Written by Gary
US stock future indexes are up this morning almost one percentage points as the US dollar unconvincingly attempts a breakout. The Q4 earnings season is underway after Alcoa last night reported mixed results. Oil continued its plunge yesterday, dropping to within pennies of a $29 handle. The markets are expected to open higher.
Here is the current market situation from CNN Money | |
 | European markets are sharply higher today with shares in France leading the region. The CAC 40 is up 2.50% while Germany’s DAX is up 2.35% and London’s FTSE 100 is up 1.75%. |
Worries about China’s ability to manage financial markets with with deepening fears about a continued slowdown in the world’s No. 2 economy have kept investors on edge.
What Is Moving the Markets
| Here are the headlines moving the markets. | |
 | Stock futures rise as crude oil limps higher (Reuters) – U.S. stock index futures were higher on Tuesday as crude oil prices edged off 12-year lows. |
| Wanda goes to Hollywood: China tycoon’s firm buys film studio Legendary for $3.5 billion BEIJING (Reuters) – Chinese conglomerate Dalian Wanda Group has bought U.S. film studio Legendary Entertainment for about $3.5 billion, turning its chairman into a Hollywood movie mogul as China’s richest man steps up a drive to diversify his business empire overseas. |
| BP to slash thousands more jobs in face of oil downturn LONDON (Reuters) – British oil and gas company BP announced plans on Tuesday to slash 5 percent of its global workforce in the face of a continued slump in oil prices. |
| Oil steadies below $32 as investors book profits LONDON (Reuters) – Crude oil steadied near $32 per barrel on Tuesday, recovering slightly as investors booked profits after it fell to a near-12-year low on concerns about oversupply and fragile demand from China. |
| Exclusive: Hedge fund stars join losers’ club for first time NEW YORK (Reuters) – An elite group of hedge fund managers must have awakened on Jan. 1 with an unusual type of hangover: their first annual loss. |
| Ex-politician John Edwards among lawyers vying for lead role in Volkswagen suit (Reuters) – Among the more than 140 plaintiffs’ lawyers competing to lead private litigation against Volkswagen over its emissions cheating scandal is former U.S. Senator and Democratic Vice-Presidential candidate John Edwards. |
| Exclusive: Hyundai plans to shift some small car output to Mexico next year – sources SEOUL (Reuters) – Hyundai Motor Co is planning to build the new version of its Accent small car at a Mexican plant owned by sister company Kia Motors next year, two people familiar with the matter said, shifting some output of the low-margin vehicle out of high-cost South Korea. |
| Sweden to open fraud probe into Volkswagen emissions scandal STOCKHOLM (Reuters) – A Swedish prosecutor said on Tuesday he had opened a preliminary fraud investigation into Volkswagen over the German carmaker’s emissions test cheating scandal which has affected up to 11 million vehicles worldwide. |
| Airbus beats Boeing in 2015 order race, lags on deliveries PARIS (Reuters) – European planemaker Airbus beat Boeing in the race for new business last year, swelling its total order book to a record $1 trillion, but remained behind on deliveries as Boeing extended its lead as the world’s largest jetmaker. |
| Forget $20 Oil: StanChart Says “Prices Could Fall As Low As $10 A Barrel”A little over a year ago, Paul Hodges was roundly mocked when in December 2014 he made a drastic call that “Oil May Drop To $25 On Chinese Demand Plunge, Supply Glut, Ageing Boomers.” After oil got as close as 40 cents away from the dreaded 2-handle, Paul had the last laugh. But the bigger point is that not only is $20 oil not a shocker any more, it is largely expected and could be indeed welcomed, as first Goldman, then practically everyone else has now admitted it is just a matter of time before oil trades to levels not seen since the 20th century. So, perhaps to make a name for himself, the head of commodity research at Standard Chartered, Paul Horsnell decided to lower the bar into even more dramatic territory, and overnight suggested that oil prices could drop as low as $10 a barrel. “Given that no fundamental relationship is currently driving the oil market towards any equilibrium, prices are being moved almost entirely by financial flows caused by fluctuations in other asset prices, including the USD and equity markets, Horsnell said. “We think prices could fall as low as $10/bbl before most of the money managers in the market conceded that matters had gone too far.” When does he see oil bottoming? “in extreme case, price floor may be set when entire market believes oil has undershot.” So with a new, and even lower bogey, that means that an upper, or even lower $20-print in oil will be the shocker so many bottom hunters are looking for, but instead after this expectations reset, oil may have to indeed drop another $10 before the BTFD algos can finally make some money. So with a $10 oil bogey now in the books, here is what others are predicting, courtesy of Bloomberg. Spoiler alert: everyone is bearish. Energy Aspects Even oil in $20s won’ … |
| Rabobank: “Everyone Rational Wants To Sell, While Everyone Official Has Been Told To Buy”The best summary of what happened overnight comes courtesy of Michael Every, head of financial markets research at Rabobank Group in Hong Kong, who was quoted by Bloomberg as follows:
Every was referring to China; he could have been talking about every central bank anywhere in the world. And then, a close runner up, is Deutsche Bank’s Jim Reid who in his overnight note, explains just why “everyone official has been told to buy”
|
| Frontrunning: January 12Oil slips toward $30, traders bet on more falls (Reuters) Oil Plunge Sparks Bankruptcy Concerns (WSJ) RBS cries ‘sell everything’ as deflationary crisis nears (Telegraph) World stocks drop but Europe shrugs off oil slide, China money market surge (Reuters) Canadian Stocks Fall in Longest Slump Since 2002 as Oil Slides (BBG) State of Union Speech to Note Work Yet to Be Done (WSJ) “Murderous” Yuan Rate Jolts Hong Kong as Top Currency Hub (BBG) Putin Says Sheltering Assad Would Be Easier Than Snowden Asylum (BBG) Goldman Sachs Sees $64 Billion in Buybacks Rescuing Japan Stocks (BBG) Anti-refugee right-wingers go on rampage in Leipzig, say police (Reuters) Central Bankers Enjoy Twitter Party as Followers Jump by Half ( |
| Futures Jump After Oil Rebounds From 11 Year Low On Turkish Terrorist AttackAs reported last night, now that the PBOC has devalued the Yuan to a level China’s central bank is comfortable with, if only for the time being,and having done so by unleashing a “murderous” short squeeze “to deter bearish bets and helping to stabilize equity markets”, manifesting itself in the offshore Yuan 1 week deposit rate exploding to a record 82%…
… markets are content that the Chinese debacle seems to be contained if only for a while, and so the attention of both traders and algos alike has focused on oil, which earlier in the session dragged global equities lower as it dropped by 3%, just shy of the $30 level, a new 11 year low, before staging another dramatic rebound in minutes, wiping out all losses in the aftermath of what appears to be a deadly suicide bomber explosion (unclear if this one is real or staged) on a square the middle of Istanbul’s historic district.
And since the Paris terrorist attacks taught everyone that terrorism is bullish for stocks via the “OPEC wealth effect channel”, after starting off the session in the red, and sliding as low at 1900, US equity futures have … |
| Global Stocks Rise as China StabilizesSigns of stabilization in China’s currency and financial markets boosted global stocks Tuesday, as investors paused to question whether the year’s sharp losses were overdone. |
| Oil Edges Closer to $30 a BarrelCrude-oil prices fell as traders built up short positions amid crumbling confidence in the Chinese economy and a growing global glut. |
| Silicon Valley: We Don’t Trust FICO ScoresA new generation of lenders is challenging the usefulness of one of the bedrocks of the modern financial system: the FICO score. |
| Saudi Arabia: Palace Intrigue At A Time Of Transitionfrom STRATFOR — this post authored by Reva Bhalla
|
| Need to Know: Why the panic selling on Wall Street hasn’t gone nearly far enoughAnother bank says stocks are no longer worth your trouble, yet all the selling we have seen hasn’t come close to what this market needs if it’s going to get back on its feet again. |
| The Wall Street Journal: Starboard sells part of its Darden stakeActivist investor Starboard Value LP sells shares in Darden Restaurants, as it took advantage of a significant appreciation in the stock price. |
| The Wall Street Journal: Starbucks CEO Schultz plans 500 new stores in China in each of next five yearsœWe have confidence in the future of the Chinese economy, despite all the rhetoric, noise and issues, Starbucks CEO Howard Schultz tells the Wall Street Journal. |
In the past two weeks, Saudi Arabia has outraged the world with the execution of Shiite cleric Nimr al-Nimr and sent investors into a frenzy over the possible sale of shares in the world’s largest oil company, the Saudi Arabian Oil Co.Earnings Summary for Today
leading Stock Positions
Current Commodity Prices
Commodities are powered by Investing.com
Current Currency Crosses
The Forex Quotes are powered by Investing.com.
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
