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18Jul2016 Pre-Market Commentary: Wall Street Futures Up This Morning Indicating An Opening In The Green, BoA Profits Slip 19%, Crude Prices Slipping

Written by Gary

US future stock indexes are up fractionally (SPY +0.1%) and Global stocks are on the rise on SoftBank bid for ARM, dollar up vs yen after Turkey crushes coup. Crude prices slipping, US dollar steady as more than 90 of the biggest U.S. companies will report results this week, giving a clearer picture of what is expected to be the fourth straight quarter.


Here is the current market situation from CNN Money

European markets are mixed. The FTSE 100 is higher by 0.47%, while the CAC 40 is leading the DAX lower. They are down 0.25% and 0.04% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

Dollar up on failed Turkey coup; SoftBank's ARM bid boosts shares

LONDON (Reuters) - The dollar strengthened against the yen on Monday as investors unwound safety trades after a failed coup in Turkey, while SoftBank Group's $32 billion deal to buy British chip designer ARM Holdings lifted European equities.

Bank of America profit falls 19.4 percent as interest income drops

(Reuters) - Bank of America Corp , the second-largest U.S. bank by assets, reported a 19.4 percent fall in quarterly profit on Monday as low lending rates dented its interest income.

ExxonMobil launches bidding war for InterOil in PNG gas push

MELBOURNE (Reuters) - ExxonMobil Corp has made a bid worth at least $2.2 billion for InterOil Corp and its stake in a rich Papua New Guinea gasfield, winning the support of its target and topping an offer from Australia's Oil Search Ltd.

SoftBank to buy UK chip designer ARM in $32 billion cash deal

TOKYO/LONDON (Reuters) - SoftBank Group Corp has agreed to buy UK chip designer ARM Holdings PLC in a 24.3 billion pound ($32.2 billion) cash deal, the two sides said on Monday, a bold bet on internet-connected machines that will transform the Japanese group.

Exclusive: U.S. and Chinese labor groups collaborated before China Wal-Mart strikes

CHICAGO (Reuters) - OUR Walmart, the American worker group, has taken the unusual step of collaborating with a group of Chinese Wal-Mart workers trying to fight work schedule changes and low wages.

Success of Pokemon GO adds impetus for change at Nintendo

TOKYO/SINGAPORE (Reuters) - The phenomenal success of Pokemon GO and the surge in Nintendo Co's market value by $17 billion in just over a week has been seized upon by one of its most vocal investors to press for a change of strategy at the company.

Oil prices ease as market shrugs off Turkey coup bid

LONDON (Reuters) - Oil prices fell on Monday as traders shrugged off the impact of the attempted coup in Turkey and the market turned its attention to bearish fundamentals, while disruptions to crude exports in Libya lent prices some support.

Elliott sues Bank of East Asia over share sales, escalating dispute

HONG KONG (Reuters) - Activist investor Elliott Management Corp has begun new legal proceedings against Bank of East Asia (BEA) over a share placement, escalating a long-running dispute between the New York-based hedge fund and the tycoon-owned Hong Kong bank.

Rate-starved U.S. banks happily gobble mortgage business

NEW YORK (Reuters) - Just as mortgage bankers were preparing for the end of a historic boom driven by low interest rates, borrowers have begun knocking at their doors again.

John Kerry Threatens Turkey With NATO Expulsion

While the experts debate if Turkey's flash coup was staged or merely grossly incompetent, a rather theatrical fallout is taking place between Turkey and the US.

Recall that on Saturday, as part of its populist campaign to blame the coup on the US-based cleric Fethullah Gulen, Turkey accused the US of being "behind the military coup", to which John Kerry promptly responded that such allegations are "utterly false" and harmful to relations. Kerry also said that authorities should respect the rule of law during their probe of the coup. Kerry also noted that there would be no prompt deportation of Gulen (something which is also in Erdogan's favor), when he said that "we fully anticipate that there will be questions raised about Gulen, and obviously we invite the government of Turkey ... to present us with any legitimate evidence that withstands scrutiny and the United States will accept that and look at it and make judgments appropriately," he said.

This however did not lead to any moderation in Turkish rhetoric, and yesterday, Prime Minister Binali Yildirim threated to go to war with any country that would "stand by" the exiled Fethullah Gulen; this would naturally imply the US which is where Gulen is currently located. "The US is behind the coup attempt. A few journals that are published there [in the US] have been conducting activites for several months. For many months we have sent requests to the US concerning Fethullah Gulen. The US must extradite him," said the Labor Minister in a statement.

Curiously, despite all the posturing, Turkey has yet to send out a formal extradition request.

However, the tensions between Turkey and US appear to have spilled over this morning, when moments ago John Kerry threatened Turkey that it could lose its NATO mem ...

Frontrunning: July 18



Global stocks rise on SoftBank bid for ARM, dollar up vs yen after Turkey crushes coup (Reuters)

U.S. backs justice for coup plotters but urges Turkey to keep rule of law (Reuters)

Law and Order Will Be a Big Republican Convention Them (WSJ)

SoftBank to buy UK chip designer ARM in $32 billion cash deal (Reuters)

Rate-starved U.S. banks happily gobble mortgage business (Reuters)

Oil Prices Steady but Products Glut Looms (WSJ)

Bank of America Profit Tumbles 19% As NIM Hits Record Low, EPS "Beat" On Surge In Cost-Cutting (ZH)

Obama Decries Baton Rouge Killings of Police as Unrest Mounts (BBG)

Baton Rouge shooter was ex-Marine who denied ties to any group (Reuters)

Baton Rouge: A city divided between police and the policed (Reuters)

EU Said to Eye 'Nuclear Option' to Force May's Hand on Exit ( ...

Read This Before Investing Another Cent...

While CNBC and other perma-bulls claim that the stock market is a great investment today, the smart money is already prepping for a disaster.

Goldman Sachs has told its clients to "sell at the new high."

Credit Suisse just told its clients stocks "haven't looked this worrisome since the tech bubble."

They're correct. Stocks are in a bubble by virtually every reasonable metric.

According to CAPE, stocks have only been more expensive relative to earnings TWICE in history. Both of those situations were also massive bubbles.

The media Price to Sales (P/S) ratio for the S&P 500 is at an all-time high. Stocks have NEVER been more expensive based on this metric.

h/t Ned Davis

And finally, stocks, as priced in Enterprise Value to Earnings Before Interest Taxes Depreciation and Amortization (EV/EBITDA) is at levels not seen since 2000.

H/T the Euchre

A Crash is coming... and the time to prepare is NOW, before it hits.

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 the coming crash will unfold...which investments will perform best... and how to take out "crash" insurance trades that will pay out huge returns during a market collapse.

We are giving away just 1,000 copies of this report fo ...

Gold, Trump and Rates: Bank That Foresaw Rally Flags $1,500

Financial Market Strategists are advising their clients to "buy gold on dips".

"Gold has seen four major bull markets since 1970: this is another one," Benjamin Wong, foreign exchange strategist at the Singapore-based bank's Chief Investment Office, said in an e-mail. "The market has yet to deal with the political uncertainty going into the Nov. 8 presidential election."

Fears surrounding Brexit saw gold rally to the recent highs of $1,375. However, as the uncertainty created in the wake of the "Leave" vote wanes, global equity markets have rallied, helped in no small part by surprisingly strong employment numbers from the U.S.

However, some feel that the gold market retracement is only temporary and that,"the market has yet to deal with the political uncertainty going into the Nov. 8 presidential election."

Wong is advising clients that any dips ...

SoftBank-ARM: These Chips Don't Come Cheap

SoftBank's $32 billion bid for U.K. smartphone chip designer ARM is a high price, leaving the Japanese conglomerate swimming in debt.

Japan and Helicopter Money: Fan Blades Aren't Turning Just Yet

Bank of Japan chief Haruhiko Kuroda isn't shy of getting creative. It's just hard to tell when those creative juices are ready to flow.

Microsoft's Cloud Trip Is No Free Ride

The software giant's business shift has weighed down gross margins.

A New Normal? The Prospects For Long-Term Growth In The United States

from the Richmond Fed

-- this post authored by Aaron Steelman and John A. Weinberg

Economic growth in the United States following the Great Recession has been well below the post-World War II average. Some observers have called this the "new normal." They argue, among other things, that innovation has slowed and is unlikely to improve and that demographic trends pose serious problems for fiscal policy that will hinder the economy. Such issues are significant, but the "new normal" is not a given. Continued innovation, as well as good policy, could yield improvements in economic performance.[1]

Europe Markets: European shares gain ground, but Turkish stocks fall after coup attempt

European stocks are higher Monday, led by a rally in shares of ARM Holdings, but Turkish shares are lower in the wake of a failed coup attempt.

The Wall Street Journal: LendingClub names BlackRock vet chief capital officer

LendingClub has tapped a BlackRock executive to for chief capital officer, a role that will put him in contact with investor groups.

The Wall Street Journal: Venezuela's inflation is set to top 1,600% next year

In Venezuela, consumer-price inflation is forecast to hit 480% this year and top 1,640% in 2017, according to the International Monetary Fund.

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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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