06Mar2017 Pre-Market Commentary: Wall Street Starts Week Opening Lower Amid Accusations Of Wire Tapping And North Korea Missile Launches

Here is the current market situation from CNN Money

European markets are lower today with shares in Germany off the most. The DAX is down 0.42% while France’s CAC 40 is off 0.40% and London’s FTSE 100 is lower by 0.37%.

PSA targets Opel turnaround as GM exits Europe

PARIS/FRANKFURT (Reuters) – France’s PSA Group has agreed to buy Opel from General Motors in a deal valuing the business at 2.2 billion euros ($2.3 billion), creating a new European car giant to challenge market leader Volkswagen .

Futures slip after Trump’s wiretap accusation

(Reuters) – U.S. stock index futures slipped on Monday as President Donald Trump’s accusation that his predecessor, Barack Obama, wiretapped him cast a shadow on the market.

GM shifts from bigger is better to less global, more profitable

DETROIT (Reuters) – General Motors Co’s decision to sell its European operations doubles down on a bet that the company can win by being less global, but more profitable, in an auto industry increasingly driven by software.

Deutsche Bank shares drop on capital hike plan

FRANKFURT (Reuters) – Shares in Deutsche Bank fell almost 7 percent in early trading on Monday after the lender announced an 8 billion-euro ($8.48 billion) capital increase that Chief Executive John Cryan had previously declared a last resort.

Euro zone investor morale hits almost 10-year high

BERLIN (Reuters) – Investor sentiment in the euro zone improved more than expected in March, hitting its highest level in almost 10 years on Monday, as concerns that global political risks could end an economic upswing dissipated.

Oil slips on concerns over Chinese demand, Russian output

LONDON (Reuters) – Oil prices slipped on Monday, wiping out some of the previous session’s gains, as lower growth targets in China and concerns over Russia’s compliance with a global deal to cut oil output sparked renewed worries over a crude oil supply glut.

ChemChina says Syngenta deal filing accepted by Beijing

BEIJING (Reuters) – ChemChina [CNNCC.UL] said on Monday that Beijing had accepted its application for regulatory approval of its $43 billion takeover of Syngenta last month.

Funds expect Saudi Aramco to be valued around $1-1.5 trillion: survey

DUBAI (Reuters) – Fund managers and institutional investors expect oil giant Saudi Aramco to have a market capitalization of $1 trillion to $1.5 trillion when it sells shares to the public next year, a survey by regional investment bank EFG Hermes showed on Monday.

China’s Xi says Shanghai should lead in reform, innovation: Xinhua

SHANGHAI (Reuters) – Shanghai should lead China’s plans to reform and advance innovation, the official Xinhua news agency has reported President Xi Jinping as saying at the annual meeting of parliament.

The World’s Most Deceptive Chart

Via Lance Roberts of RealInvestmentAdvice.com,

I received an email last week which I thought was worth discussing.

“I just found your site and began reading the backlog of posts on the importance of managing risk and avoiding draw downs. However, the following chart would seem to counter that argument. In the long-term, bear markets seem harmless (and relatively small) as this literature would indicate?”

This same chart has been floating around the “inter-web,” in a couple of different forms for the last couple of months. Of course, if you study it at “face value” it certainly would appear that staying invested all the time certainly seems to be the optimal strategy.

The problem is the entire chart is deceptive.

More importantly, for those saving and investing for their retirement, it’s dangerous.

Here is why.

The first problem is the most obvious, and a topic I have addressed many times in past missives, you must worry about corrections.

Why Dollar Bulls “Despair” As March Hike Looks Baked In

Bloomberg FX strategist, Vincent Cignarella, explains why for dollar bulls betting on a continued rise in the dollar, the lack of a strong move higher following last week’s repricing of March rate hike odds may be an ominous development.

Dollar Bulls Despair as March Fed Hike Looks Like It’s Baked In

Federal Reserve Chair Janet Yellen’s remarks Friday all but confirmed what traders rushed to price in last week: a rate hike mid-month is close to a lock.

The heightened confidence about March may actually spell trouble for dollar bulls in coming days — there’s little in the way of fresh incentives to buy more of the U.S. currency right away, after it surged to an almost six-week high last week. Fed speakers are now in a blackout period until their March 14-15 meeting, and for major economic data, traders have to wait for February jobs figures to be released March 10.

“A further adjustment of the federal funds rate would likely be appropriate” in March if employment and inflation continue to evolve as expected, Yellen said in the text of a speech Friday in Chicago. She also said the removal of accommodation is unlikely to be as slow as the past couple years, when the Fed hiked by a quarter-point in two consecutive Decembers.

But for market participants, that may not have been hawkish enough. After her remarks, futures indicate traders actually saw less of a chance that the Fed will achieve its projected pace of three hikes in 2017. The Bloomberg dollar index sank to the day’s lowest levels after her appearance. It dropped 0.7 percent, its worst day since January. It also stalled at its 55-day moving average, dropping back to a support level at its 100-day average.

There’s another potentially ominous sign for i …

Frontrunning: March 6

Geopolitics, Deutsche Bank drag global stocks lower (Reuters)

Deutsche Bank Turnaround Plan Gets Mixed Reaction (BBG)

Conservative Groups Jeopardize GOP Plan to Repeal Health Law (WSJ)

Russian Hackers Seek Hush Money From Liberal U.S. Groups (BBG)

Automakers Near a Victory on Rollback of Fuel Standards (NYT)

Brought Down by Long Bust, Texas Oilmen Pray for Another Boom (WSJ)

General Motors Waves Goodbye to Europe (BBG)

PSA targets Opel turnaround as GM exits Europe (Reuters)

GM to Take $4 Billion Charge on Sale of European Unit to Peugeot (WSJ)

Standard Life to Buy Aberdeen in $4.7 Billion Stock Deal (BBG)

Bezos Expected to Unveil Further Plans for Private Space Exploration (

“Think About and Prepare For” Euro Catastrophe

“Think About and Prepare For” End Of Euro – TV3 Agenda Interview

David McWilliams interviewed Lara Marlowe and Cormac Lucey about the elections in France (April 23 and May 7) for TV3’s Agenda and the short interview about the French elections, Le Pen and the risks posed to the euro is a must watch.

Key points covered
– “Could the French say ‘au revoir’ to the euro?”
– Brexit vote and Trump election given a “lot of cold chills”
– Le Pen has “promised to take France out of euro”
– Her election would be “catastrophic for Europe and the euro”
– “If people break out from the lunatic asylum … Ireland should leave the euro…”
– ‘Going bankrupt slowly and then suddenly’ as per Hemingway’s warning
– “Money moves when it is panicked …”
– This is now not a “fringe” concern – deep insiders are warning
– Lack of rational debate about risks – blindly dismiss concerns
– “Seeing a slow motion bank run…”
– “Think about and prepare for…”

Deutsche Bank: Big Capital Call Offers Little Long-Term Reward

The German lender is seeking stability but investors will likely be underwhelmed.

The Bad News and the Really Bad News for Retailers Fighting Amazon.com

Amazon.com’s ability to sustain its retail growth rate will determine the fate of the rest of the retail industry.

AmEx: Why You Can Still Leave Home Without It

Even after recent enhancements, the American Express Platinum card isn’t a great deal.

Age Discrimination And Hiring Of Older Workers

from the San Francisco Fed

David Neumark, Ian Burn, and Patrick Button

Population aging and the consequent increased financial burden on the U.S. Social Security system is driving new proposals for program reform. One major reform goal is to create stronger incentives for older individuals to stay in the workforce longer. However, hiring discrimination against older workers creates demand-side barriers that limit the effectiveness of these supply-side reforms. Evidence from a field experiment designed to test for hiring discrimination indicates that age discrimination makes it harder for older individuals, especially women, to get hired into new jobs.

Project Syndicate: Rethinking economic progress, and how far we have yet to go

By one standard, the world’s population is 20 times richer than our ancestors in the Agrarian Age, but that measure does not count the incredible expansion of choices undreamt of even a few years ago, writes Brad DeLong.

Need to Know: This ‘most un-fun bubble ever’ isn’t like other bubbles — and there’s comfort in that

One “grizzled old” former derivatives trader explains why this is such a joyless bull market.

Key Words: David Letterman would like one more shot at interviewing Donald Trump

Legendary late-night host David Letterman says he doesn’t miss his TV show, but that if he still had it, Donald Trump’s presidency would give him a unique problem — having too much material.