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31Aug2017 Pre-Market Commentary: Wall Street To Open Fractionally Higher, Gas Prices Higher, WTI Crude Trading Near The High 45 Handle, US Dollar Index Trending Higher

Written by Gary

US stock market index futures were higher this morning (SPY +0.2%) as upbeat Chinese and U.S. economic data boosted appetite for riskier assets and calming investors worries.


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 0.80% while London's FTSE 100 is up 0.65% and Germany's DAX is up 0.62%.

Tensions with North Korea and Hurricane Harvey, which has hobbled the U.S. energy sector. As of Wednesday afternoon, just over 13B shares had been traded for the week, on track to be the lowest weekly volume since last Christmas. Seasonality is playing a big role, with many traders away from their desks ahead of Labor Day weekend.

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. oil set for biggest monthly loss in over a year as floods hit demand

AMSTERDAM (Reuters) - U.S. crude oil prices are on track to post the steepest monthly losses in more than a year on Thursday as concerns spread over falling demand in the world's top oil-consuming country after storm Harvey knocked out almost a quarter of its refineries.

GE's new CEO preparing job cuts in bid to reduce costs: source

NEW YORK (Reuters) - General Electric Co is making plans to significantly reduce corporate staff in an effort to cut spending and boost profits under its new chief executive, and the company already has halted hiring in certain technology positions, a person familiar with the situation told Reuters.

NAFTA nations plan talks progress under barrage of Trump threats

MEXICO CITY (Reuters) - Trade negotiators plan to take small steps forward in a second round of talks to rework the North American Free Trade Agreement (NAFTA) this weekend, trying to ignore daily threats from U.S. President Donald Trump to tear it up if he does not get his way.

U.S. stock futures higher on strong economic data

(Reuters) - U.S. stock index futures were higher on Thursday as strong global economic data brought back appetite for riskier assets, even as tensions in the Korea peninsula and worries about the economic impact of tropical storm Harvey lingered.

New Uber CEO promises change, sees IPO in 18-36 months

SAN FRANCISCO/GEORGETOWN, Del. (Reuters) - Uber Technologies Inc's new Chief Executive Dara Khosrowshahi told employees on Wednesday the ride-services company would change its culture and may go public in 18 to 36 months.

Dollar, commodities cheered by China, U.S. data

LONDON (Reuters) - Investors rediscovered a taste for the dollar and commodities on Thursday, as upbeat Chinese and U.S. economic news whetted appetite for riskier assets globally, while tensions over North Korea simmered in the background.

Goldman plots return to banking growth mode through hires, investments

HONG KONG (Reuters) - Goldman Sachs Group Inc plans to add about half a dozen senior bankers over the next six months or so and invest more in Asia using its balance sheet as the Wall Street firm seeks to switch to a growth mode in investment banking, a top executive said.

U.S. house prices to keep rising on supply constraints: Reuters poll

BENGALURU (Reuters) - U.S. house prices are forecast to rise by a cumulative 10 percent over this year and next, driven by a scarcity of new homes, low interest rates and steadily-increasing demand, a Reuters poll of property market analysts showed.

German tourism body blames aviation regulation for Air Berlin failure

BERLIN (Reuters) - German taxes and regulation have allowed foreign airlines to take market share from German carriers and contributed to the failure of Air Berlin , Germany's tourism trade body said on Thursday.

Front-Month RBOB Tops $2 After Colonial Pipeline Shutdown

Gasoline prices have exploded higher once again this morning - topping the Maginot Line of $2.00 for the first time since July 2015 - following reports that the main conduit for fuel from the Gulf to the East Coast has been shut due to Hurricane Harvey.

Motor fuel prices climbed as much as 6.6 percent in New York, advancing for an eighth session, while crude oil was little changed. Harvey has shuttered about 23 percent of U.S. refining capacity, potentially cutting fuel-making ability to the lowest level since 2008 and depriving the Colonial Pipeline of supplies.

Its operator was forced to shut the main diesel line late Wednesday and planned to halt its gasoline line Thursday, meaning motorists from Maine to Florida may soon see higher prices at the pump.

Colonial, which is the biggest single fuel transporter in the US, shipping more than 2.5m barrels a day on its line - or roughly one in every eight barrels of fuel consumed in the country - said in a statement late on Wednesday that its line carrying diesel and jet fuel would shut on Wednesday evening, followed by its gasoline pipe on Thursday. And that sent front-month RBOB above $2...

Frontrunning: August 31



Katrina Survivors Relive Nightmare (WSJ)

Harvey drenches Louisiana, sparks blast at Texas chemical plant (Reuters)

Immigration crackdown could slow rebuilding efforts (Reuters)

Kushners' China Deal Flop Was Part of Much Bigger Hunt for Cash (BBG)

U.S. bombers drill over Korean peninsula after latest North Korea launch (Reuters)

Britain, Japan discuss possible new U.N. resolution against North Korea (Reuters)

Trump's Impatience Emerging as Biggest Threat to Nafta Deal (BBG)

NAFTA nations plan talks progress under barrage of Trump threats (Reuters)

Markets Are About to Find Out What China's Leadership Reshuffle Means (BBG)

Southeast Asian Stocks Post Longest Winning Streak in Five Years (BBG)

Iraqi PM Abadi declares victory over Islamic State in Tal Afar (

U.S. Deploys B-1Bs, F-35s To Korea In "Unprecedented" Show Of Force

A day after President Donald Trump finally broke his silence on North Korea after the isolated nation twice provoked its geopolitical adversaries in the span of just four days, Yonhap is reporting that the US sent four F-35B stealth jets and two nuclear-capable B-1B strategic bombers to train with South Korea's F-15K fighter jets over the Korean Peninsula on Thursday in what it described as an "unprecedented" escalation of the allies' military response to N.Korea's provocations.

Thursday's air-to-ground precision-strike drills were conducted a mock bombing drill, which simulated a surgical strike of key enemy facilities, over the Pilsung Range in the eastern province of Gangwon.

The "unprecedented" combined maneuver involved the F-35Bs from Japan and the long-range bombers based in Guam as well as a squadron of four F-15Ks, Yonhap said.

They used MK-84, MK-82 and GBU-32 bombs, according to Yonhap. In a statement, US Pacific Command said the flyover was a "direct response to North Korea's intermediate range ballistic missile launch." "North Korea's actions are a threat to our allies, partners and homeland, and their destabilizing actions will be met accordingly," said Gen. Terrence O'Shaughnessy, commander of Pacific Air Forces.

Global Stocks Rise On Strong Economic Data, Dollar Set To End Streak Of Monthly Declines

It's groundhog day as S&P futures, European and Asian shares all rise overnight, while the dollar is poised to finally end its streak of monthly losses.

The Bloomberg Dollar Spot Index is finally headed for its first monthly gain since February, supported by renewed focus on better-than-forecast U.S. economic growth with the dollar getting an added boost after a Reuters report that Euro gains are worrying a growing number of ECB policy makers. The DXY is up 1.6% from multiyear low set on Tuesday while US Treasuries yields also rose in muted trading ahead of key core PCE inflation data due shortly Thursday and ahead of Friday's jobs report.

Not helping the ECB case for a weaker Euro (and stronger dollar) was the latest Eurozone inflation data, which came in hotter than expected at the headline level, printing at 1.5% for August, above the 1.4% expected, and 1.3% in July, while inflation ex food and energy also came in stronger than the 1.2% expected, printing 1.3% in August, 0.1% higher than July. Core HICP inflation printed at 1.2%, matching the median forecast.

In addition to the ECB "trial balloon", investors rediscovered a taste for a stronger dollar and commodities as upbeat Chinese economic data on Thursday, as well as stronger U.S. economic news, whetted appetite for riskier assets globally, even as tensions over North Korea simmered in the background. As reported overnight, the latest official PMI survey showed Chinese factory growth unexpectedly accelerated in August, confounding forecasts for a slight slowdown. The official PMI ...

Costco Stock at a Discount

One of the few ways for retailers to compete against the growing might of Amazon.com is to offer something different. Costco Wholesale does that, but the market has been unwilling of late to give it credit for its uniqueness.

Emerging-Market Bonds: The Stars Align

Low inflation is a puzzle in developed markets, but a pleasant and powerful phenomenon for emerging-market bonds

Beijing Shows Its Power With China's Latest Megamerger

The combination of the country's leading coal miner and power producer is the clearest sign yet of Chinese leaders' desire to enhance the role of big state-owned companies.

Need to Know: Don't fear September, this tech overlord has the rally in hand

September has been billed as a rough month for stocks, but the tech overlords may have something to say about that. A sparkle seems to be returning for that sector as a grind of a month comes to a close.

Called to Account: Earnings season is still a headache, and shareholders shouldn't stand for it

Once again, earnings season was a confused mix of badly-written releases with missing numbers and tables, all issues that should raise red flags.

Best Buy withstands Amazon Prime Day pressure with better-than-expected results

Best Buy results show that it was able to overcome the challenge posed by Amazon and its huge Prime Day event.

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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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