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07Jun2016 Pre-Market Commentary: US Futures Fractionally Higher, Crude Trading In The 50's, US Productivity Fell And Yellen Less Hawkish

Written by Gary

US stock future indexes are up fractionally (SPY +0.1), WTI crude up and the US dollar marginally weak. Oil prices hit their highest in eight months today, buoyed by the dollar nearing one-month lows and by falling Nigerian oil output.

The productivity of American businesses and workers fell in the first quarter, but not as much as initially reported: 0.6% instead of 1%, revised government figures show.


Here is the current market situation from CNN Money

European markets are broadly higher today with shares in Germany leading the region. The DAX is up 1.67% while France's CAC 40 is up 1.25% and London's FTSE 100 is up 0.34%.

U.S. STOCK INDEXES

The June S&P 500 was higher overnight as it extends this year's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this year's rally, weekly resistance crossing at 2133.40 is the next upside target.

Closes below the 20-day moving average crossing at 2074.28 are needed to confirm that a short-term top has been posted.

First resistance is the overnight high crossing at 2116.00. Second resistance is weekly resistance crossing at 2133.40. First support is the 10-day moving average crossing at 2096.57. Second support is the 20-day moving average crossing at 2074.28.

What Is Moving the Markets

Here are the headlines moving the markets.

Stock futures up after Yellen eases worries over economic health

(Reuters) - U.S. stock index futures were higher on Tuesday, a day after Federal Reserve Chair Janet Yellen expressed confidence in the health of the economy, but was less hawkish on raising interest rates in the near-term.

Oil hits 2016 high on ebbing supply, softer dollar

LONDON (Reuters) - Oil prices hit their highest in eight months on Tuesday, buoyed by the dollar nearing one-month lows and by falling Nigerian oil output after a spate of attacks on infrastructure.

China gives U.S. investment quota for first time to deepen financial ties

BEIJING (Reuters) - China said it will give the United States a 250 billion yuan ($38 billion) investment quota for the first time to buy Chinese stocks, bonds and other assets, deepening financial ties and interdependence between the world's two largest economies.

U.S. presses China to reduce barriers for foreign business

BEIJING (Reuters) - Senior U.S. officials pressed China again on Tuesday to reduce barriers for foreign businesses, saying concerns have grown due to a more complex regulatory environment.

Viacom investors look beyond Dauman, betting on suitors

(Reuters) - Media investors are looking beyond the legal battle between the Redstone family and Viacom Inc O> CEO Philippe Dauman, speculating that a deal for the $18 billion media conglomerate could be on the horizon.

U.S. productivity contracts 0.6 percent in first quarter

WASHINGTON, (Reuters) - U.S. nonfarm productivity fell less sharply than previously thought in the first quarter, but labor-related costs still surged as companies employed more workers to boost output.

French court rules SocGen fired ex-trader Kerviel without cause

PARIS (Reuters) - Societe Generale fired former trader Jerome Kerviel without real and serious cause, a French labor court ruled on Tuesday, ordering the bank to pay him 450,000 euros ($510,255), according to his lawyer and a court official.

Fed's Yellen sees rate hikes ahead, but few hints on when

PHILADELPHIA (Reuters) - Federal Reserve Chair Janet Yellen on Monday gave a largely upbeat assessment of the U.S. economic outlook and said interest rate hikes are coming but, in an omission that stood out to some investors, gave little sense of when.

Wall Street hopes software helps it hire loyal bankers

(Reuters) - Clinching a job on Wall Street soon may have as much to do with beating an algorithm as nailing the interview.

"Finally, A Week Of Buying" - After A Record 18 Weeks Of Selling, The "Smart Money" Is Back

Forget BTFD... BTFATH is back.

A relentless stream of selling by Bank of America's "smart money" clients stretching for over 4 straight months, or 18 consecutive weeks, is finally over. As BofA's Jill Carey Hall reports, last week, during which the S&P 500 was flat from the prior week, BofAML clients were net buyers of US stocks for the first time in 19 weeks, breaking a record-long selling streak that began in mid-January.

Sales had generally been decelerating since late April. Net buying of $0.8bn was led by institutional clients, who have been the biggest sellers of US stocks this year. However, the selling continued among hedge funds and private clients who continued to derisk exposure last week.

Broader global flow data (EPFR data) similarly suggested inflows into US stocks in the most recent week (Thurs-Weds, vs. Mon-Fri for flows in this report). But four-week average BofAML client flows remain negative, as they have been since February, and flows in the coming weeks will suggest whether this represents true capitulation or simply a brief pause in outflows. Other sentiment measures, such as our Sell Side Indicator, suggest still-bearish equity sentiment.

How did the smart money invest: passive inflows, but single-stock buying, too (led by HC)

Global Trade Bellwether Taiwan Posts 16 Straight Months Of Sliding Exports

Taiwan's exports fell 9.6% y/y in May, marking the 16th straight month of decline. The results were slightly better than estimates of a 9.9% fall, however significantly worse than April where exports fell 6.5% y/y. Imports also fell 3.4% y/y, leaving a $3.5 billion trade surplus for May.

The declines highlight a slowing global economy, specifically in China which is a significant trading partner with Taiwan. We have highlighted for some time that there have been massive amounts of layoffs in China, and the impact is now making its way to the broader global economy. Countries exporting to China will continue to face headwinds, because as we pointed out yesterday the real unemployment rate in China is 12.9%, triple the official reported rate.

As Reuters adds, the near double-digit per cent fall in the data, a gauge of world appetite for high-tech gadgets, comes amid easing expectations for a US rate rise and reinforces the view Taiwan's central bank will likely cut rates for the fourth straight meeting this month as e ...

Frontrunning: June 7



Soothing Fed sounds send stocks to five-week high (Reuters)

Clinton reaches magic number in fight for Democratic nomination (Reuters)

Euro-Area Economy Grows Faster as Consumption Gathers Pace (BBG)

Trump unyielding on Hispanic judge uproar (Reuters)

European Firms Find 'Increasingly Hostile' Environment in China (WSJ)

China tells U.S. to play constructive South China Sea role (Reuters)

Republican Alternative to Dodd-Frank Calls for Banks to Boost Capital (WSJ)

Saudi Arabia to Cut Public-Sector Wage Bill in Post-Oil Plan (BBG)

Goldman Probed Over Malaysia Fund 1MDB (WSJ)

Syrian army, U.S.-backed forces advance separately against Islamic State (Reuters)

Struggling Ralph Lauren Tries to Fashion a Comeback (WSJ)

The Alchemist Who Turned Toxic Assets Into Gold at Citigroup (

Is the Fed Outright Buying Stocks/Futures to Prop Up the Markets?

"Someone" is getting desperate.

Throughout the last week, anytime stocks have begun to correct or drop, "someone" has bought S&P 500 futures to prop the market up.

Anyone who's been involved with the markets for a while knows the difference between real buyers and manipulation. This is manipulation plain and simple.

Look at all those "V" rallies. Three days in a row stocks opened DOWN and someone immediately stepped in and began buying aggressively.

Another tell-tale sign of manipulation: the buying halts almost the moment stocks get to 2,100 on the S&P 500. At this point the manipulation ends. And because there are few REAL investors buying stocks at these levels, the market immediately retreats.

Could it be that the Fed or Plunge Protection Team is aware that earnings are collapsing... signaling that this stock market bubble is ready to burst?

Or that the US economy fell off a cliff a few months ago? We're now almost assuredly in a recession.

Indeed, the number of data points that are "the worst since 2008-2009" is staggering...

This whole mess feels just like the end of 2007/ beginning of 2008 to me.

On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide

In it, we outline precisely how the coming crash will unfold, as w ...

Yellen Lays Out the Fed's New Rate Project

Federal Reserve Chairwoman Janet Yellen is taking rate increases off the clock.

China's Property Prices Rebound, but Stocks Tell Another Story

China's housing prices are up even as property company stocks languish. Investors should listen to the stocks.

Dish: Ergen's Vision Is Worth More Than the Market Thinks

Recent moves by Dish Network enhance the value of its wireless spectrum for a potential buyer.

The Rise Of Manufacturing Marks The Fall Of Globalization

from STRATFOR

-- this post authored by Rebecca Keller

Whether you're reading this article on a smartphone, tablet or laptop, chances are the device in front of you contains components from at least six countries spanning three or more continents. Its sleek exterior belies the complicated and intricate set of internal parts that only a global supply chain can provide. Over the past century, finished products made in a single country have become increasingly hard to find as globalization - weighted a term as it is - has stretched supply chains to the ends of the Earth.

Economic Report: U.S. productivity falls revised 0.6% in first quarter

The productivity of American businesses and workers fell in the first quarter, but not as much as initially reported: 0.6% instead of 1%, revised government figures show.

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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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