14Oct2016 Pre-Market Commentary: Wall Street Higher, Nary A Bear In Sight, Bank Earnings Up, Gold Digging A Grave For Itself And The US Dollar Is Very Volatile

Here is the current market situation from CNN Money

European markets are broadly higher today with shares in France leading the region. The CAC 40 is up 1.78% while Germany’s DAX is up 1.54% and London’s FTSE 100 is up 0.81%.

China inflation relief sends global stocks, dollar higher

LONDON (Reuters) – Global stocks and the dollar edged up on Friday, erasing some losses from the previous day, as stronger-than-expected Chinese inflation data eased some concerns about the health of the world’s second-biggest economy.

Exclusive: Carmakers forced back to bigger engines in new emissions era

PARIS (Reuters) – Tougher European car emissions tests being introduced in the wake of the Volkswagen scandal are about to bring surprising consequences: bigger engines.

Stock futures rise on strong China data, JPMorgan results

(Reuters) – U.S. stock index futures rose on Friday, a day after dropping to one-month lows, as JPMorgan’s upbeat quarterly report kicked off the big U.S. banks’ earnings on an optimistic note and strong Chinese inflation boosted sentiment.

Looming digital regulation has U.S. truck industry scrambling

GREEN BAY, Wisc. (Reuters) – A new regulation that will force U.S. trucking companies to electronically log employee hours is designed to limit accidents by keeping tired drivers off the road.

Samsung flags $5.3 billion profit hit from Note 7 failure

SEOUL (Reuters) – Samsung Electronics Co Ltd on Friday said it expected to take a hit to its operating profit of about $3 billion over the next two quarters due to the discontinuation of its fire-prone Galaxy Note 7 smartphone.

Citigroup quarterly profit falls 7.8 percent

(Reuters) – Citigroup Inc , the fourth-biggest U.S. bank by assets, reported a 7.8 percent fall in quarterly profit on Friday, hurt by lower revenue from equity trading.

Wells Fargo’s quarterly profit falls 3.7 percent

(Reuters) – Wells Fargo & Co reported its fourth straight fall in quarterly profit as it set aside funds for potential legal costs amid an increasingly politicized bogus-account scandal that cost Chief Executive and Chairman John Stumpf his job.

JPMorgan beats third quarter forecast as trading roars back to life

(Reuters) – JPMorgan Chase & Co beat forecasts for revenues and profits on Friday as global bond and currency markets roared back to life in the third quarter following Britain’s vote to leave the European Union.

Accused UK ‘flash crash’ trader to be extradited to U.S.

LONDON (Reuters) – A London-based trader accused of contributing to the 2010 Wall Street “flash crash” by placing bogus orders to spoof the market lost a legal appeal against extradition at the High Court in London on Friday and will now be sent for trial to the United States.

All Kinds Of Stock Market Irregularities

Submitted by Jeffrey Snider via Alhambra Investment Partners,

A great many asset classes have been moving almost perfectly sideways for months now. That is unusual by any standard, but more so given the circumstances of late 2016. This might be indicative of doubts, some of which are being reinforced by weakness that might be characterized as “unexpected” but really no longer is.

Yesterday’s data on Chinese exports is a good example. To hear economists tell it, the weak start to this year as leftover from last year was a close call but one that is now just history. This is the view that predominates of wishful thinking on the FOMC. And, at times, it did seem as if this was a realistic scenario; Chinese trade including imports did appear to be improving if only as less negative. But as optimism builds for that scenario it is regularly interrupted by its opposite; September exports fell very sharply, casting serious doubts as to what the real trajectory might be. Is it actual growth just delayed, or more of the same stagnation and worse?

Translating that into asset markets, especially stocks, it has resulted in what can only be described as indecision. In the past two weeks, however, the hesitancy has manifested in a highly unusual trading pattern. For the second week in a row, the S&P 500 just underwent another “inside week.” That is a technical term for where the index fails to match the prior week’s range at either the top or the bottom. The market trades the whole week “inside” the prior week’s range.

Deutsche Bank To Fire Another 10,000 Bankers, Bringing Total Layoffs To 20% Of Workforce

The hits for Deutsche Bank just keep on coming. One day after a report that the German lender has imposed a hiring freeze in the latest bid to reassure investors that it has expenses under control and is stemming the outflow of cash, moments ago Reuters reported that Deutsche Bank’s finance chief told his staff that job cuts at the bank could be double that planned, a step that could remove 10,000 further employees.

Such cuts would likely take many years but setting such a goal could reassure investors that the bank is determined to tackle costs that sources said the European Central Bank sees as bloated. Unless, of course, they are forced to cut much faster. If 10,000 job losses were ultimately to follow the 9,000 announced by management in October 2015, roughly one in five of the bank’s workforce around the globe would be affected.

“Schenck said that the bank would need to cut another 10,000 staff to bring down costs,” said a person who attended the meeting with the chief financial officer cited by Reuters. Although no such decision has yet been taken, Marcus Schenck’s remarks, at an internal meeting, signal the lender is considering further significant cost cuts, as it faces a multi-billion-euro fine and a crisis of confidence among investors.

The discussion about further job cuts comes as Deutsche’s chief executive, John Cryan, reassesses a year-old strategy to revive the flagging group, as ebbing market confidence sends its stock price tumbling and prompts some customers to withdraw funds.. A second person familiar with these discussions said the …

“Gold Is A Great Hedge Against Politicians” – Goldman

“Gold Is A Great Hedge Against Politicians” – Goldman Sachs

Gold has risen another 1.7% in British pound terms this week and is 1.8% higher in euro terms and is again acting as a hedge against currency devaluations, Brexit, eurozone and heightened political and geo-political risk in the UK, EU, U.S. and most of the world.

Gold is marginally higher in dollar terms this week after surging on the open in Asia on Sunday night. Gold quickly rose 1% from $1,251/oz to $1,264/oz as China and the Shanghai Gold Exchange (SGE) began trading again after being closed for the Chinese Golden Week.

Since then gold prices moved lower despite the return of the world’s largest gold buyer – India – as seen in the return of gold premiums in the Indian gold market. Gold in dollar terms is now marginally higher for the week.

Goldman Sachs has long been the most vocal, prominent and widely q …

Frontrunning: October 14

China inflation relief sends stocks, dollar higher (Reuters)

China producer prices rise for first time in nearly five years, may ease debt woes (Reuters)

Oil rises further above $52 on tighter U.S. fuel stocks (Reuters)

Oil From $50 Billion Kashagan Field Starts Flowing to Export (BBG)

HP Plans Up to 4,000 Job Cuts Over Three Years (BBG)

New Rules Make It Harder for Companies to Manage Their Cash (WSJ)

The Sept. 11 Lawsuit Bill Is Weaker Than It Appears (BBG)

The U.S. Election Is Driving Americans Nuts (BBG)

Republicans weigh response with eye toward future (Reuters)

Hershey CEO Bilbrey prepares to step down (Reuters)

More Than 1 Million in Obamacare to Lose Plans as Insurers Quit (BBG)

Saudi Arabia, SoftBank aim to be world’s No. 1 tech inv …

SoftBank’s Elephant Gun Packs a Scare

SoftBank may need to shed more assets to fill an audacious new $100 billion technology investment fund.

China’s Ballooning Mortgage Debt Built on Shaky Foundation

The absolute level of China’s mortgage debt may not matter as much as the pace of increase.

Volkswagen’s Chinese Medicine Is About to Wear Off

Roaring sales in China pushed Volkswagen’s year-to-date growth figures into the black, but growth has probably peaked.

Economic Report: U.S. retail sales snap back in September

Sales at U.S. retail stores rebounded in September, with auto dealers and gas stations racking up the biggest gains, in a sign consumers are still spending fast enough to keep the economy on solid ground.

Market Extra: Another stock-market party wrecker? Shrinking profit margins

Wall Street bulls are hoping that an end to an earnings recession and a double-digit growth outlook for next year jolts the range-bound market higher, but declining profit margins may put a damper on those hopes

Economic Report: U.S. producer prices climb 0.3% in September

U.S. producer prices rose again in September as inflation at the wholesale level keeps creeping higher.