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06Jan2017 Pre-Market Commentary: Wall Street Futures Flat, Added Jobs Below Expectations, Unemployment Rate Rose, US Dollar Volatile, WTI Crude Higher At The 54 Handle

Written by Gary

U.S. futures pointed to a flat to higher open (SPY +0.1%) as the Labor Department reports the U.S. economy added 156K jobs in December, below expectations for 178K jobs. The US dollar is volatile, but fractionally higher.

Here is the current market situation from CNN Money

European markets are mixed to lower. Shares in France are off as the CAC 40 drops 0.40%. The DAX is down 0.10% while the FTSE 100 in London is unchanged.

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.

What Is Moving the Markets

Here are the headlines moving the markets.

Job growth slows, but wages rebound strongly

WASHINGTON (Reuters) - U.S. employment increased less than expected in December but a rebound in wages pointed to sustained labor market momentum that sets up the economy for stronger growth and further interest rate increases from the Federal Reserve this year.

As Trump targets Toyota over Mexico, Nissan faces bigger risk

TOKYO (Reuters) - U.S. President-elect Donald Trump has threatened Toyota Motor Corp over its Mexican-built cars, but the biggest risk from a punitive tariff would be for its compatriot Nissan Motor Co , the largest automaker operating in the country.

Japan defends Toyota after Trump broadside over Mexican plant

TOKYO (Reuters) - The Japanese government defended Toyota Motor Corp on Friday as an "important corporate citizen" of the United States, after President-elect Donald Trump singled out the automaker and threatened to slap punitive tariffs on its Mexico-built cars.

Exclusive: China's ZTE to slash about 3,000 jobs - sources

HONG KONG (Reuters) - Chinese telecom equipment maker ZTE , which is facing U.S. trade sanctions that could severely disrupt its supply chain, is slashing about 3,000 jobs, including a fifth of positions in its struggling handset business in China, company sources said.

Oil prices post gains on OPEC hopes, but doubts linger

LONDON (Reuters) - Oil prices edged higher on Friday as output cuts by OPEC members met with lingering concern that other producers could try to shirk their share of planned decreases aimed at curbing global oversupply.

J.C. Penney holiday sales drop 0.8 percent, shares slide

(Reuters) - J.C. Penney Co Inc said same-store sales for November and December fell 0.8 percent, the latest department store chain to report a disappointing holiday season performance.

Mexico central bank sells dollars in Asia: Bloomberg

MEXICO CITY (Reuters) - Mexico's central bank sold dollars in Asia on Friday, Bloomberg reported, after it sold dollars in Mexico and New York a day earlier to fight a slump in the peso.

Siemens chief does not expect to be put under pressure by Trump

SEEON, Germany (Reuters) - Siemens chief Joe Kaeser said on Friday he does not expect the German engineering group to come under pressure from U.S. President-elect Donald Trump.

Trump: Mexico Will Pay Us Back For "Great Wall"

After months of promising that Mexico would pay for a border wall, CNN reported last night that Trump was working with House Republicans on a plan to fund the wall project through appropriations, a move which they said would "break a key campaign promise."

President-elect Donald Trump's transition team has signaled to congressional Republican leaders that his preference is to fund the border wall through the appropriations process as soon as April, according to House Republican officials.

The move would break a key campaign promise when Trump repeatedly said he would force Mexico to pay for the construction of the wall along the border, though in October, Trump suggested for the first time that Mexico would reimburse the US for the cost of the wall.

And here is Anderson Cooper on the topic last night:

Of course, this morning Trump has fired back with yet another tweet blasting the "dishonest media" saying that any taxpayer money spent on the "Great Wall (for sake of speed), will be paid back by Mexico later!"

The dishonest media does not report that any money spent on building the Great Wall (for sake of speed), will be paid back by Mexico later!

— Donald J. Trump (@realDonaldTrump) January 6, 2017

Meanwhile, the ever defiant Vicente Fox maintained that while T ...

Frontrunning: January 6

December Jobs Data to Wrap Up Obama's Economic Legacy (WSJ)

FBI Says Democrats Refused Access to Hacked E-Mail Servers (BBG)

As Trump attacks, Nissan at bigger risk than Toyota (Reuters)

Democratic leader Schumer emerges as Trump's newest punching bag (Reuters)

PBoC raises renminbi's daily fix by most since 2005 (FT)

China central bank urges rational investment in bitcoin (Reuters)

China Doubles Down on Defense of Yuan (WSJ)

Millennials Think the Trump Economy Is Going to Implode (BBG)

Judge Rules Against Sanofi and Regeneron in Patent Case (WSJ)

Ash Carter Says Putin Is Making It Harder for U.S. to Work With Russia (WSJ)

China Plans Scrutiny of U.S. Firms If Trump Starts Feud (BBG)

Duterte hopes Russia will become Philippines' ally a ...

Trump Asks "What Is Going On" After It Emerges Democrats Refused FBI Access To Hacked Servers

Closing off his tweeting on Thursday evening, the president-elect questioned why the Democratic National Committee did not reportedly cooperate with the FBI's investigation of hacks into its servers; a hack which the US intelligence agencies were quick to conclude was the action of Russia despite, allegedly, not having seen all the evidence.

As Bloomberg reports, while the DNC says the FBI never requested access to its servers after they were breached, a senior law enforcement official said the FBI repeatedly asked for access "only to be rebuffed." If the FBI itself never examined DNC servers, Trump wrote on Twitter, "how and why are they so sure about hacking"?

"What is going on?" Trump added.

The Democratic National Committee would not allow the FBI to study or see its computer info after it was supposedly hacked by Russia......

— Donald J. Trump (@realDonaldTrump) January 6, 2017

So how and why are they so sure about hacking if they never even requested an examination of the computer servers? What is going on?

— Donald J. Trump (@realDonaldTrump) January 6, 2017

The FBI Thursday released a statement confirming Trump's claim.

"The FBI repeatedly stressed to DNC officials the necessity of obtaining direct access to servers and data, only to be rebuffed until well after the initial compromise had been mi ...

An Angry Japan Responds To Trump's Toyota Taunts

After Trump's Thursday morning twitter taunt targeted Toyota, when the President-elect warned Japan's biggest carmaker that it will face heavy penalties if it chooses to make cars for the US market in Mexico, writing "Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax", a tweet which sent shares of Japanese carmakers sliding on Friday with a 1.7% fall for Toyota, 2.2% for Nissan and 3.2% for Mazda, an angry Japanese government and corporate establishment pushed back against Trump's criticism of Toyota as the attack on the country's most powerful corporate name sent shockwaves across "Japan Inc."

As the FT notes, CEOs of Japanese companies including Sony's Kazuo Hirai and Nissan's Carlos Ghosn weighed in, while analysts feared the president-elect's targeting of Toyota would lead to a broader fallout on Japan-US trade relations, similar to concerns about an escalating trade war between the US and China.

"Toyota is responsible for large employment at US plants such as in Kentucky. It's questionable whether the new US president has a grasp of how many vehicles Toyota builds in the US," said Taro Aso, Japan's finance minister. Hiroshige Seko, minister for trade and industry, added that the Japanese government would do its part to explain to the US administration about the contribution of the country's car industry to the US economy.

"Toyota is equivalent to Japan as a whole, so Mr Trump's criticism could be interpreted as a message to the Japanese governme ...

Why Beijing's Grip on the Yuan Is Becoming Tenuous

Beijing is now finding that the influence of global financial markets within its own markets is bigger and harder to control than before.

Mobileye's Road Gets More Crowded

Chip companies are driving hard at future of self-driving cars, raising competitive stakes for Mobileye.

Retailers Will Keep Singing the Blues

Problems at Macy's and Kohl's are emblematic of an industry in transition toward a less-profitable business model.

Rail Week Ending 31 December 2016: Rail Down 5% for the Year

Week 51 of 2016 shows same week total rail traffic (from same week one year ago) improved according to the Association of American Railroads (AAR) traffic data.

Metals Stocks: Gold on track to end 4-day win streak, but post best week in 6 months

Gold futures on Friday trade lower, maintaining an earlier decline, in the wake of a monthly jobs report that, although lackluster, didn't considerably change the trend of job creation in the U.S.

Weekend Sip: Boozy seltzer is now a thing

This new offering from Smirnoff has just 90 calories per serving.

Economic Report: U.S. adds 156,000 jobs as wages rise in December

The U.S. added 156,000 new jobs in the final month of 2016 and worker pay rose at the fastest pace since the Great Recession, reflecting a surge in employment over the past six years that's left many companies complaining about a shortage of skilled labor.

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