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14Dec2016 Pre-Market Commentary: Wall Street To Open Lower, Crude Prices Slip And Investors Await Fed Rate Reduction Today

Written by Gary

Wall Street stock future indexes pointed to flat open today (SPY -0.1%), a day after all three closed at record highs, for the sixth time since the U.S. election. Oil prices fell fractionally after the American Petroleum Institute said late Tuesday that U.S. crude oil inventories unexpectedly rose by 4.7 million barrels last week.


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 0.50% while Germany's DAX is off 0.42% and London's FTSE 100 is lower by 0.20%.

What Is Moving the Markets

Here are the headlines moving the markets.

Futures little changed ahead of Fed decision

(Reuters) - U.S. stock index futures were little changed on Wednesday, as investors refrained from making large bets ahead of the outcome of the U.S. Federal Reserve meeting where the central bank is widely expected to raise interest rates.

Fed set to hike rates, policy outlook now hinges on Trump presidency

WASHINGTON (Reuters) - The Federal Reserve will conclude its two-day policy meeting on Wednesday afternoon with an interest rate increase all but assured and will issue new forecasts assessing whether the economic outlook has changed since the U.S. election.

Uber, SpaceX/Tesla, and PepsiCo execs join Trump business council

WASHINGTON (Reuters) - Elon Musk, the chairman and chief executive of SpaceX and Tesla as well as Uber Technologies CEO and co-founder Travis Kalanick and PepsiCo Chairman and CEO Indra Nooyi have joined U.S. President-elect Donald Trump's advisory council, Trump's transition team said on Wednesday.

U.S retail sales cool in November after strong gains

WASHINGTON, (Reuters) - U.S. retail sales barely rose in November as households cut back on purchases of motor vehicles, suggesting some loss of momentum in economic growth in

OPEC signals larger 2017 oil surplus, unless cuts implemented

LONDON (Reuters) - OPEC on Wednesday signaled a growing oil supply surplus next year unless members implement their deal to curb output from record levels and outside producers also deliver on cutback pledges made at the weekend.

Google extends conservative outreach as Trump calls tech meeting

SAN FRANCISCO/WASHINGTON (Reuters) - Alphabet's Google is racing to hire more conservatives for its lobbying and policy arm, trying to get a foothold in President-elect Donald Trump's Washington after enjoying a uniquely close relationship with the administration of President Barack Obama.

Amazon launches Prime Video globally, leaves out China

(Reuters) - Amazon.com Inc on Wednesday launched its video-on-demand service, Prime Video, in nearly every country except China, pitting itself against video-streaming pioneer Netflix Inc .

New accusations against former Fox News head Ailes in lawsuit

(Reuters) - New sexual harassment accusations against former Fox News network chief Roger Ailes were revealed in a lawsuit filed against 21st Century Fox on Monday.

Exclusive: Maersk, DONG oil and gas merger talks stall over price - sources

COPENHAGEN/LONDON (Reuters) - Talks between shipping group A.P. Moller-Maersk and DONG Energy to merge their oil and gas business have stalled after the two Danish firms could not agree on a price, industry and banking sources said on Wednesday.

Forget The Fed: For JPMorgan This Is The Biggest Catalyst Heading Into 2017

With the market certain the Fed will hike at 2pm today, there is little room for surprise. Furthermore, as Deutsche Bank previewed yesterday, no matter the Yellen spin, whether it is a "hawkish", "neutral", or "dovish" hike the market reaction is expected to be bullish...

... and as a result the market is already turning its attention to what the Fed will way about 2017, furthermore, with bond traders near record short positions, there is potential for a squeeze in rates after the announcement should Yellen err on the dovish side.

In a slightly more informative preview, JPM writes in its early morning update that big event today (and pretty much the last big one of the year) is the Fed announcement and while some are worried about a "hawkish hike" (whereby Yellen uses the press conf. to warn of the potential for a more rapid normalization pace in '17 and beyond) it is unlikely this afternoon's decision will prove particularly disruptive.

However, it is more interesting what JPM is focusing its attention on next. As JPM notes, the "next very big catalyst for this market will be the Trump/Ryan tax reform plan and how it makes its way through Congress (which is why the FT article "Republicans face corporate tax rebellion" is one of the most incremental of the morning). Elevated political expectations are the single biggest risk for the tape and once the year-end chase rally euphoria wears off this will likely weigh on sentiment."

To be sure, this is has been a recurring concern on this website, most recently noted in "< ...

WTI Tumbles To $51 Handle After OPEC Warns Glut May Continue Longer Than Expected

On the heels of last night's big crude build, OPEC's overnight report stating that supply cuts won't re-balance the market until the second half of 2017 has sparked further losses in oil prices, almost erasing the entire OPEC/NOPEC/Saudi cut ramp.

As Bloomberg reports, OPEC said its agreement to cut production, while speeding up the re-balancing of the global oil market, won't result in demand exceeding supply until the second half of next year.

The Dec. 10 agreement between the Organization of Petroleum Exporting Countries and non-members such as Russia and Kazakhstan "will accelerate the reduction of global inventories and bring forward the re-balancing of the oil market to the second half of 2017," OPEC said in its monthly report Wednesday.

It's a more pessimistic outlook than that published Tuesday by the International Energy Agency, which indicated a supply deficit in the first half.

Despite a commitment from those countries to lower their output in the first half by 600,000 barrels a day, the organization slightly increased forecasts for supplies from outside OPEC in 2017. It estimates that production in Russia, which pledged half of the non-OPEC cut, and in Kazakhstan, which also agreed to cut, will remain steady for the six months covered by the deal.

And the result is further downside on oil - almost erasing the entire OPEC/NOPEC rally...

Someone Has Officially Called The CIA's Bluff Over Russia

Submited by Alice Salles via TheAntiMedia.org,

The scapegoating of Russia is now so widespread, Dirty Wars author and investigative journalist Jeremy Scahill took to The Intercept to call the Central Intelligence Agency (CIA) on its bluff.

In the article, "Obama Must Declassify Evidence Of Russian Hacking," Scahill and Jon Schwartz called out U.S. intelligence agencies for their record of deceit, asserting that the American people are not going to simply "take their word for it."

"U.S. intelligence agencies have repeatedly demonstrated that they regularly both lie and get things horribly wrong," the article argues. But when it comes to the CIA's case against Russia's alleged interference with the latest U.S. presidential elections, it's impossible to claim the hearsay is based on facts if evidence is not made available to support the agency's claims.

Nevertheless, Scahill and Schwartz argue, it's possible that Russia may have pulled some strings. But even if the Kremlin had its reasons and acted on them, America is the country with the long history of election meddling &mda ...

Shariah Gold Standard Is "Revolutionary" - Mark Mobius

Shariah Gold Standard Is "Revolutionary" Says Mark Mobius

One of the world's leading investors, Mark Mobius told a gold conference in Dubai that the new 'Shariah Gold Standard' is both "innovative and revolutionary" and importantly will bring "transparency" to the physical gold market which suffers from a lack of trust.

Source: Bloomberg

The executive chairman of Templeton Emerging Markets Group was speaking at the 'Gold in Islamic Finance' conference organised by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), the World Gold Council and Amanie Advisors and held in Dubai last Thursday.

"This standard is a God send. We have a global standard for gold. This is innovative and revolutionary" said Mark Mobius.

Dr Mobius drew the audiences attention to the growth potential in both the emerging ...

Zara Owner Inditex: Cheap Clothes But Expensive Shares

The Spanish giant is an exceptional performer, but an eye-watering valuation looks susceptible to a turn in the interest-rate environment.

U.K. Economy: Emerging Cracks in Brexit Facade

The pound has been supported by the resilience of the U.K. economy, but that may be changing.

Investors Get Ready for the Coming Electric Car Revolution

Battery-powered electric cars outsold gasoline ones at the dawn of the automotive age. In a decade or so they may well do so again. Investors need to watch out they don't get caught on the wrong side of history.

Retail Sales Improves In November 2016

Written by Steven Hansen

Retail sales were up according to US Census headline data - but slightly below expectations. Our analysis paints a better picture of retail sales.

.

Market Extra: Gundlach: Brace for stock market upset if 10-year yields top 3%

Stock investors have largely ignored the recent carnage in bond markets, but they could face a rude awakening next year when Donald Trump takes over the U.S. presidency, warns bond guru Jeffrey Gundlach.

Bond Report: Treasury yields drop as investors brace for Fed rate hike

Investors bought back into the Treasury market on Wednesday, driving yields lower ahead of the Federal Reserve's December interest-rate decision.

Economic Report: U.S. wholesale inflation speeds up in November, PPI shows

Inflation at the U.S. wholesale level rose sharply in November and continued a gradual upward trend that could translate into higher prices for consumers in the near future.

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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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