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04Sep2017 Pre-Market Commentary: Wall Street Closed For Labor Day Holiday, Stock Markets Across Asia Ended Lower, With Indexes In Tokyo And Seoul Falling Sharply

Written by Gary

US stock futures dipped 0.4%, though Wall Street will be closed for the Labor Day holiday. Global stock markets slumped in risk-off trade, after North Korea conducted its sixth and most powerful nuclear test to date on Sunday.


Here is the current market situation from CNN Money

European markets are lower today with shares in France off the most. The CAC 40 is down 0.33% while London's FTSE 100 is off 0.30% and Germany's DAX is lower by 0.08%.

What Is Moving the Markets

Here are the headlines moving the markets.

Stocks dip, yen gains after North Korea test

LONDON (Reuters) - Stocks and the dollar fell on Monday while the yen, gold and sovereign bonds rose after North Korea's most powerful nuclear test to date dampened investor appetite for risk.

U.S. gasoline prices tumble as Harvey subsides

LONDON (Reuters) - Benchmark U.S. gasoline prices slumped on Monday to pre-Hurricane Harvey levels as oil refineries and pipelines in the U.S. Gulf Coast slowly resumed activity, easing supply concerns.

Sharp differences over labor surface at NAFTA talks in Mexico

MEXICO CITY (Reuters) - Tensions over sharp differences in pay between Mexican workers and their Canadian and U.S. counterparts surfaced on Sunday as negotiators discussed labor market rules in talks to overhaul the North American Free Trade Agreement.

Novartis's Jimenez stepping down, Narasimhan named new CEO

ZURICH (Reuters) - Novartis Chief Executive Joseph Jimenez will retire in 2018, with chief drug developer Vasant Narasimhan taking over as CEO starting in February, the Swiss drugmaker said on Monday.

South Korean court rejects Qualcomm's request to suspend antitrust body's order

SEOUL (Reuters) - A South Korean court on Monday rejected Qualcomm Inc's request to suspend an order by the country's antitrust agency to take corrective action on the way it licenses patents.

McDonald's workers stage company's first strike in Britain

LONDON (Reuters) - Workers at two McDonald's restaurants staged the first strike to hit the company in Britain in a protest over pay and other issues on Monday.

Most Clariant shareholders support merger says Huntsman

ZURICH (Reuters) - The vast majority of Clariant's shareholders support the Swiss chemical maker's planned $20 billion merger with American peer Huntsman , Huntsman's Chief Executive told Swiss newspaper NZZ am Sonntag.

How fair is our food? Big companies take reins on sourcing schemes

LONDON (Reuters) - From cocoa to tea, food and drink giants are setting their own standards for ethical sourcing of raw materials, moving away from third-party labels such as Fairtrade.

Daimler to launch Via ride-hailing in Europe

FRANKFURT (Reuters) - Daimler is investing 50 million euros (£46 million) in a new joint venture with U.S.-based ride-hailing start-up Via to offer on-demand shared shuttle services in European cities starting with London this year.

Ethereum, Bitcoin Crash After China Declares Initial Coin Offerings Illegal

Ethereum and bitcoin are crashing this morning, after China confirmed its recent threat of an ICO crackdown (reported here last Monday) when the central bank said on Monday that initial coin offerings are illegal and disrupt financial markets, according to statement on China's central bank website. The PBOC also asked all related fundraising activity to be halted immediately, issuing the strongest regulatory challenge so far to the burgeoning market for digital token sales.

The crackdown was announced in a statement on the PBOC's website in which the central bank said that it had completed investigations into ICOs, and will strictly punish offerings in the future while penalizing legal violations in ones already completed. The regulator said that organizations or individuals that completed initial coin offerings should return the money raised, in move "to protect investors' rights and properly handle risks," though it didn't specify how the money would be paid back to investors.

Taking the recent SEC crackdown on Initial Coin Offerings several steps further, the PBOC also said digital token financing and trading platforms are prohibited from doing conversions of coins with fiat currencies. Digital tokens can't be used as currency on the market and banks are forbidden from offering services to initial coin offerings, and are also also banned from offering pricing and information services on coins. Most importantly was the PBOC's determination that "digital token can't be used as currency on the market" and its warning that "China will strictly punish over sustained offerings and law violations in completed ones."

The central bank's Monday directive made no men ...

"Is This Time Different?": Global Risk Pares Losses Despite Report Of Imminent N.Korea ICBM Launch

Having started off with a sharp gap lower following Sunday's news of the latest, 6th nuclear test by North Korea, global stocks and US futures pared losses in the overnight session, despite reports of North Korean preparations for yet another missile launch, while the yen trimmed its risk-off gains even as gold kept its upside and the South Korean Kospi closing 1.2% lower, with traders asking whether "this time will be different:, or inversely, will today's market reaction will be a carbon copy of what happened last Monday, when stocks gapped sharply lower on North Korea missile launch fears, only to surge 1% by the end of the week, as shown in the chart below.

Still, concern that U.S. President Donald Trump has few viable options to rein in North Korea has disrupted a three-week-long rally in emerging markets, sending stocks to the biggest loss since Aug. 11: The MSCI index of world stocks dropped 0.7%, led by consumer-discretionary and industrial-goods sectors, as the relative strength index, a measure of momentum, fell to 60 from 68 on Friday.

The South Korean Kospi extended declined at the close, down 1.2% after Yonhap reported South Korea had detected North Korea's preparation for an ICBM missile launch. The index fell as much as 1.7% at the open Monday before paring back some of its decline to a 0.9% drop; volatility among South Korean stocks surged as much as +15%, although absent further escalation, that spike will likely be faded in the coming days.

Europe's Stoxx Europe 600 Index declined, with all industry sectors in the red ...

North Korea Making Preparations For Another ICBM Launch, South Says

Barely had the market digested news of the latest, 6th - and this time allegedly thermonuclear - test by North Korea (with the South Korean Kospi cutting initial losses of as much as 1.6% in half on yet another BTFNWD ramp), when Yonhap reported that South Korea's spy agency said it had detected that North Korea is making preparations for a possible intercontinental ballistic missile launch, a move that would further raise tensions a day after it conducted its sixth and most powerful nuclear detonation.

Chang Kyung-soo, acting chief of the defense ministry's policy planning office, told lawmakers on Monday that North Korea was making preparations for a missile firing, according to Bloomberg while Yonhap adds that South Korea's spy agency said there was a chance the North could fire an ICBM into the Pacific Ocean, saying that the isolated state was able to conduct a nuclear test at any time. Gen. Jang didn't say what the signs of activity were, nor did he give a time frame for a possible launch. But many experts have been preparing for a weapons test around Sept. 9, when North Korea marks the anniversary of its foundation in 1948.

His assessment was echoed by South Korean intelligence officers, who said North Korea could test launch another ICBM toward the northern Pacific Ocean or a submarine-launched ballistic missile, according to lawmakers who attended a closed-door legislative meeting on Monday. The intelligence officers also said North Korea could conduct further nuclear tests at any time, based on construction work on two tunnels at its test site that appear to be near completion, these lawmakers said.

The National Intelligence Service (NIS) told lawmakers in a closed session that Py ...

A "Super-Powerful" EMP Attack: North Korea's Newest Weapon Against The U.S.

The dynamics of the standoff between the US and North Korea have shifted dramatically in the past week.

First, the North started with an unexpectedly sharp provocation - launching a missile over the Japanese island of Hokkaido - before following that up with its sixth nuclear test. Also, judging by the size the earthquake detected in the country's mountainous North on Sunday morning, North Korea may have been telling the truth when it said it conducted what it described as its first hydrogen bomb test.

And while the North bragged about the weapon's "great destructive power" in a TV broadcast, what caught analysts' attention was a mention of a different tactic: detonating an H-bomb at high altitude to create an electromagnetic pulse that could knock out parts of the US electrical grid.

Here's WSJ:

"North Korea's threats against the U.S. now include a tactic long discussed by some experts: an electromagnetic pulse, or EMP, triggered by a nuclear weapon that would aim to shut down the U.S. electricity grid.

North Korea's state news agency made a rare reference to the tactic in a Sunday morning release in which the country said it was able to load a hydrogen bomb onto a long-range missile. The bomb, North Korea said, 'is a multifunctional thermonuclear nuke with great destructive power which can be detonated even ...

A Jobs Pause That Refreshes

If payroll growth is indeed cooling, then the Federal Reserve can focus on hard data without worrying about labor market slack and could well be on hold for the rest of 2017.

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.

Wait Before Investing in Music Industry's Recovery

Upbeat results from the world's largest music company aren't enough to make parent company Vivendi an appealing investment.

London Markets: FTSE 100 falls after Pyongyang again tests its nuclear capabilities

U.K. stocks slipped Monday, falling alongside markets throughout Europe and Asia after North Korea conducted another test of its nuclear capabilities.

Market Extra: How North Korea's nuclear test is rattling markets — in 5 charts

Financial markets kick off another week in a cautious mood on Monday, after North Korea claimed it had successfully tested a nuclear bomb and was said to prepare the possible launch of a long-range ballistic missile.

Market Snapshot: U.S. stock futures drop after North Korea test, as traders take Labor Day break

U.S. stock-index futures fall Monday, with analysts blaming the drop on renewed worries about North Korea after the isolated nation conducted its largest-ever nuclear test.

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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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