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07Feb2018 Pre-Market Commentary: Wall Street Expecting Another Triple-digit Drop For The Dow, WTI Crude Drops Into The 62 Handle, House Passes Stopgap Spending Bill To Avert Shutdown

Written by Gary

US stock index futures dropped deep into the red again overnight, pulling back from the roller coaster ride yesterday (SPY -0.4%). The stock market's next move? Might as well spin a roulette wheel.


Here is the current market situation from CNN Money

European markets are broadly higher today with shares in London leading the region. The FTSE 100 is up 1.00% while Germany's DAX is up 0.91% and France's CAC 40 is up 0.70%.

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street set to fall again after Tuesday's recovery

(Reuters) - U.S. stock index futures cut their early losses by half but Wall Street was still set to open lower on Wednesday, an almost 2 percent gain in the previous session failing to calm the nerves following the Dow's biggest intraday fall on Monday.

Casino magnate Steve Wynn quits as CEO after sexual misconduct claims

(Reuters) - U.S. casino mogul Steve Wynn has resigned as CEO of his company Wynn Resorts following claims he subjected women who worked for him to unwanted advances, becoming one of the most prominent business leaders to quit over sexual misconduct allegations in recent months.

Kalanick returns to court in Waymo-Uber autonomous car secrets trial

SAN FRANCISCO (Reuters) - Former Uber Chief Executive Officer Travis Kalanick is expected to testify at trial for a second day on Wednesday, responding to rival Waymo's allegations that Uber expressly hired a star Waymo engineer to gain self-driving car technology trade secrets.

Snap surges 24 percent after user growth bounce

(Reuters) - Shares of Snapchat owner Snap Inc rose as much as 24 percent in premarket on Wednesday after the company beat expectations for fourth quarter revenue and reported an acceleration in growth of active users for the first time as a public company.

U.S. solar industry lost nearly 10,000 jobs in 2017

(Reuters) - The U.S. solar industry lost nearly 10,000 jobs last year, led by steep losses in mature markets like California and Massachusetts where installation growth has slowed, according to a new report published on Wednesday.

Tronc to sell Los Angeles Times: source

(Reuters) - Tronc Inc , the owner of the Los Angeles Times, is expected to announce a sale of the newspaper to billionaire biotech investor Patrick Soon-Shiong, a source familiar with the matter said.

Hasbro reports surprise drop in revenue

(Reuters) - Toymaker Hasbro Inc reported a surprise fall in quarterly revenue on Wednesday, hit by a decline in sales of its toys based on the Star Wars franchise in the holiday season.

Goldman in talks with Apple to finance iPhone sales: WSJ

(Reuters) - Goldman Sachs is in talks to offer financing to shoppers buying Apple products including iPhones, the Wall Street Journal reported on Wednesday.

Boeing says key issues remain in Embraer tie-up talks

SINGAPORE (Reuters) - Boeing said on Wednesday key issues remain in talks to forge a partnership with Brazil's Embraer and stressed the price must make sense for all concerned.

Nomura "Sincerely Apologizes" For Blowing Up Investors With Its VIX-Linked ETN

On Monday evening, well before Credit Suisse decided to pull the plug on its now infamous XIV ETN which lost 96% of its value in the blink of an eye after Monday's Volmagedon, resulting in massive losses for ordinary retail investors...

... Nomura became the first bank to announce the early redemption of its VIX-linked ETN, the aptly named "Next Notes S&P500 VIX Short-Term Futures Inverse Daily Excess Return Index ETN", which would be redeemed at a 96% discount, i.e., a complete wipeout for investors.

Then, overnight, realizing it is facing an avalanche of lawsuits even though it explicitly laid out the possibility of the ETN getting "terminated" should VIX explode, Japan's biggest brokerage issued an apology after investors in its $300 million vol-linked ETN were all but wiped out during this week's stock-market turmoil.

In a statement, Nomura said that it has received inquiries from individual investors after its decision to redeem the exchange-traded notes at a 96% discount.

"We sincerely apologize for causing significant difficulties to investors," its Nomura Europe Finance u ...

Blain: "We All Know What Really Caused The VIX Storm"

Submitted by Bill Blain of Mint Partners

Stock Resilience - why, and how to avoid an earful of cider

"People stop buying things, and that is how your turn a slowdown into a recession."

What a difference a day makes...

As suddenly as it came, the mini-crisis VIX-Storm, dissipated. Stock markets demonstrated incredible resilience - so strong some observers wonder if it might have been "enhanced" with a pharmaceutical-like shove from Central Banks (perish the thot!). If you didn't buy yesterday - and that's exactly what we're wondering: who did? - then maybe you missed the buy-the-dip opportunity? Most sensible money was sitting on the sidelines watching. What did fuel yesterday's strength? I guess a lot of hedge fund managers must be high-fiving themselves this morning....

In fact, the day went pretty much as our stock pickers expected - a rally off the low yesterday, but they caution we are likely to re-test a new low in the medium term before any new direction is established. They see buy signals - but suggest stock markets will remain choppy in the meantime, so most folk will be watching and waiting - certainly through this week. This is not over yet.

What about bonds? - the 10-year Treasury back up to 2.77%, but there are sure fire signs its headed higher as the narrative changes back to inflation threats, overheating in the job markets, and normalisation. If the global economy remains on the Global Macro Growth alignment trend - and no real reason to think it isn't - then we're still going to see the bulk of Central Banks tighten this year, and rates rise.

It's the BIG THEME of 2018 - the normalisation trend. We're expecting rates to rise back towards higher "normal" levels - no ...

Wall Street Responds To Steve Wynn's Surprising Resignation

The godfather of gaming is no more: as reported last night, in a (somewhat) surprising development, Steve Wynn, founder and CEO of Wynn Resorts, stepped down amid sex abuse allegations as he found himself "the focus of an avalanche of negative publicity."

And While Steve Wynn's resignation as Chairman and CEO of Wynn Resorts, and his replacement with eases concerns over whether its Macau business can get its gaming license renewal, it does bring up questions over the company's ownership and management stability, Wall Street analysts said.

Below is a sample of analyst reactions to the Wynn news, courtesy of Bloomberg:

BERNSTEIN



Wait for more clarity after the news, especially possible further management change: analysts led by Vitaly Umansky

"Steve Wynn is WYNN (the company). Without him, the Wynn Resorts (and Wynn Macau) is a different operation":

Without Wynn's leadership in the personalities, it's questionable whether the company could keep all key management members

Speculation on whether Wynn Resort could be acquired will grow

MORGAN STANLEY



Who will be the controlling shareholder in future would be key if Steve Wynn decides to sell off his stake in Wynn Resort: analysts led by Praveen Choudhary

Less concerned about Wynn Macau's gaming license renewal

BLOOMBERG INTELLIGENCE



Expects little immediate impact on Wynn's Macau business: Margaret Huang

In Asia, most peoples' perception of Wynn is tied to the upscale property and product, but less to Steve Wynn as a figure

JEFFERIES



Wynn's resignation reduces the risk of getting license in Macau, Boston and Nevada: analysts led by Da ...

Goldman Will Soon Finance Your iPhone Purchase

Two weeks after Goldman reported its worst revenue growth in two years - driven by a 50% plunge in bond trading - the push by the FDIC-backed hedge fund, which has realized that traditional trading just won't cut it any more in a low vol world - into traditional banking and consumer finance reached a new milestone when the WSJ reported that the investment bank, which famously evaded responsibility for its role in disseminating toxic mortgage securities, is in talks to provide financing for iPhone purchases.

This would mean customers purchasing a $1,000 iPhone X could soon take out a loan from Goldman's recently launched consumer loan unit, Marcus, instead of charging it to credit cards that often carry far high interest rates.

And with interest rates climbing and consumer revolving credit - a fancy term for credit-card debt - reaching all time highs, according to the latest data, the competition to offer affordable loans is intensifying.

goldman

While talks between the companies are reportedly still in progress - and the deal could still fall apart - the deal woul ...

Market Plunge Lays Bare the Peril of 'FOMO'

The only thing investors have to fear, Franklin Delano Roosevelt might have said, is the fear of missing out. As investors struggle to grasp the recent sell-off, it is worth taking a look at popular recent advice.

Snapchat's Parent Sharpens Up

Snapchat parent finally pleases investors with accelerating user and revenue growth.

How the Bull Market's Greatest Trade Went Bust

A record increase in volatility blew up a trade that had been among the most lucrative of the entire bull market—betting the market would get calmer and stay calm.

Countries In The IMF Financial Spotlight In 2018

from the International Monetary Fund

The IMF in 2018 will complete ten assessments of countries' financial systems, to identify risks and propose policies to strengthen their financial stability. Three of this year's reviews will be for countries with Systemically Important Financial Systems : Belgium, Brazil and Poland. In addition, IMF experts will assess the euro area's financial stability. Other financial stability assessments will cover Armenia, Jamaica, Namibia, Peru, Romania, and Tanzania.

Investor Bulletin: An Introduction To ABLE Accounts

from the Securities and Exchange Commission

The SEC's Office of Investor Education and Advocacy is issuing this Investor Bulletin to educate investors about ABLE accounts.

Outside the Box: No matter what the stock market does, doing this one thing will improve your life

Bolster your health and your financial prospects.

The stock market's next move? Might as well spin a roulette wheel

The 'smart money' can very easily be wrong.

The Ratings Game: Lululemon CEO's resignation opens the door for former Ralph Lauren CEO Stefan Larsson

Lululemon's CEO departure was unexpected, but there's opportunity for Stefan Larsson, who has held positions at Old Navy and Ralph Lauren, to step in, analysts say.

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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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