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29Sep2016 Pre-Market Commentary: US Markets Expected To Open Lower, GDP Higher, Unemployment Lower, US Dollar Higher, Crude Prices Steady And Higher

Written by Gary

US stock future indexes are down this morning (DOW - 0.2%), but should turn higher, WTI crude prices remain in the low 47 handle, gold is volatile and showing signs of weakening by slipping below 1320. The US dollar shot up after morning reports unemployment benefits rose less than expected and U.S. economic growth was less sluggish than previously thought. Indicators neutral to bullish.

Here is the current market situation from CNN Money

European markets are higher today with shares in London leading the region. The FTSE 100 is up 0.99% while France's CAC 40 is up 0.82% and Germany's DAX is up 0.48%.

Looking at the last three columns, the first one (Actual), is what was reported this morning. The second column (Forecast) is what analysts had forecast and the third column is the previous report. Full calendar HERE.

Today's Economic Calendar

5:00 Fed's Harker speech
8:30 GDP Q2
8:30 Corporate Profits
8:30 Initial Jobless Claims
8:30 International trade in goods
8:50 Fed's Lockhart speech
9:45 Bloomberg Consumer Comfort Index
10:00 Pending Home Sales
10:00 Fed's Powell speech
10:30 EIA Natural Gas Inventory
2:30 PM Fed's Kashkari speech
3:00 PM Farm Prices
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
5:10 PM Janet Yellen speech

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. jobless claims rise less than expected

WASHINGTON, Sept 29 (Reuters) - The number of Americans filing for unemployment benefits rose less than expected last week and held at relatively healthy levels that could support

U.S. GDP growth less sluggish in the second-quarter as businesses boost investment

WASHINGTON, (Reuters) - U.S. economic growth was less sluggish than previously thought in the second quarter as exports grew more than imports and businesses raised their investments, hopeful signs for the economic outlook.

Oil shares lift global stocks, crude dips on doubt over OPEC deal

LONDON (Reuters) - An agreement by OPEC members to curb output boosted oil company shares on Thursday, lifted the currencies of crude-producing countries, and drove yields on low-risk government debt higher.

OPEC agrees modest oil output curbs in first deal since 2008

ALGIERS (Reuters) - OPEC agreed on Wednesday modest oil output cuts in the first such deal since 2008, with the group's leader Saudi Arabia softening its stance on arch-rival Iran amid mounting pressure from low oil prices.

Fed's Lockhart wants to see more improvement before hiking U.S. rates

ORLANDO, Fla. (Reuters) - A top U.S. Federal Reserve official said on Thursday he supported the U.S. central bank's decision to leave interest rates unchanged at its policy meeting earlier this month until there was more evidence the economy is moving closer to the Fed's goal of full employment and 2 percent inflation.

Takata should file for bankruptcy protection, all five bidders say: sources

TOKYO (Reuters) - All five bidders seeking to bail out Japan's beleaguered Takata Corp have presented restructuring plans that require the air bag maker to file for bankruptcy protection, people with knowledge of the process told Reuters.

Iraq's OPEC revolt shows Saudi-Iran oil deal fragility

ALGIERS (Reuters) - For years, debates in the OPEC conference room were dominated by clashes between top producer Saudi Arabia and arch-rival Iran.

Sumner Redstone's National Amusements calls on CBS, Viacom to merge

(Reuters) - Sumner Redstone's National Amusements Inc on Thursday urged the boards of Viacom Inc and CBS Corp to explore a combination.

Fed, BOJ add shine to risk-parity strategy

NEW YORK (Reuters) - The Federal Reserve and Bank of Japan's actions last week have given a second wind to an alternative investment strategy that relies on cheap money and low market volatility to produce outsized returns.

Post-February Uptrend In Stocks Being Tested

Via Dana Lyons' Tumblr,

Key indices across the U.S. equity market are testing their uptrend lines stemming from the February lows.

It's only fitting that today's Chart Of The Day includes a trendline considering our regular "Trendline Wednesday" feature on Twitter and Stocktwits (follow us on both platforms: @JLyonsFundMgmt). Granted, it's not the most profound trendline we've ever monitored. However, it very well may be quite significant on an intermediate-term duration. Furthermore, as the subheading indicates, there are many other segments of the market presently being impacted by trendline dynamics similar to those illustrated in the example here.

So what are we looking at? The index is the broad NYSE Composite and the trendline is the uptrend defining the post-February rally. Specifically, the trendline originates at the February lows in the NYSE and connects the June Brexit lows as well as the early September lows. Why is this line so important? First of all, because it traces out the precise lower bound of the NYSE's post-February rally. Secondly, the NYSE is presently testing the top of this line.


So is this line going to hold? In a vacuum, the assumption is always that a trendline should hold - until it doesn't. Therefore, in this instance, the ...

How Constant Is Gold's Purchasing Power?

An often-perceived analysis in the gold community is that gold is the constant in our global economy. But is this true? Yes and no. Allow me to share my observations. Although gold has an exceptionally constant nature, and we have yet to see another currency that can compete with gold's constant nature, the reality is, that there is no exact constant in economics. In any market all goods, assets, currencies, etc. continuously fluctuate in value relative to each other due to ever changing supply and demand dynamics. Having said that, in this post we'll examine gold's constant nature by measuring its purchasing power in the short (weeks) medium (years) and long term (decades). Additionally, we'll compare our findings to fiat's nature.

We will find that when gold is officially recognized as the center of a monetary system - throughout history there have been several forms of gold standards - gold is approximately constant in the short, medium and long term. Since the gold standard has been abandoned, the metal has become less constant in the short and medium term, but has remained impressively constant in the long term.

In turn, fiat can have periods of being constant in the short term, but will always loose value in the medium term and evaporate in the long term. Thereby, due to fiat's fragile nature and the current stress in global finance, there are also risks fiat can significantly devalue overnight. Hence, gold is highly suitable to secure one's purchasing power.

When examining the value of gold we have to measure it in terms of goods and services. In this day and age one might forget the end goal of any participant in the economy is goods and services. All else traded in our vast financial system is merely a means to an end. All sorts of money, but also stocks, bonds, cred ...

ECB "Refused To Answer Questions" - "Systemic Threat" Of Deutsche Is "Not ECB Fault"

The potential collapse of Deutsche Bank and the systemic risk it poses to banks and the European financial and monetary system moved into the German political sphere yesterday. The German government denied it was preparing a rescue of the embattled bank and the Bundestag attempted to ask questions of ECB President Mario Draghi about the causes of the "systemic risks" posed by the bank.

draghi_ECBRalph Orlowski | Reuters
ECB President Mario Draghi refused to answer questions in German parliament

The ECB president brazenly "refused to answer questions" regarding Deutsche Bank during a closed-door meeting in the German parliament. Afterwords in conversation with journalists, he denied that the negative interest rates being imposed by the ECB are partly responsible for Deutsche Bank and the German financial system's troubles.

However, many analysts rightly assert that zero interest rate policies (ZIRP) and now negative interest rate policies (NIRP) are a factor and partly contributing to the challenges facing ban ...

Pain Spreads To Germany's Second Biggest Bank: Commerzbank Scraps Dividend, Fires 20% Of Workforce

With Deutsche Bank mercifully missing from overnight headlines for the first day in almost two weeks, it is time to bring attention to Germany's second largest bank which, as we first reported earlier in the week citing a Handelsblatt leak, confirmed it is also going through a historic rough patch. This morning, Commerzbank said it plans a wide-ranging business restructuring that includes scrapping the bank's dividend for the rest of the year, terminating nearly 10,000 jobs - roughly 20% of its workforce - and merging two large units.

"The focus on the core business, with some business activities being discontinued, and the digitalization and automation of workflows will lead to staff reductions amounting to around 9,600 full-time positions," Germany's second-largest lender said.

The plan, according to the WSJ, is a strong sign new Chief Executive Martin Zielke is determined to shrink the partially state-owned bank amid a protracted period of ultra-low or negative interest rates and weak client demand.

While the overhaul and liquidity "shoring" was previously reported in recent weeks, it came as a surprise because the bank portrayed the picture of an institute that is done emerging from an extensive overhaul when former Chief Executive Martin Blessing in November last year said he would leave the bank. However, now the bank is merging its investment bank with the unit that caters to small and midsize enterprises. The renewed efforts to streamline Germany's second-largest bank mark the first moves Mr. Zielke, who took the helm at Commerzbank in May.

There is a silver lining: the 20% headcount reduction will be offset by the hiring of 2,300 new workers as the bank efforts to make wo ...

Why Markets Are Riding Such a Long and Narrow Path

There been much talk about policies that might wake up markets, such as helicopter money, fiscal stimulus, or structural reforms. But little or no action.

China's Streaming Craze Launches a Billion Shooting Stars

The owner of streaming app Inke is China's newest unicorn thanks to a 19-fold increase in value in eight months.

Companies Pick Wages Against the Machine

This year's weak capital spending figures are at odds with the strength in U.S. hiring.

The Terrorist Networks At Our Fingertips


-- this post authored by Scott Stewart

Two teenage girls were arrested in Nice, France, on Sept. 25 for conspiring to conduct terrorist attacks on behalf of the Islamic State. During the interrogation, the young women admitted to authorities that they had been in contact with Rashid Kassim, a 29-year-old French jihadist affiliated with the Islamic State who has been active on Telegram, an instant messaging service.

Infographic Of The Day: Dubai Interesting Statistics And Facts

Did you know international visitors account for 62% of total arrival in Dubai and city of Dubai has the highest 4.8 visitors per resident in world followed by Amsterdam with only 2.6 visitors per resident.

Not even the government knows what 'healthy' actually means

The current definition dates back to 1994.

The Wall Street Journal: Viacom, CBS urged to explore merger by Redstone firm

Sumner Redstone's family holding company, National Amusements, urged the boards of the companies it controls--Viacom and CBS--to explore a merger.

Economic Report: Jobless claims rise slightly to 254,000

Applications for unemployment benefits rose 3,000 to 254,000 in late September, but the low level of initial claims points to a steadily improving labor market in which jobs are the easiest to find in years.

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