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14Jul2016 Pre-Market Commentary: US Markets Are Expecting To Open Higher Sending The SP500 To New Highs, Investors Gleefully Happy On Prospects Of More Helicopter Money, Short-Term Indicators Cautious

Written by Gary

US stock future indexes are up fractionally (SPY +0.8%) and the SP 500 is expected to hit another historic high at the opening. Global shares hit an eight month high after the BoE decided to keep rates on hold, a move investors believe could set off another round of global central bank and government-led stimulus. The US dollar plunged at the BoE action, crude mostly unchanged and JPMorgan Chase reported a better-than-expected quarterly profit.

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 1.34% while France's CAC 40 is up 1.11% and London's FTSE 100 is up 0.13%.

What Is Moving the Markets

Here are the headlines moving the markets.

Fed's Harker now sees just up to two rate hikes this year

PHILADELPHIA (Reuters) - The Federal Reserve could hike interest rates up to two times before year end, a top U.S. central banker said on Wednesday, slightly downgrading his expectations for monetary tightening even though he said the economy is on "fairly firm footing."

JPMorgan beats expectations, helped by loan growth and cost controls

(Reuters) - JPMorgan Chase & Co reported a marginally lower second-quarter profit on Thursday but still beat subdued analyst expectations, helped by loan growth and a tight control on operating expenses.

BoE surprises markets by keeping rates on hold, signals August move

LONDON (Reuters) - The Bank of England kept interest rates unchanged on Thursday, wrong-footing many investors who had expected the first cut in more than seven years with Britain's economy reeling from last month's vote to leave the European Union.

Global stocks hit eight-month highs ahead of BoE Brexit response

LONDON (Reuters) - World shares hit an eight-month high on Thursday as the Bank of England prepared to deliver its Brexit defense plan, a move investors believe could set off another round of global central bank- and government-led stimulus.

BlackRock's quarterly profit falls 3.7 percent

(Reuters) - Asset manager BlackRock Inc's quarterly profit fell 3.7 percent, hurt by lower fees as investors shifted from equities to cash deposits and fixed income investments amid global uncertainties.

Delta Air profit tops expectations; growth curbs planned

(Reuters) - Delta Air Lines Inc on Thursday reported a second-quarter profit above analysts' expectations and promised more curbs to its flight capacity growth to help offset a decline in a closely watched revenue measure.

U.S. posts $6 billion budget surplus in June

WASHINGTON (Reuters) - The U.S. federal government posted a budget surplus of $6 billion in June, compared with a surplus of $50 billion in the same month a year earlier, the Treasury Department said on Wednesday.

Oil bounces after big losses but glut persists

LONDON (Reuters) - Oil prices recovered more than $1 a barrel from sharp losses on Thursday as the dollar eased but brokers said the downtrend could resume soon as record-high stocks and worries over slowing economic growth dampened sentiment.

A Big Problem Emerges For Japan's "Helicopter Money" Plans

Over the past four days, risk assets have been on a tear, led by the collapsing Yen and soaring Nikkei, as the market has digested daily news that - as we predicted last week - Bernanke has been urging Japan to become the first developed country to unleash the monetary helicopter, in which the central banks directly funds government fiscal spending, most recently with an overnight report that Bernanke has pushed Abe and Kuroda to sell perpetual bonds, all of which would be bought by the BOJ.

There may be a very big problem with what the market is pricing in, however. As Reuters reports, citing government and central bank officials directly involved in policymaking, "there is no chance Japan will resort to helicopter money." The problem: it is prohibited by law to directly underwrite government debt, which means parliament needs to revise the law for the central bank to start directly bank-rolling debt.

"Adopting helicopter money in the strict sense is impossible as it's prohibited by law," said one of the officials. "If it's about the BOJ buying huge amounts of bonds and the government deploying fiscal stimulus, we're already doing that."

With the BOJ already keeping borrowing costs near zero with aggressive money printing, as the central bank already gobbles up more government bonds than is sold to the market each month under its massive monetary stimulus program, there is no strong push from premier Shinzo Abe's administration to revise the law and force the central bank to resort to helicopter money, said the officials, who declined to be named due to the sensitivity of the matter.

While h ...

"We Are On the Cusp of an Explosion in the Silver Price" - John Embry

Not everybody is believing the positive spin being put on recent financial market data. In fact some would go as far as to say that it is "propaganda" being spread in the mainstream media in an election year for the US. At least that is what John Embry concluded in a recent interview.

For those that are not familiar with Embry, he is the chief investment strategist at Sprott Asset Management and Sprott Gold and Precious Minerals Fund, and a highly respected precious metals industry expert with nearly 50 years of experience.

King World News - 50-Year Veteran Says Silver To Hit New All-Time Highs, Warns About Hyperinflation And The BIS

Embry believes that, while stock markets have gone back to near record levels in the US, the fact that interest rates remain at depression levels in most industrialised countries, including the US, is telling the real economic story.

He also highlights the stellar performance of silver mining stocks as an indicator of what might be in store fo ...

JPM Revenue Rebounds On Stronger Fixed Income Trading, Jump In Lending

Moments ago, JPM - the biggest US bank by assets - became the first bank to report second quarter earnings, which beat expectations with Adjusted EPS of $1.46 (reported EPS of $1.55) on $25.2 billion in non-GAAP revenue ($24.4 billion in reported revenue), which was $1.1 billion higher than in Q1 and $0.7 billion more than a year ago. Wall Street was expecting $1.43 and $24.42 billion in EPS and revenue respectively (although a meet if one uses the actual reported top-line number). Q2 profit fell 1.4%, or less than expected, as fixed-income trading revenue and loan growth jumped.

Net income dropped to $6.2 billion, or $1.55 a share, from $6.29 billion, or $1.54 a share, a year earlier, the New York-based company said Thursday in statement. Revenue climbed 2.8 percent to $25.2 billion. That figure included $3.96 billion from fixed-income trading, a 35 percent increase, and $1.6 billion from equity trading, up 1.5 percent.

While JPMorgan executives have said trading rebounded in April and May, that was before the referendum roiled markets and pushed out expectations for additional U.S. interest-rate increases to at least next year. The delay would extend a post-financial-crisis era of low rates that's forced banks to rely on expense cuts to cope with stagnant revenue. Citigroup Inc. and Wells Fargo & Co. are scheduled to report results Friday, while Bank of America Corp., Goldman Sachs Group Inc. and Morgan Stanley are due next week. Analysts estimate the industry will post its fourth-straight profit decline in the second quarter, according to data compiled by Bloomberg. The group saw profits fall 12 percent on a year-over-year basis in the first quarter.

Going back to JPM's results, the good news was tha ...

The Fed's New Froth Problem

From an economic standpoint, it makes sense for the Federal Reserve to hold off on rates. But then there's what's happening with asset prices.

How Google's YouTube Business Is Tuned In

Despite their differences, YouTube and the music industry have a strong case of mutual need.

Burberry: New Normal, Same Old Valuation

Burberry's stock looks expensive given its exposure to a luxury sector caught between retrenching consumers and rising property costs.

June 2016 Producer Prices Year-over-Year Inflation Is Now Insignificantly Inflating.

Written by Steven Hansen

The Producer Price Index year-over-year inflation is insignificantly in expansion. The intermediate processing continues to show a large deflation in the supply chain.

Economic Report: U.S. producer prices climb 0.5% in June

U.S. producer prices jumped 0.5% in June — the biggest increase in more than a year — largely owing to higher oil prices and margins for financial services.

Economic Report: No sign of rising layoffs: Jobless claims flat at 254,000

The number of Americans who applied for unemployment benefits last week was unchanged at 254,000, offering more proof that the U.S. labor market remains sound despite a slower pace of hiring in 2016.

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