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25Aug2016 Pre-Market Commentary:The Specter of Jackson Hole Is Weighing On the Markets

Written by Gary

Not only are most major global markets in the red, the USA markets look like they will also open moderately down from yesterday's close. Pundits claim investors are sitting on the sidelines awaiting clarity from Fed Chair Yellen tomorrow on interest rates. The specter of Jackson Hole is weighing on the dollar, oil, and gold.


Here is the current market situation from CNN Money

European markets are lower today with shares in Germany off the most. The DAX is down 0.88% while France's CAC 40 is off 0.83% and London's FTSE 100 is lower by 0.19%.

What Is Moving the Markets

Here are the headlines moving the markets.

Exclusive: Companies made deals that could run afoul of U.S. whistleblower rules

WASHINGTON (Reuters) - Wells Fargo , Advanced Micro Devices and Fifth Third Bank have in recent years agreed to settlement deals that seek to muzzle former employees in ways that some lawyers said could violate U.S. whistleblower protection laws.

Central bankers eye public spending to plug $1 trillion investment gap

JACKSON HOLE, Wyoming(Reuters) - While markets wait for Janet Yellen's latest message about the direction of monetary policy, the Federal Reserve chief and her colleagues already have one for politicians: the U.S. economy needs more public spending to shift into higher gear.

Exchanges call for regulatory clarity over blockchain use

LONDON (Reuters) - A lack of clarity over regulation is holding back the development of blockchain technology for cutting the cost of share trading, the world's trade body for exchanges said on Thursday.

Luxury jeweler Tiffany posts surprise rise in quarterly profit

(Reuters) - Upscale jeweler Tiffany & Co reported an unexpected rise in second-quarter profit as margins got a boost from lower product input costs, changes in product sales mix and price increases.

Stock futures lower as countdown to Yellen speech begins

(Reuters) - U.S. stock index futures were slightly lower on Thursday, with investors on the sidelines as they wait for more clarity from the Federal Reserve its path to raise interest rates.

Mylan cuts EpiPen costs after Clinton criticism

(Reuters) - Mylan NV said on Thursday it would reduce the out-of-pocket cost of its severe allergy treatment EpiPen, a day after Democratic Presidential candidate Hillary Clinton joined other lawmakers in criticizing the high price of the drug.

Global stocks wilt ahead of Fed gathering, dollar wobbles

LONDON (Reuters) - European stocks saw their biggest fall in three weeks on Thursday and currency markets were noticeably subdued as investors took to sidelines ahead of one of the big global central banker gatherings of the year.

Sears to take more debt from CEO's hedge fund, posts loss

(Reuters) - Struggling retailer Sears Holdings Corp posted a quarterly net loss, and the company said it accepted additional debt financing of $300 million from billionaire Chief Executive Edward Lampert's hedge fund.

Brussels rebuffs U.S. attack on EU tax investigations

BRUSSELS (Reuters) - The European Commission rebuffed an attack by the U.S. Treasury on its investigations into alleged sweetheart tax deals between companies such as Apple and McDonald's and European governments, saying there was no anti-U.S. bias.

Nigel Farage Draws Thunderous Ovation At Trump Rally: "I Wouldn't Vote For Hillary If She Paid Me"

It was a match made in anti-establishment heaven when Nigel Farage appeared next to Donald Trump at a Mississippi rally last night. One week after Trump tweeted that "They will soon be calling me MR. BREXIT," the real Mr. Brexit spoke alongside Trump in a much anticipated event.

Farage, the former leader of the UK Independence Party and according to many the chief proponent of the successful Brexit campaign, joined Trump on stage at a rally to draw similarities between the UK's vote to leave the European Union and Trump's insurgent campaign. He started off by focusing on a common enemey, President Barack Obama, whom he savaged for urging British voters to remain in the European Union ahead of the "Brexit" referendum: "He talked down to us. He treated us as if we were nothing," Farage said, and while he declined to endorse Trump, he opined on the US presidential election.

"I will say this: If I was an American citizen, I wouldn't vote for Hillary Clinton if you paid me. I wouldn't vote for Hillary Clinton if she paid me," Farage said, as Trump's supporters roared with approval.

Political observers have drawn a slew of similarities between Trump's campaign and the pro-Brexit movement and Trump has also approvingly likened the two political movements.

Farage's visit came as Trump trail Hillary in the polls, with the British politician seeking to encourage Trump supporters not to despair, pointing to polling in the UK that hinted at defeat for the referendum to leave the EU. "And actually they were all wrong," Farage said.

Mylan Caves, Announces EpiPen Price Cuts Up To 50%

Following a blitz campaign by Congress, one which saw Hillary Clinton announce yesterday that the Epipen price increases were "outrageous", moments ago Mylan caved and announced it would take immediate action to cut the cost of its EpiPen allergy treatment. In a press release issued moments ago, Mylan said it would expand already existing programs to help people with high out-of-pocket expenses, effectively reducing costs by 50 percent for some patients while doubling the eligibility of its patient assistance program which will "eliminate out-of-pocket costs for uninsured and under-insured patients and families as well."

Yet even as it caved, Mylan could not resist taking a shot at Obamacare: "as the health insurance environment has evolved, driven by the implementation of the Affordable Care Act, patients and families enrolled in high deductible health insurance plans, who are uninsured, or who pay cash at the pharmacy, have faced higher costs for their medicine."

In any event, it appears that as of this moment, the threat of a congressional hearing crisis involving the company's CEO, and daughter of a senator, has passed, with the market cheering the announcement, pushing the stock higher by 4% in the premarket.

Global Stocks Decline Along With The Dollar, As Jackson Hole Begins

Global stocks declined broadly, led by European equities which fell for the first time this week, suffering their biggest fall in three weeks, while currency markets continued their subdued tone even as the recent 4-day rally in the USD appears to have topped out, as investors took to sidelines ahead of the Jackson Hole meeting which begins tonight. Japanese and Chinese stocks had suffered modest drops in Asia. S&P 500 Index futures slipped 0.2%, continuing yesterday's modest selloff.

Stubbornly low oil prices and warnings about steel demand kept the pressure on miners, while pharma stocks were also hit with traders citing social media comments from U.S. presidential candidate Hilary Clinton chastising EpiPen price hikes

A rally that's driven global equities to their highest level in a year has petered out as the prospect of higher U.S. rates risks thwarting efforts by other central banks to stimulate growth by cutting borrowing costs. While German business confidence dropped to the lowest level in six months in August, a U.S. report on Thursday will probably show a pickup in durable goods orders.

Once again, all attention remains focused on the Jackson Hole symposium which begins tonight with a speech by the Kansas Fed's George. "There is renewed caution ahead of Yellen's appearance at Jackson Hole tomorrow," said Michael Ingram, a market strategist at BGC Partners in London. "It won't take a great deal for sentiment to turn from glass half full to glass half empty." Michael Hewson of CMC Markets said that "there is basically just a bit of risk aversion ahead of Jackson Hole. I think expectations are way too high, though, I don't think Yellen sets as much importance on Jackson Hole as Ben Bernanke did."

Deutsche Bank CEO Warns Of "Fatal Consequences" For Savers

Deutsche Bank's war of words with the ECB is not new: it was first unveiled in February when, as we wrote at the time "A Wounded Deutsche Bank Lashed Out At Central Bankers: Stop Easing, You Are Crushing Us." Europe's largest bank, with the massive derivatives book, then upped the ante several months later in June, when its chief economist Folkerts-Landau launched a shocking anti-ECB rant in which it warned of social unrest and another Great Depression.

Ironically, these infamous diatribes hurt more than helped: telegraphing to the market just how hurt DB was as a result of the ECB's monetary policy, the market punished its stock, which has been recently trading within spitting distance of all time lows, in effect making Deutsche Bank's life even harder as it now has to contend not only with its own internal profitability problems, but also has to maintain a market-facing facade that all is well. So far, it has not worked out very well, prompting numerous comparisons to another infamous bank.

So, in what may have been DB's loudest cry for help against the ECB's unwavering commitment to rock-bottom interest rates, the bank's CEO, John Cryan, warned in a guest commentary ahead of the Handelsblatt Banking Summit titled, appropriately enough "Banks in Upheaval", to be held in Frankfurt on August 31 ...

What to Learn From the ECB's Great European Corporate Bond Squeeze

The European corporate bond market is heading into ever more extraordinary territory.

Bond Market Smackdown: SolarCity vs. Sri Lanka

Elon Musk's big bond purchase should give his investors, and Tesla shareholders,​pause.

Glencore's Self-Help Is Actually Help From Commodity Markets

The Swiss commodities giant is out of the danger zone thanks to rebounding coal and copper prices.

FDA Approves New Cancer-fighting Drug

The Food and Drug Administration has approved a new drug called Venetoclax that melts away cancer cells. It treats chronic lymphocytic leukemia, and not only kills cancer cells, but also prevents them from replicating.

July 2015 Philly Fed Coincident Index Rate of Year-over-Year Rate Of Growth Insignificantly Ticks Up

The year-over-year rate of growth of the US Coincident Index marginally improved relative to last month's revised level. A comparison of this US Coincident Index with the Aruoba-Diebold-Scotti business conditions index, Conference Board Coincident Index, ECRI's Coincident Index, and the Chicago Fed National Activity Index follows.

The Tell: Apple's stock has gotten a bad rap under Tim Cook

Apple's stock has gotten a bad rap under Tim Cook, as investors have had to endure two bear markets and a disappointing time as a member of the Dow Jones Industrial Average, but it really hasn't been that bad.

5 things Tim Cook has done better than Steve Jobs

Tim Cook has done a few things over the past few years to benefit Apple that may have been overlooked by Steve Jobs.

Forget Brexit — 1.4 billion brick shortage is biggest threat to U.K. housing market

The biggest problem for the U.K. housing market isn't the fallout from the country's EU referendum, but rather a significant shortage of bricks to build much-needed new homes, according to an analysis out on Thursday.

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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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