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30Oct2017 Pre-Market Commentary: Wall Street Futures Slightly Lower As Fed Chair Decision Looms, WTI Crude Trades In The 45 Handle, US Dollar Slips As The Gold Index Rises

Written by Gary

US stock market index futures pointed to a lower opening this morning (SPY -0.2%) as investors are holding back from making big bets ahead of a decision on the next Federal Reserve head.


Here is the current market situation from CNN Money

European markets are mixed. The DAX is higher by 0.16%, while London's FTSE 100 is off 0.26%. Shares in France are unchanged with the CAC 40 at 5,493.93.

What Is Moving the Markets

Here are the headlines moving the markets.

U.S. consumer spending posts largest gain since 2009

WASHINGTON (Reuters) - U.S. consumer spending recorded its biggest increase in more than eight years in September, likely as households in Texas and Florida replaced flood-damaged motor vehicles, but underlying inflation remained muted.

World stocks hit new high as Spain relief, tech rally boost European trading

LONDON (Reuters) - A strong rally in the technology sector helped drive global stocks to a record high on Monday, while a recovery in Spanish markets helped to lift European shares after an opinion poll smoothed investors' concerns over Catalan secession.

U.S. regulator wants to loosen leash on Wells Fargo: sources

WASHINGTON (Reuters) - A leading U.S. regulator wants to make it easier for Wells Fargo to pay employees when they leave, loosening a restriction in place since a phony accounts scandal hit the bank last year, according to people familiar with the matter.

New Akzo Nobel boss pursues $30 billion deal with Axalta

AMSTERDAM/FRANKFURT (Reuters) - Dutch paints maker Akzo Nobel, seeking to recover after rejecting a takeover offer and issuing two profit warnings, is discussing a merger with smaller U.S. rival Axalta Coating Systems Ltd to create a $30 billion company.

U.S. oil exports boom, putting infrastructure to the test

NEW YORK/HOUSTON (Reuters) - Tankers carrying record levels of crude are leaving in droves from Texas and Louisiana ports, and more growth in the fledgling U.S. oil export market may before long test the limits of infrastructure like pipelines, dock space and ship traffic.

Futures slightly lower as Fed chair decision looms

(Reuters) - U.S. stock index futures pointed to a lower opening for Wall Street on Monday as investors held back from making big bets ahead of a decision on the next Federal Reserve head.

Scandal-hit Kobe Steel seeks loans, shareholder offers support

TOKYO (Reuters) - Kobe Steel Ltd is seeking 50 billion yen ($440 million) in loans from banks, a banking source said on Monday, while a shareholder said it was ready to offer support as the company grapples with a scandal over falsified product specifications.

Two banks drop McKinsey in fallout from South Africa scandal

JOHANNESBURG (Reuters) - Barclays Africa and Standard Bank said on Monday they would stop working with McKinsey, a further blow to the global consultancy as it faces allegations of bribery for work done with friends of South African President Jacob Zuma.

Activist White Tale demands Clariant board seats, review

ZURICH (Reuters) - White Tale Holdings, the activist investor that thwarted a $20 billion merger between Clariant and U.S. rival Huntsman, on Monday demanded three seats on the Swiss chemical maker's board and an independent strategic review of the business.

Trump To Make Fed Chair Announcement On Thursday: Politico

Far more important than any corporate earnings or central bank announcements this week, will be Trump's widely telegraphed and trial ballooned choice who will replace Janet Yellen, and as Politico writes, that announcement is likely to come on Thursday. As Politico reports, citing sources, "look for an announcement on Thursday, though plans are not totally set yet." The reports adds that Jerome Powell is still the most likely pick, but Trump could surprise, Politico says and adds that if Trump changes his mind, "Kevin Warsh is more likely than John Taylor."

More details on Warsh's unexpected rise in the ranks:

The reason for this is that senior administration officials argued (evidently successfully) to Trump that while Taylor is a rock star economist and monetary policy expert, he might not be the steady hand you'd want at the helm during a potential crisis. Powell may not be the world's most exiting chair but he is viewed as the safest pick outside of Janet Yellen. That's where Warsh comes in.

If Trump decides at the last second that he wants a splashier pick that would satisfy more conservatives, Warsh could be the guy. And he worked at the Fed during the financial crisis, so presumably could be counted on if for whatever reason we hit the skids hard again.

Still, as of this writing, Powell remains the very likely pick. He wouldn't be able to take part in any announcement early in the week, given the FOMC meets Tuesday and Wednesday. That would push the announcement to Thursday.

Meanwhile, over the weekend, the NYT reported tha ...

Can The Cautious Capitalist Invest in Cryptocurrency?

The currency market is hot and many investors are attracted, but "What we're looking at is a new technology that people are still trying to understand," says Mathew Gertler of Digital Asset Research and compares it to the Internet in 1994. Warren Buffet has been quoted as saying. "Never invest in a business you cannot understand." Joe Kinahan of TD Ameritrade illustrates the bitcoin transaction problem: "Say you agree to buy a car [in bitcoin] and the price on Saturday is $32,000 and because of a bitcoin move, on Monday it's $41,000—people just can't live their lives like that."

Opening the bitcoin market to average investors is a problem of securitization. Goldman Sachs is considering bitcoin operations. J. P. Morgan is working on its own block-chain technology even though its chairman

Paul Manafort Told To Surrender To FBI On Charges Including Tax Fraud

Update: Manafort has been hit with several charges, including tax fraud, WSJ reported. He's expected in federal court in Washington later Monday, a person familiar with the matter said.

* * *

Update: CBS News confirms a photojournalist has captured images of Manafort leaving his home this morning with his lawyer.

* * *

Surprise, surprise. The New York Times is reporting that the first indictment in Special Counsel Robert Mueller's probe into possible collusion between the Trump campaign and Russia has been unsealed.

And the target is none other than Paul Manafort, who briefly served as chief executive of the Trump campaign last summer before reports about his work for Ukraine's former leader Viktor Yanukovich forced him out. Manafort has reportedly been asked to surrender by the FBI, sparing him an embarassing perp walk.

Manafort's former deputy Rick Gates has also been asked to surrender.

The charges against the pair weren't immediately clear. But they do represent an escalation in the probe that has loomed over President Trump's first year in office.

Gates is a longtime protege and junior partner at Manafort's firm. His involvment in the probe was revealed in the spring. His name appeared in docume ...

White House Braces For First Arrest In Mueller Probe

After more than 14 months, it's possible the first arrests in the FBI's long-running probe into possible collusion between the Trump campaign and Russia - launched in July 2016 by then-FBI Director James Comey before being handed off to Special Counsel Robert Mueller in May - could happen as soon as this morning.

Multiple reports over the weekend - beginning Friday evening with CNN - said at least one person's been charged and could be arrested as early as Monday morning. It wasn't clear who the first target will be, what the charges are, and what happens next in the Mueller investigation, and some have speculated that a series of tweets from President Trump insisting that the FBI ramp up its investigation into Hillary Clinton could be a sign that the White House has reached the end of its patience with Mueller, and that the special counsel might soon be fired, an act that CNN claims would trigger "a constitutional crisis".

On Sunday, Trump lashed out at the latest CNN leak, slamming the "collusion" narrative which he has dubbed as a witch hunt, and demanding that "something" be done to investigate Clinton's own alleged opposition research which was aided by Russia.

Never seen such Republican ANGER & UNITY as I have concerning the lack of investigation on Clinton made Fake Dossier (now $12,000,000?),....

— Donald J. Trump (@realDonaldTrump) October 29, 2017

Millennials Have Fallen in Love With Gucci, for Now

Classic brands often blame millennials for sales downturns, but the younger generation is giving Gucci a sensational boost. This could assure the luxury goods maker years of growth, or leave it grumbling like everyone else about that fickle group.

Sickly Earnings Season for Drug Stocks

This earnings season has an unhappy one for pharma investors. The NYSE Arca Pharmaceutical Index is down more than 5% over the past three weeks.

The Bond Selloff's Missing Ingredient: Inflation

Better growth and tighter central bank policy are lifting bond yields, but the market lacks a critical factor for lift-off.

Market Snapshot: U.S. stocks set to retreat after earnings-fueled tech surge

U.S. stocks on Monday are poised to open lower after a series of hotter-than-expected quarterly results in the technology sector last week helped to power broad-market gains.

12 things you can learn about investing from Nobel Prize winner Richard Thaler

Tren Griffin notes that the economist is also a skilled professional investor.

: Carbon dioxide levels rose at a record rate last year, UN outfit says

Concentrations of carbon dioxide in the atmosphere jumped at a record rate last year to their highest levels in 800,000 years, according to a United Nations outfit focused on the weather and climate.

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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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