18Aug2016 Pre-Market Commentary: US Futures Flat, Crude Prices Pushing 50, US Dollar At 8 Week Low, Investors Having Difficulty Understanding Divided Fed

Here is the current market situation from CNN Money

European markets are mixed today. The DAX is up 0.27% while the FTSE 100 gains 0.09%. The CAC 40 is even.

Futures flat as minutes show Fed divided over rate

(Reuters) – U.S. stock index futures were little changed on Thursday, a day after the minutes of the Federal Reserve’s July meeting showed policymakers were divided over whether to raise interest rates in the near-term.

Wal-Mart profit beats expectations, stock rises

(Reuters) – Wal-Mart Stores Inc , the world’s largest retailer, reported a higher-than-expected quarterly profit on Thursday as sales at its established U.S. stores rose for the eighth consecutive quarter, sending its shares up more than 3 percent.

Citi CEO seen asking for more patience as targets still elusive

NEW YORK (Reuters) – Earlier this year, an analyst asked Citigroup Inc Chief Executive Michael Corbat what he would do if activist investors tried to shake things up after what seems like eons of underperformance.

NY Fed, Bangladesh central bank to resume normal money transfers: sources

(Reuters) – The Federal Reserve Bank of New York and Bangladesh’s central bank have agreed to withdraw additional payment security measures put in place after one of the world’s biggest cyber heists, the theft of $81 million from Bangladesh Bank’s account at the Fed, two sources said.

SolarCity slashing costs, including CEO pay

LOS ANGELES (Reuters) – SolarCity Corp on Wednesday said it would cut operating costs, including slashing its chief executive’s salary, to bring expenses in line with its reduced solar installation outlook.

Amazon steps up British investment with Tilbury distribution center

LONDON (Reuters) – Online retailer Amazon said it would create 1,500 new jobs in 2017 when it opens a new distribution center in Tilbury, south east England, maintaining its surge of investment in Britain.

VW to cut hours at three more plants amid supplier row: source

HAMBURG (Reuters) – Volkswagen will cut working hours in some parts of production at its core factory in Wolfsburg and two other German plants as it grapples with a supplies shortage caused by a parts maker refusing to stick with delivery commitments, a source close to VW said on Thursday.

Low-cost airlines bet on data to drive profit

DUBLIN (Reuters) – Europe’s low-cost airlines once mocked the air miles programs run by flag carriers as expensive relics of a bygone era. But after watching wide-eyed as customer databases were valued at billions of dollars, they are scrambling to catch up.

As technology shifts more layoffs loom at tech companies

NEW YORK (Reuters) – Cisco Systems Inc’s announcement on Wednesday that it plans to lay off 5,500 employees is unlikely to be the last round of Silicon Valley pink slips as hardware companies struggle to keep up with rapid technology shifts, analysts and recruiters said.

Frontrunning: August 18

World stocks rise, dollar weakens on divided Fed (Reuters)

U.S. Held Cash Until Iran Freed Prisoners (WSJ)

Brazil police pull U.S. swimmers from flight amid robbery probe (Reuters)

Rio’s Latest Headache: Loads of Empty Seats (WSJ)

Clinton Foundation hired cyber firm after suspected hacking (Reuters)

How Lending Club’s Biggest Fanboy Uncovered Shady Loans (BBG)

Spain PM seeks small party support to try to snap deadlock (AP)

Lawsuit Alleges Banks Manipulated Australian Rate (WSJ)

Brexit Means Little to British Consumers When the Sun Is Shining (BBG)

Welcome to the ‘Meat Casino’! The Cattle Futures Market Descends Into Chaos (WSJ)

Cathay Says Premium Travel Slumping, Prompting Discounts (

Gold – “Mother of All Bull Markets Has Only Just Begun” – Grandich

There are many reasons to believe that “the mother of all bull markets has only just begun” for gold.

So believes Peter Grandich, the market analyst dubbed the “Wall Street Whiz Kid” whose track record speaks for itself. He called the Wall Street Crash in 1987 and subsequent sharp stock market recovery, the end of the bull market in stocks in 2000 and the global financial crisis in 2008.

Gold in USD – 1971 to Today

On his website this week he entertainingly and insightfully outlined why he is so positive on gold:

I’m not going to write some long dissertation but rather just highlight some of the reasons I personally believe gold is in the earliest stages of what can turn out to be its biggest bull market ever.

The bullish fundamentals for gold ownership grow almost daily. Again, I could write pages of why, but I will just point out a few key ones:

1 – The severe gold correction literally …

Wal-Mart Jumps After Beating, Guiding Higher Despite Drop In US Profits; Buybacks Soar

After several quarters of deteriorating results, moments ago US retail giant Wal-Mart redeemed itself by reporting adjusted Q2 earnings of $1.07 (net of a $0.14 adjustment from the gain of a sale in China), higher than the $1.02 consensus estimate, on revenue of $120.9 billion, up 0.5% from the $120.2 billion a year ago, and also higher than the $120.3 billion expected. The company also reported positive comp sales in the US for the eighth consecutive quarter, up 1.6%, above the 1.0% estimate.

In a sign that its e-commerce business is picking up, WMT said that globally e-commerce sales and GMV increased 11.8% and 13.0%, respectively, representing an acceleration from the first quarter.

Year to date WMT reported operating cash flow of $14.9 billion and free cash flow of $10.3 billion, both approximately $5.0 billion higher than last year. The company aslo announced that while dividends in Q2 were flat at $1.6 billion, buybacks soared by 111% Y/Y to $3.7 billion, suggesting virtually all of the free cash flow in the quarter was returned back to shareholders.

A visual summary of the key results:

But most importantly, and the reason why the stock is more than 2% higher in the pre market is that Wal-Mart boosted its FY17 adj. EPS view to $4.15-$4.35, up from the $4.00-$4.30 it saw in February. Here is the latest guidance from WMT:

Why Some Banks Are Thankful for Money-Market Strains

In 2008, higher Libor was a thing to fear, now it looks set to bring benefits.

Lenovo: Why Selling Property Can’t Fix Computer Crash

Lenovo, the world’s largest PC maker, might look cheap, but it could well be a value trap. Selling property isn’t the answer.

Wal-Mart’s Stock Price Needs a Rollback

Wal-Mart’s rally this year will be put to the test in Thursday’s quarterly results.

Market Extra: Is Wall Street’s ‘fear gauge’ signaling that investors are getting too complacent?

Wall Street’s so-called fear gauge has some worried that stocks could be on the verge of tumbling lower.

Economic Report: Jobless claims fall 4,000 to one-month low of 262,000

The number of people who applied for unemployment benefits last week fell by 4,000 to 262,000 to mark a one-month low, a sign the labor market remained healthy in late summer.

Need to Know: Here’s a shining sector that’s not stuck in a glut

Gluts are not just for oil, they’re everywhere. Our call of the day looks at three trouble spots for the market, but then one shining beam of light.