09Jan2017 Pre-Market Commentary: U.S. Stock Index Futures Again Directionless This Morning, Crude Prices Falling Sharply, U.S. Dollar Looking Stronger, European Shares Fall

Here is the current market situation from CNN Money

European markets are mixed. The FTSE 100 is higher by 0.27%, while the CAC 40 is leading the DAX lower. They are down 0.71% and 0.51% respectively.

European shares fall, sterling dives on Brexit comments

LONDON (Reuters) – The dollar edged up on Monday, boosted by robust U.S. wage growth data that strengthened the case for more U.S. interest rate rises, while Britain’s pound fell on comments by Prime Minister Theresa May seen as pointing to a “hard” Brexit.

Oil down on concerns rising U.S. production could dampen output cut deal

LONDON (Reuters) – Oil fell 2 percent on Monday as signs of growing U.S. production outweighed optimism that many other producers, including Russia, were sticking to a deal to cut supplies in a bid to bolster the market.

Mars to buy pet health care provider VCA for $7.7 billion

(Reuters) – Candy and pet food maker Mars Inc said it would buy VCA Inc , which runs hospitals for animals, for $7.7 billion.

Japan’s Takeda to buy U.S. cancer drug maker Ariad in $5.2 billion deal

(Reuters) – Japan’s Takeda Pharmaceutical Co Ltd said on Monday it would buy cancer drug maker Ariad Pharmaceuticals Inc in a deal valued at $5.20 billion, to beef up its oncology pipeline.

VW executive to appear in Miami court over Dieselgate scandal

DETROIT (Reuters) – Volkswagen executive Oliver Schmidt will appear in Federal Court in Miami, Florida, on Monday, a spokeswoman for the United States Attorney’s office in Detroit said.

McDonald’s sells most of China, HK business to CITIC, Carlyle for $2.1 billion

HONG KONG (Reuters) – McDonald’s Corp has agreed to sell the bulk of its China and Hong Kong business to state-backed conglomerate CITIC Ltd and Carlyle Group LP for up to $2.1 billion, seeking to expand rapidly without using much of its own capital.

Fiat Chrysler ups the ante as automakers respond to Trump

DETROIT (Reuters) – Fiat Chrysler Automobiles on Sunday said it will invest $1 billion to modernize two plants in the U.S. Midwest and create 2,000 jobs, upping the ante as automakers respond to threats from President-elect Donald Trump to slap new taxes on imported vehicles.

Big China bitcoin exchange says no government pressure on outflows

SHANGHAI (Reuters) – The head of a major bitcoin exchange in China says few people there use the cryptocurrency to get around rules on how much money they can take out of the country, and despite a publicized meeting with the central bank last week the exchange, BTCC, hasn’t been told explicitly to check capital outflows.

Google shows improved self-driving system in Chrysler Pacifica

DETROIT (Reuters) – Google unveiled its latest self-driving system in a Chrysler Pacifica minivan during a Sunday preview ahead of the Detroit auto show, saying the technology is more reliable and affordable.

Italy Unemployment Unexpectedly Deteriorates To Highest Since June 2015; Youth Unemployment Jumps To 39.4%

While the rest of Europe’s troubled periphery has been enjoying a slow, if steady, economic improvement in recent years (it is unclear if it would sustain should the ECB’s QE backstop be withdrawn and sovereign interest rates spike), in an unexpected deterioration reported earlier this morning, Italy’s unemployment rate rose to the highest level since June 2015, as the country struggles to regain a solid economic footing.

According to Italy’s statistics agency Istat, the jobless rate jumped to 11.9% in November, up from a revised 11.8% the month before, and well above the 11.6% consensus forecast. Despite the headline deterioration, there were 19,000 more people employed in Italy in November compared with the month before, Bloomberg reports.

Even more troubling, youth unemployment rose to 39.4 percent, up from 37.6% and the highest since October 2015.

The Italian deterioration stood out across a stable European backdrop: the November unemployment rate for broader euro area was 9.8%, the European Union’s statistics office in Luxembourg said later Monday.

US Destroyer Fired Warning Shots At Four Iranian Vessels In Strait Of Hormuz

In the latest dangerously close encounter between US and Iranian navies, Reuters reports that a U.S. Navy destroyer fired three warning shots at four of Iran’s Islamic Revolutionary Guard Corps vessels on Sunday after they closed in at a high rate of speed in the Strait of Hormuz, according to two U.S. defense officials.

The Reuters sources said that the USS Mahan established radio communication with the boats but they did not respond to requests to slow down.

The USS Mahan

The Navy destroyer fired warning flares and a U.S. Navy helicopter also dropped a smoke float.

The Iranian vessels came within 900 yards (800 meters) of the Mahan, which was escorting two other U.S. ships.

The last such encounter in which a US navy ship fired warning shots at Iranian vessels took place last August, when the USS Nitze fired three warning shots after a “harassing” Iranian fast-attack craft approached and circled two U.S. Navy ships and a Kuwaiti vessel in the northern Gulf. The U.S. ship fired the shots into the water after the Iranian ship did not leave after a brief radio conversation.

The Iranian vessels had moved at high speed toward the Nitze, which allegedly was operating in accordance with international law in international waters and ignored maritime “rules of the road” as set out in the 1972 Convention on the International Regulations for Preventing Collisions at Sea. According to the Navy official, the IRGC vessels ignored multiple warnings, creating a dangerous, harassing environment that could have pushed the Nitze to take defensive measures, escalating the situation. At the time, Iran’s defense …

Frontrunning: January 9

European shares dip, sterling falls on Brexit comments (Reuters)

Pound Falls to 10-Week Low as May Hints at Single-Market Exit (BBG)

Offshore Yuan Falls for Second Day as Bears Reload After Squeeze (BBG)

Trump’s choices for top Cabinet posts face big tests this week (Reuters)

Nine Trump Nominees Who’ll Face Extreme Vetting by Democrats (BBG)

Meet the Mercers: New Power Brokers in Trump’s Washington (WSJ)

Why the China Manipulator Label Looks Increasingly Appealing to Trump (BBG)

Turkish Lira Extends Losses as Rate Speculation Mounts (BBG)

Auto Makers in Hot Seat as Political Pressure Rises (WSJ)

GM Won’t Move Small-Car Production From Mexico (WSJ)

‘La La Land’ Sets Golden Globes Record With …

Chinese Bonds Coming to Ratings Company Near You

As Chinese bonds sold off sharply in December, Beijing quietly declared its intention to allow foreign credit-rating companies to rate local issues for the first time.

McDonald’s Shakes Up Its China Approach

The fast-food giant’s sale of its China business to a state-owned company could be more profitable in the long run.

Apple’s Fortunes Are Hard to Read

Apple’s highly focused business model means even conservative forecasts can miss the mark.

Dissecting The Falling Labor Force Participation Rate

from the St Louis Fed

Questions about the jobless recovery following the Great Recession have spurred economists to scrutinize the nation’s rate of labor force participation (LFP). The LFP rate measures the share of the population that actively participates in the labor market, or the total number of people employed and unemployed as a share of the working-age population.

Fed should get on with its interest-rate tightening, global-economy experts Rajan and Rogoff tell MarketWatch

The Federal Reserve should get on with tightening, given the improvement in the economy, two top international economists said.

The Fed: Asset prices are not ‘broadly unsustainable,’ Fed’s Powell says

Low interest rates helped the economy recover and have not pushed asset prices to ‘broadly unsustainable’ levels, said Fed Gov. Jerome Powell.

Jeff Reeves’s Strength in Numbers: 3 ways to profit with stocks and ETFs in the ‘year of the dollar’

Regardless of your allocation to stocks or your investment horizon, this kind of big-picture trend in the dollar means now is the time to position your investment portfolio to profit — and to avoid some of the pitfalls that can come from a strong domestic currency, writes Jeff Reeves.