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17Jun2016 Pre-Market Commentary: Looks Like A Good Day For The Markets

Written by Gary

All major world markets are in the green. The only uncertainty out there seems to be Brexit - which now seems not to be affecting the markets even though most polls show a British exit vote winning. Maybe the markets have realized it may not be a big deal?


Here is the current market situation from CNN Money

European markets are broadly higher today with shares in London leading the region. The FTSE 100 is up 1.02% while France's CAC 40 is up 0.90% and Germany's DAX is up 0.40%.

What Is Moving the Markets

Here are the headlines moving the markets.

Sell-off abates as Brexit opinion seen shifting

LONDON (Reuters) - Shares, oil and bond yields rose on Friday after a tumultuous week and as campaigning for Britain's EU membership vote next week was suspended after the killing of a pro-"Remain" politician.

Investors back rivals Uber and Didi, raising eyebrows

SAN FRANCISCO (Reuters) - Ride-hailing companies Uber and Didi have brought many new dimensions to the startup industry, such as making billion-dollar-plus funding rounds routine.

Global oil majors look to shed refineries as crude prices rebound

NEW YORK (Reuters) - Global oil majors Chevron Corp and Royal Dutch Shell Plc are putting small refineries on the auction block as they look to trim lower-margin assets in the face of headwinds from rising crude oil prices.

Mitsubishi plans $600 million compensation for four models over mileage cheating

TOKYO (Reuters) - Japan's Mitsubishi Motors Corp said it plans to give owners of four minivehicles close to $1,000 in compensation for its overstating of mileage readings, part of reimbursement costs that will total at least $600 million.

Barclays labels $1.0 billion lawsuit over 2008 fundraising 'misconceived'

LONDON (Reuters) - Barclays has described as "fundamentally misconceived" a $1.0 billion-plus lawsuit brought by British financier Amanda Staveley over the bank's emergency fundraising from Gulf investors at the height of the credit crisis in 2008.

British companies prepare for long night to possible Brexit

LONDON (Reuters) - British companies are preparing for the possibility that the country will vote to leave the European Union with extra funds, pre-written statements and plans for late-night vigils by teams of consultants.

Sumner Redstone moves to oust five Viacom directors including CEO from board

NEW YORK/SAN FRANCISCO (Reuters) - Sumner Redstone removed five of Viacom Inc's directors, including Chief Executive Philippe Dauman, from the board of the media company he controls on Thursday, a big step toward a potential management shake-up of the almost $20 billion company.

U.S. gun shares extend gains after strong Smith & Wesson earnings

SAN FRANCISCO (Reuters) - Shares of firearm makers surged on Thursday after a strong quarterly report from Smith & Wesson Holding Corp , adding to gains this week after a shooting at a gay nightclub in Florida in which 49 people were killed.

U.S. strikes back at judge's decision that MetLife not 'too big to fail'

WASHINGTON (Reuters) - The U.S. government laid out its arguments against a federal judge's decision to strike down the designation of life insurer MetLife Inc as "too big to fail" in a brief filed late on Thursday, showing how it intends to defend a key provision of the Dodd-Frank Wall Street reform law.

Global Stocks Rebound As Brexit Odds Decline Following Tragic Death Of UK Lawmaker

Traders are still stunned by the dramatic move in risk assets during yesterday's US session. As a reminder, at the lows for the day in the mid-morning Eastern Time, we saw the DAX at -1.81%, FTSE -1.13%, S&P500 -1.03%, US 10y yield 1.516% (lowest since August 2012) and GBPUSD 1.401. By the various closes these rallied to -0.59%, -0.27%, +0.31%, 1.580% and 1.420 respectively!

What changed?

Unfortunately it had everything to do with the death of Jo Cox, which as even Deutsche Bank admits, "while it seems insensitive to talk about markets in relation to this event, unfortunately this story heavily influenced them yesterday. Before this news came out the two phone polls that the market had been waiting for both came out in favour of 'leave' (Ipsos-Mori 53%/47% and Survation 45%/42%)." The reason: BBC eyewitness reports (later questioned) suggesting the killer shouted 'put Britain first'. As a result, campaigning has been suspended for now and it's unclear when it will get going again. As we first noted, the immediate outcome of the shooting was a rumor that the Brexit vote next Thursday will be postponed, which in turn boosted "Remains" odds.

And, as Bloomberg also puts it, "Sterling rebounded from a two-month low as an opinion poll on voter intentions in next week's referendum was delayed."

Odds on the U.K. leaving the EU slid to 38 percent after hitting a record 44 percent on Thursday, according to Oddschecker calculations based on bookmakers' quotes. œIf you do see uncertainty, that typically will drive voters to the status quo, said Karl Schamotta, director of foreign-exchange research and strategy in Toronto at Cambridge Global ...

Brexit: All Eyes On European Banks

Submitted by Lewis Johnson via Capital Wealth Advisors,

"If you go then I'll be blue cause breaking up is hard to do."

Neil Sedaka

"France and Great Britain shall no longer be two nations, but one Franco-British Union. The constitution of the Union will provide for joint organs of defense, foreign, financial and economic policies. Every citizen of France will enjoy immediately citizenship of Great Britain, every British subject will become a citizen of France. " Proposal from England's War Cabinet to France in May of 1940 in the hope of keeping France fighting the Nazi invasion "The greatest disappointment of my political career." French Prime Minister Paul Reynaud expressing his disappointment with the failure of the above initiative "Hell is truth seen too late." Hobbes "War is horrible...but slavery is worse." Churchill "The end was contained in the beginning." George Orwell "I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." Thomas Jefferson "All political parties eventually die choking on their own lies." Mark Twain

It Begins: Members Of European Parliament Beg Draghi To Unleash Helicopter Money

Remember earlier this year when Mario Draghi said that the use of helicopter money was "a very interesting concept"? If not, rest assured that 18 members of the European Parliament do.

In an open letter to ECB president Mario Draghi, 18 members of the European Parliament's social democrat, leftwing and green groups recommended that the ECB look into the use of helicopter money and buying bonds from the European Investment Bank "as possible solutions to enhance economic development through direct spending into the real economy" the FT reports.

The leader of parliament's Green group, Philippe Lamberts, who is also one of the signatories, said that embracing helicopter money could make more sense than continuing with the ECB's current quantitative easing policy, because "inundating a sick financial system under a tsunami of liquidity equates to pushing on a string", adding that buying EIB bonds would be a "robust alternative to kick-start the EU economy."

Fabio De Masi, a German lawmaker from the Die Linke party is pushing the ECB to consider alternative policy options because QE combined with austerity "will only inflate asset bubbles as nobody invests despite ultra-low interest rates", adding "we hence need to spend directly into the economy. Funding public investment via EIB would be my preferred option but helicopter money to low income households would definitely work."

Indeed, if by "definitely work" De Masi meant would completely ruin what little bit is left of a functioning capital market and create the need for a vault the size of Scrooge McDuck's just to go purchase a loaf of bre ...

Austerity Kills! Bank Of Greece Admits "Greeks' Health Deteriorating, Life Expectancy Shrinks"

Via KeepTalkingGreece.com,

The economic crisis and the strict austerity bound to the Greek bailout agreement kills. They kill Greeks. The Bank of Greece may not write it in such a melodramatic way on its Monetary Policy Report 2015-2016. However, the conclusions in the chapter about "Reforms in health, economic crisis and impact on the health of population" are shocking and confirm what we have been hearing and reading around from relatives and friends in the last years: that the physical and mental health of Greeks has been deteriorating - partly due to economic insecurity, high unemployment, job insecurity, income decrease and constant exposure to stress. Partly also due to economic problems that have patients cut their treatment, partly due to the incredible cuts and shortages in the public health system.

The Report notes that "while it takes longer to record the exact effect, trends show a deterioration of the health of Greeks in the years of loan agreements and austerity cuts."

Why Brexit Isn't Game Over for These European Banks

The U.K. referendum is spooking investors across financial services, but some southern European banks are insulated from the blow.

China's Short-Term Lending Boom Won't End Well

Volumes in China's overnight interbank lending market are surging, making the financial system more interdependent "and precarious.

Why Some Banks Are Hurt More Than Others by Falling Rates

The relentless decline in long-term interest rates is bad for all banks, but some are more exposed than others.

May 2016 Import Sea Container Count Trends Are Improving.

Written by Steven Hansen

Only the rolling averages for exports and imports remain in negative territory after two months of soft data. Month-over-month, year-over-year, and year-to-date data are now is in expansion.

Rail Week Ending 11 June 2016: Rail Contraction Continues

Week 23 of 2016 shows same week total rail traffic (from same week one year ago) contracted according to the Association of American Railroads (AAR) traffic data. The contraction this week was less than last week.

Why Apple doesn't have a venture-capital arm

Unlike many top technology companies, Apple doesn't have a venture capital arm. The reason comes down to Apple's culture of secrecy, but it could cost the tech giant if the $1 billion bet on Didi Chuxing pays off.

Need to Know: Here's the line in the sand for the S&P 500 if a Brexit happens

A calm settles over the markets after a tragic day in the U.K. For world markets, the waiting game goes on, and for the S&P 500, here's the level that may not hold if Brexit turns into reality next week.

Philippe Dauman may as well start packing up his desk at Viacom

Media magnate Sumner Redstone has replaced five members of the Viacom Inc. board of directors a day after telling investors he no longer trusted Chief Executive Philippe Dauman and the board.

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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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