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27Oct2016 Pre-Market Commentary: Wall Street Pointing To A Higher Opening, Unemployment Benefits Fell, SP 500 Futures Up 0.4 Percent

Written by Gary

US stock index futures rose this morning (SPY +0.4%) as investors focused on the third-quarter corporate results season which is expected to mark an end to a year-long earnings recession. The number of Americans filing for unemployment benefits fell last week, pointing to sustained labor market strength and firming economic growth.


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 0.52% while London's FTSE 100 is off 0.32% and France's CAC 40 is lower by 0.26%.

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. jobless claims fall; continuing claims lowest since 2000

WASHINGTON, (Reuters) - - The number of Americans filing for unemployment benefits fell last week, pointing to sustained labor market strength and firming economic growth.

Qualcomm to buy NXP for $38 billion in largest chip deal

(Reuters) - Qualcomm Inc agreed to buy NXP Semiconductors NV for about $38 billion in the biggest-ever semiconductor industry deal, expanding the reach of its chips from phones to cars.

Twitter beats estimates, cuts jobs with eye on 2017 profitability

(Reuters) - Twitter Inc said Thursday it would cut 9 percent of its global workforce to keep costs down as the microblogging service reported quarterly results that beat Wall Street expectations, lifting shares.

Futures rise as earnings continue to be prime focus

(Reuters) - U.S. stock index futures rose on Thursday as investors focused on the third-quarter corporate results season which is expected to mark an end to a year-long earnings recession.

Belgium breaks deadlock over EU-Canada trade pact

BRUSSELS (Reuters) - Belgium agreed a deal with its regional parliaments on Thursday to approve a landmark EU-Canada free trade agreement, breaking a deadlock that has blocked the pact for weeks.

Recall, product launch costs slash Ford third-quarter profit

DETROIT (Reuters) - Ford Motor Co reported a more than 50 percent drop in third-quarter net income on Thursday, saying its North American business suffered from lower sales, higher recall costs and a complicated introduction of a new pickup truck.

Deutsche Bank warns of tough times ahead due to U.S. fine

FRANKFURT (Reuters) - Deutsche Bank chief John Cryan pledged to redouble restructuring efforts on Thursday, warning that it faces tough times finalizing talks with U.S. justice authorities over a multi billion dollar fine.

Apple expected to refresh ageing computer line with new MacBook Pro

(Reuters) - Apple Inc is expected to unveil a revamped MacBook Pro on Thursday with a fingerprint reader and faster ports, returning to the product line it build the company on after updating smartphones with the iPhone 7.

Hundreds of flights canceled in Lufthansa budget unit strike

AMSTERDAM (Reuters) - Cabin crews at Lufthansa budget units Eurowings and Germanwings staged a strike on Thursday in a row over pay and conditions, forcing the carrier to cancel hundreds of flights.

Podesta Part 20: Wikileaks Releases Another Batch Of Emails; Total Is Now 34,197

With just 12 days to go until the November 8 presidential election, the final countdown is now on, and Wikileaks continues its ongoing Podesta dump by unveiling another 1000+ emails in the latest Part 20 of its Podesta release, bringing the total emails released so far to exactly 34,197, with just under 40% of the total dump left to go.

RELEASE: The Podesta Emails Part 20 #PodestaEmails #PodestaEmails20 #HillaryClinton https://t.co/wzxeh70oUm pic.twitter.com/V1OuCQN7of

— WikiLeaks (@wikileaks) October 27, 2016

Among the last batch of released documents was the so-called "Rosetta Stone" of the Clinton Foundation: a confidential memo which laid out how Clinton's consultancy Teneo was engaging in quid pro quo with corporate "donors", a leak which has even made the front page of the WSJ.

As usual we will go parse through the disclosure and bring you some of the more notable ones.

Top Republican Congressman Says He'll Vote For Trump Weeks After Dropping His Support

Just three weeks ago, after the infamous 2005 tape of Donald Trump's lewd remarks about women publicly emerged, one of the more prominent republicans, Rep. Jason Chaffetz (R-Utah) abandoned his endorsement of Trump "I'm out," he told Fox 13 in Salt Lake City on Oct. 7. "I can no longer in good conscience endorse this person for president. "It is some of the most abhorrent and offensive comments that you can possibly imagine," Chaffetz added.

It did not take him long to change his mind and last night Chafetz announced on Twitter that he will be voting for Donald Trump.

"I will not defend or endorse @realDonaldTrump, but I am voting for him. HRC is that bad. HRC is bad for the USA," he wrote on Twitter, referring to Hillary Clinton.

I will not defend or endorse @realDonaldTrump, but I am voting for him. HRC is that bad. HRC is bad for the USA.

— Jason Chaffetz (@jasoninthehouse) October 27, 2016

Chaffetz's fellow Utahn, Sen. Mike Lee, called on Trump to withdraw from the presidential race after the recording was made public.

Chaffetz, chairman of the House Oversight Committee, has long been a foe of Clinton.

He said Wednesday that he expects years' worth of further hearings on Clinton's private email server use while secretary of State.

Chaffetz was the first of several GOP congressmen who yanked their endorsement from Trump after the recording's publication.

Other prominent republicans who tacitly pulled their support include House Speaker Paul Ryan who vowed he would neither campaign for nor defend Trump ahead of Election Day.

Eleven women have since accused Trump of kissing or groping them without permission ...

Qualcomm Buys NXP For $47 Billion: Biggest Semiconductor Deal Ever

Last night, David Rosenberg pointed out something troubling: we have just witnessed five multi-billion dollar deals this past week alone — $207 billion globally (AT&T/Time Warner; TD Ameritrade/Scottrade) in what has been the most active announcement list since 1999. We can now add another massive deal to the list: this morning Qualcomm announced it would buy NXP Semiconductors NV for about $47 billion, including debt, as it seeks to expand the reach of its chips from phones to cars. The equity value of the deal is $37.88 billion.

According to the WSJ, the agreement represents the biggest semiconductor deal ever, eclipsing Avago Technologies Ltd.'s pact to buy rival Broadcom Corp. for $37 billion, and behind only Dell Inc.'s $60 billion acquisition of EMC Corp. among pure tech deals.

The combined company is expected to have annual revenue of more than $30 billion, the companies said.

Less than a year ago, NXP closed a nearly $12 billion deal to buy U.S.-based Freescale Semiconductor last December, creating the world's top maker of automotive electronics and doubling the percentage of its auto-related revenue to 40 percent.

Qualcomm intends to fund the transaction with cash on hand and new debt.

The deal would make Qualcomm, which supplies chips to Android smartphone makers and Apple one of the biggest suppliers to the fast-growing market of chips used by the automotive industry. Qualcomm said it would offer $110 per share in cash, a premium of 11.5 percent to NXP Semiconductor's Wednesday's close. But the real rationale for the deal is that San Diego-based Qualcomm is facing slowing smartphone sales and stiff competition from Chinese and Taiwanese rivals.

The company gets the bulk of its revenue from chip sales but most of its profit comes from wireless patents it licenses to the mobile industry.

In a notable t ...

Leaked Memo Exposes Shady Dealings Between Clinton Foundation Donors And Bill's "For-Profit" Activities

We have written frequently in recent weeks about a feud that erupted between Chelsea Clinton and Doug Band back in 2011 after Chelsea raised concerns about potential conflicts of interest between Band's firm, Teneo, the Clinton Foundation and the State Department (see here, here, here and here). The feud ultimately resulted in Band being forced to draft a memo spelling out, in vivid detail, the many entangled relationships between himself, Teneo, the Clinton Foundation and the State Department. Fortunately, today's Wikileaks dump included that memo which reveals, for the first time, the precise financial flows between the Clinton Foundation, Band's firm Teneo Consulting, and the Clinton family's private business endeavors.

The memo starts with a brief background on Teneo, which was created in June 2011, shortly after Declan Kelly resigned from his position as "United States Economic Envoy to Northern Ireland," a position to which he was appointed by Secretary Clinton.

In June 2009, DK Consulting was founded by Declan Kelley. Mr. Kelly served as COO of FTI Consulting until June 2009, when he stepped down and established DK Consulting. At that time, he also became the United States Economic Envo ...

U.S. Banks Still Eating Deutsche's Trading Lunch

Deutsche Bank and Barclays results show stronger and less distracted U.S. banks continue to take market share from European rivals.

How to Get Out of Chinese Property When the Price Is High

Billionaire Li Ka-shing is selling out of a huge property project in Shanghai. Investors should take note.

Tata: The Mess Spreads At India's Biggest Company

Accusations by Tata Son's ousted chairman, Cyrus Mistry, raise serious issues about India's sprawling conglomerate.

The Ratings Game: Panera could get squeezed out by other fast-casual chains

Some analysts say Panera growth may have reached a peak, even after the chain reported an earnings beat.

Economic Report: Jobless claims drop 3,000 to 258,000

The number of people who applied for unemployment benefits last week fell by 3,000 to 258,000, extending a period of extremely low layoffs last seen in the early 1970s.

Economic Report: Durable-goods orders soften in September

Orders for long-lasting goods made in the U.S. fell slightly in September, largely because of lower demand for military hardware and computers. Business investment also posted the biggest drop in seven months.

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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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