US stock future indexes are pointing towards a fractional higher opening this morning (SPY +0.2%). The dollar surged to 14-year highs after the Fed hiked interest rates. The Labor Department reported prices at the consumer level increased 0.2%. (Full report below)
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 0.63% while Germany's DAX is up 0.38% and London's FTSE 100 is up 0.04%.
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.
LONDON (Reuters) - Rupert Murdoch's Twenty-First Century Fox said on Thursday it had agreed to buy European pay-TV firm Sky for $14.6 billion, sticking to its earlier offer despite complaints from some investors.
WASHINGTON (Reuters) - The U.S. Federal Reserve raised interest rates on Wednesday and signaled a faster pace of increases in 2017 as central bankers adapted to the incoming Trump administration's promises of tax cuts, spending and deregulation.
WASHINGTON/BEIJING (Reuters) - China's plan to punish a U.S. automaker accused of price-fixing is a sign of how Beijing could retaliate if President-elect Donald Trump upends decades of relations between the two nations.
TOKYO (Reuters) - Interest rate hikes are back on the radar at the Bank of Japan, for the first time in a decade, as the U.S. Federal Reserve's tightening cycle pushes global bond yields higher, heralding a new era for central banks retreating from post-crisis stimulus.
LONDON (Reuters) - Job cuts announced by European banks have tumbled in 2016, as they work through a backlog of layoffs unveiled in previous years and struggle to find new areas where they can trim staff without threatening profitable operations.
BRUSSELS (Reuters) - A European Union court has dismissed Nestle's attempt to register the Kit Kat shape as a trade mark for its chocolate biscuit bar, questioning whether consumers in all EU states would recognize the snack's "distinctive character".
(Reuters) - Lonza Group AG announced its biggest ever acquisition on Thursday with a deal to buy Capsugel, a U.S. maker of capsule products and other drug delivery systems, for $5.5 billion in cash to broaden its product range as a pharmaceuticals industry supplier.
Initial Jobless Claims dropped once again, back near 43 year lows this week (-4 to 254k) as Continuing Claims picked up 11k to 2.018 million. As the following two charts show, this is all very humorous...
The jobs aren't coming from the manufacturing side...
And neither is the services side of the economy going gangbusters...
So just where are all these jobs coming from? Amazon drone drivers? $15 Starbucks gourmet coffee makers?
Gold is suffering the worst 6-week tumble since May 2013 and the last 24 hours have seen the losses accelerate as following The Fed's second rate hike in a decade, someone dumped over $10 billion notional of the precious metal through the futures market. As the dollar surges to 14 year highs (and EUR tumbles) so silver also is plunging most since the election near a $15 handle once again.
over 90,000 contracts were puked through futures in the brief time after yesterday's rate hike decision - over $10 billion notional, and that selling pressure has re-accelerated this morning
The FOMC rate hike has come and gone, and, contrary to expectations, it was far more hawkish than many expected, not so much due to the actual 25bps tightening, or the one additional rate hike as forecast by the "dots", bringing the total for 2017 to three, but due to Yellen's hint that the economy no longer needs a fiscal stimulus, and as a result any excessive fiscal stimulus by Trump would lead to even more rate hikes.
That said, we remind readers what JPM warned yesterday, namely that it is not so much the Fed, or even the threat that Trump "stimulates" more than some expect, that is the biggest risk to the market, but whether he can get there in the first place.
And, to reiterate his point, here is this morning's "early look at the market" from JPM's Adam Crisafulli, which again states that "elevated political expectations are the single biggest risk facing the tape."
Here is the key excerpt:
Asian equities mostly finished lower (w/the exception of Japan) while Eurozone equities and US futures have a mild bid. It was generally slow overnight as far as macro news is concerned w/most of the press focusing on digesting the Fed decision. In aggregate the FOMC was "hawkish" but not necessarily b/c of the added '17 hike. Instead, some of the commentary from Yellen during the presser about the need for fiscal stimulus (she suggests the economy currently doesn't need it) was more notable. In general though monetary policy isn't driving the tape at present and (as was the case w/the ECB last week) the market's Fed focus will likely quickly fade w/attention turning back to the precise scope, timing, and structure of the Trump/Ryan fiscal/regulatory ag ...
As the Fed wound down its QE program in 2014, the $USD hit liftoff. It has since hovered in the mid- to upper-'90s.
Throughout this period, anytime the $USD began to move sharply higher one of more Fed officials appeared to "talk down" the $USD.
The reasoning here is simply. A strong $USD crushes corporate profits. Indeed, since the $USD began its bull market S&P 500 earnings have collapsed to 2012 levels.
A strong $USD also asks for trouble from China. It was the strong $USD that forced China to devalue the Yuan in August 2015 and again in December 2016... both of these times, US stocks collapsed 10% in the span of a few days.
Having said all of this... in the last month the $USD has erupted above 100 and the Fed hasn't said a word.
Worse than this, the Fed raised rates again yesterday and has predicted THREE more rate hikes in 2017.
The Fed is doing this when the $USD is already at a 13 year high!?!?
The Fed is playing a very dangerous game both with China and with the markets. I wouldn't be surprised to see a VERY aggressive Yuan devaluation in the next few weeks.
And it's going to trigger a market meltdown just as it did in August 2015 and January 2016.
THIS WILL HIT BEFORE THE END OF JANUARY.
Another Crisis is brewing... the time to prepar ...
According to the BLS, the Consumer Price Index (CPI-U) year-over-year inflation rate was 1.7 % - up slightly from than last month's 1.6 %. The year-over-year core inflation (excludes energy and food) rate was unchanged at 2.1 %, and remains slightly above the target set by the Federal Reserve.
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