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17Feb2017 Pre-Market Commentary: Wall Street To Open Lower Ahead Of Three Day Weekend, Crude Prices Lower, Gold Higher, Investors Pause, Waiting For Clarity On Economic Policy

Written by Gary

U.S. future indexes are showing an average loss of about -0.3%, pointing to lower open this morning (SPY -0.3%). Volume is expected to be quiet due to a lack of economic reports and many traders may head home early given the three-day weekend at hand.

Here is the current market situation from CNN Money

European markets are mixed. The FTSE 100 is higher by 0.08%, while the CAC 40 is leading the DAX lower. They are down 1.08% and 0.45% respectively.

Wall Street expected to open lower as Trump rally pauses

Oil was slightly lower Friday, extending losses in what looked to be its first weekly decline in five weeks. Crude chalked up losses this week as the Energy Information Administration said Wednesday that U.S. stockpiles of crude and gasoline hit record highs.

Gold Futures managed to edge forward on Friday in early morning U.S. hours, recovering from earlier losses. The precious metal remained trading not far from a three-month high and was set for its seventh weekly gain in eight weeks.

What Is Moving the Markets

Here are the headlines moving the markets.

Stock futures dip as Wall Street rally loses momentum

(Reuters) - U.S. stock index futures fell for the second straight day on Friday, after a record-setting few days on Wall Street, as investors await clarity on economic policy and ahead of a long weekend.

Kraft Heinz to pursue merger despite Unilever rejection

LONDON (Reuters) - U.S. food company Kraft Heinz Co has proposed a merger with $125 billion Unilever in what would be one of the biggest deals ever, but the Anglo-Dutch consumer goods company has declined, Kraft said on Friday.

Samsung chief Lee arrested as South Korean corruption probe deepens

SEOUL (Reuters) - Samsung Group chief Jay Y. Lee was arrested on Friday over his alleged role in a corruption scandal rocking the highest levels of power in South Korea, dealing a fresh blow to the technology giant and standard-bearer for Asia's fourth-largest economy.

S&P downgrade warning sends Toshiba shares falling

TOKYO (Reuters) - S&P Global Inc said in a report on Friday it could cut its rating of Toshiba Corp credit by several notches should the Japanese firm receive financial support that includes debt restructuring, sending Toshiba stock down 9 percent.

Struggling European banks see light at end of low-rates tunnel

FRANKFURT/PARIS (Reuters) - Rock-bottom interest rates hurt more big European banks in 2016 than in the previous year, but the worst could soon be over with the prospect of rising borrowing costs rippling from the United States to Europe.

Snap lowers valuation expectations in highly awaited IPO

(Reuters) - Snap Inc , owner of the popular messaging app Snapchat, set a lower-than-expected valuation range on Thursday, amid mounting investor concern over its unproven business model, slowing growth and tight founder control.

Opel labour chiefs prepared to talk to PSA

RUESSELSHEIM (Reuters) - Workers' representatives of General Motors' European arm Opel are prepared to hold "constructive" talks with prospective new owner PSA Group as long as commitments to jobs and plant investments are upheld, they said on Friday.

As U.S. shale oil activity surges, sand could be in short supply

NEW YORK (Reuters) - Demand for frac sand has surged in recent weeks as U.S. producers rush back to the oil patch, stoking concern that supplies of the key component of drilling may not be able to keep up with demand later this year, industry professionals said.

Apple to start India manufacturing in coming months with iPhone SE: source

MUMBAI (Reuters) - Apple Inc will in the coming months start assembling its lower-priced iPhone SE models at a contract manufacturer's plant in the southern Indian technology hub of Bengaluru, an industry source with direct knowledge of the matter said on Friday.

For BlackRock, This Is The Red Flag Among Record Low Volatility

With both volatility and asset correlations near all time lows...

... and complacency dominating across all global markets, one BlackRock money manager warns that investors should probably be a little more nervous.

Even as the recent stock surge and below-average volatility show investor optimism is near all time highs, markets are underpricing global political risks, said Russ Koesterich, who helps manage the $41 billion BlackRock Global Allocation Fund.

Why is Koesterich worried? The price of gold, which has failed to validate the prevailing calm, in fact just the contrary. Bloomberg reports:

Looming elections in Europe and political uncertainty in the U.S. are among developments that could shift investor sentiment, Koesterich said. Adding to the threat is the potential impact of Britain's exit from the European Union and a debt crisis in Greece. Such concerns have helped boost haven demand for gold, which has climbed almost 8 percent this year after posting the worst quarter since 2013.

"That hiding political risk is not reflected in markets," Koesterich said in a telephone interview Thursday. "People are not that nervous, and there are things that could go wrong, particularly when you think about all of the political risks. That adds to the argument for having gold in a portfolio."

As a result he recommends go ...

Frontrunning: February 17

'In Trump We Trust' Is Market Mantra as Turmoil Besets White House (BBG)

World stocks lose momentum after record-breaking week (Reuters)

As Tax Debate Heats Up, Lawmakers Struggle to Think of a Plan B (WSJ)

Mnuchin Warned as G-20 Sees New Economic Order (BBG)

Deutsche Bank examined Donald Trump's account for Russia links (Guardian)

Stop hurling insults and listen, Pope Francis tells politicians (Reuters)

Carney, Wrong on Brexit, May Have Called Consumer Collapse Right (BBG)

SCOTUS to frame Trump's immigration plans (Reuters)

Trump Assails Critics as Russia Questions Mount (WSJ)

French Bonds Drop on Potential Left-Wing Candidacy Merger (BBG)

S&P downgrade warning sends Toshiba shares falling (Reuters)

Meet the G ...

Unilever Shares Soar After Kraft Heinz Confirms £112BN Takeover Bid; Options Confirm Leak

Unilever shares soared this morning after food conglomerate Kraft-Heinz, backed by Warren Buffett and Brazil's 3G, confirmed it made a £112bn takeover offer for Unilever, leading to a 11% surge in the shares of the London-listed Anglo-Dutch conglomerate, the biggest one day surge since 1987. Shares of Kraft Heinz rose over 4% premarket in New York.

In a statement issued shortly after the FT reported earlier on Friday that Kraft Heinz had made an approach to Unilever, Kraft said that Unilever declined its initial offer, but added "while Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction."

The U.S. food and beverage maker said it is uncertain that any further formal proposal will be made to Unilever or that an offer will be made at all. It also said the terms of any such transaction are uncertain.

With Unilever's market capitalization of £112bn, a potential takeover would be one of the largest in history. The company is the world's fourth-largest consumer goods company by sales, with revenues last year of 52.7 billion. As the FT adds, "a deal would unite some of the biggest brands in the global consumer good industry, adding the likes of Dove and Knorr to the Kraft Heinz roster, which spans Philadelphia cream cheese, ketchup and Weight Watchers."

Following the news, Mondelez dropped 5.2% pre-market, Kellogg -2% and General Mills -0.9%, as a potential deal has dampened speculation that other packaged food companies could be targets for KHC.

As the takeover was first reported by the FT Alphaville blog, there was immediate speculat ...

Allianz: Bumper Buyback Shows Insurer's Strength

People often complain their insurers don't pay out what they should: Investors in Allianz can have no such gripes.

Who Are Snap's Real Friends?

Snap is asking a lot of its investors in its coming IPO, and that may lead them to push back.

Toshiba and Japan's Struggling Banks

Despite Toshiba's negative shareholder equity, its creditors have reiterated their commitment to continuing support.

January 2017 Import and Export Sea Container Rolling Averages Improving Trend Accelerates

Written by Steven Hansen

This month both imports and exports trend lines accelerated further into positive territory - and imports hit an all time hign.

Oscars are the last thing moviegoers care about when picking what to see

A new poll from Morning Consult finds that Hollywood still very much runs on star power. The actors in a film and the trailers are the most effective in influencing what moviegoers choose to see on the big screen.

This is the least healthy city in America

See how your city rate in terms of food, fitness, green space and health.

The Moneyologist: My elderly uncle has dementia — do I pay off his mortgage before he can no longer live alone?

This man is the sole caretaker and advocate for his 76-year-old relative.

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