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01Jun2017 Pre-Market Commentary: Wall Street To Open Higher, US Dollar Sharply Higher, Gold Moderately Lower

Written by Gary

US stock future indexes are pointing towards a positive, but fractionally higher opening (SPY +0.2%). Crude prices are recovering today from yesterday's decline. Reports that U.S. crude stockpiles had fallen more than expected have helped boost markets.


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 0.57% while London's FTSE 100 is up 0.46% and Germany's DAX is up 0.31%.

What Is Moving the Markets

Here are the headlines moving the markets.

'Axis of love': Saudi-Russia detente heralds new oil order

MOSCOW (Reuters) - A meeting between the two men who run Russia and Saudi Arabia's oil empires spoke volumes about the new relationship between the energy superpowers.

Exclusive: OPEC looked at extra 1-1.5 percent oil supply cut, could revive proposal

DUBAI/LONDON (Reuters) - OPEC discussed cutting its oil output by a further 1-1.5 percent when it met last week, three sources familiar with the matter said, and could revisit the proposal should inventories remain high and continue to weigh on prices.

U.S. private sector adds 253,000 jobs in May: ADP

(Reuters) - U.S. private employers added 253,000 jobs in May, above economists' expectations, a report by a payrolls processor showed on Thursday.

Oil rises as Trump decides on climate pact, yuan surges

LONDON (Reuters) - Oil prices rose on Thursday, lifting energy company shares, on expectations the United States will withdraw from a global pact to fight climate change, while China's yuan shrugged off weak factory data to hit a seven-month high against the dollar.

Sulk but no tantrum likely as central banks sidle toward exit

LONDON (Reuters) - History suggests that financial markets react violently when a central bank signals it is scaling back the stimulus that has kept an economy afloat - and lined the pockets of investors.

PPG admits defeat for now in quest to buy Akzo Nobel

AMSTERDAM (Reuters) - U.S. paints and coatings maker PPG Industries has dropped its attempt to buy Dutch rival Akzo Nobel in a 26.3 billion euro ($29.5 billion) deal, stung by repeated rejections from the company, legal defeats and hostility from Dutch politicians.

Toshiba, Western Digital trade barbs in spat over chip unit auction

TOKYO (Reuters) - Western Digital said on Thursday it is still seeking arbitration in a dispute with Toshiba Corp over the auction of its prized chip unit, arguing that a transfer of assets by the Japanese firm had not resolved what it calls a serious breach of contract.

Deere to buy German road construction firm Wirtgen for $5.2 billion

(Reuters) - U.S. based farm and construction major Deere & Co said on Thursday it would buy privately held German road construction company Wirtgen Group for $5.2 billion, including debt.

Asian factories lose momentum in May, Europe stays buoyant

LONDON/NEW DELHI (Reuters) - Factories across much of Asia ran into a soft patch in May as export demand slowed but those in Europe enjoyed buoyant growth amid signs of steady improvement in the global economy.

ADP Employment Surges Despite Biggest Job Cuts Spike In 2 Years

Despite Challenger's headlines of a 71% jump in job cuts YoY in May, ADP reported a bigger-than-expected 253k rise in employment for May (above all economist expectations) after a big plunge in April.

May saw the biggest YoY jump in job cuts since September 2015...

But ADP reports a massive surge in employment...

Services jobs outpaced goods-producing jobs once again (+205k vs +48k) with medium-sized business seeing the biggest jump.

"May proved to be a very strong month for job growth," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. "Professional and business services had the strongest monthly increase since 2014. This may be an indicator of broader strength in the workforce since these services are relied on by many industries."

Mark Zandi, chief economist of Moody's Analytics said, "Job growth is rip-roaring. The current pace of job growth is nearly three times the rate necessary to absorb gr ...

Oil Jumps On First 'OPEC Sources' Headline Of The Day

WTI Crude had erased its post-API (big crude draw) gains this morning after weak China PMI overnight and so something had to be done to keep the oil-normalization dream alive. OPEC sources stepped up...



OPEC COULD REVIVE IDEA OF DEEPER SUPPLY CUT AT NEXT MEETING IF OIL INVENTORIES STAY HIGH - TWO SOURCES FAMILIAR WITH MATTER

And the reaction was a kneejerk higher oiff the pre-API levels...

Gold to benefit from Uncertainty thanks to Twitter and UK elections


  • Gold hits five-week high

    Gold to benefit from Uncertainty thanks to Twitter and UK elections


    • Reaches $1,273.74/oz, highest since April 25th

      Sterling recovers after UK polls point towards a hung Parliament

      Expected Fed-tightening capped gains

      90-dead in Kabul, further signs of increasing tension in Middle East

      Trump expected to pull out of Paris Accord and Trump's anti-Iran axis already feuding

      Yesterday gold hit $1,273.74/oz, a level not seen for five weeks. Analysts point to some safe-haven demand for the yellow metal on account of the geopolitical tensions, upcoming UK elections and tomorrow's non-farm payroll data.

Nigel Farage Is "Person Of Interest" In FBI's Probe Of Trump And Russia

In what may be the most unexpected news of Thursday morning, the Guardian has reported that former UKIP leader, and the man largely responsible for Brexit, Nigel Farage is a "person of interest" in the FBI's investigation looking into possible collusion between the Kremlin and Donald Trump's presidential campaign. As the UK newspaper notes, citing "sources with knowledge of the investigation", the former Ukip leader had raised the interest of FBI investigators because of his relationships with individuals connected to both the Trump campaign and Julian Assange, the WikiLeaks founder whom Farage visited in March.

"One of the things the intelligence investigators have been looking at is points of contact and persons involved," one source said. "If you triangulate Russia, WikiLeaks, Assange and Trump associates the person who comes up with the most hits is Nigel Farage.

So far, Farage has not been accused of wrongdoing and is not a suspect or a target of the US investigation. But being a person of interest means investigators believe he may have information about the acts that are under investigation and he may therefore be subject to their scrutiny.

The Guardian adds that it was Farage's proximity to people at the heart of the investigation that was being examined as an element in their broader inquiry into how Russia may have worked with Trump campaign officials to influence the US election. "He's right in the middle of these relationships. He turns up over and over again. There's a lot of attention b ...

Yuan Rally Doesn't Have Far to Run

Chinese capital outflows have quietly gained steam again in recent weeks and a more hawkish-than-expected Fed could add fuel to the fire. China's central bank is taking pre-emptive action.

Baidu's Turn as a Bank Is Unwelcome

China's biggest search engine has been selling risky investment products that could come back to bite it.

China's Debt Problem Moves Back to the Future

Chinese firms avoided bond defaults this spring by falling back on the old system of expensive shadow bank loans. That could spell trouble if inflation and profits start weakening later this year.

Economic Report: Jobless claims climb to 5-week high of 248,000

The number of Americans who sought unemployment benefits in late May rose to a five-week high, likely reflecting the normal ebb and flow that occurs around a holiday.

Economic Report: Private sector job growth rebounds to 'rip-roaring' pace in May, ADP says

Employment gains in the private sector rebounded handily in May after a sluggish April, payroll processor ADP said Thursay

Jeff Reeves's Strength in Numbers: Has Apple's stock finally run out of steam?

Jeff Reeves offers 7 reasons why it has — and 7 reasons why it's still a buy.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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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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