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27Oct2017 Pre-Market Commentary: Wall Street To Open Sharply Higher After Strong Tech Earnings, US Economy Grows 3.0 Percent In Q3 On Inventories, Trade

Written by Gary

US stock market index futures are pointing to a higher opening (SPY +0.4%), perhaps recording new historic highs again. Solid results from tech titans Amazon and Google-parent Alphabet are driving the market futures higher.


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 0.78% while Germany's DAX is up 0.75% and London's FTSE 100 is up 0.15%.

What Is Moving the Markets

Here are the headlines moving the markets.

Dovish ECB, earnings, lift European shares to five-month high

LONDON (Reuters) - European shares hit a five-month high on Friday, underpinned by strong earnings and a sharp drop in the euro a day after the European Central Bank took a cautious route to scaling back stimulus.

Exxon Mobil's profit jumps 50 percent on higher oil, natgas prices

HOUSTON (Reuters) - Exxon Mobil Corp , the world's largest publicly-traded oil producer, said on Friday its quarterly profit jumped 50 percent on higher crude and natural gas prices.

Wall Street loves electric cars, America loves trucks

DETROIT (Reuters) - Wall Street may love the shares of Silicon Valley electric carmaker Tesla Inc , but Americans love big, fuel-thirsty trucks like Ford Motor Co's bestselling F-Series pickups and are paying ever higher prices to buy them.

Activist investors scupper $20 billion Clariant-Huntsman merger

ZURICH (Reuters) - Swiss specialty chemicals maker Clariant and U.S. group Huntsman abandoned their $20 billion merger on Friday, notching a win for activist investors who fought the deal for months on the grounds it would destroy shareholder value.

U.S. economy grows 3.0 percent in third quarter on inventories, trade

WASHINGTON (Reuters) - The U.S. economy unexpectedly maintained a brisk pace of growth in the third quarter as an increase in inventory investment and a smaller trade deficit offset a hurricane-related slowdown in consumer spending and a decline in construction.

Futures jump after strong tech earnings

(Reuters) - Solid results from tech titans Amazon and Google-parent Alphabet were seen driving the U.S. stock index futures higher on Friday.

U.S. probes Ford Fusion cars for potential detached steering wheels

(Reuters) - The U.S. National Highway Traffic Safety Administration said Friday it is opening a preliminary investigation into 841,000 Ford Motor Co cars over concerns steering wheels could detach while driving.

No end in sight for tech giant share gains

(Reuters) - How much bigger can the world's biggest tech companies get?

Self-driving startups race down a narrowing road

DETROIT/SAN FRANCISCO (Reuters) - Lei Xu and Justin Song once worked at electric carmaker Tesla Inc , one of the hottest companies in Silicon Valley. But with interest and investments in autonomous vehicles mounting, they left to pursue what they see as the next big thing.

Contagion Spreads To Europe Amid Spanish Bank Bloodbath As Catalan Readies Independence Declaration

Spanish stocks have given back all of their gains from yesterday's chaotic on-again-off-again headline-hockey surrounding Catalan independence as it appears all but inevitable that the separatists will pull the trigger any minute now.

The contagion has spread to European bank stocks which have tumbled to unchanged on the week...

And Sabadell and Caixa stocks are both slumping...

However, we note that both Spanish and Catalan bond yields are dropping...

And Sabadell and Caixa bonds are rallying...

We can only assume on the back of Draghi's promises yesterday.

Frontrunning: October 27



U.S. Economy Expected to Show Momentum, Despite Storms (WSJ)

As Trump tax comes to floor, failure could spell stocks selloff (Reuters)

Washington's Biggest Mystery: What's in the Republican Tax Plan? (BBG)

Spain set to impose direct rule in Catalonia as crisis spirals (Reuters)

Catalans Send Emissary to Madrid to Plead for a Deal (BBG)

Catalan Leader Runs Out of Options as Streets Demand Secession (BBG)

Trump releases some JFK files, blocks others under pressure (Reuters)

Fed Candidate Taylor Calls for Reforms That Echo Trump Agenda (BBG)

It's Going to Stay a Yellen Fed No Matter Who Gets the Job (BBG)

CVS, Aetna in Talks Over $66 Billion Tie-Up Deal (

Russia Buys 34 Tonnes Of Gold In September

Russia Buys 34 Tonnes Of Gold In September

- Russia adds 1.1 million ounces to reserves in ongoing diversification from USD
- 34 ton addition brings Russia's Central Bank holdings to 1,779t; 6th highest
- Russia's gold reserves are at highest point in Putin's 17-year reign
- Russia's central bank will buy gold for its reserves on the Moscow Exchange
- Russia recognises gold's role as independent currency and safe haven

Editor: Mark O'Byrne

< ...

Tesla Cuts Model 3 Orders From Core Supplier By 40%

Just days after the Shanghai government was stunned to read in the WSJ that it had granted Tesla permission to open a new gigafactory in its free-trade zone (turns out the two are only in the negotiations stage), according to Taiwanese media reports one of Tesla's largest suppliers in the country has been instructed to pare back production on parts for the Tesla Model 3 - the latest sign that the cash-burning Silicon Valley carmaker is going to miss its goal of producing 5,000 cars a week by December.

Hota Industrial Manufacturing Co, a Taiwanese automotive components maker and long-time Tesla supplier, has been told to dial back its production of Model 3 components from 5,000 units per week in December to 3,000 per week - a 40% drop, Taiwan's Economic Daily reports and adds that Hota Chairman Shen Kuo-jung said that the company has received a notice from Tesla to reduce its December order quantity due to production "bottlenecks."

Hota, which has supplied parts for Tesla's Model S and Model X, began supplying components, including gears, for the Model 3 in May of this year. Though December orders have been cut back by 40%, Hota indicates that the company is committed to meeting the needs of Tesla's upcoming production ramp and is scheduled to ship 10,000 parts in May or June, timing that was pushed back from an original March date.

The news follows a handful of embarrassing reports earlier this month, including the revelation that problems with the company's assembly line had forced ...

Asia's Rich Are Helping Swiss Bankers Recover Their Poise

Asian investors, particularly from China, are helping UBS revive from a summer stumble and its shares have further to run.

Chinese Banks' Capital Cushion Isn't So Comfy

Banks have been issuing a huge pile of new debt to shore up their balance sheets, suggesting all is not well beneath the surface.

Trading Places: Why Barclays Is Falling Behind Deutsche Bank and Everyone Else

Barclays is achieving something that long seemed impossible in European banking: it is making Deutsche Bank look good.

FA Center: Why a healthy slice of bonds can be good for you — in any market

A portfolio that allocates 60% to stocks and 40% to bonds has performed almost as well as an all-stock portfolio, with less risk.

The Fed: Economy grows at 3% rate in third quarter, despite negative impact from hurricanes

The economy grew at a 3% annual pace in the third quarter, down only slightly from the 3.1% rate in the prior quarter, the Commerce Department said Friday.

Europe Markets: European stocks extend gains, euro suffers after dovish ECB move

A continued pullback in the euro and some well-received corporate earnings reports helped European stocks bounce higher Friday. German shares were on course to finish the week with a fresh record.

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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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