20Jan2016 Pre-Market Commentary: US Futures Off Sharply Again, Asia Closed In The Red, Europe Down Significantly And WTI Crude Dropped To 2003 Lows

Written by Gary

US stock future indexes are down 1.5% fractionally up from the premarket opening lows. Global markets are in full retreat as a relentless slide in oil prices and a weaker world growth outlook from the IMF dealt another blow to investor appetite. Crude futures are getting slammed again, with U.S. oil falling to its lowest since September 2003 on worries about a global glut. (Brent -2.3% to $27.80/bbl)

Here is the current market situation from CNN Money
	European markets are sharply lower today with shares in France off the most. The CAC 40 is down 3.05% while London’s FTSE 100 is off 2.66% and Germany’s DAX is lower by 2.22%.

What Is Moving the Markets

Here are the headlines moving the markets.
	Big Chipotle investor held steady during stock’s fourth-quarter plunge BOSTON (Reuters) – Fidelity’s Contrafund, the biggest mutual fund investor in Chipotle Mexican Grill Inc, said it had held onto its entire stake during the fourth quarter even as an outbreak of food-borne illness in the restaurant chain pummeled its shares.
	AerCap plays down fears of price war over big jets DUBLIN (Reuters) – The head of one of the world’s biggest aviation fleets played down the risk of a price war over big jets like the Boeing 777 on Tuesday, saying its U.S. manufacturer would rather sacrifice production than risk damaging its own portfolio.
	Goldman profit slumps after huge mortgage-backed bond settlement (Reuters) – Goldman Sachs Group Inc’s profit slumped for the third straight quarter as a $5 billion settlement of crisis-era legal claims ate into earnings in a tumultuous three months.
	VW executive committee member says no alternative to CEO Mueller FRANKFURT (Reuters) – Volkswagen Chief Executive Matthias Mueller’s position is not in danger, a member of the carmaker’s executive committee said after a committee meeting that discussed the CEO’s progress in clearing up its diesel-emissions scandal.
	Stock futures sink as oil rout shows no signs of abating (Reuters) – U.S. stock index futures fell sharply on Wednesday, tracking global markets, as crude oil prices tumbled to new lows and fears of slowing global growth continued to gnaw at investors.
	Apple seeks nod to open India stores amid concerns of slowing sales growth MUMBAI (Reuters) – Apple Inc has applied to set up its own stores in India, one of the world’s fastest growing smartphone markets, as the iPhone-maker looks to tap new opportunities amid worries of slowing growth in its main markets.
	Oil slump rocks markets again in equity rout LONDON (Reuters) – World stocks sank to their lowest levels since 2013 on Wednesday, hit by another tumble in oil to 13-year lows that kept global equities set for one of their worst monthly performances ever.
	Insight: Electric vehicle sales fall far short of Obama goal DETROIT (Reuters) – Back in 2008, with gas prices averaging nearly $4 a gallon, President Barack Obama set a goal of getting one million plug-in electric vehicles on the roads by 2015.
	No global meltdown, EU growth outlook unchanged: EU economic chief DAVOS, Switzerland (Reuters) – Central banks still have more firepower they can use to counter a slowdown in global growth, which does not change the outlook for recovery in the euro zone, European Economics Commissioner Pierre Moscovici said on Wednesday.
	“If Assets Remain Correlated, They’ll Be A Depression”: Ray Dalio Says QE4 Just Around The Corner CNBC’s Andrew Ross Sorkin and Becky Quick, donning their finest goose down bubble coats to remind viewers they’re reporting live from scenic Davos, generously took some time out of their busy schedules to chat with Ray Dalio on Wednesday and unsurprisingly, the œzen master again predicted the Fed will reverse course and embark on more QE. Dalio begins by noting that the Fed’s move to inflate financial assets by pumping money into the system means there’s an œasymmetric risk on the downside. The rationale is simple: the trillions in fungible, excess cash the Fed unleashed in the wake of the crisis has driven asset prices into bubble territory and at this juncture, there’s essentially nowhere to go but down. That, Dalio says, will create a œnegative wealth effect , the opposite of Bernanke’s infamous virtuous circle wherein Americans would supposedly spend more and thus boost the economy if only the Fed could repair the damage their 401ks suffered in 2008. In short, Dalio reiterated his contention that the Fed will ultimately be forced into QE4 and that the much ballyhooed tightening cycle will essentially amount to a one-off, œjust to show you we could do it, blip on the ZIRP radar screen. œEvery country in the world needs easier monetary policy, Dalio said, before noting that central banks now have less room to ease. He made similar comments in September of last year in an interview with Bloomberg TV. Dalio also said he’s concerned that the Fed isn’t concerned. When Becky Quick suggested the FOMC is more vigilant than the market might think, Dalio respon …
	Goldman Posts Worst Q4 Revenue Since 2011; Average Comp Rises To $344,511 Since looking at Goldman’s Q4 EPS was going to be a meaningless attempt at comparing apples to oranges due to the bank’s recently announced $3 billion after-tax RMBS settlement, which reduced diluted earnings per common share by $6.53, we decided to instead do what we normally do with Goldman’s earnings report and focus on its top line, where we found that in the fourth quarter the bank had generated only $7.3 billion in revenue, a 5.4% drop from a year ago, and underscoring just how difficult the environment is even for the bank that does god’s work, this was the weakest Q4 revenue from Goldman since 2011. Looking at the breakdown of the revenue components does not reveal any major surprises, unlike in Q3 when Goldman’s prop trading collapsed: First the good news: Investment Banking of $1.5 billion was a 7% increase, however was offset Institutional Client flow in FICC of $1.1 billion, down 7.8% while Equities flow revenue of $1.8 billion was also down 9.1%. And while Investment Management revenues of $1.55 billion were largely unchanged, Investing and Lending, aka Prop, once again dropped by 15.4% Y/Y to just $1.3 billion. This is because it is difficult to make money when you control the central banks when not even the central banks have any idea what they are doing. Finally, while the overall pict …
	Frontrunning: January 20 Oil slump rocks markets again in equity rout (Reuters) Global Stocks on Brink of Bear Market as Oil Slides; Ruble Drops (BBG) Global Stocks Slide on Oil Rout (WSJ) Emerging Markets Roiled as Stock Selloff Surpasses Asian Crisis (BBG) Rising Debt in Emerging Markets Poses Global Threat (WSJ) China shares slip as oil slides, outweighing stimulus hopes (Reuters) Europe Stocks Fall to 13-Month Low as Results Stoke Growth Fears (BBG) Former U.S. VP candidate Palin endorses Trump with a ‘hallelujah’ (Reuters) Americans missing in Baghdad kidnapped by Iran-backed militia (Reuters) Hong Kong Dollar Forwards Sink to Weakest Since ’99 on Peg Bets (BBG) Saudi Arabia and Iran Tussle Over Exports to China (WSJ) A GoldMAN? What Kind of Man Spends Millions to Elec …
	Global Stocks Slide on Oil Rout Global stocks resumed the year’s steep selloff Wednesday as oil prices sank to a 12-year low and resurgent concerns about global growth snapped a brief bout of gains in financial markets.
	Oil Prices Continue to Fall Oil prices slid on Wednesday, with U.S. oil futures falling to their lowest level since 2003, dragged down by a slide in global financial markets and continued concerns about the glut of crude.
	Goldman Sachs Profit Drops on Massive Legal Settlement Goldman Sachs said its quarterly profit tumbled 65% as weak trading conditions and the firm’s agreement to pay a large regulatory penalty took a heavy toll.
	Tax Guy: Doing your taxes? What to expect from the new Form 1040 Tax time is coming.
	Economic Report: Housing starts fall 2.5% in final month of 2015 Home builders cut back slightly on new construction in the final month of 2015, though they built the most homes last year since 2007.