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23May2017 Market Commentary: Wall Street Investors Shrug Off UK Terror Attack, WTI Crude Higher After Trump Proposes Selling Half Of US Oil Resurves

Written by Gary

U.S. stocks opened higher (SPY +0.2%) today, shrugging off a deadly bomb blast in Britain and ahead of U.S. President Donald Trump's first full budget plan that is aimed at slashing government spending and trimming the deficit.


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 0.61% while Germany's DAX is up 0.32% and London's FTSE 100 is up 0.14%.

What Is Moving the Markets

Here are the headlines moving the markets.

Wall St. set to open higher ahead Trump's budget plan

(Reuters) - U.S. stocks looked set to open higher on Tuesday, shrugging off a deadly bomb blast in Britain and ahead of U.S. President Donald Trump's first full budget plan that is aimed at slashing government spending and trimming the deficit.

U.S. plan to sell oil reserves undermines OPEC supply management efforts

SINGAPORE (Reuters) - U.S. President Donald Trump's proposal to sell half of the United States' strategic oil reserve surprised energy markets on Tuesday since it counters OPEC's efforts to control supply in order to boost prices.

Trump seeks to slash government spending in budget plan

WASHINGTON (Reuters) - The White House on Tuesday will ask Republicans who control the U.S. Congress - and federal purse strings - to slash spending on healthcare and food assistance programs for the poor as they push ahead on plans to cut taxes and trim the deficit.

GM to cut 600 South Africa jobs by July as it pulls out of country

CAPE TOWN (Reuters) - South Africa's top manufacturing union NUMSA said late Monday that 600 workers out of 1,500 at General Motors SA will lose their jobs by July after a decision last week by the car maker to sell its local operations.

China to open more sectors to foreign investors

BEIJING (Reuters) - China will further open its economy to foreign investors, through measures such as allowing investment in more industries, such as services, state television said on Tuesday, citing a reform group meeting chaired by President Xi Jinping.

As Syngenta deal closes, ChemChina and Sinochem press $120 billion deal: sources

HONG KONG/BEIJING (Reuters) - Chinese state-owned Sinochem and ChemChina are in merger talks to create the world's biggest industrial chemicals firm, to be headed by Sinochem chief Ning Gaoning, four people with knowledge of the negotiations said.

Daimler says German prosecutors search premises in emissions probe

FRANKFURT (Reuters) - German carmaker Daimler on Tuesday said the Stuttgart public prosecutor's office would search Daimler premises as part of a fraud probe related to the possible manipulation of exhaust-gas after-treatment in diesel-engine cars.

CEOs of Target, ADM to square off on U.S. border tax at hearing

WASHINGTON (Reuters) - The chief executive officers of two major American companies - retailer Target Corp and agribusiness Archer Daniels Midland Co - will offer countering views in a hearing before U.S. lawmakers on Tuesday on a proposed border adjustment tax.

German Fin Min sees deal for Greece in three weeks 'if all goes well'

BRUSSELS (Reuters) - Germany's Finance Minister Wolfgang Schaeuble expressed some confidence on Tuesday that Greece's international creditors would overcome their differences and agree in three weeks on a deal that would release more loans to Athens.

OPEC Is Studying The Following Three Options Ahead Of Thursday's Meeting

Last week, ahead of the OPEC meeting, BofA commodity analyst Francisco Blanch said the oil cartel faced three specific choices ahead of its May 25 meeting in Vienna, when it is widely expected to extend the production cut:


  1. First, OPEC could cut production beyond the 1.2mn b/d agreed in December and encourage non-OPEC members to deepen the cuts.

    Second, OPEC could increase output aggressively and restart the oil price war.

    And third, OPEC could keep the cuts at the current levels for the next 6 to 9 months and hope for oil market demand conditions to improve.



For clarity, BofA also presented the following table adding the proposed likelihoods of any given choice of action, of which a simple deal extension had the highest probability of occuring.

It appears that BofA was right, because on Tuesday morning, Bloomberg reported, citing delegates, that the OPEC committee is currently studying three deal extension options: a 6-, 9- and 12-month extension. Bloomberg also notes that OPEC's Joint Ministerial Monitoring Committee will be studying these three options and will meet one day before the general meeting - ie on Wednesday. Committee members include Algeria, Kuwait and Venezuela, and non-members Russian and Oman.

Separately, confirming that further cuts will most likely not be announced, the Kuwait oil minister said today that OPEC is not considering deeper cuts, as they're not "necessary right now."

As a remember, yesterday OPEC's secretary general said that consensus is building around a 9 month extension, which is also the base case of most sellside firms. Saudi has also voiced support for such a move: on Monday ther ...

Rand Spikes After South Africa's ANC Reportedly Looking To Ouster President Zuma

The Rand spiked towards 13/USD - its highest in a month - after reports that South Africa's ruling African National Congress's National Executive Committee will discuss option of the party removing President Jacob Zuma at May 26-28 meeting, according to two members of the decision-making panel who declined to be identified because they aren't authorized to speak publicly on the matter.

As Bloomberg reports, the option to remove Zuma to be raised as part of discussion on no-confidence motion called by opposition parties in president in parliament, one of the people says.

While the official denial has been issued

While the NEC's agenda will only be agreed at its meeting, the matter of Zuma's removal won't be discussed, ANC spokesman Zizi Kodwa says by phone.

USDZAR has not stalled its move yet.

CBS Reports Suspected Manchester Attacker Is 23-Year-Old Salman Abedi

While unclear if this is an official release - recall, earlier in the day UK PM Theresa May said authorities knew the name of the Manchester attack suspect but were not disclosing it until they were certain - moments ago CBS reported that the suspect behind the Manchester attack is 23-year-old Salman Abedi. As CBS also adds, he was known to authorities.

CORRECTION: CBS News can confirm suspected Manchester attacker is 23-year-old Salman Abedi https://t.co/OtAmmxHRzF pic.twitter.com/vWYlZrenyB

— CBS News (@CBSNews) May 23, 2017

JUST IN: @CBSNews can now confirm Salman Abedi as the name of the suspected Manchester bomber pic.twitter.com/nJxcPxlmRZ

— CBS This Morning (@CBSThisMorning) May 23, 2017

CBS News confirms #ManchesterBombing suspect as Salman Abedi, 23, who was known to authorities.

— justin michael (@JstnMchl) May 23, 2017

As a reminder, earlier on Tuesday morning, ISIS claimed responsibilty for the Manchester bombing.

ISIS Statement claiming responsibility for the attack in #Manchester ...

Islamic State Claims Responsibility For Manchester Bombing

Following the horrific events last night in Manchester in which a bombing at an Ariana Grande concert, primarily attended by teenagers, claimed the lives of at least 22 people, we're just now learning that the Islamic State is claiming responsibility for the attack.

BREAKING: Islamic State group says one of its members carried out the Manchester attack that killed 22 people.

— The Associated Press (@AP) May 23, 2017

#ManchesterAttack: Islamic State says one of its members carried out deadly attack, with a device planted at the Ariana Grande concert pic.twitter.com/8oAlUeGvKI

— Sky News (@SkyNews) May 23, 2017

Here is the statement from the Islamic State:

"With Allah's grace and support, a soldier of the Khilafah managed to place explosive devices in the midst of the gatherings of the Crusaders in the British city of Manchester, in revenge for Allah's religion, in an endeavor to terrorize the mushrikin, and in response to their transgressions against the land of the Muslims. The explosive devices were detonated in the shameless concert arena, resulting in 30 Crusaders being killed and 70 others being wounded. And what comes next will be more severe on the worshipers of the Cross and their allies, by Allah's permission. And all praises due to Allah, Lord of the creation."

Ford's New Boss Won't Bring Quick Fixes

Ford's new boss comes from the future side of the business. That implies more long-term investment, not a quick profit fix for suffering shareholders.

Why European Companies Could Really Miss London

Most industries need access to raw materials: In finance and markets that raw material is savings.

Noble Has One Option Left

The battered commodities trader may soon have no choice but to restructure its debts.

This is the best section in every MLB stadium to catch a home run ball

SeatGeek and ESPN ran the numbers so you know where to sit the next time you go to a game.

Deep Dive: At these three restaurant companies, the stock is the main course

Unlike 54 competitors, they have increased sales per share by double digits while improving profit margins.

The surprising debts that are holding many Americans back

Credit card debt and student loans aren't the only culprits

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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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