16Jun2016 Pre-Market Commentary: Will USA Be Down For The Sixth Day In A Row?

Here is the current market situation from CNN Money

Fed keeps interest rates unchanged, signals fewer future hikes

WASHINGTON (Reuters) – The U.S. Federal Reserve kept interest rates unchanged on Wednesday and signaled it still planned to raise rates twice in 2016, though it said slower economic growth would crimp the pace of monetary policy tightening in future years.

European stocks, oil slide as growth fears add to Brexit pressure

LONDON (Reuters) – European shares hit a four-month low on Thursday as banks dropped sharply, while oil prices headed for a sixth session of losses after the Bank of Japan refrained from further stimulus and the U.S. central bank struck a cautious note.

U.S. Judge extends VW diesel emissions settlement deadline

WASHINGTON (Reuters) – A U.S. judge late on Wednesday extended the deadline for Volkswagen AG , U.S. government regulators and owners of nearly 500,000 2.0 liter vehicles to reach a final diesel emissions settlement until June 28.

Oil hits three-week low on weak U.S. stock draw, Brexit fear

LONDON (Reuters) – Oil prices hit their lowest in more than three weeks on Thursday, the sixth straight day of losses and longest bearish run since early 2016, as U.S. crude stocks fell less than expected and concerns over Britain’s future in the EU weighed.

Airbnb gets $1 billion debt facility from U.S. banks: source

(Reuters) – Apartment-sharing startup Airbnb Inc has secured a $1 billion debt facility from some big U.S. banks to aid its new services and finance its expansion plans, a source close to the company said.

BOJ holds off on easing despite weak inflation, sparks yen spike

TOKYO (Reuters) – The Bank of Japan refrained from offering additional monetary stimulus on Thursday despite anemic inflation and weak global growth, sending the yen spiking to a two-year high that clouds an already darkening outlook for the economy.

VW says must be more efficient to fund transformation

WOLFSBURG, Germany (Reuters) – Volkswagen needs to become significantly more efficient and optimize its portfolio to pay for massive investments it needs to transform itself in the wake of its Dieselgate scandal, its chief executive said on Thursday.

Visium’s Valvani charged with insider trading on FDA leaks

NEW YORK (Reuters) – A Manhattan hedge fund manager was charged on Wednesday with trading on confidential tips about drug approvals, in one of the biggest insider trading cases since a 2014 court ruling made it harder for U.S. prosecutors to pursue them.

Disney’s China fairytale begins with $5.5 billion park opening

SHANGHAI (Reuters) – Walt Disney Co has opened the gates to its first theme park in China, prompting a rush from thousands of gathered Mickey Mouse enthusiasts to be the first to storm Treasure Cove, ride the Roaring Rapids or visit Disney’s tallest castle.

Frontrunning: June 16

Global Stocks Fall as Bank of Japan Stands Pat (WSJ)

European stocks, oil slide as growth fears add to Brexit pressure (Reuters)

Yellen Says Forces Holding Down Rates May Be Long Lasting (BBG)

Fed’s Yellen acknowledges difficulty of escaping world’s low rate grip (Reuters)

Oil hits three-week low on weak U.S. stock draw, Brexit fear (Reuters)

China Dumping More Than Treasuries as U.S. Stocks Join Fire Sale (BBG)

Brexit would make all of Europe seem less reliable: German minister (Reuters)

Scottish leader says EU referendum on knife edge, Brexit could trigger independence vote (Reuters)

‘Lone hacker’ claims responsibility for cyber attack on Democrats (Reuters)

Orlando Shooter Raised Suspicion at Gun Shops (WSJ)

Brexit darkens cloud hanging over European banks (Reuters)

U.S. officials say American Muslims do report extremist threats (

Deutsche Bank: “This Chart Is Even More Appropriate To Show A Broken Financial System”

Yesterday, DB’s credit strategist Jim Reid (whose bank just hit a new record low stock price earlier this morning), said that “If One Wanted A Simple Indicator Of A Broken Financial System, Then This Is It”, and proceeded to show the chart of the 10 Year Bund yield, which is now well in the negative territory. Today Reid, in his quest to show how broken the global “market” has become as a result of relentless central bank tinkering, and has come up with what he believes is an even better example.

This is what he said:

… how can i get virtually guarantee to get 100 back on an investment in the middle of this century? Well one way would be to spend 231 CHF today and buy the Swiss 2049 maturity Government bond. You have the luxury of an annual 4% coupon to ease the pain of the ginormous capital loss but over the last couple of days, this 32.5 year bond joined the negative yield club (on the ask side). Yesterday we said that the chart we published on 10 year bund yields back to 1807 was an excellent way of showing a broken financial system well maybe the chart in today’s PDF showing this Swiss 2049 bond yield is even more appropriate. You now have to pay the Swiss government for the privilege of lending to them for nearly 33 years. I wonder what the real return on that investment will be over its lifetime? All guesses welcome.

Global Stocks Continue To Plunge As Central Banks Disappoint, Brexit Looms

The last time US equities fell after the Fed came out as overly dovish was in January, when the Fed modestly relented on its “tightening” plan. It was immediately dubbed as “policy error” and led to the February market swoon as a result of Yuan-induced market volatility. But if January was bad for the Fed, yesterday was even worse, with stocks proceeding to stumble and close at the lows after a rambling, disjointed press conference by Yellen failed to convince anyone that the Fed has any idea what it is doing anymore and that the “rate hike cycle may have left the building” as Jeff Gundlach put it. Even Steve Liesman admitted that “the Fed is as close to capitulation as I’ve ever seen them.”

œThe very dovish comments from Janet Yellen didn’t bring much support, said Guillermo Hernandez Sampere, the head of trading at MPPM EK in Eppstein, Germany. œThe market took a breather yesterday but there was nothing more to it. There aren’t enough buyers out there to prevent the downside. The more people are talking about a possible Brexit the more it creates fear among investors.

The odds of the Fed raising key borrowing costs this year are now below 50 percent. About 28 percent of economists in a Bloomberg survey had forecast additional easing at this BOJ meeting, with 55 percent looking to the next gathering in July. The Bank of England will announce its policy decision at noon in London.

Then the BOJ added insult to injury after Kuroda confirmed the BOJ is likewise trapped and did nothing to ease the pain in either the soaring Yen which is back to October 2014 highs, or the Nikkei, when proceeded to tumble another 3% and is now down over a quarter from its summer …

The Bond Market Bubble is the Next Black Swan Event (Video)

By EconMatters

Central Banks are encouraging excessive risk taking in the Bond Markets, setting the stage for the next financial crisis. Bill Gross is right, Bonds are a systemic risk bubble right now. Conditions are ripe right now around the globe for an absolute crash in the bond market similar to a prolonged drought setting the stage for a forester fire that does such damage to become a natural disaster. Once the preconditions are set, it just takes one small match or event to kick start the entire natural disaster or financial crisis black swan event.

Why Bank of Japan Pays Price for Waiting

By standing on the sidelines, the Bank of Japan risks having to watch the yen strengthen to an uncomfortable level, undermining its fight to generate positive inflation

Brexit: Why Jitters Are Spreading Beyond U.K.’s Shores

Until recently, markets have tended to think of Brexit as as a U.K. event. But with polls suggesting that the œleave campaign has the momentum, there are signs of contagion to Europe.

Tencent-Supercell: Big Bucks for a Record High Score

Tencent’s more-than $9 billion deal for Supercell is a huge price in a sector where barriers to entry are low.

The Struggle To Harden Soft Targets

from STRATFOR

— this post authored by Scott Stewart

Two men dressed in suits and ties walked into the Max Brenner cafe on June 8 in Tel Aviv’s upscale Sarona market, sat down and ordered dessert. A few minutes later, they stood up and opened fire on other patrons of the cafe, killing four and wounding another seven before one of the men’s homemade submachine guns malfunctioned. Four days later, early on the morning of June 12, a gunman forced his way into the Pulse nightclub in Orlando, Florida, armed with a rifle and a pistol, killing 49 people and wounding another 53.

May 2016 Adobe Digital Price Index Shows Widespread Deflation Continues. Online Searches For Housing Purchases and Rentals Have Slowed.

from Adobe

Adobe’s May Digital Price Index unveiled deflation in the majority of the consumer goods it tracks and low-cost items saw the greatest price drops year-over-year (YoY) with the exception of TVs. Between April 2015 and April 2016, prices of the most expensive TVs dropped much faster than the cheapest TVs (26.0 percent versus 15.0 percent).

Market Snapshot: U.S. stocks set for 6th day of losses as Brexit vote looms large

Wall Street is set for a sixth straight session of losses on Thursday, as so-called Brexit risks intensified with both the Federal Reserve and Bank of Japan raising concerns about the U.K.’s EU referendum next week.

Need to Know: Brexit or not, these stocks look ripe to rip higher

Brexit sends markets in another uproar, and even central banks are on a knife’s edge ahead of that vote. While there’s only one hedge in town, this sector looks poised to bust higher, no matter what the U.K. chooses.

Why Apple doesn’t have a venture-capital arm

Unlike many top technology companies, Apple doesn’t have a venture capital arm. The reason comes down to Apple’s culture of secrecy, but it could cost the tech giant if the $1 billion bet on Didi Chuxing pays off.