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19Oct2016 Pre-Market Commentary: Corporate Earnings Continue To Shine, Crude Drawdown Spikes Prices, Gold Is Climbing And The US Dollar Is Volatile

Written by Gary

US stock market future indexes are flat this morning (SPY +0.05%) pointing to an interesting session as Saudi oil minister boasts about output deal pushing Texas Tea over 51 (+1.3%). Housing starts fall short in September and Morgan Stanley topping the EPS estimate.

Here is the current market situation from CNN Money

European markets are lower today with shares in France off the most. The CAC 40 is down 0.14% while Germany's DAX is off 0.06% and London's FTSE 100 is lower by 0.03%.

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.

What Is Moving the Markets

Here are the headlines moving the markets.

Morgan Stanley profit jumps 61.7 percent on trading comeback

(Reuters) - Morgan Stanley reported a better-than-expected quarterly profit on Wednesday, boosted by a surge in bond trading that followed Britain's surprise vote to leave the European Union and bouts of anxiety about monetary policy around the world.

U.S. housing starts tumble on weak multi-family construction activity

WASHINGTON, (Reuters) - - U.S. housing starts tumbled to a 1-1/2-year low in September amid a steep decline in the construction of multifamily homes, but a surge in the construction of single-family units pointed to sustained strength in the housing market.

Dollar recedes from seven-month peak, lifts oil

LONDON (Reuters) - The U.S. dollar fell from a seven-month peak on Wednesday, combining with signs of an easing supply glut to help lift oil prices back towards a one-year high.

At crisis-hit Samsung, nerves jangle as annual review looms

SEOUL (Reuters) - The next few weeks are traditionally a tense time at Samsung Electronics Co as executives wait to see if their work over the year is rewarded with promotion at the South Korean firm's annual performance review.

Stock futures flat ahead of earnings reports, economic data

(Reuters) - U.S. stock index futures were little changed on Wednesday, ahead of another flood of earnings reports, a Federal Reserve report on economic health and the final U.S. presidential debate.

EU believes free trade deal with U.S. won't be completed this year: source

BERLIN (Reuters) - The European Commission believes it is unlikely that negotiations with the United States over a free trade deal will be completed under the current U.S. administration, a Commission source told Reuters on the condition of anonymity on Wednesday.

Abbott's third-quarter revenue rises nearly 3 percent

(Reuters) - Abbott Laboratories , which is in the process of acquiring St. Jude Medical Inc , reported a nearly 3 percent rise in quarterly sales, fueled by strength in its generic drug and medical device businesses.

Halliburton posts surprise profit as expenses fall

(Reuters) - Halliburton Co, the world's No.2 oilfield services provider, posted a surprise quarterly profit, helped by higher cost cuts, and said it expected a rise in oil prices to boost rig count.

Starbucks names China CEO, sees 5,000 stores there by 2021

(Reuters) - Starbucks Corp on Wednesday named its first chief executive officer for China and said it plans to more than double its store count in that country to 5,000 by 2021.

1 In 4 Young Americans Prefer A 'Giant Meteor' To Trump Or Clinton As President

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Can't really blame them, can you.

Reuters reports:

Young Americans are so dissatisfied with their choices in this presidential election that nearly one in four told an opinion poll they would rather have a giant meteor destroy the Earth than see Donald Trump or Hillary Clinton in the White House.

The tongue-in-cheek question was intended to gauge young Americans' level of unhappiness about their choices in the Nov. 8 election, said Joshua Dyck, co-director of UMass Lowell's Center for Public Opinion, which conducted the poll alongside Odyssey Millennials.

The choice alluded to the Twitter hashtag "#GiantMeteor2016," a reference to an imaginary presidential candidate used to express frustration about this year's election choices.

Some 53 percent of the 1,247 people aged 18 to 35 said they would prefer to see a meteor destroy the world than have Republican New York real estate developer Trump in the Oval Office, with some 34 percent preferri ...

ECB Wants To Curb Bitcoin Use Over Fears It May "Lose Control Over Money Supply"

The first time the ECB officially warned about the dangers of virtual currencies in general, and in particular, bitcoin - what was then a mostly unknown currency trading in the single digits (in USD terms) - was in November 2012 when in a report called "Virtual Currency Schemes" it warned that "in an extreme case, virtual currencies could have a substitution effect on central bank money if they become widely accepted. The increase in the use of virtual money might lead to a decrease in the use of "real" money, thereby also reducing the cash needed to conduct the transactions generated by nominal income. In this regard, a widespread substitution of central bank money by privately issued virtual currency could significantly reduce the size of central banks' balance sheets, and thus also their ability to influence the short-term interest rates. Central banks would need to look at their existing tools to deal with this risk (for instance, trying to impose minimum reserve requirements on virtual currency schemes)."

Ironically, since then the ECB has moved significantly down the narrative of currency substitution, and in fact, following a recent push to eliminate paper currency (now that the 500 bill is no longer produced) the central bank has been urging for a shift away from real, paper money and into electronic variants.

However, overnight in a surprising reminder how the European central bank feels about bitcoin and other virtual money, the ECB urged EU lawmakers to tighten proposed new rules on digital currencies such as bitcoin, fearing they might one day weaken its own control over money supply in the euro zone.

In other words, first the ECB went after cash; now it is going after all virtual curren ...

Frontrunning: October 19

China third quarter GDP grows 6.7 percent as expected as construction booms, debt rises (Reuters)

China Growing at 6.7% Opens Window to Deliver Debt-Curb Vow (BBG)

U.S. expects Islamic State to wield chemical weapons in Mosul fight (Reuters)

Iraq urges U.S.-led coalition to prevent Islamic State escape to Syria (Reuters)

Fox national poll shows Clinton leading by six points (Hill)

Trump's appeal for poll monitors draws tepid response from some supporters (Reuters)

Clinton camp asks for change to handshake protocol at final debate(The Hill)

The Video Defense About Her Emails Hillary Clinton Never Gave (NPR)

EU believes free trade deal with U.S. won't be completed this year (Reuters)

Hedge Fund Launches Dwindle to 16-Year Low as Returns Lag (BBG)

How Yuan-Lending Curves and Ice Hockey Are Related (

"Higher Gold Prices" On Global Trade Slowdown - HSBC

HSBC's respected chief precious metals analyst James Steel has written a note pointing out that the global trade slowdown will likely lead to "higher gold prices" as reported by Bloomberg.

Analysts at HSBC Group Inc. are telling clients that gold may be about to have another shining moment, as the precious metal's status as a safe haven asset could boost prices, given the prospect of a looming downward shift in globalization.

The firm's Chief Precious Metals Analyst James Steel says in a note published on Friday that "demand for gold is often stimulated by the same factors that fan protectionist and populist sentiment" and that "abrupt declines in cross border trade, investment and immigration, the dislocation of global economic policies, and a beggar-thy-neighbor approach to trade is almost tailor-made for higher gold prices."

Previously, Steel advocated owning gold as a "long term insurance policy".

Finding Cracks in China's Growth Story

There is an assumption that Chinese consumers are flush with savings. But they are also increasingly reliant on credit.

Goldman Should Share the Wealth

Goldman Sachs posted good third-quarter earnings, but it could do more to ensure shareholders benefit.

StubHub: EBay's Ticket to Growth

More than a year after parting ways with PayPal, eBay has a new growth driver in the spotlight.

Housing starts tumble 9% as sturdy recovery remains elusive

Builders broke ground on fewer homes than expected in September but applied for more permits for future construction.

Beat the System: 10 things the Goldman Sachs tapes reveal about Hillary Clinton

She spoke more freely in those small, elite gatherings than she typically does on the stump, writes Brett Arends.

Market Snapshot: Stock futures perk up on Morgan Stanley earnings as housing starts loom

Stock futures point to a steady start for Wall Street, which is waiting on a batch of earnings from Halliburton and Morgan Stanley, along with housing data.

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