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14Mar2017 Pre-Market Commentary: Wall Street To Open Lower, Fed's Expected To Raise Rates As High As One Percentage Point, WTI Crude Fell To The High 47 Handle, US Dollar Showing Strength

Written by Gary

US stock market indexes are pointing towards a modest opening this morning (SPY -0.3%) as the Fed's kicks off its two-day policy meeting today. Oil prices plunged to the lowest level since the end of November after Saudis Report Big Jump In Production; Kuwait Warns Of Drop To $45.


Here is the current market situation from CNN Money

European markets are lower today with shares in France off the most. The CAC 40 is down 0.59% while Germany's DAX is off 0.41% and London's FTSE 100 is lower by 0.15%.

Futures point to lower open on Wall Street; Fed meeting in focus

What Is Moving the Markets

Here are the headlines moving the markets.

Ackman's Pershing Square sells Valeant stake, takes $3 billion loss

BOSTON (Reuters) - Billionaire investor William Ackman walked away from Valeant Pharmaceuticals International Inc on Monday with a loss of more than $3 billion as he sold his entire stake in the struggling drug company after trying to rescue it for some 18 months.

Futures dip before Fed policy meeting kicks off

(Reuters) - U.S. stock index futures were marginally lower on Tuesday ahead of the Federal Reserve's closely watched two-day meeting, where it is widely expected to raise interest rates.

Fed to hold rate policy meeting as planned despite weather

WASHINGTON (Reuters) - The U.S. Federal Reserve will hold an interest rate policy meeting as planned on Tuesday and Wednesday, the central bank said in a statement that might dispel any doubts over whether policymakers would brave a snowstorm hitting Washington on Tuesday morning.

Boeing, aerospace manufacturers back U.S. tax overhaul

SEATTLE (Reuters) - Boeing Co and about 90 other aerospace companies are urging Congress to overhaul the U.S. tax system, saying a set of changes Republicans proposed last year - including a big cut in the corporate tax rate - will make them more competitive globally and help create U.S. jobs.

Fed, in shift, may move to faster pace of rate hikes

SAN FRANCISCO/WASHINGTON (Reuters) - The Federal Reserve, which has struggled to stoke inflation since the financial crisis and up until now raised rates less frequently than it and markets expected, may be about to hit the accelerator on rate hikes.

Toshiba pushes sale of nuclear unit Westinghouse as crisis deepens

TOKYO (Reuters) - Toshiba Corp is 'actively considering' a sale and other strategic options for U.S. nuclear unit Westinghouse, the group said on Tuesday, as it expanded a probe into problems there that caused it to miss an earnings deadline for a second time.

VW CEO says not ruling out merger talks with Fiat Chrysler boss

WOLFSBURG, Germany (Reuters) - Volkswagen Chief Executive Matthias Mueller said he is not ruling out talks with Fiat Chrysler boss Sergio Marchionne about a possible merger.

Exclusive: Deutsche Bank replaces U.S. head Woodley with equities manager - sources

NEW YORK/FRANKFURT (Reuters) - Deutsche Bank is replacing its U.S. chief Bill Woodley with the global head of its stock-trading business, Thomas Patrick, people close to the matter said.

South Australia taps new gas plant, batteries to fix power crisis

SYDNEY (Reuters) - South Australia, the country's most renewable-energy dependent state, outlined plans on Tuesday to spend A$510 million ($385 million) to keep the lights on, just four days after Tesla Inc boss Elon Musk offered to save the state from blackouts by installing large-scale battery storage.

"The Powers-That-Be Have Looted Everything" - Greek Farmers Fight Riot Police With Shepherd Crooks

Authored by Daniel Lang via SHTFplan.com,

The economic and social disintegration of Greece used to be big news.

However it's largely been overshadowed by the migrant crisis, and the American media hardly reports on Greece anymore. If you've been out of the loop, allow me to get you caught up on the financial situation in that country, by giving two answers to the questions you're probably thinking. Yes, the Greek government still sucks. And yes, the people of Greece are still really pissed off.

Believe it or not, riots are still a common occurrence in that country. In fact there was an incident last week in Athens, after the government tried to increase taxes and social security contributions. In response, over a thousand farmers from Crete, who used to be immune from these taxes, took a ferry to Athens and proceeded to riot outside of the agriculture ministry building.

This however wasn't an ordinary riot, not even by Greek standards. The farmers fought the riot police with shepherd crooks.

Taxes are being hiked to satisfy inspectors who represent the international creditors who Greece's debt. If the government can't pay 7 billion euros by July, then the country will once again face the possibility of default. However, the ...

Oil Tumbles After Saudis Report Big Jump In Production; Kuwait Warns Of Drop To $45

Just as WTI was trying to record its first increase in 6 days, the latest, March, OPEC monthly report was released which revealed something surprising: while secondary sources claimed that Saudi Arabia production declined by 68kbpd to 9.797mmbpd, according to Saudi's own numbers, the kingdom ramped up production in February by a whopping 263kpb, back over 10 million barrels per day.

While the Saudi surge was a surprise, the kingdom contained itself to producing within its permitted quota, which as per the Vienna agreement is at 10.058mmbpd.

Perhaps just as concerning is that as a result of the vast gap between the self-reported Saudi production, and the far lower secondary sourced one, the official OPEC production number is now quite suspect: according to the cartel, in February, total production declined by 140kbpd to 31.958mmpd, however thwas number is driven by a Saudi number that is over 200kbps below the one reported by Saudi Arabia itself, and as such one can argue that in February total OPEC production actually rose if using primary source data.

Finally, the straw that broke the oil rebound's back came from Kuwait's oil minister, Issam Almarzooq, who said at the same time as the OPEc report was released that oil risks dropping to $45/barrel as a result of rising shale production, ...

Frontrunning: March 14



U.S. East Coast Braces for Late-Winter Blizzard (WSJ)

U.S. Blizzard Grounds Flights, Raises Power as Trump Tweets (BBG)

Debt Ceiling Fight May Be Too Tempting for Trump to Pass Up (BBG)

Russia appears to deploy forces in Egypt, eyes on Libya role (Reuters)

EU headscarf ban ruling sparks faith group backlash (Reuters)

Pound Tumbles in Delayed Reaction as May Gets Brexit Go-Ahead (BBG)

The Most Important Player in the AIG CEO Resignation: Carl Icahn (WSJ)

Waning Sales Force Layoffs By Gun Maker in New York (WSJ)

German police raid flats, shut mosque visited by Berlin truck attacker (Reuters)

Musk's bold offer of Tesla batteries won't solve Australia's power problems (Reuters)

Proof Wall Street Is Still a Boys' Club (BBG)

Why Robert Shiller Is Worried About the Trump ...

Goldman Warns CBO Report Will Substantially Delay Obamacare Repeal

After CBO's much-anticipated estimate of the GOP's Obamacare replacement proposal showed that the legislation could result in as many as 24 million Americans losing coverage by 2026, we wondered just how much of an additional bottleneck this report would present to the already conflicted passage of the controversial "Trumpcare." We got the answer overnight, when Goldman's government economists Alec Phillips said that the CBO scoring would likely slow the passage of the Obamacare repeal process. Specifically, he said that "CBO's estimates of the Obamacare replacement legislation's effects on coverage were somewhat worse than expectations and suggest changes are likely to be necessary before the bill can pass the Senate. We continue to expect enactment of ACA replacement this year but probably not by the early April deadline that Republican leaders have highlighted." And since the Obamacare process timeline is closely tied to Trump's tax reform, a delay in the former, will mean yet another delay in the latter, leading to further market disappointments, which however so far have yet to materialize as the "market" seems oblivious of the practical realities of Trump's economic policies.

Here are the main points from Goldman:

CBO Estimates Could Slow Passage of Obamacare Replacement Bill

BOTTOM LINE: CBO's estimates of the Obamacare replacement legislation's effects on coverage were somewhat worse than expectations and suggest changes are likely to be necessary before the bill can pass the Senate. We continue to expect enactment of ACA replacement this year but probably not by the early April deadline that Republican leaders have highlight ...

America's college students are not squandering their student loan money on spring break

Millennial shaming has begun just in time for March Madness.

Currencies: Pound drops to lowest level since January after Brexit path cleared

The British pound fell against the dollar on Tuesday, dropping to its lowest level since January a day after U.K. lawmakers set the wheels in motion for Brexit talks to begin.

Metals Stocks: Gold tries for second day of mild recovery ahead of Fed decision

Gold futures tried for back-to-back gains Tuesday after a nine-session slide had landed the yellow metal at lows last seen in late January.

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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