Written by Gary
Premarkets up fractionally as the oils climb steadily and the U.S. Dollar weakens further. Euro zone economy leading the way as China struggles and the German DAX has only been this extended relative to its 200-day moving-average once in history… March 2000 – and that did not end well.
Hard to believe it but according to the BLS, the Consumer Price Index (CPI-U) year-over-year inflation rate is now zero – and this was despite rising energy prices month-over-month
Here is the current market situation from CNN Money | |
 | European markets are higher today with shares in Germany leading the region. The DAX is up 0.13% while France’s CAC 40 is up 0.11% and London’s FTSE 100 is up 0.05%. |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
 | February 2015 CPI Annual Inflation Rate Shows No Inflation. Do You Believe It?by Doug Short and Steven Hansen According to the BLS, the Consumer Price Index (CPI-U) year-over-year inflation rate is now zero – and this was despite rising energy prices month-over-month. The year-over-year core inflation rate rose from 1.6% to 1.7%, and continues to be well under the targets set by the Federal Reserve. |
| U.S. consumer prices rebound, underlying inflation firming WASHINGTON (Reuters) – U.S. consumer prices rebounded in February as gasoline prices rose for the first time since June, and there were also signs of an uptick in underlying inflation pressures, which could keep a June interest rate increase on the table. |
| Euro zone economy leading the way as China struggles LONDON (Reuters) – Euro zone businesses ramped up activity this month, just as the European Central Bank starts printing money to spur growth and inflation, while a slowdown among Chinese factories has fueled calls for more stimulus there. |
| DAX Is The Most Overbought Since The Peak In 2000Th German DAX stock market index has only been this extended relative to its 200-day moving-average once in history… March 2000 – and that did not end well…
Thank you Mr. Draghi… Chart: Bloomberg |
| Fed’s Bullard says zero U.S. rates no longer appropriate LONDON (Reuters) – Federal Reserve policymaker James Bullard said on Tuesday that zero percent interest rates were no longing appropriate in the United States, and that a rate hike in the summer would still leave policy extremely accommodative. |
| Frontrunning: March 24Germanwings Airbus crashes in France, 148 feared dead (Reuters) Greece promises list of reforms by Monday to unlock cash (Reuters) Merkel Points Tsipras Toward Deal With Greece’s Creditors (BBG) Banks Shift Bond Portfolios -Move to ‘held to maturity’ category aims to guard against rising rates, shield capital (WSJ) Beijing to Shut All Major Coal Power Plants to Cut Pollution (BBG) As Silence Falls on Chicago Trading Pits, a Working-Class Portal Also Closes (NYT) Oil below $56 as Saudi output near record, China activity slows (Reuters) London Skyscraper Prices Seen Threatened by EU Exit Risk (BBG) |
| Stock futures tick up ahead of data NEW YORK (Reuters) – U.S. stock index futures edged higher on Tuesday ahead of a data deluge including measures on inflation, home prices and sales, and factory activity. |
| Eurozone Business Growth Nears 4-Year High, Report Shows Purchasing managers reported that output in March expanded at the quickest pace since May 2011, according to a Markit Economics survey. |
| China March flash HSBC PMI contracts to 11-month low, fans policy easing expectations BEIJING (Reuters) – Activity in China’s factory sector dipped to a 11-month low in March as new orders shrank, a private survey showed, signaling persistent weakness in the world’s second-largest economy that will likely fuel calls for more policy easing to support growth. |
| Lufthansa Germanwings Airbus A320 Crashes In French Alps; 148 Feared DeadMoments ago, a Lufthansa Germanwings Airbus A320, flight 4U9525, on a Barcelona to Dusseldorf route, was reported to have crashed in the area of Digne, in the Alpes-de-Haute-Provence in southern France, an area which French president Hollande said is “very difficult to access.” According to Plane Finder, the Germanwings plane, callsign D-AIPX, was a 24 year old A320 and part of the Germanwings fleet. Germanwings is a low-cost affiliate of German airline Lufthansa, which was created in 1997. Tuesday’s Airbus A320 crash has been the first accident in the history of Germanwings. French Interior Minister is heading to the crash site, Le Monde reported. The information was also confirmed by the local authorities of the Alpes-de-Haute-Provence.
According to initial press reports the plane had 142 passengers on board, with another 6 in the flight crew. It appears the flight had sent out a distressed signal at 9:4 … |
| Silicon Valley gender lawsuit heads to closing arguments SAN FRANCISCO (Reuters) – A landmark Silicon Valley sex bias case that has forced venture capital firm Kleiner Perkins Caufield & Byers to air awkward details about its operations goes to closing arguments on Tuesday after four weeks of testimony. |
| On Money: Debunking the Myth of the Job-Stealing Immigrant Even those of us who favor a path to citizenship are not going far enough, because we are mired in zero-sum thinking. |
| Futures At Overnight Highs On China PMI Miss, Europe PMI BeatIt is a centrally-planned “market” and everyone is merely a bystander. Last night, following a dramatic China PMI miss, which as previously reported tumbled to the worst print since early 2014 and is flashing a “hard-landing” warning, the Shanghai Composite first dipped then spiked because all a “hard-landing” means is even more liquidity by the PBOC (which as we suggested a month ago will be the last entrant into the QE party before everyone falls apart). Then, this morning, a surprise beat by the German (and Eurozone) PMI was likewise interpreted by the algos as a catalyst to buy, and at this moment both European stock and US equity futures are their session highs. So, to summarize, for anyone confused: both good and bad data is a green light to buy stocks. In fact, all one needs is a flashing red headline to launch the momentum igniting algos into a buying spasm. Some more on the just announced Eurozone PMI numbers:
From Goldman:
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| Oil rebounds towards $57 as weaker dollar overshadows China slowdown LONDON (Reuters) – Brent crude reversed early losses to trade back towards $57 a barrel on Tuesday, as a weaker dollar overshadowed signs of slowing growth in China and Saudi Arabian oil production close to an all-time high. |
| Strong euro zone business data sends euro, shares higher LONDON (Reuters) – The euro rose and European shares edged up on Tuesday, responding to signs the euro zone economy is gaining momentum, while a slowdown in factory activity in China kept oil and commodities-linked assets under pressure. |
| U.S. law firm rallies Tesco investors to join lawsuit LONDON (Reuters) – A U.S. law firm is asking Tesco shareholders to join a group that wants to bring a lawsuit and seek billions of pounds in compensation for losses relating to the British retailer’s overstatement of profit last year. |
| Oil below $56 as Saudi output near record, China activity slows LONDON (Reuters) – Brent crude oil held below $56 a barrel on Tuesday on signs of slowing growth in China and as Saudi Arabia said its production was close to an all-time high. |
| Market Anticipates FED Rate Hike, Despite Collapse in Housing Starts……..Originally posted March 18th – Written by Nathan McDonald for Sprott Money Stocks are pulling back ahead of a greatly anticipated FED meeting. Investors are holding their breath as they wait for news from Janet Yellen on whether or not the FED will give more indication of future interest rates. It is widely anticipated that the FED will remove a key word “patient” from its statements. This is in reference to the timing of an interest rate hike and the FED’s previously dovish stance to raise them. The market believes that the FED will begin more strongly indicating that a hike in rates is on the horizon. Of course, levels will still be historically low, even if a rate hike was to occur, as they are now resting at 0.25%. That is a big “if”. Although the FED is likely just jawboning and pandering to Wall Street, they themselves have said time and time again that they would only raise interest rates if the economy was recovering and firing on all cylinders. Clearly, despite what the mainstream media would have you believe, it is not. One of the key indicators that the FED bases economic recovery on is the housing sector. The new American Dream as some call it, others consider it a nightmare. |
| Airbus says RwandAir signs MOU for two A330 aircraft PARIS (Reuters) – RwandAir, the national flag carrier of the Republic of Rwanda, has signed a memorandum of understanding for two A330 aircraft, European planemaker Airbus said on Tuesday, in a deal worth around $500 million based on list prices. |
| Railroads Weekly Review: Norfolk Southern, CSX, Union PacificThe only good news in the week’s carload report was Norfolk Southern’s strong intermodal volume growth. In the week ended March 14, intermodal volumes grew 8.1%, compared to 0.7% in the week ended March 7. Union Pacific’s petroleum products carloads declined 26% during the week ended March 14. Carloads of farm products other than grain, food products, primary forest products, chemicals, automobiles and equipment were in the positive during the week. Now that the labor contract negotiations between the ILWU and PMA have ended, Union Pacific’s intermodal carloads have also begun to recover, with a 5% increase during the week. |
| RBS Set To Shrink Stake In Citizens To Below 50%Once RBS gets rid of these shares, its stake in CFG will decline to no more than 49.3%. This brings RBS (which is majority-owned by the British government) one step closer to its mandate of focusing on its retail and commercial banking operations in U.K. The announced stake sale will be facilitated by Morgan Stanley, Goldman Sachs, JPMorgan and Citigroup. |
| Weekly Software Notes: SAP, Symantec and SalesforceShares of software vendors SAP SE, Symantec and Salesforce.com appreciated sharply during the week ended March 20th. Shares of European major SAP led the rally with a 7% gain Monday through Friday, buoyed by investors’ and customers’ positive response to SAP’s recent moves into the Internet of Things. Salesforce’s shares appreciated by 5% during the week, while Symantec’s shares gained 4%, in line with the 4% uptick in the Dow Jones U.S. Software Index. In comparison, the broader S&P 500 gained 3% Monday through Friday. |
| Deja Vu: Could The Nasdaq Drop 33% In The Next Three Weeks?Fifteen years ago today the Nasdaq stock market index had just come off an all-time high when it suddenly declined a jaw-dropping 33% in the ensuing three weeks. Then, like right now, the Nasdaq Composite Index is just below that all-time high, having just climbed back up that mountain after fifteen years, and many market observers feel we are overdue for a correction. Moreover, this comes just as we are entering that curious time frame of April 15th – 22nd, which has historically been one of the most volatile and historically significant times throughout American history. Fifteen years ago, parents’ retirement and college savings were crashing in value, having lost a third of their wealth in three weeks just as taxes were due and their high school seniors were deciding which college to attend. Sound familiar? Things can change quickly. Are you prepared? |
| Hyundai Motor targets 5 percent U.S. sales growth this year SEOUL (Reuters) – South Korea’s Hyundai Motor aims to boost its U.S. sales by 4.7 percent this year, ahead of the industry’s projected growth rate, despite a consumer shift to SUVs and pick-up trucks. |
| The Queen of Luxury Cheapens Herself in China’s Mainland MarketWritten by Yuhua Zhang, GEI Associate Based on the latest news, Chanel, the world leading well-known luxury brand, decided to cut prices by around 20% in the China mainland market and raise prices by same range in European markets starting April 8. As a top luxury brand which always bases its marketing strategy on higher price to establish “nobility”, this decision will doubtless bring about reform in Chinese luxury market.
Read more … |
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