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10Nov2016 Pre-Market Commentary: US Futures Higher This Morning, Crude Prices Fractionally Higher, US Dollar Testing Resistance, Markets Expected To Open Higher

Written by Gary

US stock future indexes are sharply higher this morning (SPY +0.5%) after staging a dramatic comeback yesterday, led by banks and healthcare stocks as investors bet on the prospect of less regulation under a Trump administration. Indicators are bullish.


Here is the current market situation from CNN Money

European markets are mixed today. The CAC 40 is up 0.70% while the DAX gains 0.27%. The FTSE 100 is off 0.30%.

What Is Moving the Markets

Here are the headlines moving the markets.

Stock futures rise day after Trump wins U.S. election

(Reuters) - U.S. stock index futures were higher on Thursday with Dow futures hitting a record high, a day after Republican Donald Trump won the White House race and signaled a shift from austerity policies.

U.S. jobless claims drop more than expected

WASHINGTON, (Reuters) - - The number of Americans filing for unemployment benefits fell more than expected last week, underscoring the robustness of the labor market.

Trump economic adviser stresses growth over Fed talk: CNBC

WASHINGTON (Reuters) - A senior economic adviser to President-elect Donald Trump stressed economic growth over discussion of Federal Reserve policies on Thursday, citing the need for small business job growth through better regulation, energy policy and tax cuts.

MetLife board approves $3 billion buyback program, its biggest ever

(Reuters) - MetLife Inc said on Thursday its board had approved a new $3 billion share buyback program, its largest ever.

Macy's quarterly sales fall 4.2 percent

(Reuters) - Department store operator Macy's Inc reported a 4.2 percent fall in third-quarter sales, and said it had formed a partnership with asset manager Brookfield Asset Management to enhance the value of its real estate.

ConocoPhillips trims 2017 budget as cost cuts offsets cheap oil

(Reuters) - ConocoPhillips , the largest U.S. independent oil producer, said on Thursday it would reduce its capital budget by 4 percent to $5 billion next year due to technology gains, cost cuts and other improvements.

U.S. should have joined China-led infrastructure bank: Trump adviser

HONG KONG (Reuters) - A top adviser of U.S. President-elect Donald Trump lashed out at the Obama administration for failing to embrace the China-led Asian Infrastructure Investment Bank (AIIB), suggesting a possible policy shift when Trump takes office in January.

Rubik's Cube loses EU trademark fight over its shape

BRUSSELS (Reuters) - Rubik's Cube, a multicolored three-dimensional puzzle, lost a trademark battle on Thursday after Europe's top court said its shape was not sufficient to grant it protection against copycats.

IEA sees global market awash with oil in 2017 if no OPEC cut

LONDON (Reuters) - The oil market surplus may run into a third year in 2017 without an output cut from OPEC, while escalating production from exporters around the globe could lead to relentless supply growth, the International Energy Agency said on Thursday.

The Last Time The Market Did This, It Didn't End Well

Via Dana Lyons' Tumblr,

There was an inordinate number of new highs AND new lows on the exchanges today, a condition that has spelled trouble for stocks in the past.

Even aside from yesterday's historic election results, the action in financial markets was downright epic. It certainly makes selecting one Chart Of The Day a difficult prospect. There were so many gyrations, buying frenzies and selling panics that we hardly know where to begin. Because so many have covered the stunning equity rally off of the election night lows, we're going to go in a different direction. To the extent that any of today's monumental trading actually contained meaningful signals, we're going to present a few charts demonstrating why the rally may not have been quite as robust as it appeared. Now, we're not trying to minimize a 1000+ point reversal in the Dow. But there were a few items that didn't quite jive with a rally that large.

Bad Breadth

First off, while the stock indexes put in hefty gains by the end of the day, breadth was not nearly as strong by comparison. Specifically, though the S&P 500 gained more than 1% on the day, NYSE Advancing issues outpaced Decliners by a relatively thin margin of 1698-1386. And while bond-related issues may have had a large impact on the data, at barely 55% of issues traded, this marked the weakest showing by NYSE Advancing Issues on a day the S&P 500 gained over 1% since October 2008.

image

Since 1970, there have now been 70 occurrences whereby the S&P 500 gained at least 1% while NYSE Adva ...

Global Bond Investors Lose A Third Of A Trillion Dollars In One Day

Back in June, we warned that based on simple duration analysis, as a result of total market-traded US debt aggregates anywhere between $17 and $40 trillion - an all time high in terms of rate duration...

... traders faced massive mark-to-market losses of anywhere between $2.4 and $5 trillion should rates suddenly spike higher.... as they did yesterday, when as we reported the yield on the 10Y and 30Y Treasury jumped the most in percentage terms on record."The U.S. 10-year yield was three basis points, or 0.03 percentage point, higher at 2.09 percent as of 12:09 p.m. in London, according to Bloomberg Bond Trader data. The yield jumped 20 basis points Wednesday, the most on a single day since July 2013."

Today, Bloomberg has crunched the numbers after yesterday's bond rout, and calculates that bond investors saw $337 billion - just over a third of a trillion - in losses on global bond holdings in a single day Wednesday "as Donald Trump's election as U.S. president sparked concern his plan to boost economic growth will lead to a surge in inflation."

The sharp, aggressive selloff, which continues today, spread into European and Asian bonds on Thursday, as traders caught up with moves in U.S. Treasuries. Speculation that Trump's victory and a Republican-led Congress will lead to a wave of spending, spurred the likelihood that inflation will pick up in coming months, which would in turn erode the value of bonds. The decline in bonds saw Bank of America Merrill Lynch's Global Broad Market Index drop by about 0.7 percent on Wednesday.

Frontrunning: November 10



Trump Victory Starts New Era for GOP (WSJ)

President-Elect Trump Goes to Washington to Begin Transition (BBG)

Trump Team Plans First Months (WSJ)

The Promises of President-elect Donald Trump, in His Own Words (BBG)

Donald Trump Transition Team Planning First Months in Office (WSJ)

Europe's Populists Hail Trump's Win (WSJ)

Merkel's conservatives warn of Trump effect in Germany (Reuters)

Democrats Seek a Fresh, More Inclusive Approach (WSJ)

Obama's Environmental Legacy Is Up in Smoke (BBG)

China state media warns Trump against isolationism, calls for status quo (Reuters)

Stocks and Metals Surge Again After Trump's Victory (BBG)

Bank Stocks in Europe Soar (

Dedollarization and Uncertainty drive Central Bank Demand for Gold

Dedollarization and Uncertainty drive Central Bank Demand for Gold


  • Central banks added 81.7t to their gold reserves in the third quarter

    Total central banks purchases in the year-to-date reach 271.1t.

    Fellow-SCO member Kazakhstan and Belarus also had to holdings

    90% of reserve managers intend to increase or maintain gold reserves.

    "The case for gold remains compelling for reserve managers" state WGC

    Unconventional monetary policies will underpin gold demand in coming years.

    Central banks added 81.7t to their gold reserves in the third quarter, bringing total purchases in the year-to-date to 271.1t. This was a fall from 168t purchased in the previous quarter. Much of this has gone unnoticed by the mainstream media, something which seems shortsighted given the monetary and geopolitical implications both this and recent elections results may lead to.

    The World Gold Council described recent buying as a 'more measured' approach to previous years. Between Q3 2014 and Q3 2015 407.7t were purchased by central banks. The data was slightly ...

Banks Love Trump Even If It Isn't Mutual

President-elect Donald Trump supposedly doesn't care about Wall Street. It is ironic then that the world's biggest banks are rallying on his victory.

Where to Find Some Certainty in Trump's Uncertain World

Donald Trump's victory puts some big question marks on the U.S. economy that are unlikely to be resolved soon.

With Financing Scarce, Chinese Developers Get Too Clever by Half

For property developers like Sunac China, issuing shares would seem a safe way to raise capital. Not always.

Economic Report: Jobless claims fall to one-month low of 254,000

The number of people who applied for unemployment benefits in early November fell by 11,000 to 254,000 and touched a one-month low, keeping the rate of layoffs near the lowest levels in decades.

Market Snapshot: Stock market set for 4th straight day of gains

U.S. stock futures rise, putting Wall Street on track for another day of solid gains as investors continue to decipher what a Donald Trump election win means for the future of U.S. equities.

Tax Guy: What Trump's victory means for you and your taxes

The president-elect plans to make some radical changes to your taxes.

Earnings Summary for Today

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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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