Costs of Being a Big Bank

Comments from Fed governor Daniel Tarullo show the cost of being a big bank will rise through annual 'stress tests.'

Rail Week Ending 28 May 2016: Have the Winds Changed?

Week 21 of 2016 shows same week total rail traffic (from same week one year ago) IMPROVED according to the Association of American Railroads (AAR) traffic data. The year-over-year rolling averages improved for the first time in over one year - although the year-over-year rolling averages are deeply in negative territory.

Infographic Of The Day: How To Choose The Right Blender

If you are in the market for a new blender, then you probably understand how difficult it can be to choose one. With so many options out there, how do decided which is the right one for you?

Capitol Report: Trump switches nickname to 'Lyin' Clinton | Trump supporters assaulted after rally | Gun control group backs Clinton

Donald Trump reassigns 'Lyin'' nickname to Hillary Clinton; Trump supporters assaulted after rally; gun control group backs Clinton; and more.

J.P. Morgan's Dimon says 4,000 jobs may be cut if Brexit takes place

Thousands of J.P. Morgan jobs in the U.K. could get cut if Britain were to slash membership ties with the European Union, warned Jamie Dimon, the bank's chief executive, on Friday.

Capitol Report: Even with outrageous housing costs, Silicon Valley pay still goes the furthest

OK, it may cost a million for an actual shack. But, even with its outrageous housing costs, Silicon Valley workers still have it best.

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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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