US stock market future indexes are down fractionally (SPY - 0.1%)(DOW - 0.3%) with the FED due to release minutes this afternoon. Asian markets fell again today as investors stayed edgy after a disappointing start to the U.S earnings season and fears of a Federal Reserve interest rate hike. Indicators are fractionally bearish.
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 0.47% while London's FTSE 100 is off 0.37% and France's CAC 40 is lower by 0.33%.
SEOUL (Reuters) - Samsung Electronics Co slashed its quarterly profit estimate by a third on Wednesday, soaking up a $2.3 billion hit from ditching its flagship smartphone in what could be one of the costliest product safety failures in tech history.
ISTANBUL (Reuters) - Energy ministers from Qatar, the United Arab Emirates, Algeria, Venezuela and Russia began informal closed-door talks with the secretary general of OPEC in Istanbul on Wednesday as they try to coordinate efforts to rebalance the oil market.
LONDON (Reuters) - State-backed Lloyds Banking Group said on Wednesday it planned to ax 1,230 jobs as part of a three-year restructuring plan aimed at cutting costs and improving returns for shareholders.
HONG KONG (Reuters) - Apple Inc will set up a research and development center in China's manufacturing metropolis Shenzhen, the U.S. tech giant said on Wednesday, as the firm looks to spur growth in the world's second largest economy amid growing competition.
Submitted by Charles Hugh-Smith via OfTwoMinds blog,
That few believe Mr. Market can possibly stumble only increases the odds of a stumble.
You know how to get into crash positions, correct? Here's your guide:
Very few punters expect a real downturn here in stocks. The reasons for confidence are many: the Fed has our back, buy the dip has worked great and will continue to work great, the Fed won't raise rates until December (if ever), the Powers That Be will keep the market aloft lest a plunging market upset the election of the status quo candidate, and so on.
This confidence that the market will be on cruise control into the November post-election rally is the ideal set-up for a crash to SPX 1,850. While we can argue technicals all day, the fact is gaps get filled, usually sooner rather than later. There are two big open gaps in the S&P 500 around 2.040 and 1,860 that have been begging to get filled for months.
The question arises: after months of going unfilled, why not fill them now with a pleasantly unexpected little October crash? Technically, there are a couple of features that suggest the market would really, really like to plummet, if only the Plunge Protection Team would stand aside for a few days.
First, there are the open gaps that ache to be filled.
Then there's the peculiar Zombie Market of July and August, when volatility vanished and trading ranges fell as close to zero as is possible. A sign of strength? Hardly.
Third, the SPX has struggled mightily to claw its way above the 50-day moving average, and has failed to surmount this important technical target des ...
We were surprised when, just after the close on Friday, Deutsche Bank announced it would issue $3 billion in five year paper carrying a nosebleeding coupon of 4.25%, and a spread of 300 bps over Treasuries. By issuing debt at such a high yield - indicatively 300 basis points is close to the average for highly-rated junk debt in dollars and more than twice the 143 basis points Deutsche Bank paid for similar notes in August 2015 - DB management confirmed it had liquidity concerns (the issue did nothing to help the bank's ailing capitalization).
As we said on Friday, "some have wondered why the need to sell new paper at such a wide concession: after all as we reported before, DB has no current liquidity constraints courtesy of substantial ECB generosity, which backstop DB's existing liquidity reserves of just over 200 billion" leading to the question: "does DB know something investors don't?."
While the question remains unanswered, a similar question emerged last night when taking advantage of the still open issuance window, Deutsche Bank raised another US$1.5 billion in bonds, tapping last Friday's $3 billion 5-year issue. The self-led tap of its 4.25% October 2021s priced at similar terms, at 100.263 and a spread of 290bp over Treasuries for a yield of 4.191%, and a coupon of 4.25%. According to Bloomberg, the German lender targeted mostly the same investors who bought last week's $3 billion private deal. The deal was priced at a premium of 290 basis points, once again suggesting that at least from the perspective of investors, DB is effectively a junk rated credit.
Our condolences to anyone long Swedish telecom giant Ericsson, who will observe the following chart first thing upon waking up today.
The reason for Ericsson's 17% crash, is that the Swedish network maker reported a surprising slump in third-quarter sales and profitability, warning investors that its business was deteriorating faster than expected, with no turnaround in sight. Unexpectedly, the company said sales in the third quarter had dropped by 14% while its operating profit was all but wiped out, falling from SKr5.1bn a year ago to SKr300m. The sales drop was the biggest in 13 years, going back all the way to 2013.
Cited by Bloomberg, Mathias Lundberg, an analyst at Swedbank said that "we knew that the business climate was weak, and that would show in the numbers, but we didn't know that things were this bad," Lundberg said by phone. "That was a surprise both to us and the market."
Jan Frykhammar, the acting chief executive, said: "Our result is significantly lower than we expected, with a particularly weak end of the quarter, and deviates from what we previously have communicated regarding market development."
Hardly encouraging for mobile companies (elsewhere Samsung had a just as ugly morning after the Korean handset maker slashed its quarterly profit forecast by a third), according to the FT, Ericsson blamed a "further deterioration in demand for mobile broadband and said the current trends were likely to continue in the short term." Since ...
The new lows in U.S. politics might make you want to go hide — and yesterday's one-month low for U.S. stocks could be adding to that "Gimme Shelter" feeling. But today's call says it's a mistake to plan on hiding in cash until after the election.
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