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14Sep2016 Pre-Market Commentary: Wall Street Sees Green For The Opening, Crude Prices Plunging Before Inventory Data Release, US Dollar Steady In The Mid 95's, Watch For Volatility

Written by Gary

US stock future indexes are up moderately (SPY +0.3%) ahead of key crude inventory data. U.S. crude was down to $44.57 at 0845ET. Investors are apparently in risk-on mode as rising bond yields do not seem to be a factor this morning.


Here is the current market situation from CNN Money

European markets are mixed today. The FTSE 100 is up 0.55% while the DAX gains 0.43%. The CAC 40 is off 0.10%.

The blue-chip Dow futures are up 0.15%, the S&P 500 futures have risen +0.2%, while the tech-heavy Nasdaq 100 futures climbed +0.3%.

Meanwhile, oil prices moved lower (-0.6%) after the Organization of the Petroleum Exporting Countries said on Monday that crude output from rival producers is stronger than expected and will result in a bigger supply glut than previously believed this year and next.

What Is Moving the Markets

Here are the headlines moving the markets.

Bayer clinches Monsanto with improved $66 billion bid

NEW YORK/FRANKFURT (Reuters) - German drugs and crop chemicals company Bayer has won over U.S. seeds firm Monsanto with an improved takeover offer of around $66 billion, ending months of wrangling after increasing its bid for a third time.

Bond sell-off keeps investors on edge

LONDON (Reuters) - Rising bond yields, triggered in part by deepening worries over the difficulty of the world's major central banks to stimulate growth, kept investors in broadly risk-off mode on Wednesday.

Three ships chartered to troubled Hanjin sold, more on the block

SHANGHAI/SINGAPORE (Reuters) - Three ships chartered to Hanjin Shipping Co Ltd have been sold and two more vessels are up for sale, ship brokers said on Wednesday, kicking off an asset sale sparked by the failure of the world's seventh largest container shipper.

Ford Motor says 2017 financial results to drop from 2016 levels

DETROIT (Reuters) - Ford Motor Co's 2017 financial performance will decline from this year's results, because of increased spending on "emerging opportunities" and other costs, the No. 2 U.S.-based automaker said on Wednesday.

Samsung China to recall 1,858 Galaxy Note 7 smartphones: watchdog

BEIJING (Reuters) - China's quality watchdog said on Wednesday Samsung Electronics Co Ltd's local unit will recall 1,858 units of its Galaxy Note 7 phones, after the Korean firm's product was found to have fire-prone batteries.

Wall Street banks need fundamental business model shift, McKinsey says

(Reuters) - Despite slashing billions in costs and retrenching from key businesses since the financial crisis, Wall Street banks still have not done enough to repair and restructure, according to a new report.

ECB needs to be more flexible as it chases inflation: Knot

VIENNA (Reuters) - The European Central Bank needs to be more flexible in interpreting its inflation mandate, Governing Council member Klaas Knot said, the second rate-setter in two days to urge caution as the bank prepares to review its policy stance.

Oil rises on smaller-than-expected build in U.S. crude stocks

LONDON (Reuters) - Oil prices firmed on Wednesday after falling by as much as 3 percent in the previous session, as data from an industry group showed a smaller-than-expected build in U.S. crude stockpiles.

Markets addicted to central banks' backstop, Citi warns

LONDON (Reuters) - Central bank efforts to soften the blow to markets from weakening fundamentals are losing their impact and are leaving a system vulnerable to shocks, analysts at Citi said.

US To Provide Israel With Record $38 Billion In Military Aid

While the US relationship with Saudi Arabia can be described, perhaps courtesy of the latter's donations to the Clinton campaign, as one of preferential treatment when it comes to arms deals, observed most recently a month ago when the US approves the sale of 130 Abrams tanks, 20 Armored vehicles and various other equipment to Saudi Arabia for $1.2 Billion, when it comes to America's other "anchor"mid-east ally, Israel, the relationship is even simpler.

As Reuters reported overnight, the US and Israel reached an agreement on a record new package of at least $38 billion in U.S. military aid and the 10-year pact is expected to be signed this week.

In a major concession by Obama, whose relationship with Netanyahu has been rather contentious in recent years, the deal represent the biggest pledge of U.S. military assistance made to any country. As for Israel, the country will agree not to seek additional funds from Congress beyond what will be guaranteed annually in the new package, and also to phase out a special arrangement that has allowed Israel to spend part of its U.S. aid on its own defense industry instead of on American-made weapons, the officials said.

In other words, a win-win for, drumroll, the US Military-Industry Complex, which is about to benefit from some $38 billion in taxpayer largesse, as Israel receives funds which will then promptly be refunded in the US to buy weapons so that the various wars in the middle east can continue indefinitely, with the blessing of Uncle Sam, of course.

As Reuters reports, Israel's chief negotiator, Jacob Nagel, acting head of Netanyahu's national security council, arrived in Washington overnight in preparation for a signing ceremony with U. ...

Trump Soars In Latest Polls: Sees 5 Point Lead In Ohio And Latest LA Times National Poll

Proving that Trump's recent strategic shift to keep his mouth shut and let the media focus on the ongoing fallout from Hillary's "basket of deplorables" comment as well as her recent health scare, has been successful, Bloomberg reported this morning that Donald Trump leads Hillary Clinton by 5% points in a Bloomberg Politics poll of Ohio, a key battleground state that has backed the winning presidential candidate in every election since 1964. The gap "underscores the Democrat's challenges in critical Rust Belt states after one of the roughest stretches of her campaign."

The Republican nominee leads Clinton 48 percent to 43 percent among likely voters in a two-way contest and 44 percent to 39 percent when third-party candidates are included.

The Bloomberg poll was taken Friday through Monday, as Clinton faced backlash for saying half of Trump supporters were a "basket of deplorables" and amid renewed concerns about her health after a video showed her stumbling as she left a Sept. 11 ceremony with what her campaign later said was a bout of pneumonia.

According to Bloomberg, Trump's performance in the poll, which features strength among men, independents, and union households, is better than in other recent surveys of the state. It deals a blow to Clinton after she enjoyed polling advantages nationally and in most battleground states in August before the race tightened in September as more Republican voters unified around Trump.

Why the surge? Darren Roberts, 45, a facilities maintenance and home improvement retail worker who lives in Columbus and considers himself an independen ...

Frontrunning: September 14



Bayer wins over Monsanto with improved $66 billion bid (Reuters)

Yen trims gains as doubts creep in over BOJ easing (Reuters)

BOJ to make negative rates centerpiece of future easing: sources (Reuters)

Stocks Halt Selloff in Europe as Commodities Gains Lift Miners (BBG)

Donald Trump, New Team Recast His TV Image (WSJ)

Hanjin Brings One of World's Busiest Shipping Terminals Close to Standstill (BBG)

New York attorney general opens probe of Trump Foundation (Reuters)

Rubber bullets and tear gas - how China's 'democracy village' was silenced (Reuters)

Colin Powell Urged Hillary Clinton's Team Not to Scapegoat Him for Her Private Server, Leaked Emails Reveal (Intercept)

There's a $300 Billion Exodus From Money Markets Ahead (BBG)

Gloom Descends on Luxury-Goods Industry (BBG)

Kremlin: Obama's T ...

Biggest German M&A Deal Ever: Monsanto Accepts Bayer's $66 Billion Takeover Offer, Creating Agri-Giant

In a transaction that will allow Bayer to command more than a quarter of the combined world market for seeds and pesticides, not to mention is set to be the biggest M&A deal for 2016, Reuters reported that Bayer has won over Monsanto's management with a $128 per-share cash offer to acquire the global seed market leader, in a deal worth $66 billion.

Bayer has signed a deal that includes a fee of $2 billion should the transaction fail to get regulatory clearance as planned, the Reuters source said. The deal is expected to close by the end of 2017, the source told Reuters on Wednesday.

According to Reuters calculations, at a total deal value of close to $66 billion - based on 442 million Monsanto shares and the U.S. group's net debt of $9.3 billion as per end-May - it will be the largest transaction ever involving a German buyer. It would trump Daimler's merger deal with Chrysler in 1998, which valued the U.S. carmaker at more than $40 billion.

By accepting Bayer's offer, the largest cash acquisition proposal on record ahead of brewer InBev's $60.4 billion offer for Anheuser-Busch in 2008, Monsanto is set to give the German company a shot at grabbing the top spot in the fast-consolidating farm supplies industry, combining its crop science business with Monsanto's strength in seeds. It will also set the stage for the deal to be closely scrutinized by antitrust regulators, with some analysts predicting that various anti-trust authorities will not be too excited with the combined company.

The breakthrough in negotiations, which follows more than four months of talk ...

Why the Bank of Japan May Raise Rates Even as It Cuts Them

The Bank of Japan may push long-term rates up while keeping short-term rates negative. Markets will see this as tinkering rather than a big-bang move.

China's Stranglehold on Yuan Leaves Markets Gasping for Air

Borrowing costs in China's offshore yuan market have skyrocketed again. A possible cause of the dysfunction: Beijing's meddling from a year ago.

Holiday Hiring To Remain Flat In Retail - Hiring Shifts From Front-of-store To Behind-the-scenes

from Challenger Gray and Christmas

Target was the first major retailer to reveal its national holiday hiring plans, announcing Monday that it will add nearly 70,000 extra workers in its stores this year. That represents just under 10 percent of the more than 700,000 retail job gains expected this holiday season.

Current Home Prices The Most Stable During The Last 40 Years

from CoreLogic

Volatility has roiled the U.S. and global financial markets for some time. June's Brexit vote, for example, was the most volatile day in the history of foreign exchange markets. Likewise, the huge influx of foreign capital drove longer-dated Treasury maturities to record lows. But one market seems to have escaped these gyrations: U.S. housing.

Market Extra: Wall Street's 'fear gauge' shows it's about to get ugly in the stock market

The CBOE Volatility Index, often used as a measure of fear in the market, is up about 20% on Tuesday, implying that investors are increasing bets that stocks could suffer a near-term shock.

Sarepta Therapeutics shares jump on news of critic's departure from FDA

The company's Duchenne muscular dystrophy drug has been through a drawn-out approval process.

Market Snapshot: U.S. stocks set to climb after oil-fueled selloff

U.S. stocks on Wednesday are on track to open with small gains, as equity benchmarks attempt to recoup some of the prior session's selloff.

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gary@econintersect.com

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