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02Feb2018 Pre-Market Commentary: Wall Street Set To Open Lower, But Strong Jobs Report May Offset Earlier Losses, Bitcoin Price Drops Below $8,000 For First Time Since Nov 24

Written by Gary

US stock index futures were sharply lower this morning (SPY -0.4%), with DOW futures dropping more than 250 points. WTI crude in the 65 handle, US dollar sharply higher and the gold index slips after strong jobs report.


Here is the current market situation from CNN Money

European markets are broadly lower today with shares in Germany off the most. The DAX is down 1.33% while France's CAC 40 is off 1.10% and London's FTSE 100 is lower by 0.32%.

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.

Futures add to losses after strong jobs data

(Reuters) - U.S. stock index futures added to losses on Friday after data showed job growth surged in January and wages increased further, bolstering expectations that inflation will push higher and pushing up bond yields further.

Exclusive: Dell, VMware decide to explore options including merger - sources

(Reuters) - U.S. computer maker Dell Technologies Inc and business software provider VMware Inc have decided to explore options that could include a potential merger of the two companies, people familiar with the matter said on Thursday.

Breaking News, Murdoch edging towards solution to bring Sky in house

LONDON (Reuters) - Rupert Murdoch's Fox is hoping the creation of an independent editorial board to protect the news channel at bid target Sky will satisfy regulators and allow it to finally take control of the European pay-TV group.

Exxon fourth-quarter profit spikes; sees $5.9 billion tax gain

HOUSTON (Reuters) - Exxon Mobil Corp, the world's largest publicly-traded oil producer, said on Friday its quarterly profit jumped more than four-fold on rising oil prices and cost cuts.

Texas shale challenges North Sea crude as world oil benchmark

NEW YORK (Reuters) - Surging shale oil production in Texas and North Dakota is being felt on trading desks in Chicago, Houston and New York, where a brisk business in West Texas Intermediate crude futures is far outpacing contracts for London-based Brent crude.

Bitcoin set for worst week since 2013 as crypto sell-off intensifies

LONDON (Reuters) - Cryptocurrencies plunged on Friday, with several of the largest falling by more than 20 percent and bitcoin sliding below $8,000 and headed for its worst week since 2013, as worries about a regulatory clampdown globally sent investors scrambling to sell.

On Super Bowl Sunday, beer and pizza mainstays face challenges

SAN FRANCISCO (Reuters) - When Americans snack on pizza, beer and guacamole this Sunday as they watch the Philadelphia Eagles square off against the New England Patriots, the Super Bowl will not be the only contest going on in their living rooms.

Sony CEO Hirai to step down, turnaround ally Yoshida to take helm

TOKYO (Reuters) - Japan's Sony Corp said CEO Kazuo Hirai would be handing over the reins to finance chief Kenichiro Yoshida, while it also hiked its annual profit forecast further to a record that highlights the revival in fortune they have both engineered.

Exclusive: How Tesla's first truck charging stations will be built

SEATTLE (Reuters) - Elon Musk, the chief executive of Tesla Inc, has said little about how he plans to turn his prototype electric truck into reality.

Payrolls Jump 200K, Beating Expectations As Earnings Soar Most Since 2009

While Wall Street did expect a whisper number above the consensus forecast of 180K, the big question for today's payrolls report was what would average hourly earnings - that critical leading indicator for inflation - do. Well, according to the BLS, while January payrolls did indeed beat, rising by 200K, above consensus...

... it was the average hourly earnings that slammed expectations, rising by 2.9% Y/Y (and up 0.3% M/M, exp. 0.2%) well above the 2.6% expected, and the highest print since Jun 2009.

The unemployment rate, meanwhile, kept constant at 4.1%, as expected.

Bitcoin Bounces Hard But Cryptocarnage Remains

Update 0815ET: Just as we saw at yesterday's US stock market close, dip-buyers just stepped in to Bitcoin in a significant way, lifting the crypto currency over $1000 off the lows and back above $8000...

But the carnage remains... for now...

Notably, another exchange - BitMEX is down...

* * *

It seemed like just yesterday that every cryptocurrency bloodbath would be promptly bought, often sending the price of bitcoin and its peers to new record highs. Those days appear to be over, at least for now.

So far this year, cryptocurrencies have been beset with bad news: Bitfinex, by some accounts the world's largest exchange, was recently subpoenaed by the CFTC, along with Tether, a separate corporate entity that involves many of the same people from Bitfinex, ...

"'Release The Memo' Is A Political Stunt, But I Want It Out Anyway..."

Authored by Mike Krieger via Liberty Blitzkrieg blog,

Before I get started, I want to put my cards on the table. I don't trust Republicans like Devin Nunes for a moment. He doesn't care about the civil liberties of Americans, and it's become clear to me the whole "release the memo" thing is largely a political stunt. I'm not claiming there isn't anything important in there, but rather that they don't have the best interests of the U.S. citizenry in mind. Nevertheless, I'm very much in favor of it being released for a variety of reasons.

First, I want to offer a little advice. It's always tempting to immediately take a side on whatever issue happens to be dominating the news cycle at any given moment, but this is typically a poor decision. One thing I've learned over the years is you should always wait at least a few days before coming to any sort of conclusion on most big stories being aggressively hyped by partisan pundits in the media.

From my seat, both Republicans and Democrats in Congress are being dishonest about the memo, which makes perfect sense because the vast majority of politicians in Washington D.C. are corrupt liars who pretend to hate each other while consistently passing bipartisan legislation to abuse the American public. If that's not obvious to you by now, I don't know what it'll take.

Devin Nunes and other Republicans in the House of Representatives have been attemptin ...

BofA: "Our Sell Signal Was Triggered On Jan 30, S&P 2686 Is Next"

Last Friday, when the S&P hit an all time high and inexplicably melted up in the last hour of trading in a burst of frenzied buying, we warned that according to Bank of America, "Biggest Sell Signal In 5 Years Was Just Triggered." Incidentally, on that very day, the S&P 500 bull market became the second largest of all time last Friday, as the global equity market cap of $86.6TN rose $57.9TN from 2009 lows and $29.9TN from 2016 lows, according to BofA.

In retrospect, following what is shaping up as the worst week for stocks since 2016, Bank of America was right.

Now, in a follow up, Bank of America's chief investment strategist Michael Hartnett confirms in his latest Flows Show that the bank's indicator of market sentiment officially hit a "sell" signal on January 30, pointing to a downturn for risk assets.

Specifically, the bank's "Bull & Bear" indicator of market sentiment jumped from 7.9 to 8.6 on Jan 30, driven up by record inflows to equities and strong hedge fund risk appetite.

Why is this relevant? Because as we noted last week, the indicator has accurately predicted 11 out of 11 corrections since 2002, with a 12% average decline ...

No Bill Yet for Facebook's Fixes

The social network's changes slow user growth but financials stay strong.

5G Coming Sooner, But Who Will Reap Benefits?

Silicon Valley companies have reaped most of the benefits of the smartphone revolution, leaving network builders and operators running to stand still. It seems unfair, but the 5G era might not be any different.

How Alibaba Built Its Way to Record Sales

China's e-commerce giant Alibaba delivered another record quarter, though investors should worry about how it got there.

Rail Week Ending 27 January 2018: Finally A Good Week

Week 4 of 2018 shows same week total rail traffic (from same week one year ago) improved according to the Association of American Railroads (AAR) traffic data. The rolling averages for the economically intuitive sectors remain in contraction.

Infographic Of The Day: Smoke Without Fire

The success of the vaping market. E-cigarettes, also known as vaping is a growing market with the number of consumers increasing from 2.8 million in 2013 to 6.1 million in 2016.

Economic Report: U.S. adds 200,000 jobs with wage growth fastest in more than 8 years

The U.S. created 200,000 new jobs in the first month of 2018 and worker pay rose at the fastest yearly pace since 2009, showing that companies are still hungry to hire more than eight years after an economic expansion began.

Market Snapshot: Dow set to lose grip above 26,000 with a 200-point fall ahead of jobs report

Dow Jones Industrial Average futures trade more than 200 points lower on Friday, as global government bond yields extend a recent ascent, with investors bracing for an important U.S. jobs update.

Futures Movers: Oil market pauses advance as U.S. output crosses milestone

Oil prices were lower Friday, as the market weighed rising U.S. crude output against more bullish factors such as increased compliance with OPEC-led production curbs.

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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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