22Mar2016 Pre-Market Commentary: Global Markets Mixed, USA Markets Flat Likely Due To Brussels Terrorist Attack

Written by Gary

Just another day where terrorism is the headlines – and creates market chaos. European and most Asian markets are flashing red. Western hemisphere market futures are still in the green – just barely.

Here is the current market situation from CNN Money
	European markets are lower today with shares in London off the most. The FTSE 100 is down 0.41% while France’s CAC 40 is off 0.32% and Germany’s DAX is lower by 0.07%.

What Is Moving the Markets

Here are the headlines moving the markets.
	Apple bets new 4-inch iPhone to draw big-screen converts in China, India CUPERTINO, Calif/MUMBAI (Reuters) – Apple Inc is betting a new 4-inch iPhone will spur smartphone users in key markets such as China and India to ditch their larger-screens in favor of the diminutive, yet feature-rich and lower-priced iPhone SE.
	Futures fall as Brussels attacks spark safety concerns (Reuters) – U.S. stock index futures were lower on Tuesday after explosions in Brussels sparked fresh geopolitical concerns and sent investors scurrying for safety.
	European stocks fall, gold and govt bonds rise after Brussels explosions LONDON (Reuters) – European stocks fell and investors rushed for the safety of gold and government bonds on Tuesday, after two explosions at Brussels airport killed several people and blasts at metro stations in the Belgian capital.
	Brazil’s federal police launches new raid in Petrobras case BRASILIA (Reuters) – Brazilian federal police were seeking to arrest 15 people on Tuesday as part of the corruption investigation centered on state-run oil producer Petroleo Brasileiro SA , police said.
	Citigroup says being investigated in Germany over dividend trades FRANKFURT (Reuters) – Citigroup is being investigated by German tax authorities over an equity trading strategy known as “cum-ex” or “dividend stripping,” the U.S. bank said on Tuesday.
	Foxconn seeks to lower takeover offer for Sharp: sources TOKYO (Reuters) – Taiwan’s Foxconn aims to lower its offer for Japan’s Sharp Corp by at least around 100 billion yen ($893 million) to account for likely worse than expected annual earnings at the loss-making electronics firm and for newly revealed risks, two sources said on Tuesday.
	U.S. says it may not need Apple to open San Bernardino iPhone (Reuters) – U.S. prosecutors said Monday that a “third party” had presented a possible method for opening an encrypted iPhone used by one of the San Bernardino shooters, a development that could bring an abrupt end to the high-stakes legal showdown between the government and Apple Inc .
	World’s longest aircraft readies for first flight in Britain LONDON (Reuters) – The world’s longest aircraft, an airship spanning more than six double-decker buses, is set to make its maiden flight later this Spring, British manufacturer Hybrid Air Vehicles said on Monday.
	Poll: Apple’s privacy fight does not win extra points for security (Reuters) – Most Americans trust Apple Inc to protect their personal information from hackers, according to a national Reuters/Ipsos poll, but not any better than rivals Google, Amazon and Microsoft.
	Belgium Cancels All Air, Rail Traffic Into/ Out Of Brussels; Military Deployed In the wake of the three (and now possibly four) explosions that rocked Brussels on Tuesday morning, Belgium has cancelled all air and rail traffic to the city. Eurostar has suspended all service to Brussels following a deadly explosion at Maelbeek metro station were more than 20 were reportedly killed this morning. Meanwhile, all flights from the Brussels airport are cancelled. All flights cancelled at #brusselsairport for the rest of the day. Avoid the surroundings of the airport >> https://t.co/cpd0hk1t9R ” Brussels Airport (@BrusselsAirport) March 22, 2016 The airport says it will remain closed until at least Wednesday. “The blasts add to the woes of the travel industry in Europe, the Middle East and Africa, which already has seen tourism drop after two terrorism attacks in Paris last year, the destruction of a Russian airliner in Egypt, bombings in Ankara and Istanbul in Turkey, and a deadly assault on tourists on a Tunisian beach,” Bloomberg notes. Meanwhile, the Belgian army will deploy an additional 275 troops to Brussels as the city will once again come to resemble a war zone in the aftermath of an apparent coordinated suicide attack that authorities believe may well be linked to last week’s anti-terror raid that ended with the capture of Paris fugitive Salah Abdeslam.
	Global Markets, S&P500 Futures Fall After Brussels Bombings This morning’s Brussels bomb attacks have led to risk-off sentiment across European asset classes, with Bunds higher and equities firmly in the red, although if the Paris terrorist attacks of November are any indication, today’s tragic events may be just the catalyst the S&P500 needs to surge back to all time highs. FX markets have also been dominated by events in Brussels, with USD and JPY strengthening, while EUR and GBP softening throughout the European morning. Losses today would disrupt a five-week rally bolstered by improving economic data, rising crude prices and “optimism that central banks around the world will continue to support growth” as Bloomberg puts it clearly not aware of the irony that the world is no longer able to grow precisely due to decades of central bank “stimulus.” This is where global markets stand as of this morning. S&P 500 futures down 0.4% to 2034 Stoxx 600 down 0.9% to 338 FTSE 100 down 0.6% to 6149 DAX down 0.9% to 9854 German 10Yr yield down 3bps to 0.2% Italian 10Yr yield down less than 1bp to 1.25% Spanish 10Yr yield up 2bps to 1.46% S&P GSCI Index down less than 0.1% to 336 MSCI Asia Pacific up 0.7% to 130 Nikkei 225 up 1.9% to 17049 Hang Seng down less than 0.1% to 20667 Shanghai Composite down 0.6% to 2999 S&P/ASX 200 down 0.3% to 5167
	“Pfandbriefe”, or “It Wasn’t Me!”: Why Nobody Realizes That Germany Is the Biggest Systemic Risk in the EU I grew up in a small town in Long Island with some very funny people, Howard Stern and Eddie Murphy. Eddie had a skit in his stand-up comedy “Raw” which is a reminiscent of the macro scene of the modern day EU. Let me know if you get it… “This is a quote from myriad analyst, “It is hard to believe that while banks in Euro area are plagued with asset write downs and massive losses, while the German banks are untouched. If any of the German banks fail, it would cause wide spread tumbling down of the entire banking sector in the Euro Area.” You see, Germany is that dude that Eddie Murphy is talking about. Their major trading partners are either in recession, or entering recession. Their real estate is super duper, uber bubbly (but of course will go much higher, so now is the time to buy), and their banks have highly leveraged assets that literally dwarf the economy that their domiclied in – thus making a cash bailout arithmetically impossible. Despite all of this, when investors look over there and say “Hey, you look like your in some pretty hot water and the ECB is obviously acting to protect somebody in troube!”, what do the Germans say? “Hey, it wasn’t me!”
	Gold Silver Ratio Says It’s Time to Buy Silver, Sell Gold Silver remains undervalued versus gold and the gold silver ratio suggests œselling the former and œbuying the latter according to a Bloomberg article published today. When the head of one of the world’s biggest silver streaming companies says he’s more bullish on his metal than gold, don’t dismiss him just for talking his own book. This chart suggests Silver Wheaton Corp. Chief Executive Officer Randy Smallwood may be right. The gold-to-silver ratio just fell below 80, and the last three times that happened silver outperformed gold by 60 to 302 percentage points in the next two or three years. We continue to see silver as very undervalued vis a vis gold but more especially vis a vis stocks, bonds and many property markets. Rather than selling the financial insurance that is gold, we would advise reducing allocations to stocks, bonds and property and allocating to silver. If one is very overweight gold in a portfolio and has no allocation to silver than there is of course a case for selling some gold and reweighting a portfolio in order to diversify into silver.
	Global Stocks Lower After Brussels Explosions Global stocks edged lower and haven assets gained Tuesday as investors reacted to early reports of explosions in Brussels.
	Goldman-1MDB Probe Zeroes In on Bond Deals The investigation is focusing on whether the Wall Street firm misled investors when it sold securities issued by the Malaysian government-investment fund.
	IMF Wants More Details From China on New Way It Props Up Yuan The International Monetary Fund is pressing China to disclose more data on its currency operations according to the standards the Chinese central bank pledged to follow, as Chinese authorities resort to more-discreet ways to support the yuan.
	Sluggish Wage Growth May Be A Poor Indicator Of Labor Market Slack from the San Francisco Fed — this post authored by Mary C. Daly, Bart Hobijn, and Benjamin Pyle While most labor market indicators point to an economy near full employment, a notable exception is the sluggish rise of wages. However, this slow wage growth likely reflects recent cyclical and secular shifts in the composition rather than a weak labor market. In particular, while higher-wage baby boomers have been retiring, lower-wage workers sidelined during the recession have been taking new full-time jobs. Together these two changes have held down measures of wage growth.
	London Markets: FTSE 100 under pressure after deadly explosions in Brussels U.K. stocks fell Tuesday, driven lower by shares of travel companies after Brussels was rocked by multiple explosions that killed and injured dozens of people, according to reports.
	Earnings Outlook: What to expect from Nike earnings Nike had a strong 2015, but ahead of third-quarter earnings, analysts are cautious about the competition and other factors.