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09Jun2017 Pre-Market Commentary: Wall Street To Open Higher, Another Sideways Session In Question, WTI Crude Steady, US Dollar Rises Significantly

Written by Gary

US stock market index futures point to a fractionally higher opening (SPY +0.1%) as a shock British election result that left no single party with a clear claim to power. Crude prices steadied in the mid 45 range and the US dollar gaps upward.

Here is the current market situation from CNN Money

European markets are higher today with shares in London leading the region. The FTSE 100 is up 0.49% while France's CAC 40 is up 0.42% and Germany's DAX is up 0.19%.

Europe markets mixed; FTSE rises as sterling dips; UK election sees hung parliament

Today's Markets

In Asia, Japan +0.5%. Hong Kong -0.1%. China +0.3%. India +0.2%.
In Europe, at midday, London +0.5%. Paris ++0.2%. Frankfurt +0.3%.

Ten-year Treasury Yield flat at 2.2%

Today's Economic Calendar

10:00 Wholesale Trade
1:00 PM Baker-Hughes Rig Count

Companies reporting earnings today »

What Is Moving the Markets

Here are the headlines moving the markets.

Dollar cleans up as UK election shock stuns sterling

LONDON (Reuters) - A shock British election result that left no single party with a clear claim to power hit sterling on Friday and left the dollar on course for its best week in over a month, while world shares headed toward their first weekly fall since April.

Mexico sugar deal hard to swallow for last U.S. candy cane maker

NEW YORK (Reuters) - For the last U.S.-based manufacturer of the red and white striped candy cane that is a ubiquitous North American holiday season treat, the sugar supply deal struck between Mexico and Washington is anything but sweet.

SoftBank to buy robotics businesses from Alphabet Inc

TOKYO (Reuters) - SoftBank Group Corp said it would buy two firms that build walking robots from Google's parent company, Alphabet Inc , adding to the Japanese company's growing artificial intelligence portfolio.

Airbus predicts $5.3 trillion jet demand, trims traffic outlook

TOULOUSE, France (Reuters) - Airbus raised its forecast for deliveries by 6 percent to 34,899 aircraft worth $5.3 trillion over the next 20 years, creating jobs for more than a million pilots and technicians as China surges past the United States to dominate air travel.

EU approves J&J purchase of Actelion subject to conditions

BRUSSELS (Reuters) - EU antitrust regulators approved on Friday Johnson & Johnson's planned purchase of Actelion Pharmaceutical subject to conditions intended to ensure clinical development of insomnia drugs were unaffected.

Born-again BlackBerry: Canadian icon hopes to ride trucks to growth

BOLTON, Ontario (Reuters) - A visit to trucking firm Titanium Transportation helps explain why BlackBerry's stock is once again a darling in Canadian markets, having soared 70 percent in two months.

Toshiba says Western Digital meeting didn't dispel concerns over chip proposal

TOKYO (Reuters) - Toshiba Corp said that Western Digital Corp CEO Steve Milligan met with its executives on Friday but failed to dispel concerns about the U.S. firm's proposal to buy Toshiba's prized chip unit.

Oil's price fall stalls despite supply glut

LONDON (Reuters) - Oil prices steadied on Friday after steep falls earlier in the week under pressure from widespread evidence of a fuel glut despite efforts led by OPEC to tighten the market.

Firms see big bucks in upgrade of U.S. air traffic control system

SEATTLE (Reuters) - Inside the control tower at John F. Kennedy International Airport, air traffic controllers can track planes traveling hundreds of miles away.

Is $50 Oil Still Realistic?

With crude (and gasoline) prices doing nothing but tumble since OPEC announced its 'extension' deal, erasing all the hope-fuelled bounce off cycle lows, the question once again becomes, is $50 oil still realistic?

Via's Nick Cuningham,

Oil prices have plunged back to levels not seen since OPEC announced its original production cut deal last November. Prices have been falling since the group extended their cuts for another nine months, a two-week slide that puts WTI back in the mid-$40s.

The underlying factors for the price drop are the same as before: U.S. shale production continues to rise; inventories remain elevated; and the markets are concerned that the OPEC cuts are not doing enough to drain the surplus.

But, in fact, the outlook has grown a bit darker more recently, as downside risks to the market have grown.

The immediate spark to the sharp percent selloff in crude oil prices on Wednesday came from the unexpectedly bearish EIA inventory report, which surprised market analysts. The report was especially bad news because both crude oil and gasoline inventories increased by 3.3 million barrels each at a time when stocks typically decline heading into the driving season. The increase ended several consecutive weeks of drawdowns and poured cold water on any hopes of swift rebound in prices - WTI and Brent dropped roughly 5 percent.


Theresa May Says She Will Form A Government With Support Of DUP Party

In a last ditch hail mary effort to avoid resignation and new snap elections, Theresa May arrived at Buckingham Palace earlier to meet with the Queen where she will attempt to cling to power by linking her Conservative party with Northern Ireland's rightwing Democratic Unionist Party (DUP) following the disastrous election that left her short of a governing majority.

As noted earlier, May has reached an understanding with Northern Ireland's Democratic Unionist Party to form a coalition U.K. Government. With 649 of 650 seats declared, the Conservatives had won 318 seats and Labour 261. 326 seats are needed for majority. The DUP, which took 10 seats, was considering an arrangement which would involve it supporting a Conservative minority government on key votes in parliament but not forming a formal coalition, Sky said.

"If ... the Conservative Party has won the most seats and probably the most votes then it will be incumbent on us to ensure that we have that period of stability and that is exactly what we will do," a grim-faced May said after winning her own parliamentary seat of Maidenhead, near London.

The prime minister is headed back to Downing 10 after meeting with the Queen shortly after midday to seek permission from the Queen to form a new government despite the Tories winning just 318 seats in Thursday's general election, eight short of the 326 needed to secure a majority on their own. The support of the 10 members of parliament elected for the DUP, the more hardline of the two traditional pro-British parties in Northern Ireland, would put Mrs May just over the threshold to form a government.

According < ...

Frontrunning: June 9

UK voters deal May a crushing blow (Reuters)

May Fights to Remain U.K. Premier After Election Debacle (BBG)

Warning of U.S. desertion, EU chief calls for European defense (Reuters)

EU Turns Schadenfreude Up to Maximum After May Election Disaster (BBG)

Dollar cleans up as UK election shock stuns sterling (Reuters)

Trump tweets on Comey, declares 'total vindication' (AP)

Baghdad rejects Kurds' move to press for independence unilaterally (Reuters)

Oil's price fall stalls despite supply glut (Reuters)

Once Stalwart Oil Stock Bulls Starting to Say Enough Is Enough (BBG)

Feud over Qatar deepens conflicts across Arab world (Reuters)

Venezuela Bond Repudiation Jitters Grow After Goldman Sachs Deal (BBG)

Saudis Have a Lot to Lose in Qatar Fight, Even If The ...

Gold in Pounds Rises 1.5% To £1,001/oz - Risk Of UK Political Turmoil

Gold in Pounds Rises 1.5% To £1,001/oz - Risk Of UK Political Turmoil

- Gold in pounds rises 1.5% from £986/oz to £1,001/oz after shock UK election result

- Gold reaches 7 week high and surges 6% in the last 30 days from £942/oz to £1,001/oz

Gold in pounds - 1 month

- Very robust gold sales experi ...

What Theresa May's Drubbing Means for Brexit

Prime Minister Theresa May's tenuous grip on power following an embarrassing loss of seats in parliament severely dents her ability to lay down ultimatums in the Brexit talks.

U.K. Elections: Britain Is an Uncertainty-Generating Machine

The surprise U.K. election results show markets once again worrying about political risk in all the wrong places. Even worse, valuable time to reach a Brexit deal has been burned.

Watch Out for FANG Inc.

Earnings expectations at Facebook, Netflix and Alphabet have risen year to date. Their stock prices have risen more.

Rail Week Ending 03 June 2017: Movements Up 6.4% in May

Week 22 of 2017 shows same week total rail traffic (from same week one year ago) improved according to the Association of American Railroads (AAR) traffic data. The economically intuitive sectors contracted.

Capitol Report: Trump breaks silence to call Comey 'a leaker'

President Donald Trump fired back at former Federal Bureau of Investigation Director James Comey in an early-morning tweet on Friday, calling him a "leaker" and stating "total and complete vindication" after the ex-FBI chief's testimony on Thursday.

Need to Know: After U.K. election shocker, Brexit itself looks 'surely in trouble now'

Another election, another surprise. Markets are taking the shock U.K. result pretty well, except for the poor pound.

Beat the System: Britain's election shock: What you need to know

The U.K. general election has resulted in one of the biggest upsets on record — a loss of majority for the Conservatives and a hung parliament. Here's a rundown of what it means for Brexit, markets and the U.K.

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