22Jan2016 Pre-Market Commentary: ECB Stimulus, Rising Oil Prices And US Cold Weather Has Helped Markets Rebound

Written by Gary

US stock future indexes are up again this morning joining in on a major relief rally going on across the globe, pushing European equities up after a dovish Mario Draghi hinted at more stimulus, plus crude prices continued to bounce higher. Some analysts are saying the resent cold wave in the United States has helped markets rebound. 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 3.38% while Germany’s DAX is up 2.20% and London’s FTSE 100 is up 2.16%.

What Is Moving the Markets

Here are the headlines moving the markets.
	China shares end higher on global stimulus hopes SHANGHAI (Reuters) – China’s fragile shares ended higher on Friday, in a relatively muted response to hints of more policy stimulus in Europe and Japan that prompted a robust rally in battered oil prices and equities elsewhere.
	Oil rises 6 pct but set for biggest January fall in 25 years LONDON (Reuters) – Oil rose by more than 6 percent on Friday, as a cold snap boosted demand for heating oil across the United States and Europe, but was still mired near its lowest since 2003 and set for its largest January drop in at least 25 years.
	Stock futures higher as oil surges for second day (Reuters) – U.S. stock index futures were higher on Friday, helped by a cold wave in the United States and Europe that boosted oil prices.
	GE’s industrial profit falls 8 percent, hit by tumbling oil (Reuters) – General Electric Co on Friday reported that industrial profits fell 8 percent in the fourth quarter, hurt by weakness in divisions catering to the oil and gas industries.
	Germany criticizes unequal treatment of VW’s customers BERLIN (Reuters) – Volkswagen is not doing itself any favors by offering unequal compensation for U.S. and European customers following an emissions scandal last year, a German justice ministry spokesman said on Friday.
	Exclusive: Noble chairman sees company’s future as smaller, nimbler HONG KONG (Reuters) – Noble Group, Asia’s biggest commodities trader, expects to ride out the market downturn and recover from recent accounting-related allegations by being nimbler and asset-light, its founder and chairman Richard Elman told Reuters in an interview on Friday.
	Wal-Mart strikes lawful, must reinstate workers: NLRB judge (Reuters) – Wal-Mart Stores Inc unlawfully retaliated against workers who participated in strikes in 2013 and must offer to reinstate 16 dismissed employees, a National Labor Relations Board judge ruled on Thursday.
	U.S. airlines rethink hedges as oil plunges NEW YORK (Reuters) – The lowest fuel prices for more than a decade are proving to be a double-edged sword for U.S. airlines.
	Stocks, oil soar as Draghi the dove tames global bears LONDON (Reuters) – Stocks and oil, at the forefront of a global market rout since the turn of the year, rebounded strongly on Friday thanks to hints of more monetary policy support by the European Central Bank and bargain-hunting from bruised investors.
	Chesapeake Suspends Preferred Stock Dividends With Chesapeake Energy hitting its lowest stock price since 2000 earlier this week, it was only a matter of time before US gas giant Chesapeake halted all “discretionary” cash payments, which it did moments ago when it announced it would halt dividend payments on its preferred stock. From the release: Chesapeake Energy Corporation (CHK) announced today that it has suspended payment of dividends on each series of its outstanding convertible preferred stock effective immediately. Doug Lawler, Chesapeake’s Chief Executive Officer, commented, “The board and management believe this decision is in the best long-term interest of all Company stakeholders. Today’s decision to suspend our preferred stock dividends will allow the company to retain approximately $170 million of additional cash per year and use these funds to purchase debt at significant discounts in the near term. Given the current commodity price environment for oil, natural gas and natural gas liquids, we believe that redirecting this cash toward debt retirement provides better returns for the Company. We currently have senior debt securities trading at significant discounts, and we will continue to take advantage of that within the coming year.” Suspension of the dividend does not constitute an event of default under the Company’s revolving credit facility or outstanding bond indentures. We expect many more energy companies to follow in CHK’s shoes.
	Italy Races To Defuse ‚¬200 Billion Bad Loan Time Bomb With “Bad Bank” When Portugal œsurprised senior Novo Banco bondholders with a ‚¬2 billion bail-in late last month, the market got an unwelcome reminder that euro periphery banks are far from œsolid. Novo was supposed to house the œgood assets salvaged from the wreckage of failed lender Banco Espirito Santo, but as it turned out, a lot of those œgood assets were actually bad, and Novo ended up needing to plug a ‚¬1.4 billion hole. Initially, the plan was to sell assets but seizing ‚¬2 billion from bondholders ended up being a whole lot easier and far more efficient. News of the bail-in came just a week after Lisbon announced that a second bank – Banif – would need state aid after running out of cash to repay a previous cash injection from the government. As we head into the weekend, periphery banks are back in the spotlight, only this time in Italy where PM Matteo Renzi is scrambling to put the finishing touches on a plan to guarantee hundreds of billions of NPLs sitting on the books of Italian banks. Talks with the EU Commission œhave already dragged on for two years, FT notes and need to be concluded over the next few days lest œthe whole initiative should collapse. Of course Renzi missed what amounted to a deadline on œfixing the problem under the old rules governing bank resolutions. One reason the Novo Banco and Banif bail-in and bailout (respectively) were pushed through in what appeared to be a kind of haphazard, ad hoc fashion was because
	What Sent Stocks Soaring Overnight: DB’s Jim Reid Explains Earlier today we showed the three key headlines that summarized today’s euphoric mood, and explain the general liftathon among massively oversold risk assets: Stocks Rebound on Stimulus Speculation Oil Rallies in Biggest 2-Day Surge Since August on Stimulus Bets Yen Investors Homeward Bound as BOJ Stimulus Seen Boosting Bonds And now, here is DB’s Jim Reid putting it all together, and explaining that whatever it was that sent global equity markets to all time highs despite global economic slowdown as recently as last summer, is once again back front and center: From Deutsche Bank’s Jim Reid: Yesterday the folks on Bloomberg TV finally had something to get excited about with the ECB meeting even if many will end up being once bitten twice shy this time round. Indeed the last time the market flirted with Mr Draghi’s seductive sound bites it eventually got jilted at the easing aisle. However there was a hint of giving him a second chance yesterday with a fairly positive market reaction to pretty firm signaling that the ECB will ease again in March. Although the meeting is 7 weeks away could yesterday mark the start of another plate spinning cycle from the central banks? The market chatter is now looking towards Kuroda to signal more action when the BoJ meet this time next week. Will Yellen also signal a more cautious and dovish stance at the FOMC next Wednesday? We continue to think central bank money printing globally remains in the early stages. Such policies could go on for several years yet even if there are periodic pauses. Ultimately we continue to think monetary policy will finance fiscal spending but tha …
	Stocks Propelled by Oil-Price Bounce Equities rallied as oil prices staged a recovery and investors bet more stimulus from the world’s central banks could help lift financial markets.
	Economic Unease Puts Central Bankers Under Pressure Amid tumbling oil prices, unstable stock markets and slow growth in developing economies, central banks in the U.S., Europe and Japan face pressure to keep interest rates low or even expand easy-money policies.
	Iranian Oil Set to Return to Europe Next Month Iran is preparing to restart regular crude-oil shipments to the European Union possibly as early as February, according to Iranian officials, despite a host of barriers to selling its petroleum to the West.
	Earnings Outlook: Apple earnings optimism may be ˜detached from reality’ Apple is projected to report record holiday sales Tuesday, but analysts say expectations might be too high.
	Beer Goggles: Craft beer gets creative when you aren’t drinking Brewers are being creative and working hard to counter a winter decline in sales, writes Jason Notte.
	Market Extra: This oil-related play is rallying ” big time With crude-oil prices on track to rise dramatically for a second straight day, one of the currency market’s favorite oil-linked plays is rallying as well. It’s erased two days’ of losses against the U.S. dollar.