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06Sep2016 Pre-Market Commentary: US Futures Flat Ahead Of Opening Bell, Crude Prices Slipping, Gold Rising, Short-Term Indicators Bearish

Written by Gary

U.S. stock index futures point to a flat, potentially lower open (SPY +0.05%), Global stocks mixed with Fed rate outlook. Crude prices have edged sharply lower this morning to Friday levels as yesterday's 5% rise on an agreement between KSA and Russia to stabilize the oil market fading. Investors are now looking ahead to economic data for hints on the timing of the next Fed rate hike.


Here is the current market situation from CNN Money

European markets are mixed today. The DAX is up 0.41% while the CAC 40 gains 0.14%. The FTSE 100 is off 0.34%.

Today's Economic Calendar

8:30 Gallup US Consumer Spending Measure
9:45 PMI Services Index
10:00 ISM Non-Manufacturing Index
10:00 Labor market condition index
12:30 PM TD Ameritrade IMX
2:00 PM Gallup US ECI
8:30 PM Fed's Williams: Economic Outlook

What Is Moving the Markets

Here are the headlines moving the markets.

Bayer sweetens Monsanto bid as talks enter final stretch

FRANKFURT/NEW YORK (Reuters) - German pharmaceutical and crop chemicals manufacturer Bayer AG says talks with Monsanto Co have advanced and it is now willing to offer more than $65 billion, a 2 percent increase on its previous offer for the world's largest seeds company.

Construction worker shortage weighs on hot U.S. housing market

DENVER (Reuters) - The drumbeat of hammers echoes most mornings through suburban Denver, where Jay Small, the owner of company that frames houses, is building about 1,300 new homes this year.

Stock futures flat as investors assess rate hike chances

(Reuters) - U.S. stock index futures were little changed on Tuesday as investors weigh the chances of an interest rate hike this month following a tepid jobs report.

Toy maker LEGO builds more plants to revive growth in U.S. sales

COPENHAGEN (Reuters) - LEGO A/S reported a decline in revenue growth and profits for the first half of 2016, but only because the Danish toymaker needed time to add production capacity to meet increased demand for its colorful building bricks in North America, the company said on Tuesday.

Laptops and cool tops: a strong year for U.S. back-to-school shopping

(Reuters) - Along with the perennial run on leggings, students returning to America's classrooms this year are making a beeline for retro sneakers, "cold-shoulder" tops, versatile laptops and USB drives.

PayPal, MasterCard reach deal for store payments

(Reuters) - MasterCard Inc said it signed a deal with PayPal Holdings Inc that will allow customers to use PayPal's payment services in stores.

Volkswagen takes $256 million Navistar stake in trucks push

FRANKFURT (Reuters) - Volkswagen has agreed to supply engines to U.S. truck maker Navistar in exchange for a 16.6 percent stake, an alliance forged in part by the need to meet stringent emissions regulations in the United States.

G20 a success for China, but hard issues kicked down the road

BEIJING (Reuters) - China is lauding its successful hosting of the G20 summit in scenic Hangzhou, with open confrontation largely avoided and broad consensus reached over the fragile state of the global economy and the need for a wide range of policies to fix it.

Oil slips toward $47 as hopes for producer action wane

LONDON (Reuters) - Oil slipped toward $47 a barrel on Tuesday, falling further from the previous session's one-week high on receding hopes for imminent action to tackle a supply glut.

Trumps Regains National Lead Over Hillary In Latest CNN Poll

Just a few short weeks after Hillary Clinton's convention propelled her to an 8-point lead among registered voters in an early-August CNN/ORC Poll, Clinton's lead has largely evaporated despite a challenging month for Trump, which saw an overhaul of his campaign staff, announcements of support for Clinton from several high-profile Republicans and criticism of his campaign strategy. Hillary on the other hand, has suffered from the latest FBI document release Snafu, which has further dented her credibility, while concerns about her health continue to spread among the general public.

Just days after the latest Reuters/IPSOS poll showed Trump jump to a surprising lead, and wiping away what some had said was an "insurmountable" Hillary lead, moments ago the first post-labor day poll by CNN/ORC showed that Donald Trump and Hillary Clinton start the race to November 8 on essentially even ground, with Trump edging Clinton by two points among likely voters, and the contest sparking sharp divisions along demographic lines in a new CNN/ORC Poll.

Trump tops Clinton 45% to 43% in the new survey, with Libertarian Gary Johnson standing at 7% among likely voters in this poll and the Green Party's Jill Stein at just 2%.

While the race at the top remains fierce, CNN adds that neither major third party candidate appears to be making the gains necessary to reach the 15% threshold set by the Commission on Presidential Debates, with just three weeks to go ...

Frontrunning: September 6



G20 a success for China, but hard issues kicked down the road (Reuters)

Apple's New iPhones Arrive, as Glow Fades (WSJ)

Philippines scrambles to soothe tensions after insult to Obama (Reuters)

CNN: Nine weeks out, a near even race (CNN)

More Records Releases Loom for Hillary Clinton (WSJ)

Clinton rejects Mexico invitation after Trump's diplomatic ruckus (Reuters)

Behind the 1MDB Scandal: Banks That Missed Clues and Bowed to Pressure (WSJ)

Turkish air strikes hit 12 targets in north Iraq: military (Reuters)

Hanjin Shipping parent raising funds to unload stranded cargo (Reuters)

Junk Debt Getting Crowded (WSJ)

Ailes hires Hollywood libel lawyer to take on New York magazine (FT)

Japan's Central Bank Should Wait for the Fed, Abe Advisor Says (

Morgan Stanley Throws In The Bearish Towel, Sees S&P At 2,300 On A 19x "Bull Case" PE Multiple

When Morgan Stanley's Adam Parker had a notable change in heart earlier in the year when he turned from a raging bull to a muted bear, it unleashed a series of odd letters to MS clients such as this one from April where "In Bizarre, Schizophrenic Note Morgan Stanley Compares Rally Chasers To "Cockroaches", followed by an angry noted aimed at "Fake Contrarians Who "Only Care About Price", culminating with a letter in July in which he feared becoming the "counter-indicating idiot."

Well, several months later, with the central banks refusing to allow his bearish narrative to manifest itself, this morning Parker flip-flopped again, and once more threw in the towel, this time reverting back to his old bullish ways, when overnight he released a note titled that "We Think the US Stock Market Is Going Higher", something he didn't think for most of 2016.

The justification of his racent change of heart was the same one used by so many other analysts who have zero fundamental legs to stand on: the Fed Model, or low bond yields resulting in high equity valuations. This is what he said:

We are raising our 12-month price targets for the S&P 500 - base case from 2200 to 2300, bear case from 1600 to 1800, and our bull case from 2400 to 2500. Our bull-bear skew is balanced, and our base case upside is now mid-single-digit, consistent with our continued optimistic outlook. While we have argued many times that we think forecasting ...

Traders Return From Vacation To Find S&P Futures Flat, Oil And Dollar Lower, Amid Flurry Of M&A

The return from summer holidays has started in much the same way as we left off August, with another subdued session that has seen European stocks little changed, Asian shares advance and S&P futures are modestly in the green amid a flurry of M&A. The US dollar weakened, with the Bloomberg Dollar Index down 0.2% for the 2nd day in a row as prospects for a U.S. interest-rate hike this month remained subdued.

Among the main overnight news, Bayer AG sweetened its takeover bid for Monsanto Co. for the second time, saying it would be prepared to pay $127.50 a share for the U.S. seed giant provided a negotiated deal can be reached. Monsanto ended last week at $107.44 in New York. Saudi, Russia pledge oil cooperation without agreeing freeze; Fresenius SE buys Spanish hospital group for $6.42 billion. In eco data, German factory order data (July +0.2%, vs exp.0.5%, Last -0.3%) today offered the latest in a recent trend of disappointing data from euro zone and BRC data cast a shadow on U.K. economy. "After a sharp fall in July, business surveys have rebounded in the U.K. in August, suggesting that although the economy should slow in 2H, it is unlikely to experience a sharp recession such as we forecast in June," Credit Suisse analysts write in note

The final Eurozone Q2 GDP print of 0.3%, came in line with expectations, however the bulk of gains (green in chart below) came from trade as a result of the recent decline in the Euro. The ECB may have trouble maintaining the recent rate of declines when it meets on Thursday, September 8, when the best announcement the market may hope for is for Draghi to extend the ECB's bond buying into 2017.

With "bad news again good news", the MSCI Emerging Markets Index climbed to the highest in more than a year as prospects for a U.S. interest-rate hike this ...

Why Chinese Bank Stocks Can't Fly Too High

Once Chinese bank shares rise high enough, an equity raise will suddenly be on the table.

Investment Banks Shrinking Problems Aren't Going Away

Some investment banks are making better use of the fraying fabric of finance than others.

HowAppleCan Make the Next iPhone Count

Expectations for the next smartphone are modest, which leaves the company with room for surprise.

Real GDP Projected At 3.6% Annual Rate In Third Quarter

from the St Louis Fed

-- this post authored by Kevin Kliesen

The St. Louis Fed's Economic News Index predicts that real GDP will increase at a 3.6 percent annual rate in the third quarter, according to data through Sept. 2.

Capitol Report: As housing reignites, even bust towns are booming again

Some metro areas hard-hit by the housing bust are now among the hottest real estate markets, according to Realtor.com.

Capitol Report: Executives obscure accounting mistakes when they hold more stock, study finds

New research suggests executives choose low-transparency disclosures to maximize their compensation

Hanjin Group Offers $90 Million to Help Shipping Unit

South Korea's Hanjin Group will put up 100 billion won ($90 million) to help Hanjin Shipping Co., as the troubled shipping affiliate struggles to get its stalled supply chain moving globally.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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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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