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01Sep2017 Pre-Market Commentary: Wall Street To Open Fractionally Higher, WTI Crude Remains In The Low 47 Handle, Gas Prices Jump Throughout The US, US Dollar Slips

Written by Gary

US stock market indexes are pointing to Wall Street opening higher (SPY +0.2%). The August nonfarm payrolls report shows an unexpected fall to 156K from 189K on last report.


Here is the current market situation from CNN Money

European markets are higher today with shares in Germany leading the region. The DAX is up 0.84% while France's CAC 40 is up 0.79% and London's FTSE 100 is up 0.36%.

What Is Moving the Markets

Here are the headlines moving the markets.

Dow, DuPont complete planned merger to form DowDuPont

(Reuters) - Dow Chemical Co and DuPont said on Friday the companies had successfully completed their planned $130 billion merger to form DowDuPont.

Stocks advance, dollar struggles ahead of U.S. jobs data

LONDON (Reuters) - Gains for Europe and Asia pushed world shares back towards record highs on Friday, while the dollar lost traction ahead of U.S. payrolls data.

U.S. job growth likely slowed in August; wages seen tepid

WASHINGTON (Reuters) - U.S. job growth likely slowed in August after two straight months of robust gains, but the pace of increase should be more than sufficient for the Federal Reserve to announce a plan to start trimming its massive bond portfolio.

Just smile: In KFC China store, diners have new way to pay

SHANGHAI (Reuters) - Diners at a KFC store in the eastern Chinese city of Hangzhou will have a new way to pay for their meal. Just smile.

U.S. stock futures higher as August payrolls data awaited

(Reuters) - U.S. stock index futures were slightly higher on Friday as investors await the August nonfarm payrolls report, which is likely to feed into the Federal Reserve's decision for an interest rate hike later this year.

Western Digital CEO apologized to Toshiba for friction over chip unit sale

TOKYO (Reuters) - Western Digital Corp's CEO apologized to his counterpart at Toshiba Corp for strained ties after the U.S. firm sued to keep their chip joint venture from being sold to rival bidders, according to an Aug. 11 letter.

Retail U.S. gasoline prices surge as Harvey upends global markets

HOUSTON/NEW YORK (Reuters) - Retail U.S. gasoline prices hit two-year highs and global shipping routes were scrambled as the nation's largest refiners remained shut on Friday, even as Harvey was losing strength.

U.S. labor board files complaint against Tesla over worker rights

(Reuters) - The U.S. agency in charge of enforcing labor law on Thursday filed a complaint against electric carmaker Tesla Inc , saying it found merit to workers' complaints about unfair labor practices.

American retailers, restaurants oppose U.S. NAFTA produce proposal

WASHINGTON (Reuters) - American retail, restaurant and agriculture groups weighed in on Thursday against a U.S. NAFTA modernization proposal that could pave the way for U.S. seasonal produce growers to file anti-dumping cases against Mexico, according to letters sent to Trump administration officials.

Trader: "Markets Have A Slightly Feverish, Twilight-Of-The-Bull-Run Feel"

With both the S&P and global stocks once again inching back to all time highs, here are some gloomier observations from Bloomberg's EM commentatory Garfield Reynolds, who has covered and traded FX, bonds and commodities over two decades.

Down Under Doldrums Challenge Global Growth Hopes: Macro View

The latest burst of chatter that global growth is finally gathering momentum seems overdone in a world beset by geopolitical nightmares of war and debt deadlock, as well as the nagging concern of demographic-driven disinflation. And the recent slump for the key risk proxies among the G-10 currencies -- the Aussie and kiwi dollars -- shows the need to be careful we don't get dizzy with thoughts of success.

The two countries backing these tenders are beholden to raw materials exports, and they straddle a decent cross-section of the key non-oil commodities -- iron ore, coal, gold for Australia; milk and wool for New Zealand.

Accelerating world output should be driving up demand for at least some of this stuff, and yet the Aussie and the kiwi languished at the bottom last month among the major G-10 currencies... along with the Brexiting pound.

The Aussie fell for the first time in three months, and risk reversals dropped by the most since September last year.

The kiwi dropped more than 4% for its worst performance since January 2016 and speculators trimmed net longs for three straight weeks.

The fact that all this came as base metals staged a massive rally signals that there's a disconnect going on under the surface.

Stocks are climbing again and volatility is subsiding now that the Korean missile panic fades and as markets seem to trust that Donald Trump and Congress can pass a key piece of legislation on a very tight timetable.

Meanwhile U.S. GDP and China's PMIs are being cited by the optimists as proof that ...

Jackson Hole: What Has Been Said, Cannot Be Unsaid

All eyes are on the annual retreat of the central bankers at Jackson Hole, and all eyes were on the speeches of Janet Yellen and Mario Draghi (who showed up for the very first time since 2014). Whilst Yellen will very likely receive the usual comments and questions about the end of her official term as the chair of the Federal Reserve Bank, Mario Draghi could be the one who - in the end - claims most of the attention.

After not having attended the symposium in 2015 and 2016, it's 'interesting' to see Draghi confirmed his attendance for this year's conference and some are arguing this merely is a symbolic move. After all, back in 2014, Jackson Hole was when he announced the ECB's Quantitative Easing program and it would be pretty symbolic for Draghi to announce the start of tapering at the very same conference, three years later.

Source: Danske Bank

Everything will depend on the ECB's interpretation of economic growth in the Eurozone. It's a fact the economy has now been growing for almost four years straight, but this doesn't necessarily mean all issues have been solved as the recovery remains relatively weak and there's a very clear 'two speed' difference between the countries inside the Eurozone as some members are obviously posting better growth numbers than others.

The ECB minutes i ...

Putin's Warning To The World: North Korea "On The Verge Of A Large-Scale Conflict"

As tensions between the US, its regional allies and North Korea continue ebb and flow, depending on what and where Kim lobs the next missile and whether Kelly can block Trump from tweeting for the next few hours, Russian President Vladimir Putin has decided to personally weigh in on the conflict for the first time since the UN passed new sanctions against the North earlier this month. In an article published on the Kremlin's web site, the Russian president warned that the two sides are "balancing on the verge of a large-scale conflict," adding that any efforts to pressure the North to end its nuclear program would prove "futile," and that the only tenable solution to the standoff would be a "dialogue with preconditions."

"It is essential to resolve the region's problems through direct dialogue involving all sides without advancing any preconditions (for such talks)," Putin wrote. "Provocations, pressure, and bellicose and offensive rhetoric is the road to nowhere."

His remarks about a diplomatic solution alluded to a "road map" to peace formulated jointly between Russia and China.... without the U.S.

According to the joint Russian-Chinese deescalation plan, North Korea would stop work on its missile program in exchange for the US and South Korea halting large-scale war games, allowing tensions to gradually subside.

Here's more from AJ:

All Eyes On August Payrolls, As Global Stocks Rise In Bullish September Start; Yuan Surge Continues

With payrolls looming (our full preview is here), carbon-based traders around the globe are leery of putting on any major trades and so the overnight session has been rather dull, dominated by the now traditional overnight algo-mediated levitation, which means the VIX is lower and S&P futures are once again modest higher as European and Asian shares continue their ascent.

"A decent payrolls number today would be the icing on the cake in a week that has seen some positive signs that the U.S. economy may be in better shape than was previously thought prior to Jackson Hole," analyst Michael Hewson at CMC Markets writes in note. "Annual hourly wage growth is currently 2.5%, a little on the weak side for an economy supposedly at full employment, so a strong number here could increase the odds of another rate rise this year, most likely in December."

While we have penned a longer preview of today's jobs report, the only chart that may matter for today's payrolls print, expected at 180K, is the following from Morgan Stanley, which predicted the July print to the dot, and which anticipates a big miss in the August jobs number, at 136K vs the 180K expected (see full preview here).

The Stocks Europe 600 Index is higher for a third day, the Stoxx 600 up 0.4%, starting off September with solid gains - after three months of strong Euro-driven declines - with media companies among the winners after Vivendi SA sales beat estimates. the final Eurozone August manufacturing PM ...

Sell the Swiss Franc if You Think the World Is a Better Place

The Swiss franc has been slow to react to the brighter picture for the eurozone economy.

Meg Whitman Has a Different Mess to Clean Up

Hewlett Packard Enterprise faces many challenges, including earnings next week and the question of why its CEO was looking elsewhere.

Airbus on the Runway, Ready for Take Off

Airplane makers often stumble, but eventually get it right. Waiting for Airbus's problems to be fixed will be too late for shareholders to enjoy the flight.

Tesla slapped with unfair labor practices complaint by NLRB

The National Labor Relations Board on Thursday filed a complaint against Tesla Inc., and said it is investigating the electric-car company for allegedly intimidating and harassing union organizers.

Everything new on Netflix in September, and what's leaving

Netflix Inc. has been clear about the importance of content, and especially original content on the platform, and every month a new batch of TV shows and films arrives on the streaming platform.

Market Extra: Dow faces an important change to how it's calculated

The owner of the 121-year-old Dow Jones Industrial Average is set to tweak an important component of the blue-chip gauge on Friday: its divisor.

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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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