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06Nov2017 Pre-Market Commentary: Wall Street To Open Lower, SP 500 Futures Flat, Crude Prices Jump, US Dollar Also Higher This Morning While The Gold Index Shows Weakness

Written by Gary

US stock market index futures are pointing towards a negative opening (SPY -0.1%), but new highs are not of the question. WTI crude futures jumped to their highest since 2015, touching $56 a barrel following arrests of royals in a Saudi corruption probe.


Here is the current market situation from CNN Money

European markets are mixed. The FTSE 100 is higher by 0.05%, while the CAC 40 is leading the DAX lower. They are down 0.27% and 0.14% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

Broadcom offers to buy mobile chipmaker Qualcomm for $103 billion

(Reuters) - Communications chipmaker Broadcom Ltd on Monday said it offered to buy smartphone chip supplier Qualcomm Inc for $70 per share or $103 billion in cash and stock, in what would be the biggest technology acquisition ever.

Oil hits two-and-a-half year peak on Saudi purge, world shares retreat

LONDON (Reuters) - Oil jumped to its highest in over two years on Monday as Saudi Arabia's crown prince cemented his power through a crackdown on corruption, while world shares eased a notch and major currencies traded in tight ranges.

Anthem names industry veteran Gail Boudreaux as new CEO

(Reuters) - Anthem Inc on Monday named industry veteran Gail Boudreaux as its new chief executive, replacing Joseph Swedish, who will step down after more than four years at the helm of one of the largest U.S. health insurers.

U.S. truck firms accelerate into the merging lane

The consolidation of the U.S. trucking industry is picking up speed, with big trucking companies and private equity funds scooping up smaller firms as a U.S. regulatory mandate is set to go into effect and as drivers push for higher wages.

Goldman Sachs, China's CIC to launch up to $5 billion fund: sources

HONG KONG (Reuters) - Goldman Sachs is partnering with sovereign fund China Investment Corp (CIC) to jointly launch an up to $5 billion fund to invest in U.S. manufacturers, according to people familiar with the situation.

Rebuffed by American Airlines, Qatar Airways buys into Cathay Pacific

DUBAI/SINGAPORE (Reuters) - Qatar Airways has broadened its global reach by purchasing a 9.61 percent stake in Cathay Pacific , adding another strategic investor to the Hong Kong carrier's complicated share register at a time when it is looking to cut costs.

Need help to buy a ship or jet? Credit Suisse looks to lure super-rich

LONDON/ZURICH (Reuters) - The leap in assets at Credit Suisse's private bank to a record high this year has been aided by a key plank of the bank's new strategy: lending money to the world's ultra-wealthy.

LSE has made strong case for Aramco listing: UK PM's spokesman

LONDON (Reuters) - The London Stock Exchange has made a "very strong case" for oil company Saudi Aramco to lists its shares in Britain, a spokesman for Prime Minister Theresa May said on Monday after President Donald Trump urged the king of Saudi Arabia to list in New York.

Failure of U.S. deal hits Deutsche Telekom shares, growth prospects

FRANKFURT (Reuters) - Deutsche Telekom shares dropped in early Monday trading after the collapse of the merger of its T-Mobile US unit with Sprint Corp, which would have created a strong No.3 player on the U.S. market.

Saudi 'Plunge Protection Team' Rescues Stocks As Riyal Devaluation Bets Surge

As the FX markets came to life last night after a tense weekend in the middle east, it is clear that anxiety about the Saudi Riyal is at the forefront.

Forward bets on devaluation/depegging surged most in 7 months as shares in bin-Talal's Kingdom Holdings continued their slide to the lowest since Dec 2011.

The round-up risks overwhelming local and foreign investors struggling to get their heads around the rapid changes shaking the kingdom, but for the second day in a row, any selling was met by instant panic-buying as we suggest Saudi's very own Plunge Protection Team stepped in...

Frontrunning: November 6



Gunman kills 26 in Texas (Reuters)

Trump Urges Japan to Buy More U.S. Military Equipment (WSJ)

Ex-Catalan leader granted freedom to campaign for independence (Reuters)

House begins revising Republican tax bill to quell dissent (Reuters)

Why the Next Four Days Will Be Crucial for the GOP Tax Bill (BBG)

Broadcom offers to buy mobile chipmaker Qualcomm for $103 billion (Reuters)

Billionaire Olayan Family Said to Put Saudi IPO Plan on Hold (BBG)

How Doctors Are Getting Rich on Urine Tests for Opioid Patients (BBG)

Oil hits two-and-a-half year peak on Saudi purge, world shares retreat (Reuters)

Russia's Sibur, on deals with Navigator, says no sanctions violations found (

Heat Death of the Economic Universe, Report 5 Nov 2017

Physicists say that the universe is expanding. However, they hotly debate (OK, pun intended as a foreshadowing device) if the rate of expansion is sufficient to overcome gravity—called escape velocity. It may seem like an arcane topic, but the consequences are dire either way. If the rate of expansion is too low, then it will get slower and slower until expansion stops entirely, then finally, begin collapsing again in a Big Crunch. That's bad enough. But the other possible fate of the universe is even worse. If the expansion is fast enough, then the universe will keep expanding forever. Things will get colder and colder, until the state called the heat death occurs.

If only economics had similarly vigorous controversies. It faces its own existential problems. For example, there is an analogous concept to heat death in the economics universe. Will credit continue to grow, and with it the economy? Or will some force—or law of economics—prevent slow and stop it?

There is a force that can cause the heat death of the economic universe. It is not the moralizing argument that faults man for the sin of wanting more material comfort, and condemns his desire for growth as hubris.

Everyone needs growth. Even the environmentalists couch their anti-growth policies. They want us to stop using energy, but cannot openly promote energy poverty as an ideal. So they talk in terms of sustainability.

Sustainability is an interest concept. For a process or system to be sustainable, it means that there is no reason why it cannot continue indefinitely (well at least until the sun goes red giant and engulfs the Earth, which may not happen because before that our galaxy is on a collision course with the Andromeda galaxy...)

Well, is our economy and its monetary system sustainable? How do you even approach this question in a rigorous way?

We submit one fact for your consideration. To service debt, you must generat ...

It's Official: NY Fed President Bill Dudley To Retire Mid-2018

Steve Liesman's Saturday night report that NY Fed president, and former Goldman chief economist is retiring, was spot on and moments ago it was confirmed by the Federal Reserve Bank of New York which today announced that "William C. Dudley, president and chief executive officer, intends to retire from his position in mid-2018 to ensure that a successor is in place well before the end of his term. Mr. Dudley's term ends in January of 2019 when he reaches the 10 year policy-limit in the role."

The question now is if, as some have speculated, Dudley will be replaced by Kevin Warsh, a move which may have even greater implications for monetary policy than had John Taylor become Fed chair.

Full statement from the Federal Reserve:

New York Fed President Dudley to Retire

NEW YORK - The Federal Reserve Bank of New York today announced that William C. Dudley, president and chief executive officer, intends to retire from his position in mid-2018 to ensure that a successor is in place well before the end of his term. Mr. Dudley's term ends in January of 2019 when he reaches the 10 year policy-limit in the role.

Mr. Dudley joined the New York Fed in 2007 as executive vice president and head of the Markets Group, where he also managed the System Open Market Account for the Federal Open Market Committee (FOMC). He was named the 10th president and CEO of the New York Fed on January 27, 2009, taking over the remainder of his predecessor's term. Mr. Dudley was appointed for his first full term as president and CEO in 2011 and reappointed in 2016.

First as head of the Markets Group and then as president and CEO of the New York Fed and vice chairman of the FOMC, Mr. Dudley was instrument ...

Saudi Crackdown Doesn't Guarantee Aramco IPO -- Or Higher Oil

Oil markets are rising after the Saudi heir apparent - a big proponent of state oil firm Aramco's planned IPO - rounded up a swathe of potential rivals on Saturday night. Investors should be careful not to interpret this as the all-clear for oil prices or Aramco.

SoftBank's Blurry Vision

The Japanese tech giant's boss Masayoshi Son likes control. The collapse of the Sprint/T-Mobile deal talks suggests that is slipping from his grasp.

Why Companies Are Betting Big on Growth

Investors are rewarding companies that are investing to boost growth, and with ample cash available, the trend of strong business investment should persist.

The vast majority of young Americans favor stricter gun control

Experts say mass shootings have become commonplace for this generation.

Jeff Reeves's Strength in Numbers: 5 stocks that could win big from the GOP tax plan

You know Apple. But what about the others on Jeff Reeve's list?

Outside the Box: That $4,000 pay increase from tax cuts may be conservative

Many unknowns remain, but rigorous studies of tax cuts elsewhere show a lower corporate tax rate boosts income, says Cato visiting fellow Ike Brannon.

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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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