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22Jul2016 Pre-Market Commentary: Flat Opening For US Markets, IMF Paints Dark Future For The Global Economy And Crude Futures Face Higher Inventories Than Expected

Written by Gary

US stock future indexes are fractionally in the green (SPY +0.1%) supporting a higher opening, but one that may slip into losses before the morning session is over. Ahead of the G20 meeting, the IMF painted a dark outlook for the global economy and crude futures ease, face weekly decline as glut fears persist.

Here is the current market situation from CNN Money

European markets are mixed today. The FTSE 100 is up 0.41% while the CAC 40 gains 0.14%. The DAX is off 0.07%.

Thursday's Key Earnings

AMD (NASDAQ:AMD) +9.8% AH swinging to a profit.
AT&T (NYSE:T) -0.9% AH despite DirecTV gains. Biogen (NASDAQ:BIIB) +7.6% after topping expectations.
Blackstone (NYSE:BX) +3.8% boosted by an energy rebound.
Chipotle (NYSE:CMG) -1.2% AH failing to win back customers.
Dunkin' Brands (NASDAQ:DNKN) -0.7% feeling the breakfast heat.
General Motors (GM) +1.6% raising its forecast for 2016.
Pandora (NYSE:P) -8.8% AH amid lackluster subscription growth.
PayPal (NASDAQ:PYPL) +1.5% AH announcing a partnership with Visa (NYSE:V).
Schlumberger (NYSE:SLB) -0.4% AH posting a loss and more job cuts.
Skyworks Solutions (NASDAQ:SWKS) -3.5% AH despite beating estimates.
Southwest Airlines (NYSE:LUV) -11.2% following a downbeat outlook.
Starbucks (NASDAQ:SBUX) -2.8% AH on disappointing comparable sales.
Union Pacific (NYSE:UNP) -3.4% as freight revenues declined.
Visa (V) flat AH despite higher payments volume.

Today's Markets

In Asia, Japan -1.1% to 16627. Hong Kong -0.2% to 21964. China -0.9% to 3013. India +0.3% to 27803.
In Europe, at midday, London +0.5%. Paris +0.2%. Frankfurt -0.1%.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +0.2% to $44.83. Gold -0.5% to $1325.70.
Ten-year Treasury Yield +1 bps to 1.57%

Today's Economic Calendar

9:45 PMI Manufacturing Index Flash
1:00 PM Baker-Hughes Rig Count

What Is Moving the Markets

Here are the headlines moving the markets.

Stock futures edge up a day after Dow snaps winning streak

(Reuters) - U.S. stock index futures were higher on Friday, a day after the Dow industrials snapped a nine-session streak of gains and as investors assessed earnings reports from a host of industrial companies including GE.

GE profit beats estimates as power revenue jumps

NEW YORK (Reuters) - General Electric Co on Friday reported a sharp rise in adjusted net income in the second quarter, as its aviation, healthcare and power businesses countered weak demand for oil and gas and transportation equipment. A boost from the sale of its appliances business also lifted earnings.

Fox News chief Ailes resigns after sexual harassment claims

NEW YORK/LOS ANGELES (Reuters) - Roger Ailes on Thursday resigned as chairman and chief executive of Fox News Channel following allegations of sexual harassment, an abrupt end to his 20-year rein over America's most lucrative and powerful cable news channel for conservatives.

French court rules IMF's Lagarde must stand trial in Tapie case

PARIS (Reuters) - France's highest appeals court ruled on Friday that IMF chief Christine Lagarde must stand trial for her role in a 400 million euros ($440 million) payout as French finance minister in 2008 to businessman Bernard Tapie.

American Airlines profit beats estimates as costs fall

(Reuters) - American Airlines Group Inc reported a better-than-expected quarterly profit as the world's largest airline benefited from cheaper fuel.

GM says it may recall 4.3 million vehicles over Takata air bags

WASHINGTON (Reuters) - General Motors Co said on Thursday it may be forced by U.S. regulators to recall another 4.3 million vehicles for potentially defective Takata air bag inflators, a call-back that would cost the U.S. automaker $550 million.

Syngenta sees ChemChina deal done this year, first-half profit disappoints

(Reuters) - Syngenta, the world's largest pesticides maker being taken over by state-owned ChemChina, still expects the deal to close this year despite concerns that U.S. regulators could throw a spanner in the works, it said on Friday.

S&P 500 companies start facing up to the potential Brexit costs

SAN FRANCISCO/NEW YORK (Reuters) - U.S. companies, facing investors in their first earnings reporting season since Great Britain voted to leave the European Union, are broadly conceding that the so-called "Brexit" could weigh on profits.

Britain's economy wilting fast after Brexit vote, may prompt more spending

LONDON (Reuters) - Britain's economy is shrinking, the broadest survey of business confidence since last month's historic vote to quit the European Union showed on Friday, leading finance minister Philip Hammond to pledge a loosening of purse strings if the weakness endures.

DSK'd? IMF's Lagarde Loses Fight To Avoid French Trial Over Corruption Case

In December we warned of her career's "terminal decline," and it appears, just as with Dominic Strauss-Kahn, someone is upset at the IMF Director (perhaps she has just been too darn negative, or pushy towards policy-makers?). In a surprising twist for 'the establishment' Bloomberg reports that Christine Lagarde may face consequences for her actions (or lack of them). France's Supreme Court rules that The IMF director will have to stand trial for alleged "negligence" in accepting an arbitration panel decision in favor of a French businessman.

As we detailed previously,

It was over a year ago when we reported that a French court has put Christine Lagarde, head of the International Monetary Fund, under a formal probe for negligence in a corruption investigation involving famous financier Bernard Tapie, dating back to her days as finance minister.

Back then Lagarde said the decision was "without basis," adding she would challenge it with a higher court. The investigation is part of a complex, drawn-out probe into the alleged misuse of state funds. The case stems from a decision in the 2008 to use arbitration to settle a dispute with business tycoon Bernard Tapie. The arbitration panel awarded 420 million to Mr. Tapie.

"The magistrates of the court of justice of the Republic have decided to place me under formal investigation," Ms. Lagarde said in statement in August of 2014. "After three years of procedure, the sole surviving allegation is that through inadvertence or inat ...

Pound Plummets On Renewed Recession Fears As PMI Shows Fastest Contraction Since 2009

Sterling plummeted nearly 200 pips this morning, after rising in early trade to just shy of 1.33, when the latest July Markit flash PMI surveys suggested the UK is heading for a quick recession in the form of a 0.4% GDP contraction in the third quarter. Manufacturing PMI tumbled from 52.1 to 49.1, modestly beating expectations, if still the lowest in 41 months, but it was the service economy which imploded, with the Service PMI plunging from 52.3 to 47.4, in line with the worst estimate, and the lowest print in 88 months.

While considered "soft data", and perhaps suggesting that Markit had not gotten the memo that Brexit fearmongering is now a thing of the past and is instead increasingly spun as positive for the local and global economy, the surveys pointed to the worst performance for more than seven years - when the economy was in the depths of a recession - in the aftermath of Brexit. As a result of renewed recession fear, the pound was trading below 1.31 at last check.

Ironically, UK stocks jumped, with the FTSE trading well in the green as traders quickly figured these figures will add to pressure on the Bank of England to cut interest rates next month to cushion the economy from the Brexit blow.

The poor data comes as new Chancellor Philip Hammond indicated the UK could "reset fiscal policy" as data emerges about how the econom ...

Is Gold Set To Hit $1,500 Per Ounce?

Rising macroeconomic risks, low real interest rates, and a decline in the dollar versus emerging market currencies are major price catalysts for gold.

Since hitting its high of over $1,900 an ounce in 2011 after a 12 year bull run, gold fell steadily until 2015 when it reached a low near $1,000. However, this year alone we have seen a 25% increase in the yellow metal. It hit a high of $1,370 pre-Brexit and while this new bull run seems to be currently taking a breather, many analysts feel that there is still plenty of steam left in this rally.

An article in Forbes today cites continued stimulus measures by Central Banks and the current under-bought nature of gold as being indicative of a prolonged rally to come for gold.

You can read the full article here


Frontrunning: July 22

Global stocks fall, UK PMIs flash Brexit recession warning (Reuters)

Trump's greatest hits, all in one speech (Reuters)

Donald Trump Accepts GOP Nomination, Promises to Fix America (WSJ)

Trump's America Grows More Ominous Over 13-Month Run (BBG)

Hillary Clinton: unwitting star of the Republican convention (FT)

Clinton faces pressure to pick VP who is tough on trade, Wall Street (Reuters)

Trump NATO plan would be sharp break with decades-long U.S. policy (Reuters)

As Republicans anoint Trump, party grapples with identity crisis (Reuters)

For Post-Brexit Stock Pickers, Skill Is Bunk (WSJ)

Euro Traders Tell Draghi That ECB's Policy Is Going Nowhere Fast (BBG)

Draghi Joins Not-So-Sure Club Puzzling Over Brexit Aftermath (BBG)

Goldman Sachs Raising Private-Equity Fund of $5 Billion to $8 Billion (

Housing's Comeback Gains Steam

With the housing market shifting into higher gear, the economy could pick up the pace.

Why Emerging Markets Have Wind at Their Backs

Emerging markets aren't a haven—but they look like a compelling alternative to the bigger concerns that still lie in developed markets.

Komatsu Sings Ode to Joy Global

Japanese equipment giant Komatsu is walking into a bargain for mining machine maker Joy Global.

Deep Dive: Why it still makes sense to buy stocks and bonds at record prices

Selling now would be akin to market timing, a money-losing lesson investors learned last year, says Phil van Doorn.

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