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06Oct2017 Pre-Market Commentary: Wall Street To Open Muted, But Is Not Expected To Remain Down, US Stocks Have Broken 20-year Record, Crude Prices Plunge, US Dollar Rises Sharply

Written by Gary

US stock market indexes look to a lower opening this morning (SPY -0.1%) because of a poor jobs report. However, that isn't expected to keep the markets down for long.


Here is the current market situation from CNN Money

European markets are mixed today. The FTSE 100 is up 0.18% while the DAX gains 0.10%. The CAC 40 is off 0.21%.

Looking at the last three columns (below), the first one (Actual), is what was reported this morning. The second column (Forecast) is what analysts had forecast and the third column is the previous report. Full calendar HERE.

What Is Moving the Markets

Here are the headlines moving the markets.

Hurricanes Harvey, Irma expected to dim U.S. jobs growth in short term

WASHINGTON (Reuters) - U.S. job growth probably slowed further in September as Hurricanes Harvey and Irma left displaced workers temporarily unemployed and delayed hiring, the latest indication that the storms undercut economic activity in the third quarter.

Dollar gains as Europe still struggles with Spain pains

LONDON (Reuters) - Record high world stocks fell for the first time in eight days on Friday, as jitters about Catalonia's push to separate from Spain returned to Europe and bets on higher U.S. interest rates sent the dollar to its highest since mid August.

Exclusive: SEC's corporate filing system vulnerable to denial of service attacks - memo

(Reuters) - The U.S. Securities and Exchange Commission (SEC), Wall Street's top regulator, has discovered a vulnerability in its corporate filing database that could cause the system to collapse, according to an internal document seen by Reuters.

Tax-cut plan prompts fund managers to bet on automation

NEW YORK (Reuters) - The Trump administration's plan to cut corporate taxes may add more fuel to the already-hot rally in the shares of automation companies.

Bankrupt U.S. retailers begin to catch a break

(Reuters) - An unexpected helping hand from creditors, landlords and vendors is allowing more U.S. retailers to stay in business following bankruptcy with most of their stores and employees in the fold.

VW brand September sales hit record on strong demand in China, Americas

BERLIN (Reuters) - Volkswagen on Friday reported the highest-ever September sales result for its core namesake brand, with global registrations up 8 percent year-on-year to 593,700 vehicles.

Costco steps up grocery battle with new delivery services

(Reuters) - Costco Wholesale Corp has rolled out two new grocery delivery services this week, a new step in its efforts to fight growing competition from Amazon.com and Wal-Mart Stores Inc .

Summit Materials makes $3.8 billion bid for Ash Grove Cement: source

LONDON (Reuters) - U.S. cement maker Summit Materials has made a $3.8 billion offer for rival Ash Grove Cement , a source familiar with the matter told Reuters, hoping to trump an earlier takeover bid from Irish building materials firm CRH Plc .

Ford delays Fiesta recall in China due to spare part issues: media

BEIJING (Reuters) - Ford Motor Co has postponed a planned recall of its Fiesta ST cars in China, the world's top auto market, due to delays in the delivery of spare parts for repairs, state media Xinhua reported on Friday.

Bill Blain: "Aside From The Jobs Report, What Else Is There To Say This Morning?"

Submitted by Bill Blain of Mint Partners

"You're a cop. I had your job once. I was good at."

Continued Upside! What does it mean? Short term complacency danger, but long term maybe soft bull?

It's Payrolls Day! Clue: monthly payrolls are not a particularly reliable indicator, although the data-set has acquired a quasi-religious sentiment status despite being a unreliable single look-back data point amongst the deluge of information we can plough every day. (In fact, pretty much discount today's payrolls: if they are positive they change nothing, negative and they will be dismissed as "hurricane distorted" - look to the next release in November as more meaningful!)

Aside from the jobs report, I'm wondering what else there is to say this morning?

VIX at yet another record low. S&P sustains a record number of record highs. Market fully prepared and ready for a December hike. Even Spain rose yesterday - boosted by the perception of a Catalan pull-back. My bearish stock picking chum Steve Previs had to reset his shorts because of the market's resilience.. My chums in the financials sector have gone all bullish (again) convinced higher rates are good for banks, "synchronised global growth" means lower NPLs, and now we've got potential Fed Chair candidates actively supporting rolling back regulation. What can possibly good wrong?

Markets feel they are fully invested in the stronger growth and higher stocks arguments. The fact Bond markets are going to take a spanking bothers no one. Yesterday's positive US factory orders fuels the mood. Again.. when everyone thinks alike.. What can possibly go wrong?

I'm told you can't fault the r ...

Tillerson Summoned To White House As Furious Trump Raged Over "Moron" Comment

Barely a week after HHS Secretary Tom Price resigned following reports that he'd spent more than $1 million in taxpayer funds traveling in private jets, speculation that Secretary of State Rex Tillerson's head is next on the chopping block has reached a fever pitch.

After reporting earlier in the week that Tillerson had privately criticized Trump, allegedly calling him a "fucking moron", shortly before the former Exxon CEO was close to submitting his resignation, NBC reported late Thursday that the secretary had been summoned to the White House by Chief of Staff John Kelly for an impromptu meeting to discuss "a path forward."

Kelly summoned Tillerson, and their ally Defense Secretary James Mattis, to the White House, where the three of them huddled to discuss a path forward, according to three administration officials. The White House downplayed Kelly's decision to stay in Washington, saying he did so to manage day-to-day operations.

Needless to say the president was not happy, and as NBC adds, "Trump was furious when he saw the NBC News report, which was published shortly before 6 a.m. Wednesday. For the next two hours the president fumed inside the White House, venting to Kelly, officials said. He left for Las Vegas shortly after 8 a.m., 20 minutes behind schedule."

...

Pound Spikes After May Says She Has "Full Support" Of Her Cabinet

Amid speculation and doubts that UK Prime Minister Theresa May could be forced to resign as soon as Christmas amid a mutiny of Tory MPs following her disastrous conference speech, which resulted in the pound's biggest weekly decline since last October's flash crash, moments ago the UK Press Association reported that Theresa May said she is providing "calm leadership" with the "full support" of her cabinet, which sent the pound surging in kneejerk reaction.

Prime Minister Theresa May says she is providing "calm leadership" and she has the "full support" of her Cabinet

— Sky News Newsdesk (@SkyNewsBreak) October 6, 2017

"What the country needs is calm leadership and that's what I'm providing with the full support of my cabinet," May told Sky News in an interview in her Maidenhead constituency.

Separately, the BBC reports that this morning the UK government has mounted an operation to show that nothing has changed in the Conservative Party in the last few days and that Theresa May's leadership remains on track and that she is, to use another of her famous phrases. just "getting on with the job."

Following the report, cable promptly spiked by as much as 30 pips, briefly regaining 1.31, before resuming a slide lower.

Dollar Surge Continues Ahead Of Jobs Report; Europe Dips As Catalan Fears Return

World stocks eased back from record highs and fell for the first time in eight days, as jitters about Catalonia's independence push returned while bets on higher U.S. interest rates sent the dollar to its highest since mid August; S&P 500 futures were modestly in the red - as they have been every day this week before levitating to record highs - ahead of hurricane-distorted nonfarm payrolls data (full preview here). U.S. jobs report will also be released Friday with a speech on monetary policy by the New York Fed chief.

On Thursday the S&P 500 reached its latest all-time high after better-than-forecast American factory orders and hawkish comments by SF Fed President John Williams reinforced optimism in the world's largest economy, and pushed the dollar higher. Oil fell and the gold price edged higher. The VIX declined to a new record low going back to 1990.

"Uncertainty about whether Catalonian parliament will meet on Monday persists," Commerzbank strategists said in a note.

Friday's other focus for markets will be U.S. jobs data due out at 830am ET. Wall Street consensus is for a 90,000 print down from 156,000 new jobs in August. The number however will be largely distorted by hurricanes, resulting in a drop in jobs offset by a rise in wages. The number will be largely meaningless, because as Bloomberg's David Finnery writes, "any weakness will be attributed to hurricanes, while a beat on payrolls or wages would be seen as supporting a Feder ...

Netflix Needs a Bigger Box Office

The second season of the streaming service's "Stranger Things" launches later this month—conveniently about a week after many of the company's U.S. subscribers will be notified that their prices are going up.

Looking for Bubbles in All the Wrong Places

A key European junk-bond index yields less than 10-year U.S. Treasurys, the global benchmark for risk. It's worth looking a little closer at this apparent through-the-looking-glass moment.

SoftBank's Soft Valuation Is an Opportunity

The market seems to be undervaluing the Japanese tech conglomerate's collection of stakes in tech companies.

Bond Report: Treasury yields higher as investors brace for key jobs data

Treasury prices fell, lifting yields, on Friday but action was mostly muted as investors awaited a key employment report that could extent the previous session's selloff.

Outside the Box: 6 ways to decline your parents' old stuff without causing a family feud

A guide to keeping the peace with your downsizing parents.

This billion-dollar dry eye drug is behind Allergan's controversial patent deal

Allergan struck a deal with an American Indian tribe to help protect its Restasis from competition—but the agreement has attracted criticism and lawmaker scrutiny.

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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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