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06Dec2016 Pre-Market Commentary: Wall Street Opens Higher, Crude Prices Fall Sharply, US Dollar Remains Soft, Gold Not Going Anywhere, Investors Waiting For Possible Correction

Written by Gary

Wall Street opened fractionally higher (SPY +0.3%) a day after upbeat data on U.S. service sector activity sent the DOW higher to a record close. Global oil prices slipped sharply this morning as crude output rose in most major export regions despite plans by OPEC and Russia to cut production.

Here is the current market situation from CNN Money

European markets are higher today with shares in France leading the region. The CAC 40 is up 0.62% while Germany's DAX is up 0.33% and London's FTSE 100 is up 0.14%.

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. productivity in third quarter fastest in two years

WASHINGTON, (Reuters) - U.S. worker productivity rebounded sharply in the third quarter as initially estimated, marking its quickest rate of growth in two years, but the trend remained weak.

Oil dips as OPEC, Russian output rises ahead of production cut

LONDON (Reuters) - Global oil prices slipped on Tuesday as data showed crude output rose in most major export regions despite plans by OPEC and Russia to cut production, triggering fears the fuel glut that has dogged markets for over two years might last well into 2017.

Euro and global stocks hold Italy-related gains ahead of ECB

LONDON (Reuters) - Wall Street's record run looked set for a pause on Tuesday as oil saw its first fall in five days and the euro held most of the wild three-cent gains it had seen in the wake of Italy's referendum.

Exclusive: McDonald's to keep up to 25 percent stake in China, HK stores - source

HONG KONG (Reuters) - McDonald's Corp is looking to raise $1 billion to $2 billion with the sale of its China and Hong Kong stores after the U.S. fast-food chain decided to keep "a significant minority stake in the business," a person with direct knowledge of the plans said on Tuesday.

Chipotle to make announcement about board changes 'shortly'

LOS ANGELES (Reuters) - Chipotle Mexican Grill Inc expects to make an announcement shortly about a new slate of board members, Steve Ells, the burrito chain's co-chief executive, said at an investor conference on Tuesday.

Oil firms and carmakers diverge in costly debate

LONDON (Reuters) - Many carmakers are predicting a significant shift to electric vehicles in the next decade. Advances in battery technology and the growth of autonomous driving and ride sharing - suited to electric vehicles - will power this expansion, they reason.

Top Actelion shareholder says backs J&J deal above 246 Sfr/share

LONDON (Reuters) - A top-30 investor in Swiss pharmaceutical company Actelion said he would back a takeover approach for the whole company from U.S. rival Johnson & Johnson above 246 Swiss francs.

Janus' Gross sees Trump trade view hurting long-term stock prices

NEW YORK (Reuters) - One of the world's most prominent investors, Bill Gross, predicted an end to the post-election stock rally, saying that Donald Trump's anti-globalization policies would restrict trade and reduce corporate profits over the long term.

Verizon to sell data centers to Equinix for $3.6 billion

(Reuters) - Verizon Communications Inc , the No. 1 U.S. wireless carrier, is selling 29 data centers to Equinix Inc for $3.6 billion, as the telecom giant focuses on its core business.

Trade Deficit Grows More Than Expected As Stronger Dollar Pressures Exports

The U.S. monthly international trade deficit increased in October 2016 according to the U.S. Census Bureau, rising from $36.2 billion in September (revised lower from $36.4 billion) to $42.6 billion in October, higher than the $41.8BN consensus estimate, as exports decreased and imports increased which was to be expected following the recent surge in the US Dollar. The goods deficit increased $6.3 billion in October to $63.4 billion. The services surplus decreased $0.1 billion in October to $20.8 billion.

Breaking down the main trade categories, exports of goods and services decreased $3.4 billion, or 1.8 percent, in October to $186.4 billion. Exports of goods decreased $3.5 billion and exports of services increased $0.1 billion.

The decrease in exports of goods reflected decreases in foods, feeds, and beverages ($1.4 billion), in industrial supplies and materials ($1.0 billion), and in consumer goods ($0.9 billion).

The increase in exports of services mostly reflected an increase in transport ($0.1 billion), which includes freight and port services and passenger fares.

At the same time, imports of goods and services increased $3.0 billion, or 1.3 percent, in October to $229.0 billion. Imports of goods increased $2.8 billion and imports of services increased $0.2 billion.

The increase in imports of goods mostly reflected increases in consumer goods ($2.4 billion) and in capital goods ($1.1 billion). A decrease in automotive vehicles, parts, and engines ($0.7 billion) partly offset the increases.

The increase in imports of services reflected an increase in transport ($0.2 billion).

Broken down by cou ...

US Productivity Suffers First Two-Quarter Annual Decline Since 1993

US Productivity rose a disappointing 3.1% in Q3 (missing expectations of a 3.3% rise). However, on a year-over-year basis, Q3 saw a second consecutive decline - the first two-quarter decline in US productivity since 1993. Unit labor cost growth slowed in Q3 to 3.00% (with QoQ growth tumbling from 6.2% in Q2 to just 0.7% in Q3).

Actually if one looks at the official table US productivity has notr risen YoY since Q4 2015 - (Q1 0.0%, Q2 -0.3%, Q3 -0.05%)

But, as Fed-induced investment in buybacks crowds out capex, real-worker productivity is collapsing (but buy back productivity is soaring!!).

* * *

How can this be?? The mainstream media 'economists' are stunned. As we explained previously, there are a few reasons... Even Alan Greenspan has warned that America is "in trouble basically because productivity is dead in the water..." There are numerous reasons for this plunge in worker-productivity, from perverted inventives not to work to unintended consequences of monetary policy enabling zombi ...

Dallas Pension Showdown: Mayor Seeks To "Target Those Who Got Rich From System"

Submitted by Michael Shedlock via,

The Dallas Police and Fire Pension plan is severely underfunded. Not even a $1.1 billion taxpayer bailout the plan officials request will make the plan whole.

Discussion of a possible freeze in lump sum payments led to a run on withdrawals. The board still has not suspended lump sum payouts.

On Saturday, Dallas Mayor Mike Rawlings proposed targeting those who got rich from the system. This is sure to accelerate the run on assets via lump sum withdrawals.

As background to this story, please consider my October 16 article: Dallas Police Retiring in Droves, Taking Lump Sum Pensions, Fearing the Money Isn't There (And It Isn't).

Today, DallasNews reports City's plan to save Dallas Police and Fire Pension Fund will target those who got rich from the system.

A City Council briefing posted online late Friday night provided the first glimpse into the city's plan to save the Dallas Police and Fire Pension System from insolvency within the next decade or so. Rawlings and the City Council will discuss the plan Wednesday.

While the presentation is short on details, Rawlings said he can be clear about a few aspects. The city won't pay the $1.1 billion bailout that pension officials want. Taxpayers will chip in, but he doesn't want to issue debt to pay for it. Base benefits wil ...

Tucker Carlson Snaps Flaccid College Student in Half Over Trump McCarthyism at American University

This punk never had a chance. He entered the lion's den of a soft spoken man who systematically destroys his opponents in verbal combat -- tearing them limb by limb until nothing is left. In this episode of 'You Can't Cuck the Tuck', Tucker Carlson took on a meek, sub 100 IQ, college student who wants to 'fire' Gary Cohn from the Board of Trustees at American University -- for meeting with Donald Trump. It's worth noting, trustees aren't hired, since, by definition, they're big donors and subsidize student tuitions.

The tolerant and progressive students at American U have taken to campus to call for Cohn to step down, saying "We, the students of AU, will not let a man who endorses Donald Trump's hateful agenda remain in a position of leadership at our University." au

One senior, Moira Nolan, said in an interview published by The Eagle "Cohn's meeting with Trump is in complete conflict of interest with the University's mission to promote a more inclusive campus."


Content originally generated at

Italy Vote Puts Bonds to the Test

Italy's rejection of constitutional reform and the resignation of Prime Minister Matteo Renzi are far from being a Brexit-style shock. Markets got this one right. But even more political uncertainty is the result.

China Debts Just Keep on Rolling

Corporate-bond defaults in China, all the rage earlier this year, have all but disappeared—but the change may be mere optics.

Housing Market: This Luxury Builder Is Priced to Move

Toll Brothers' shares appear undervalued relative to rival builders and the overall stock market.

3Q2016 (Final): Headline Productivity Improves

Written by Steven Hansen

A simple summary of the headlines for this release is that the growth of productivity improved while the labor costs grew less than productivity (headline quarter-over-quarter analysis). The year-over-year analysis gives one the opposite view.

October 2016 Trade Data Mixed

Written by Steven Hansen

A quick recap to the trade data released today shows a mixed picture (see analyst opinion below). Many care about the trade balance which degraded from last month.

NewsWatch: Why Vanguard says this market was wrong — and still is wrong

'Tis the season for 2017 outlooks. Vanguard's peek into the future says pessimists and optimists each have had their shining moment — and then blasts them both.

Deep Dive: 10 REITs that look like big winners for 2017

A pro-business administration might keep the economy cooking, supporting higher real estate prices, writes Phil van Doorn.

Economic Report: U.S. trade deficit jumps 18% in October

The U.S. trade deficit jumped almost 18% in October as imports rose to the highest level in 14 months.

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