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13Jan2017 Pre-Market Commentary: Wall Street Is Flat On The Green Side, Crude Price Down One Percent, Trump Rally May Linger Around For Several More Months

Written by Gary

Wall Street futures pointed to a slightly higher open (SPY +0.1%) as major banks kicking off the reporting season, but investors are concerned whether Trump will follow up to put high tariffs on Chinese imports in the U.S. Oil prices dropped by around 1% and the US dollar is volatile.

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 0.84% while Germany's DAX is up 0.57% and London's FTSE 100 is up 0.40%.

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.

Wells Fargo reported 4Q profit of $0.96 per share, missing the estimate for $1.00. Revenue was $21.6 billion. The estimate was for $22.45 billion.

The nation's biggest bank by assets revealed 4Q earnings per share of $1.71 on managed revenue of $24.3 billion. It is not known right away if the numbers are comparable. Analysts expected profit per share of $1.44 on revenue of $23.94 billion.

Bank of America reported 4Q profit of $0.40 per share, which topped the estimate for $0.38. Adjusted revenue of $20.0 billion, missed the estimate for $20.85 billion

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. stock futures higher as banks kick off fourth-quarter earnings

(Reuters) - Stock index futures were slightly higher on Friday as Bank of America kicked off the fourth-quarter earnings season, with reports from two other big U.S. banks still to come.

Wells Fargo reports fifth straight decline in profit

(Reuters) - Wells Fargo & Co , the largest U.S. mortgage lender, reported its fifth straight decline in quarterly profit on Friday as it tries to recover from a bogus-accounts scandal.

JPMorgan results trump estimates as election stimulates trading

(Reuters) - JPMorgan Chase & Co , the No. 1 U.S. bank by assets, reported stronger-than-expected quarterly earnings and revenue on Friday, helped by a surge in investor activity related to the U.S. presidential election.

Bank of America profits surge on cost cuts, trading gains

(Reuters) - Bank of America Corp reported a near-50-percent jump in fourth-quarter profit on Friday due to cost cuts and higher trading revenue, and its finance chief forecast sturdy income growth ahead thanks to rising interest rates.

Retail sales rise on strong auto demand

WASHINGTON, Jan 13 (Reuters) - U.S. retail sales rose solidly in December amid strong demand for automobiles, providing further evidence that the economy ended the fourth

Diesel cheating inquiries widen to Renault and Fiat

PARIS/MILAN (Reuters) - European carmakers were drawn into widening investigations into diesel emissions cheating on Friday, with French prosecutors examining Renault and British authorities seeking answers from Fiat Chrysler Automobiles NV.

BlackRock profits beat forecasts as investors race to low-cost funds

NEW YORK (Reuters) - BlackRock Inc , the world's biggest asset manager, reported better-than-expected quarterly profits on Friday as it clamped down on expenses and investors stormed into lower-cost funds to take advantage of a year-end rally.

China posts worst export fall since 2009 as fears of U.S. trade war loom

BEIJING (Reuters) - China's massive export engine sputtered for the second year in a row in 2016, with shipments falling in the face of persistently weak global demand and officials voicing fears of a trade war with the United States that is clouding the outlook for 2017.

Senior VW managers warned not to travel to U.S.: sources

MUNICH/BERLIN (Reuters) - Senior Volkswagen managers have been warned not to travel to the United States, legal and company sources told Reuters, after six current and former managers were indicted for their role in the German carmaker's diesel test-cheating scheme.

JPM Earnings Jump On Slashed Expenses, Bond Trading Beats As Equity, IB Misses; Credit Card Charge-Offs Spike

In a report that was somewhat similar to that of Bank of America, JPM reported Q4 revenues of $23.4 billion, beating estimates of $23.1 billion, on EPS of $1.71, far higher than the expected $1.42, which however like in the case of BofA was due to a cut in expenses, which came in at $6.87 billion, far below the $7.2 billion, suggesting even greater expense - i.e. compensation - reductions.

While JPM's net Interest Income was up $553mm YoY and up $163mm QoQ, this happened even as NIM declined by 2bps QoQ. That said, like BofA, JPM said it expects firmwide net interest income to be up "modestly" QoQ.

On the key, trading side, JPM reported that while investment banking revenue rose by $17mm Y/Y to $1.49 billion, it missed expectations of $1.59bn, and while FICC of $3.37 billion rose by $795 million, beating expectations of $3.26 bn, equity markets revenue of $1.15 billion came in weaker than the $1.29 billion expected.

Some details from the report:

IB revenue of $1.5B, up 1% YoY, driven by higher debt underwriting fees, largely offset by lower advisory and equity underwriting fees

Fixed Income Markets of $3.4B, up 31% YoY, driven by strong performance across products

Equity Markets revenue of $1.2B, up 8% YoY, driven by strong performance in derivatives

The better than expected net income in the investment bankin group was mostly the result of a big drop in expense of $4.2 ...

Trump Vaccine Experts, Wakefield and Kennedy, Might Recommend Real Change

Via The Daily Bell

Trump Needs Vaccine Experts, Not Conspiracy Theorists ... Trump could have turned to any number of reputable experts to learn about vaccine safety. Instead, he went straight for the fringe. -Daily Beast

Donald Trump supposedly picked Robert Kennedy Jr. to head a commission on vaccines and autism, causing a good deal of anxiety among mainstream media.

Trump has since denied that any decision has been made, but Kennedy has been telling people the offer was extended and presumably accepted.

This is the same mainstream media that take a huge bundles of cash from pharmaceutical advertisers. Because of this it is hard to tell how many spokespeople are genuinely behind government pro-vaccine positions and how many are merely doing what they're told when it comes to voicing hyper-partisan positions.

They're certainly a lot of pro-vaccine types in the world and they have a lot of negatives about diminishing vaccines in the slightest or in any other way cutting back on them.

Imagine you're the president-elect o ...

Snowden Slams Obama After Expanding "Unchained NSA" Surveillance Powers For Donald Trump

Submitted by Josie Wales via,

The Obama administration just handed even more power to the incoming Trump administration to invade the privacy of American citizens. The recent approval of new procedures for an existing executive order will allow the NSA to share the private data it collects with all 16 agencies of the United States intelligence community. The 23-page outline of the new procedures lifts previous limits placed on the way information was filtered before being disseminated to individual agencies.

"As he hands the White House to Trump, Obama just unchained NSA from basic limits on passing raw intercepts to others," NSA whistleblower Edward Snowden tweeted Thursday.

As he hands the White House to Trump, Obama just unchained NSA from basic limits on passing raw intercepts to others

— Edward Snowden (@Snowden) January 12, 2017

Gone are the already-flimsy privacy protections that required NSA analysts to review data before handing it over to other agencies like the CIA, DEA, DHS, or others. Whereas prior restrictions required analysts to shield the identities of innocent parties and other personal data before sharing only the information deemed pertinent, there are now ...

Oil Erases Saudi Jawbone Gains Amid China Glut Concerns

Oil prices rallied the last couple of days on the heels of Saudi jawboning about just how much they cut production, after concerns on US shale production surging. However, prices are falling back as despite near-record imports of crude reported overnight in China, it appears that historical demand has 'glutted' refiners (who exported record product in 2016) leaving a slew of oil tankers stranded off the Chinese coast.

As Reuters reports, China's crude oil imports jumped to a record high in December as refiners stepped up purchases ahead of a possible OPEC deal to cut supply and bolster prices, and as more independent refiners won import permits.

Exports of refined fuel also surged to a new high as the country's giant state refiners shipped more product offshore in the face of a growing domestic surplus, adding to pressure on Asian refining margins.

Crude imports hit 36.38 million tonnes in December, data from the Chinese General Administration of Customs showed, or 8.57 million barrels per day (bpd).

This was up 9 percent from November and well above the previous record of 8.04 million bpd set last September.

Inbound shipments to China rose to a record average of 7.63 million barrels a day in 2016, boosted by the teapots, Bloomberg notes that government data shows. The purchases were one of the factors that helped crude prices recover from ...

China Needs Trade With Trump's America More Than It Admits

China's export growth is lagging behind that of its Asian peers just as other economic drivers are poised to slow

A Volkswagen-Scale Bill for Fiat Chrysler Would Be $3.5 Billion

If Fiat Chrysler Automobiles is the next Volkswagen, its stock has further to fall.

Bank Earnings: Why This Time Is Different

Bank shares may be due for a pullback, but their long-term prospects are strong.

Retail Sales Improves In December 2016

Written by Steven Hansen

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


Economic Report: Producer prices jump along with energy costs

Wholesale costs surged as energy prices recovered, the Labor Department said.

Capitol Report: What exactly is the GOP-championed 'border adjusted' tax?

The House Republican plan to adjust taxes at the border, essentially subsidizing exports and taxing imports, has this week become one of the most talked about features of a broad corporate-tax reform plan.

Economic Report: Retail sales climb 0.6% in December

Sales at U.S. retailers rose less than expected in December to finish the year on soft note, signaling potentially weaker economic growth in the final quarter of 2016.

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