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05Jan2017 Pre-Market Commentary: Wall Street To Open Lower, Weekly Jobs Claims Lower, US Dollar Weaker, Crude Prices In High 53 Handle

Written by Gary

US stock market indexes are pointing towards a fractionally lower opening today (SPY -0.2%). Oil prices holding steady while the U.S. dollar has stepped further away from a 14-year peak. ADP says 153,000 people were added to private sector payrolls down from the estimate of 170,000.

Here is the current market situation from CNN Money

European markets are mixed. The FTSE 100 is higher by 0.15%, while the CAC 40 is leading the DAX lower. They are down 0.16% and 0.13% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

Jobless claims fall to near 43-year low

WASHINGTON, Jan 5 (Reuters) - The number of Americans filing for unemployment benefits fell to near a 43 year-low last week, pointing to further tightening in the labor market.

U.S. stock futures flat day after Fed flags inflation risk

(Reuters) - U.S. stock index futures were flat on Thursday, a day after Federal Reserve minutes showed policymakers thought President-elect Donald Trump's pro-growth policies could prompt faster interest rate hikes.

OPEC oil output falls from record high ahead of planned cuts: Reuters survey

LONDON (Reuters) - OPEC's oil output in December fell from a record high ahead of a deal to cut production, a Reuters survey found on Thursday, helped by attacks on Nigeria's oil industry and top exporter Saudi Arabia trimming exports.

Monsanto swings to profit on higher South America demand

(Reuters) - U.S. seeds and agrochemicals company Monsanto Co , which is being bought by Germany's Bayer for $66 billion, swung to a quarterly profit, helped by higher demand from South America.

Dismal holiday sales at Macy's, Kohl's spell gloom for sector

(Reuters) - Disappointing holiday season sales at Macy's Inc and Kohl's Corp underscored the uphill task department stores face in winning back shoppers, who are increasingly turning to online retailers and spending less on apparel.

Exclusive: Amazon, Forever 21 vying for bankrupt American Apparel - sources

(Reuters) - Online retailer Inc and teen apparel store chain Forever 21 Inc are among the companies weighing offers to acquire bankrupt American Apparel LLC, people familiar with the talks said on Wednesday.

VW must face U.S. investor lawsuit in emissions scandal

WASHINGTON (Reuters) - Volkswagen AG and former Chief Executive Officer Martin Winterkorn must defend an investor lawsuit in California over the company's diesel emissions cheating scandal, a U.S. judge has ruled.

Walgreens profit beats estimates on PBM partnerships

(Reuters) - Walgreens Boots Alliance Inc reported a better-than-expected quarterly profit as recent partnerships with pharmacy benefit managers (PBMs) and insurance companies helped boost sales of prescription drugs as well as non-drug items.

India reluctant to give special tax incentives to Apple

(Reuters) - India is resisting Apple Inc.'s demand for tax incentives to make iPhones in the country, with the trade minister saying on Thursday that New Delhi may not make exceptions for the U.S. tech giant.

ADP Employment Disappoints As Small Business, Manufacturing Payrolls Shrink

Despite the exuberance of US equity markets and sentiment indicators, ADP reports small businesses cut jobs (-3k) in December (as large businesses added) leaving ADP at 153k (considerably below the 175k expectation). Once again goods producing jobs declined (despite soft survey data from ISM/PMI that everything is awesome) as services improved. Additionally, manufacturing jobs continued to slide, down by 9,000 in December, while construction and mining jobs also declined by 2,000 and 5,000 respectively.

As this was the 2nd lowest print for ADP since May, Mark Zandi - no longer beholden to a Democratic administration in which he desperately want a political seat - has suddenly become a doomsayer: "As we enter 2017, the tightening labor market will likely slow the growth."

Some commentary:

"As we exit 2016, it's interesting to note that the private sector generated an average of 174,000 jobs per month, down from 209,000 in 2015," said Ahu Yildirmaz, vice president and head of the ADP Research Institute. "And while job gains in December were slightly below our monthly average, the U.S. ...

Bitcoin Bloodbath As Mexican Peso Surges After Central Bank Intervention

Following yesterday's 'panic' among mexican officials that Trump has considerably more leverage than the elites believed, the peso is soaring suddenly this morning as Banxico intervention took place. At the same time, following comments from official reserachers in China on capital controls and crackdown on 'virtual' outflows, Bitcoin is getting hammered - biggest drop in 2 years.

Initially it was speculation but now Bloomberg confirms a comment from the central bank:


Something just snapped...

This is the biggest drop in Bitcoin in 2 years and biggest rise in the peso since 11/15.

China Threatens Trump With "Big Sticks" If He Wages A Trade War

In the latest not too subtle threat lobbed by China's official press aimed at Donald Trump, the mainland media warned the President-elect that he'll be met with "big sticks" if he tries to ignite a trade war or further strain ties.

"There are flowers around the gate of China's Ministry of Commerce, but there are also big sticks hidden inside the door -- they both await Americans," the Communist Party's Global Times newspaper wrote in an editorial Thursday in response to Trump's plans to nominate lawyer Robert Lighthizer, who has criticized Beijing's trade practices, as U.S. trade representative.

The latest lashing out at Trump from a state-run outlet, noticed first by Bloomberg, followed others last month aimed at Peter Navarro, a University of California at Irvine economics professor and critic of China's trade practices whom Trump last month named to head a newly formed White House National Trade Council. Those picks plus billionaire Wilbur Ross, the nominee for commerce secretary, will form an "iron curtain" of protectionism in Trump's economic and trade team, the paper wrote.

The three share Trump's strong anti-globalization beliefs and seem unlikely to keep building the current trade order, it said, adding that they will be more interested in disrupting the world trade order.

Concurrently, SCMP reported that China's state media have lambasted US president-elect Donald Trump for commenting on and conducting foreign policy on Twitter. The state-run news agency Xin ...

Trump's Tweets To Push Gold To $1,600/oz in 2017?

Trump's Twitter Age Could See Gold Rise 13% In 2017

  • Gold price seen jumping 13% in 2017 after 9% gain in 2016, Bloomberg analyst survey shows

    140-character missives by President-elect means new paradigm

    "140 characters of unfiltered Trump is likely to create tensions with America's largest trading partners..."

    Bloomberg Intelligence poll shows 42 percent of respondents predict gold will be the best-performing metal in 2017

    Two Bloomberg respondents including GoldCore say gold to reach $1,600/oz

    "Markets that are already shaken by the fallout from Brexit, the coming elections in Europe and indeed the increasing specter of cyber warfare could again see a safe-haven bid..."

    Gold is not "irrational" today - politicians, policy markers and markets are

    Gold that can inspect and take delivery of easily a vital hedge against massive irrationality in world of 2017

    From Bloomberg:

    "The Donald J. Trump era is marking a new age for gold as an investor safe haven.

    While the precious metal has always been hoarded in times of trouble, a bevy of political and economic surprises in 2016 sparked a surge in buying that sent bullion to the first annual gain ...

Commodities Find Support From Just About Everyone

Commodities in 2017 will be a tug of war between a softer China and surging activity everywhere else.

China's Electric Vehicle Strategy Paved With Potholes

China will be the world's largest user of electric cars. It won't necessarily dominate producing them.

Slippery Logic to Russia's Oil-Cut Claim

Russia's pledge to cut output may have less impact on oil supply than the headlines suggest.

31 December 2016 Initial Unemployment Claims Rolling Average Improves Again

Weekly Initial Unemployment Claims

The market expectations for weekly initial unemployment claims (from Bloomberg / Econoday) were 255 K to 262 K (consensus 260,000), and the Department of Labor reported 235,000 new claims. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 262,750 (reported last week as 263,000) to 256,750. The rolling averages generally have been equal to or under 300,000 since August 2014.

December 2016 Job Cuts Up But 1916 Totals Down 12% Year-over-Year

from Challenger Gray and Christmas

The pace of downsizing ticked up slightly to close out 2016, as U.S.-based employers announced plans to shed 33,627 jobs from payrolls in December

Economic Report: Private sector adds 153,000 jobs in December, ADP report shows

Employers added 153,000 private-sector jobs in December, ADP reported Thursday.

Economic Report: Jobless claims drop 28,000 to 233,000, near 43-year low

The number of Americans who applied for unemployment benefits after Christmas fell by 28,000 to the second lowest level of the Obama era, hugging close to a 43-year bottom.

The Tell: How Russia's soaring stocks could keep climbing in 'a blockbuster 2017'

Russian stocks are likely to score big gains this year, predicts Jeff D. Opdyke of the Total Wealth Insider newsletter.

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