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04Apr2017 Pre-Market Commentary: US Stock Market Indexes Are Looking Towards A Lower Opening, Although Volatile, Crude Prices And The US Dollar Index Somewhat Stable

Written by Gary

Wall Street to open moderately down this morning (SPY -0.3%), as a risk-averse mood spread through the market ahead of an upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping. The main focus for markets this week centers on President Donald Trump's first meeting with Chinese counterpart Xi Jinping on Thursday and Friday.


Here is the current market situation from CNN Money

European markets are mixed. The FTSE 100 is higher by 0.42%, while the CAC 40 is leading the DAX lower. They are down 0.13% and 0.05% respectively.

Wall Street expected to open lower; investors await Trump and Xi meeting

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. business seeks action, not trade war, in Xi-Trump summit

BEIJING/WASHINGTON (Reuters) - Although worried about the prospect of a trade war, American businesses operating in China nonetheless want President Donald Trump to wring some concessions on market access from China's leader Xi Jingping when the two meet this week.

Europe stocks rise but bond yield falls show investor caution

LONDON (Reuters) - European shares rose on Tuesday, shrugging off falls on Asian bourses, but low-risk government debt yields fell as investors fretted about a meeting between the U.S. and Chinese presidents and Donald Trump's ability to deliver economic stimulus.

Elon Musk mocks short sellers after Tesla stock surge

(Reuters) - As Tesla Inc's strong quarterly vehicle deliveries sent its stock to a record high on Monday, Chief Executive Elon Musk took a swipe at traders betting the luxury electric car company is on a road to ruin.

Vale megadeal puts Morgan Stanley, Bradesco at the top of Brazil M&A

SAO PAULO (Reuters) - Morgan Stanley and Banco Bradesco BBI SA topped Brazil's mergers and acquisitions rankings in the first quarter, buoyed by advisory roles in the $21 billion corporate reorganization of Vale SA , the world's No.1 iron ore producer.

Wall Street braces for rough ride as exchanges seek more speed bumps

NEW YORK (Reuters) - U.S. stock exchanges that spent decades speeding up markets with cutting-edge technology are now rushing to slow them down.

Toshiba seeks new loan, offers memory chip unit stake as collateral: sources

TOKYO (Reuters) - Toshiba Corp asked creditor banks for a new loan and offered as collateral a stake in its memory chip unit that is being split off, sources said, underlining the firm's growing financial woes as it braces for a multi-billion dollar loss.

EU Industry chief sees 'fast' phase-out of diesel post-VW scandal

BRUSSELS (Reuters) - Europe's industry chief said she saw diesel engines disappearing from markets much faster than expected as the European Parliament on Tuesday endorsed tougher rules aimed at preventing a rerun of the Volkswagen emissions cheating scandal.

Iran's Aseman Airlines signs up to buy at least 30 Boeing jets

DUBAI/PARIS (Reuters) - Iran's Aseman Airlines has signed a tentative deal to buy at least 30 Boeing 737 MAX jets, in the first new business with the U.S. planemaker since U.S. President Donald Trump took office vowing to take a tougher stance toward Iran.

Brazil's black market pipeline: Gangs hijack Petrobras' oil, fuel

RIO DE JANEIRO (Reuters) - In September, police investigating a wave of killings in the northern Rio de Janeiro suburbs followed a tip to the isolated scrubland near the massive Duque de Caxias oil refinery.

Bill Blain: "Markets Are Becoming Increasingly Binary"

From Blain's Morning Porridge by Bill Blain of Mint Partners

This morning we've got a Risk-Off blip as the market winds itself into a tizz because suddenly the US recovery isn't looking so well founded on the back of yesterday's slowing Auto-sales number. Shock and horror! And it might get worse... we've got employment numbers on Friday, (which might be less strong than expected, therefore confirming it's the end of everything), and who knows what Trump will say to China...

Stop! No need to panic.. Worry, yes.

Panic.. not yet.

If I were to take heed of everything I read across the financial media/blogo/analysis-o-sphere, I'd not only be utterly confused, but probably wrong. However, it feels like time to figure out if I am a bull or a bear, and what the consequences for bonds and stocks are likely to be..

Markets feel a tad binary at the moment. Up or down? Pass me that bright new shiny multi-sided UK pound coin and let's flip it...

Heads: there is still a very positive sentiment "thread" across markets. Its based around stronger European growth in Germany, Northern Europe, France and Spain, recovering sentiment towards Sterling, the Fed playing a smart catch-up game on rates as the US economy will continues to strengthen and justify current equity valuations. Generally it's a "relax... it will be alright" vibe to activity. My stock picking colleagues say there is no sustained selling pressure.

This positive "never mind the torpedoes" approach plays up Macro expectations. My macro economist, Martin Malone is a beaming bull - confident the hard data of economic growth will catch up and justify the soft noise markets currently trade on. Yesterday he was saying: "The rates and macro environment remains bullish for asset prices."

Ma ...

Frontrunning: April 4



Europe stocks rise but bond yield falls show investor caution (Reuters)

Danger of Sell-Off in U.S. Stocks Grows as Auto Sales Disappoint (BBG)

Battle Over Gorsuch Confirmation Is Set to Hit Senate Floor (WSJ)

U.S. business seeks action, not trade war, in Xi-Trump summit (Reuters)

Uncovering the Secret History of Wall Street's Largest Oil Trade (BBG)

Google Says Ex-Executive Built Driverless Business on the Side (WSJ)

Thousands of Greek pensioners protest against cuts as more austerity looms (Reuters)

GM Once Again Owns Corporate Aircraft (WSJ)

U.S. Considers Far-Reaching Steps for 'Extreme Vetting' (WSJ)

Greek Pensions Hot Potato Puts Tsipras in Bailout Tight Spot (BBG)

China wary about U.S. missile system (

In Aggressive Push, Trump Seeks Friday Passage Of Revised Healthcare Bill

Will second time be the charm for Trump?

Just over a week after the Republicans' embarrassing failure to repeal Obamacare as a result of infighting with both conservative and moderate factions, on Monday White House officials led by the vice president met the same opposing Republicans in the House of Representatives, in an aggressive effort to revive the passage of the Republican Obamacare deal, potentially voting as soon as the end of the this week.

As Reported by Reuters and other newswires, members of the Trump administration led by Vice President Mike Pence, invited a group of moderate Republicans known as the "Tuesday Group" to the White House. Pence then went to Capitol Hill to meet the Freedom Caucus, who have recently clashed with Trump over their insistence to block the bill in its current format. The revised deal as presented by Pence had two key components:



Granting a waver to States from some, if not all, Obamacare insurance rules including the minimum benefits, the amount of medical expenses that insurers have to cover, and the rule preventing insurers from charging higher rates to sick people, per Axios.

A $115 billion "stability fund" for the states would be narrowed to be spent specifically on high-risk pools, which many Republicans think is a better way to cover people with pre-existing conditions.

The Freedom caucus had a favorable first reaction: Pence and White House Chief of Staff Reince Priebus laid out the administration's revised healthcare plan during a 40-minute meeting with Freedom Caucus members, said Congressman Mark Meadows, the leader of the conservative group. Meadows said he was "intrigued" by the new plan, which would allow states to opt out of some of Obamacare's mandates, possibly by obtaining waivers.

"We're encouraged ... but would certainly need a whole lot more information before we can take any action either in support or in opposition," Meadows to ...

SocGen: Suddenly, The Market Is Gripped In Political And Economic Nervousness

In his overnight FX note, SocGen's Kit Juckes explains why a certain foreboding feeling of political and economic nervousness abounds in market, which continue to ignore the near all-time highs in the S&P, and instead can't quite shake off the sense that something is wrong, starting with US car sales data which don't usually make big waves, but an underwhelming performance was enough to drive Treasury yields down again and concerns that the US economy is losing momentum have returned, putting a dampener on risk sentiment generally.

Juckes adds that the planned meeting on Friday/Saturday between Presidents Trump and Xi Jinping is cited by newswires as another reason for nervousness in Asian markets. The upshot is that the yen's at the top of the global FX charts this morning, ahead of the dollar and then everything else, with AUD, NZD and KRW all down 0.5% against the dollar in Asia. The rand meanwhile, is down 1% overnight after S&P downgraded South Africa's foreign currency borrowing rating to BB+ from BBB-. .

US domestic car sales - are the wheels coming off?

It's not obvious how the market escapes this nervous mood ahead of Friday's payroll data, but if we end up with an even longer period of range-bound US yields then ultimately, the urge to find yield will overpower other market emotions. It's mostly a question of biding time this week however.

There's a certain amount of nervousness around ahead of the French presidential election too, despite opinion polls suggesting it's a foregone conclusion. With under three weeks to go until the first round vote, Emmanuel Macron and Marine Le Pen remain comfortably ahead of t ...

Don't Write Off Pharma's Nightmare Scenario

Drug-price rhetoric translating into law is nearly unthinkable for investors, but the risk still shouldn't be ignored.

Barclays Africa Exit Looking Like Good Timing

Barclay's decision a year ago to sell its African subsidiary, among the group's most profitable businesses, still looks on track despite financial ructions in its biggest market, South Africa.

French's Mustard and Heinz Ketchup: Not the Perfect Mix

French's Foods is up for sale, and Kraft Heinz is on the hunt for acquisitions. But the respective U.S. mustard and ketchup leaders aren't the perfect match they might sound.

Economic Report: U.S. trade deficit drops 10% in February

The U.S. trade deficit shot up in January to a five-year high, underscoring the daunting problem faced by a Trump administration determined to reduce the gap.

Outside the Box: This critical health-care issue isn't being talked about enough

Dying patients deserve compassionate end-of-life treatment, writes Jessica Nutik Zitter.

Encore: Your retirement plan may be overhauled to finance tax cuts

Shift to Roth accounts could pay for tax cuts - at least in the short run

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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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