23May2016 Pre-Market Commentary: Communications From The Federal Reserve

Here is the current market situation from CNN Money

European markets are lower today with shares in France off the most. The CAC 40 is down 0.97% while Germany’s DAX is off 0.59% and London’s FTSE 100 is lower by 0.22%.

Bayer defies critics with $62 billion Monsanto offer

FRANKFURT (Reuters) – German drugs and crop chemicals group Bayer has offered to buy U.S. seeds company Monsanto for $62 billion in cash, defying criticism from some of its own shareholders in a bid to grab the top spot in a fast-consolidating farm supplies industry.

Futures slightly lower as oil prices slip

(Reuters) – U.S. stock index futures were slightly lower on Monday as oil prices fell and investors awaited speeches by Federal Reserve officials this week for clues on the timing of the next rate increase.

Oil falls after Iran dampens hopes for production freeze

LONDON (Reuters) – Brent oil prices fell for a fourth consecutive session on Monday after Iran insisted it would not freeze crude output, returning investor attention to a global glut.

German investor group calls for independent probe of VW scandal

FRANKFURT (Reuters) – German investors’ association DSW called on Monday for an independent audit of Volkswagen’s emissions test-rigging scandal in addition to the carmaker’s internal probe.

Tight U.S. labor market may put pressure on inflation: Fed’s Bullard

BEIJING (Reuters) – A relatively tight labor market in the United States may put upward pressure on inflation, raising the case for higher interest rates, St. Louis Federal Reserve President James Bullard said on Monday.

Exclusive: Tribune Publishing to reject Gannett offer, will share info – sources

(Reuters) – Tribune Publishing Co has decided to reject Gannett Co Inc’s latest $864 million takeover proposal, but will agree to share confidential information with the U.S. newspaper company, people familiar with the matter said on Sunday.

GE says to double Saudi workforce as economy reforms

DUBAI (Reuters) – Saudi Arabia won support for its economic reform plan from one of the world’s biggest companies on Monday as General Electric Co (GE) said it would double its workforce in the kingdom to 4,000 people by 2020.

Sumner Redstone plans to add National Amusements executive to trust: sources

(Reuters) – Media mogul Sumner Redstone is planning to name National Amusements Inc general counsel Tad Jankowski to the seven-person trust that will determine the fate of both Viacom and CBS in the event of Redstone’s incapacitation or death, sources familiar with the situation told Reuters on Sunday.

Slumping Japan exports, factory orders add to headaches for PM Abe, BOJ

TOKYO (Reuters) – Japan’s exports fell sharply in April and manufacturing activity suffered the fastest contraction since Prime Minister Shinzo Abe swept to power in late 2012, providing further evidence that the premier’s Abenomics stimulus policy is struggling for traction.

Frontrunning: May 23

Global stocks see-saw, yields slip as investors get week off to cautious start (Reuters)

Bayer defies critics with $62 billion Monsanto offer (Reuters)

Iran has no plans to freeze oil exports, official says ahead of OPEC meeting (Reuters)

U.S. lifts arms ban on old foe Vietnam as regional tensions simmer (Reuters)

Anthem, Cigna Privately Bicker as They Seek Merger Approval (WSJ)

Fed’s Bullard sees tight US labor market putting upward pressure on inflation (Reuters)

A Mystery Deal in Canada Throws Spotlight on Anbang (WSJ)

Britain faces a ‘recession of its own making’ if we vote for Brexit, Prime Minister and Chancellor warn (Telegraph)

Egypt sends robot submarine to help plane crash search (Reuters)

Debt King Trump, Bridge Builder Clinton Equal Bigger Deficits (BBG)

Axa to Divest Its Tobacco Industry Assets Worth $2 Billion

Trade With Japan Collapses: Exports Decline 7th Month, Imports Plunge Most Since 2009

Submitted by Mish Shedlock of MishTalk

Trade With Japan Collapses: Exports Decline 7th Month, Imports Decline 16th Month

Abenomics was back in the spotlight tonight. Global trade with Japan has collapsed. Exports are down and imports are down even more. The result is an unexpected rise in Japan’s trade surplus, yet another failure of abenomics.

Japanese Output Shrinks at Fastest Pace Since 2012

The Markit Japanese PMI shows Output falls at fastest rate in over two years, underpinned by a sharp drop in new orders.

Flash Japan Manufacturing PMI™ at 47.6 (48.2 in April). Flash headline PMI signals sharpest decline in operating conditions since December 2012.

Flash Japan Manufacturing Output Index at 46.9 (47.8 in April). Production decreases at most marked rate in over two years.

Unexpected Surplus

Bloomberg reports Japan April Trade Surplus 823.5 Billion Yen, Beats Estimates.

Japan’s exports fell for a seventh consecutive month in April as the yen strengthened, underscoring the growing challenges to Prime Minister Shinzo Abe’s efforts to revive economic growth.

Overseas shipments declined 10.1 percent in April from a year earlier, the Ministry of Finance said on Monday. The median estimate of economists surveyed by Bloomberg was for a 9.9 percent drop. Imports fell 23.3 percent, leaving a trade surplus of 823.5 billion yen ($7.5 billion), the highest since …

Futures Fade Early Bounce, Slide In Illiquid Tape As Yen Rises, Oil Drops

Following the latest month abysmal trade and PMI data out of Japan overnight (April exports crashed -10.1 %, worse than the exp. -9.8 and worse than last month’s -6.8% while imports plunged -23.3% also far worse than exp. -18.8 and March -14.9%; PMI 47.6, Exp. 48.3, last 48.2), it was supposed to be a straight up for the USDJPY, and its carry linked E-mini. However, that this did not happen, and instead the Yen jumped, sinking the USDJPY as low as 109.3 was troubling and suggests that the G7 “Sendai discord”, profiled here on Saturday, was worse than even we expected, and Japan indeed no longer has a right to devalue its currency which in turn has pressured the Yen higher.

Aside from Japan, and the previously announced latest mega-M&A in the form of Bayer’s unsolicited $62 billion bid for Monsanto, the overnight session saw various European PMI prints, where despite a miss and drop in the EU Composite PMI (at 52.9, below Exp. 53.2, and last 53.0), Germany reported a modest improvement in its mfg and service PMIs which provided some optimism to the session.

Rapper Threatens To Kill Donald Trump If His “Momma’s Food Stamps” Are Taken Away

Threats by prominent members of the black community against Donald Trump, either directly or indirectly, are nothing new.

Just under two months ago we reported about the latest social fallout incident from Trump’s rising popularity, when prominent Black Lives Matter activist and rapper Tef Poe tweeted a message for “white people”: if Donald Trump wins the presidency, “niggas” will ‘incite riots everywhere.’

“Dear white people if Trump wins young niggas such as myself are fully hell bent on inciting riots everywhere we go. Just so you know,” Poe tweeted. A screenshot of his since deleted tweet was captured below by the Daily Media.

To be sure, the antagonism among African-Americans toward Trump is well-known by now, and even CLSA’s noted commentator Chris Wood touched upon this in the latest edition of hs “Greed and Fear” newsletter.

However, a new and perhaps even more bizarre protest, not to mention death threat, against Donald Trump was revealed this weekend when Louisiana rapper Maine Muzik said during a YouTube video recording that he would kill presumptive presidential candidate Donald Trump if his “Mamma’s food stamps are taken away.”

Big Oil Deals: Don’t Hold Your Breath

Energy busts usually bring large deals in the oil patch, but this time may be different.

Why Tencent Wants a Global Gaming Clash of Clans

Tencent’s quest for Finnish game maker Supercell won’t come cheap.

Why It’s Time to Take a Trip With Samsonite

Samsonite’s deal for Tumi creates a luggage giant and should reward shareholders with a long-term view.

How Many Unemployed People Are Jobless All Month?

from the St Louis Fed

— this post authored by David Wiczer

The unemployment rate is often discussed as if it is either an observable fact or some mysterious bureaucratic drivel. In some circles, it is treated with the same definitiveness as stock prices that scroll across screens. Other tribes treat it with suspicion or muddle it together with many numbers between zero and one that supposedly describe the state of the world.

Impact Of Chinese Slowdown On U.S. No Longer Negligible

from the Dallas Fed

— this post authored by Alexander Chudik and Arthur Hinojosa

The impact of the Chinese economy on the U.S. has notably increased over the past two decades. Econometric modeling shows that the U.S. economy is more likely to directly and indirectly (through its trading partners) feel the impact of a negative shock to Chinese output.

Angry Birds rules the roost at weekend box office

The family movie based on the mobile game beat out “Captain America Civil War” to take top spot.

Deep Dive: These retailers are profiting off the “Amazon effect”

The winners, or survivors, will be those that give up their old business models, writes Phil van Doorn.

Brett Arends’s ROI: Big unanswered questions in “Game of Thrones” season 6, episode 5

We’re already half way through the sixth series. And after last night’s episode, the key unanswered questions are mounting up.