15Jan2016 Pre-Market Commentary: Chinese Markets Close Down 3.6%, SPY Off Over 2% This Morning And Oil Creeps To The Low 29’s – Watch Out Below

Here is the current market situation from CNN Money

European markets are sharply lower today with shares in Germany off the most. The DAX is down 2.42% while London’s FTSE 100 is off 1.90% and France’s CAC 40 is lower by 1.60%.

Citigroup profit leaps as legal bill shrinks

(Reuters) – Citigroup Inc, the No.3 U.S. bank by assets, reported a massive jump in quarterly profit as legal costs plunged and the bank benefited from the sale of unwanted assets from its Citi Holdings portfolio.

Wells Fargo profit falls 0.8 percent

(Reuters) – Wells Fargo & Co, the biggest U.S. residential mortgage lender and a major lender to the energy industry, reported a 0.8 percent fall in profit for the last quarter of the year as it set aside more funds to cover bad loans.

Plunge in crude oil prices send stock futures sliding

(Reuters) – U.S. stock index futures were sharply lower on Friday, as oil prices dived below $30 per barrel, sending fresh tremors through financial markets globally as investors fret about a prolonged economic slowdown.

Crude dive deepens as market braces for more Iranian oil

LONDON (Reuters) – Brent crude futures plunged more than 4 percent to fresh 12-year lows on Friday as the market braced for increased Iranian oil exports, with the lifting of international sanctions possible within days.

France to cut Renault stake only when price improves: Macron

ERGUE-GABERIC, France (Reuters) – France will not carry out the planned reduction of its stake in Renault until the carmaker’s share price picks up, Economy Minister Emmanuel Macron said on Friday.

BlackRock profit weaker than expected on higher compensation, expenses

(Reuters) – BlackRock Inc on Friday reported quarterly profit that was weaker than analysts expected, due to higher compensation costs.

GE to sell appliances business to China’s Haier for $5.4 billion

(Reuters) – General Electric Co agreed to sell its century-old appliance business to China’s Qingdao Haier Co Ltd for $5.4 billion in cash, a month after abandoning a deal with Sweden’s Electrolux.

Markets catch a chill as oil falls back below $30

LONDON (Reuters) – World stocks were set for a third straight week of losses on Friday and commodity currencies took another drubbing as oil prices fell back below $30, keeping alive concerns about global growth.

Funding lifts Uber China unit’s valuation to $8 billion but profits absent

BEIJING (Reuters) – Uber Technologies Inc’s China unit boosted its valuation to $8 billion after it raised more than $1 billion in its latest funding round, although the U.S. ride-hailing app is not yet profitable in the mainland due to intense competition.

China Bank Lending Slows Dramatically, Confirming Concerns About Soaring Bad Loans

In the latest Chinese domestic financing report released by the PBOC last night, there were two divergent themes: on one hand bank loans grew far less than the expected 700Bn yuan, and at 598Bn this was the second lowest monthly increase in the past year, only higher than October’s 514bn; on the other hand total social financing soared to 1.82 trillion yuan, smashing forecasts of a 1.15 trillion increase, and the highest since June.

As noted last night, this may have been the catalyst that spooked the markets, because as Bloomberg confirms, “the data shows companies are turning to alternative sources for credit given banks’ reluctance to lend.”

The history of new loan creation:

And total social financing showing the offset to declining loan formation coming courtesy of the local bond market:

And while this time Chinese companies are not turning to the shadow banking system, they are clearly taking advantage of the “last bubble standing”, that of Chinese bond issuance.

Bullard Bounce Erased As Crude Crashes Back Below $30

Dow futures are now over 400 points off the Bullard Bounce highs as it appears The Fed’s ability to convince the world it will save it once again is fading. Thanks to deflation-inspiring credit growth in China (yes, you read that right) and Kuroda’s implied “we are done for now” comments, growth scares have spread across every asset class with crude and copper clubbed, bonds bid, and stocks tumbling…

JPY is heavily bid as carry trades unwind (JPYUSD futures)

Bullard Bounce dead…

And cruide has collapsed below $30…

World’s Largest Miner Books Massive $7.2 Billion Writedown On US Shale “Assets”

Late last month, Freeport McMoRan co-founder and executive chairman James R. Moffett was shown the door.

Moffett, known as the œlast of the old-time wildcatters , was a legend in the industry but made a fatal mistake in 2013: he paid $2.1 billion for McMoRan Exploration Co (an oil-and-gas company the parent company had separated from in the 1990s), and $6.9 billion for Plains Plains Exploration & Production.

As WSJ put it, œthe deals in part were a bet that oil prices would remain high.

Well, they didn’t, and the gamble ended up increasing the combined entity’s debt fivefold and Carl Icahn is now pushing Freeport to dump the œhigh cost assets.

Freeport wasn’t the only mining giant to make an ill-timed bet on US oil and gas assets. BHP Billiton, the world’s largest miner, spent $20 billion buying US assets in 2011, making it the largest overseas investor in US shale. Now, as œlower for longer turns to œlower for longer-er , the company is set to take a huge writedown on its US onshore portfolio.

How huge, you ask? $7.2 billion huge (or $4.9 billion after taxes) on assets the company was carrying at just over $20 billion. The company now values its US assets at $16 billion. œWhile we have made significant progress, the dramatic fall in prices has led to the disappointing write down announced today, CEO Andrew Mackenzie said. œHowever, we remain confident in the long-term outlook and the quality of our acreage. We are well positioned to respond to a recovery.

Mackenzie went on to say the company would cut the number of rigs op …

Frontrunning: January 15

Crude sinks 4 percent as market braces for more Iranian oil (Reuters)

Plunge in crude oil prices send stock futures sliding (Reuters)

Oil Slides, Deepening Gloom in Stocks as Bond Buyers Celebrate (BBG)

China Stocks Enter Bear Market, Erasing Gains From State Rescue (BBG)

Goldman Says It Will Pay $5.1b in U.S. Mortgage Probe (CBS)

Friendly no more: Trump, Cruz erupt in bitter fight at Republican debate (Reuters)

China to expand coverage of advantaged import tax policies nationwide (Xinhua)

Dollar in Best Run Since July on Haven Bid Even as Fed Odds Fall (BBG)

China’s Haier to Buy GE Appliance Business for $5.4 Billion (WSJ)

U.S. freight volume falls for first time in almost three years (Reuters)

Obama Said to Plan Suspension of New U.S. Coal Leases (BBG)

Apple May Be on Hook for $8 Billion in Taxe …

Oil Prices Fall Below $30 a Barrel

U.S. crude dropped around 5% as continued turmoil in Chinese markets and concerns over Iranian supplies adding to the global glut took their toll on the market.

Global Stock Slump Resumes

The slide in global equities resumed as steep declines in oil prices and Chinese stocks heightened anxieties that have pushed markets lower this year. U.S. stock futures pointed to a 1.7% opening drop for the S&P 500, reversing Thursday’s rally.

Switzerland: A Test Case for Currency Shock

A year after the Swiss central bank scrapped its policy of limiting the value of the franc, the Alpine country has become a test case for the economic effects of a starkly stronger currency.

Fed’s Balance Sheet 13 January 2016 Up

Total Fed Balance Sheet:

Fed’s Balance Sheet week ending balance sheet was $4,463 trillion..

Need to Know: Man up and buy as other investors flinch, a Buffett favorite says

OakTree Capital’s Howard Marks, one of Warren Buffett’s favorite memo writers, says œmove forward with a little less caution in his latest memo. But today’s chart offers a take on what you shouldn’t be buying.

Market Snapshot: Dow futures down nearly 300 points as oil breaks under $30

U.S. stock futures face an uphill climb as oil prices return to their slide and China enters a bear market, with just the prospect of bank earnings and retail data as potential saviors.