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24Jul2017 Pre-Market Commentary: Wall Street Set For A Lower Opening, OPEC Meeting Is Slated To Be Another Talk-a-thon, US Dollar Slides Yet Again Amid Of US Political Unrest

Written by Gary

US stock market index futures are flat ahead of the opening bell (SPY -0.02%). Investors are expecting further declines as the US dollar was nursing . . .


Here is the current market situation from CNN Money

European markets are lower today with shares in London off the most. The FTSE 100 is down 0.86% while Germany's DAX is off 0.26% and France's CAC 40 is lower by 0.18%.

. . . losses near 13-month lows pressured by ongoing concerns over political turmoil in Washington.

The IMF has lowered its forecasts for U.S. economic growth this year but kept its global growth outlook unchanged for this year at 3.5% and next year at 3.6%.

Earnings announcements are on tap this week from the top internet companies, with Google parent Alphabet (GOOG, GOOGL) up today after the close, followed by Facebook (NASDAQ:FB) on Wednesday, and Amazon (NASDAQ:AMZN) and Twitter (NYSE:TWTR) on Thursday.

Today's Markets

In Asia, Japan -0.6%. Hong Kong +0.5%. China +0.4%. India +0.5%.
In Europe, at midday, London -1%. Paris -0.1%. Frankfurt -0.3%.
Futures at 6:20, Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude +0.9% to $46.20. Gold +0.2% to $1,257.10.
Ten-year Treasury Yield unchanged at 2.23%

Today's Economic Calendar

9:45 PMI Composite Flash
10:00 Existing Home Sales

Companies reporting earnings today »

What Is Moving the Markets

Here are the headlines moving the markets.

High-flying euro lays European shares low as oil picks up

LONDON (Reuters) - The euro hit an almost two-year high against an ailing dollar on Monday, largely shrugging off data showing euro zone business growth slowed last month and weighing on exporters' shares.

Exclusive: Spotify, Warner hope to clinch royalty deal by September - sources

LONDON (Reuters) - Music streaming company Spotify is close to agreeing a new licensing pact with Warner Music Inc, the last big music royalty deal it needs before pushing ahead with a U.S. stock market listing, four sources familiar with the situation said.

U.S. venture capital's digital coin quandary: cash-rich startups

NEW YORK (Reuters) - U.S. venture capital firms lining up for a slice of the burgeoning digital currency market are grappling with a novel challenge - some of the hottest tech startups that sell the coins just don't need their money.

KKR to buy WebMD in $2.8 billion deal

(Reuters) - Online health publisher WebMD Health Corp said on Monday it agreed to be bought by private equity firm KKR & Co in a deal valued at about $2.8 billion.

North American strength helps Halliburton smash profit view

(Reuters) - Halliburton Co swung to a quarterly profit and handily beat analysts' expectations on higher demand in North America, sending the world's No.3 oilfield services provider's shares up 2.5 percent.

Samsung takes aim at TSMC with plans to triple chip foundry market share

YONGIN, SOUTH KOREA (Reuters) - Samsung Electronics plans to triple the market share of its contract chip manufacturing business within the next five years by aggressively adding clients, a senior company executive said, as it targets new growth drivers for the chips business.

Democrats take aim at big companies in economic blueprint

WASHINGTON (Reuters) - U.S. Democrats are unveiling an economic platform on Monday that they call "A Better Deal" for working Americans by announcing plans to address unfair market competition, rising pharmaceutical costs and stagnant wages.

Rebuffed Elliott wants 'urgent' Akzo response on new CEO

LONDON (Reuters) - Hedge fund firm Elliott Management on Monday asked the board of Dutch paintmaker Akzo Nobel to urgently respond to its concerns about the nomination of a new chief executive.

VEON names former Xerox CEO Ursula Burns as chairwoman

FRANKFURT (Reuters) - VEON named former Xerox chief Ursula Burns as its chairwoman on Monday, as the telecoms operator undertakes corporate governance reforms and a makeover as a global online services company.

"Apprehension": Main Events In Torrid Week Include Fed, GDP, Earnings And "Lots Of White House Risk"

"Apprehension" - that's how Citi describes trader sentiment as a new week begins, in which the bank points to various event risks over the coming five days. The one markets are focusing on over say, the FOMC on Wednesday, is the political noise coming from Washington. The investigation into Russia's alleged meddling in the 2016 election is back in focus as President Trumps' son-in-law testifies, along with Trump Jr and Paul Manafort later in the week. As such, risk sentiment seems apprehensive ahead of the inevitable headlines

Indeed, near term White House risk is substantial and is as follows: Jared Kushner appearing before Senate intelligence committee on Monday; the Senate healthcare vote is expected Tuesday; Donald Trump Jr. and former Trump campaign Chairman Paul Manafort are expected to appear on Wednesday before Senate committees investigating Russian meddling.

On the economic front, next week attention will be on the US FOMC rate decision, Q2 GDP data, consumer confidence, housing and durable goods orders. We also get GDP, composite PMI and CPI inflation releases across the Euro Area. GDP data in the UK. In Emerging Markets, there are monetary policy meetings in Colombia, Brazil, Turkey and Russia.

It is also the busiest week for Q2 earnings with dozens of marquee names reporting.

As Jim Reid summarizes, the highlight this week are today's flash PMI numbers and the FOMC meeting this Wednesday, although the latter will likely be a relatively mundane affair with the action perhaps being saved for a September balance sheet announcement. One also has to keep an eye on all things Washington related following Friday's announcement of Press Secretary Sean Spicer's resignation. Mr Trump now has new people at the helm of both his legal and communications teams after resignations towards the end of last week. Late on Friday Congressional negotiators agreed to advance a bill punishing Russia for its involvement in the 2016 election a ...

Property Market In Dublin Is Inflated and May Burst Again

Commercial Property Market Is Inflated and May Burst Again

by David McWilliams

Dublin property investors had better hope that Brexit happens soon.

They should also hope that it's not just a 'hard' Brexit, but a granite Brexit — a Brexit that's as hard as possible. They should be betting on the buffoonery of Boris Johnson, down on both knees praying for a massive barney between Davis and Barnier.

A granite Brexit might prompt the migration of hundreds of corporate refugees from isolated London to the freewheeling safe haven of Dublin. If Brexit doesn't drive a massive uptake in demand for prime property, we are in for a massive wobble in our inflated commercial property market.

Frontrunning: July 24



Kushner, Russian Ambassador Had Undisclosed Contact (WSJ)

Democrats take aim at big companies in economic blueprint (Reuters)

Trump open to signing Russia sanctions legislation (Reuters)

Schumer Predicts Trump Firing Mueller Would Be GOP Tipping Point (BBG)

Senate GOP Unsure of What Health-Care Measure They Will Vote On (WSJ)

Japan PM Abe denies favors for friend amid falling support (Reuters)

Britain's Economy Is Almost Flatlining (BBG)

Wall Street Outlasts Congress on Banker Pay, But Still Loses (WSJ)

An Obscure Nafta Chapter Could Be Canada's Deal-Breaker Again (BBG)

Investors Lose $22 Billion as Sweden's Benchmark Stocks Founder (BBG)

German private sector growth slows more than expected in July-PMI (

UBS Downgrades Goldman On Slump In Trading Revenues

The knives are out early this morning among the brokers, where UBS - hardly the embodiment of ibanking and sales and trading health these days - just downgraded Goldman Sachs to Neutral, cutting its price target from $250 to $235, on the recent disappointing results from the company's FICC group. UBS said it believes the market is pricing in an "inflection" in Goldman's trading revenue despite the recent weakness suggesting a recovery is needed to justify 2018 consensus estimates. The bank concedes that "recent weak results could rebound but believe a recovery in trading revenues would need to be substantial as we estimate a roughly 25% rebound in FICC revenues is implied in 2018 consensus estimates."

It adds that "while trading could rebound, that has not happened over the past year for GS absent a surprise event such as Brexit or the Trump election and we have difficulty relying on such an event in order to justify a bullish thesis."

As a result, UBS has "limited confidence" in a FICC rebound at Goldman and sees better opportunities for investors elsewhere, such as Morgan Stanley (and why note even UBS shares).

From UBS:

Shares seem to reflect a rebound in revs but we have limited confidence in that

We are downgrading GS shares to neutral as the market seems to be pricing an inflection in their FICC revenues despite the recent weakness, suggesting a recovery is needed to justify 2018 consensus. We believe there are better opportunities for investors (such as buy-rated MS). Importantly, adjusting for unusual items (ie low taxes, excess I&L, etc) 1H17 earnings missed consensus forecasts as of mid-Feb 2017 (before revisions began) by 19.2%, yet the stock is down by 12.1% and consensus 2018 estimates are only down 7.2%, suggesting to us that the street is largely willing t ...

Good News: China Is Making Less Useless Stuff

After years of overinvestment, which helped to sink global prices for steel, aluminum and other products, some of the worst-offending sectors in China are looking a bit better.

How Markets Could Come Out of the Shadows

The European Central Bank has reached the same spot the Federal Reserve reached four years ago. For financial markets on both sides of the Atlantic, it is an event that comes with consequences.

Cloud Wars at the Right Price

The cloud computing business is growing, and revenue is building even without the draw of price cuts.

Metals Stocks: Gold tries to run up streak of gains to 7 sessions

Gold tried for a seventh-straight advance with Monday's narrow gain, drawing technical support near the closely watched $1,250 line even as the U.S. dollar stabilized from last week's sharp loss.

The Tell: This move may have signaled an end to the selloff for retailers' stocks

A move in the ETF industry could mean the selloff for shares of traditional retailers has come to an end, according to some analysts.

Need to Know: Black swans? Here's why the recent global breakout in stocks should NOT be trusted

If the trend is, indeed, your friend, then more gains are on the way, because everything is breaking out around the world. Last week, nine key indexes busted through to record highs on the same day, including the Value Line Geometric Composite, maybe the broadest global gauge of them all.

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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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