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11May2017 Pre-Market Commentary: US Futures Pointing To A Moderately Lower Opening, Investors Digesting Latest Batch Of Corporate Earnings And Strong Gains In Crude Prices

Written by Gary

US stock market futures are moderately lower (SPY -0.3%), partially due to Snap Corp's earnings disappointment. Crude prices pushed higher, extending their biggest one-day jump since December and the US dollar is showing strength.

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 0.43% while Germany's DAX is off 0.36% and London's FTSE 100 is lower by 0.05%.

Wednesday's Key Earnings

21st Century Fox (NASDAQ:FOX) -1.7% AH facing new inquiries.
MannKind (NASDAQ:MNKD) -20.6% AH as earnings disappoint.
Mylan (NASDAQ:MYL) +0.5% with sales taking a hit.
Snap (NYSE:SNAP) -23% AH as user growth fell short.
Sodastream (NASDAQ:SODA) -6.7% on light guidance.
Toyota (NYSE:TM) -2.5% seeing a profit drop.
Whole Foods (NASDAQ:WFM) +2.7% AH shaking up its board.

Today's Markets

In Asia, Japan +0.3%. Hong Kong +0.4%. China +0.3%. India flat.
In Europe, at midday, London flat. Paris flat. Frankfurt flat.
Futures at 6:20, Dow -0.1%. S&P -0.2%. Nasdaq -0.2%. Crude +1.6% to $48.10. Gold +0.4% to $1223.50.
Ten-year Treasury Yield -2 bps to 2.39%

Today's Economic Calendar

8:30 Initial Jobless Claims
8:30 Producer Price Index
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
1:00 PM Results of $15B, 30-Year Note Auction
4:30 PM Money Supply

Looking at the last three columns (below), 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.

In Trump's shadow, Fed official says trade barriers a 'dead end'

MUMBAI/NEW YORK (Reuters) - Trade protectionism is a "dead end" that may score political points but will ultimately hurt the U.S. economy, one of the most influential Federal Reserve officials said on Thursday in the central bank's strongest defense yet of open borders in the face of a skeptical Trump Administration.

Verizon beats AT&T to buy spectrum holder Straight Path

(Reuters) - Verizon Communications Inc , the No.1 U.S. wireless carrier, is buying wireless spectrum holder Straight Path Communications Inc for an enterprise value of about $3.1 billion, ending a bidding war with rival AT&T .

Kohl's profit beats on lower costs, leaner inventory levels

(Reuters) - Department store operator Kohl's Corp reported a better-than-expected quarterly profit, helped by lower costs and a leaner inventory amid a tough retail environment in the United States.

Macy's quarterly profit misses estimates on weak sales

(Reuters) - Department store operator Macy's Inc reported a lower-than-expected quarterly profit, as sales continued to tumble and as higher inventory weighed on margins, and the company's shares dropped 9 percent in premarket trading on Thursday.

Wells Fargo management expected to woo shareholders with new cost cuts

(Reuters) - Wall Street is waiting to find out exactly how much more money Wells Fargo & Co management plans to save through cost cuts when top executives give six hours of presentations at the bank's investor day on Thursday.

Oil bounces, world stocks hold near all-time highs

LONDON (Reuters) - World stocks held near all-time highs on Thursday, helped by a rebound in energy shares as oil prices rose after U.S. fuel inventories declined and Saudi Arabia cut supplies of crude to Asia more than expected.

Exclusive: Aldi raises stakes in U.S. price war with Wal-Mart

WHEATON, Ill. (Reuters) - German grocery chain Aldi Inc is trying to beat the world's biggest retailer at its own game: low prices.

Boeing suspends 737 MAX flights due to engine issue

SEATTLE (Reuters) - Boeing Co said on Wednesday it had temporarily halted test flights of its new 737 MAX aircraft due to an issue with the engine, which is jointly made by General Electric Co and Safran SA of France.

EU advised to rank Uber as transport, challenging business model

LUXEMBOURG/BRUSSELS (Reuters) - Uber provides a transport service and must be licensed, an adviser to the European Union's top court said on Thursday, in a potential blow to the U.S. firm which says it is merely a digital enabler.

Stocks, Sterling, Bond Yields Drop As BoE's Carney Admits No Plan For Disorderly Brexit

US equity futures have legged lower this morning as Cable tumbles folowing remarks from Bank of England governor Carney that they "haven't modeled for a disorderly Brexit." It appears the omniscience of central bankers is very briefly in question....

And as Citi notes, GBPUSD is not looking great - we're now testing immediate support at 1.2865, and we are down almost 65 pips since the BoE initial announcement. Meanwhile EURGBP is edging higher, and GBPJPY is so much lower it might actually be causing a small squeeze in JPY elsewhere.

BoE Governor Carney has been the nail in the coffin for GBP hawks today. There has been little reference to the positive scenarios which would support removing accommodation sooner, and given that there was only one hawk calling for a rate hike (who is leaving in June), there's not many positives from Super Thursday thus far. In fact, Carney has just said that BoE stimulus isn't excessive, it's appropriate.

Frontrunning: May 11

After Comey, Russia Probe Escalates (WSJ)

Comey Firing Distracts Trump White House, Risking His Agenda (BBG)

Trump wanted to preview Comey's Senate testimony (Reuters)

Traders Ask What Will Rouse Markets When Trump and Twitter Can't (BBG)

EU Raises Growth Forecasts but Cites Threats From Brexit, Trump (WSJ)

Oil bounces, world stocks hold near all-time highs (Reuters)

McCain, Sasse to Vote Against Trump Trade Nominee (WSJ)

Acting FBI Head to Testify Before Congress (WSJ)

Aetna to Pull Out of Current Affordable Care Act Exchanges (WSJ)

In Trump's shadow, Fed official says trade barriers a 'dead end' (Reuters)

Emirates Airline Battered by Trump Travel Ban (WSJ)

Uber deemed transport ...

OPEC Capitulates, Forecasts Surge In Shale Oil Production As Saudi Output Rises

The biggest highlight in today's latest monthly OPEC oil market report for the month of May was OPEC finally capitulating to the "shale threat" and raising estimates for for non-OPEC supply growth in 2017 to 950Kbpd from the year prior, 64% or 370k higher than in the April estimate, amid a surge in U.S. output. In context, the outlook for non-OPEC growth is now 4 times higher than when OPEC announced cuts in November.

As shown in the table below, OPEC raised its 2017 U.S. supply growth outlook by 282kbpd in the past month, to 820k bpd.

The OPEC report also noted that OECD Inventories remains 276MM bbl above the five-year average. It also showed OPEC crude output declining by 2k bpd in April to 31.732m b/d according to secondary sources as 7 out of 13 members reduced output, however offset by a rebound in Saudi production to 9.954mmbpd, the highest since January. The biggest m/m changes:

Angola +97k b/d;

UAE, Libya -62k each

Saudi +49.2k b/d m/m to 9.954m b/d: OPEC secondary sources

Saudi +46.4k b/d to 9.946m b/d: Saudi direct comms to OPEC

The monthly report also kept its 2017 global oil demand growth forecast unchanged from previous month's est. at 1.27m b/d y/y, suggesting that yesterday's warning by Vitol about a decling in global demand continues to fall on deaf ears.

Finally, in its "

U.S. Gold Exports To China and India Surge In 2017

U.S. Gold Exports To China and India Surge In 2017

Gold Exports From U.S. - Something Big Is Happening


Most Americans didn't realize it, but something BIG changed in the U.S. gold market in the beginning of 2017. While precious metals sentiment and buying in the U.S. has dropped off considerably in the first quarter of 2017, the East continues to acquire gold, HAND OVER FIST.

How much gold? Well, let's just say.... U.S. gold exports have nearly doubled during JAN-FEB 2017 versus the same p ...

European Stocks Should Break on Through to the Other Side

European stocks have been trying for two decades to rise above current levels. This time, they may succeed.

Snap Fails First Test as Public Company

Snap's first quarter of results as a public company shows competition from Facebook is taking its toll on user and revenue growth.

The Surprising Losers From the VIX's Decline

The low level of the market's so-called fear gauge is not only bad news for investors who bet on higher volatility, it is bad for conservative investing strategies that profit directly from market choppiness, too.

06 May 2017 Initial Unemployment Claims Rolling Average Again Insignificantly Worse

The market expectations for weekly initial unemployment claims (from Bloomberg / Econoday) were 241 K to 245 K (consensus 244,000), and the Department of Labor reported 236,000 new claims. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 243,000 (reported last week as 243,000) to 243,500. The rolling averages generally have been equal to or under 300,000 since August 2014.

Economic Report: U.S. producer prices jump 0.5% in April

U.S. producer prices rose 0.5% in April, the Labor Department said Thursday.

Market Snapshot: Nasdaq's record run on the line, as Snap tumbles after results

U.S. stock futures indicate a modestly lower start for equities, with reaction to Snap results and earnings from retailers ahead. Meanwhile, the Nasdaq Composite faces a struggle to hit another record.

5 truly awful gifts that you should NOT buy this Mother's Day

Why mom deserves more than just another bouquet.

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