27Sep2017 Pre-Market Commentary: Markets Set To Open Flat

Here is the current market situation from CNN Money

European markets are higher today with shares in Germany leading the region. The DAX is up 0.52% while London’s FTSE 100 is up 0.33% and France’s CAC 40 is up 0.18%.

U.S. slaps steep duties on Bombardier jets after Boeing complaint

MONTREAL/NEW YORK (Reuters) – The U.S. Commerce Department on Tuesday slapped preliminary anti-subsidy duties on Bombardier Inc’s CSeries jets after rival Boeing Co accused Canada of unfairly subsidizing the aircraft, a move likely to strain trade relations between the neighbors.

Special Report: Drowning in grain – How Big Ag sowed seeds of a profit-slashing glut

CARMAN, Manitoba (Reuters) – On Canada’s fertile Prairies, dominated by the yellows and golds of canola and wheat, summers are too short to grow corn on a major scale.

Uber defends business model at UK tribunal on worker rights

LONDON (Reuters) – Uber told a British employment appeal tribunal on Wednesday its drivers were self-employed, not workers entitled to a range of benefits, less than a week after it heard it would lose its London license.

Samsung scion Jay Y. Lee set to begin appeal

SEOUL (Reuters) – Samsung Electronics Vice Chairman Jay Y. Lee on Thursday will begin an appeal of his five-year jail term for corruption, in a case highlighting South Korea’s issues with the family-run conglomerates that dominate the economy.

Ford, Lyft will partner to deploy self-driving cars

DETROIT (Reuters) – Ford Motor Co said on Wednesday it will collaborate with Lyft to deploy Ford self-driving vehicles on the ride services company’s network in large numbers by 2021.

France backs Siemens-Alstom rail deal despite job fears

PARIS (Reuters) – The French government said on Wednesday that combining the rail operations of Germany’s Siemens AG with Alstom would preserve “strategic interests” amid fears over job cuts.

SK Hynix set to invest in Toshiba chip unit, details consortium’s plans

SEOUL/TOKYO (Reuters) – South Korea’s SK Hynix Inc said on Wednesday its board had approved its participation in a Bain Capital-led consortium that plans to purchase Toshiba Corp’s memory chip unit for 2 trillion yen ($17.7 billion).

Yellen lifts dollar as global markets await Trump tax plan

LONDON (Reuters) – Growing expectations that the U.S. Federal Reserve will raise interest rates for the third time this year lifted the dollar on Wednesday, and European share prices rose as President Donald Trump’s administration prepared to outline a new tax plan.

Nasdaq, SEB to test blockchain for mutual funds

NEW YORK (Reuters) – Exchange group Nasdaq Inc and Nordic financial services group SEB have teamed up to test a blockchain-based mutual fund trading platform for the Swedish market in an effort to simplify and make the process faster.

Dollar Surges, Bonds Dump Ahead Of Trump Tax Plan

S&P futures are set for a higher open (+ 0.1%) despite the expected hit to the Dow from Nike which is down over 3% on unexpectedly poor revenue growth, as European stocks gain while Asian shares dropped. Like yesterday when the big story was the jump in the USD ahead of Yellen’s (rather hawkish) speech, so today the greenback’s levitation has continued, this time propelled by today’s unveiling of Trump’s tax plan.

On the eve of its unveiling, Trump said lawmakers should expect a “very, very powerful document” that would cut taxes “tremendously” for the middle class. If passed, the plan would be Trump’s first significant legislative win since taking office in January. “The idea that Trump could be reaching across the aisle, talking about tax cuts to middle and low income households, if it comes to pass, we are talking a pretty material fiscal boost to the U.S. economy. This sort of easy fiscal policy is why the markets are reacting the way they have,” said Mark Dowding, co-head of investment grade at BlueBay Asset Management.

One Trader Asks Whatever Happened To “Don’t Fight The Fed?”

Something appears to be off. After two consecutive admissions by Janet Yellen that the Fed has lost its grasp on the “mystery” of inflation, the market no longer appears eager to chase the direction of every Fed proclamation, especially the recent, hawkish ones. And, as Bloomberg’s Mark Cudmore writes this morning, “whether it’s because the Fed has lost credibility or just because Yellen is viewed as a lame duck approaching the end of her term, it doesn’t matter – U.S. rates and the dollar show investors aren’t buying what she’s selling.”

As a result, and because markets like narratives, Cudmore notes that “the combination of a freshly hawkish Fed and a potential tax plan is too appealing a story to ignore: it’s a tale of fiscal policy and monetary policy working together to support higher U.S. yields and a stronger dollar.” In short: the Bloomberg strategist is a big fan of being long the USD and short bonds here, unwilling to fight both a Trump administration dead set on cutting taxes, as well as a Fed where the divergence between its own and the market’s rate hike expectations is the widest it has ever been.

How One Trader Made Billions With Ethereum, And What He’s Doing Next

Former Fortress Principal Michael Novogratz left the firm’s colossal macro hedge fund almost two years ago, but has been discussing investments in virtual currencies since 2013 when he told a UBS conference…

“Put a little money in Bitcoin…Come back in a few years and it’s going to be worth a lot.”

He was of course correct, Bitcoin was trading around $200 at the time and as recently as three weeks ago was worth $5000…

Three Cheers For MEP Dan Hannan: Why Not A Better Brexit Deal For Everyone?

Authored by Mike Shedlock via MishTalk.com,

The EU values political correctness more than jobs.

The result was a collapse in support for Angela Merkel, and the rise of AfD and FDP in Germany. Let’s not forget Marine Le Pen in France, Beppe Grillo in Italy, and the far right in Austria.

For the sake of political correctness, the EU is bound and determined to punish the UK for Brexit even though new studies suggest that a Hard Brexit Will hurt the EU More Than Britain.

The European Union will lose more than twice as many jobs as Britain after a hard Brexit, research by one of the world’s leading universities found as tough UK-EU divorce talks begin in Brussels.

Hard Brexit describes what will happen if the UK and EU fail to reach a divorce deal by 29 March 2019. Britain would revert to WTO tariffs on imports and exports to and from the EU rather than the zero tariffs afforded by membership of the bloc.

The return of tariffs to goods and services would cost 526,830 British jobs and 1.209 million jobs in the remaining 27 EU member states, according to researchers at Belgium’s University of Leuven, one of the top 50 global universities. The damage would lead to a 4.48% drop in UK GDP and 1.54% in EU GDP, researchers found.

A Tax Cut’s Unintended Consequences

What a tax cut could give the economy the Federal Reserve could take away. Republican leaders on Wednesday are expected to release a tax plan that would lower tax rates on individuals and corporations and allow companies to repatriate earnings held overseas at a low rate.

Why Emerging Markets Aren’t Too Hot to Handle

The Fed’s apparent desire to push on with tightening policy may give emerging markets a pause. But if global growth continues, then a pause is all it should be.

Why Biotech’s Retreat Won’t Be as Dramatic This Time

The failure of a high-profile clinical trial to treat Alzheimer’s disease means that the biotech market is about to get a big test. But Axovant’s stock meltdown is unlikely to spread.

The World That Awaits The Next German Leader

from STRATFOR

— this post authored by Adriano Bosoni and Mark Fleming-Williams

Now that the 2017 German elections have wrapped up, the process of forming a government and determining exactly who will lead the country is underway. Negotiations to determine the members of the governing coalition could take weeks or even months, but to some extent, it doesn’t matter who is named chancellor in the end. The challenges that the next leader of Europe’s largest economy must tackle will broadly be the same, whether Angela Merkel returns to the chancellery or not. The country’s next government will have to satisfy the same set of national imperatives while dealing with the same outside pressures that shape its options in setting a national strategy. To understand the strategy, it’s first necessary to explore these imperatives and surroundings.

Risk And Complexity

from the International Monetary Fund

— this post authored by Ian Goldin and Chris Kutarna

Global integration and new technology mean rapid progress – but also higher risk. Today’s integration of economic systems and increased flow of ideas expands our choice, broadens our horizons, and is a catalyst for creativity, innovation, and growth. But it also dramatically changes the nature of risk.

Need to Know: The ‘old school’ reason why you haven’t missed the tech melt-up

Tech stocks have had a fairly good run this year, maybe too good for some investors. But our call of the day says don’t worry, you’ll get another chance to hop on the melt-up.

Market Snapshot: U.S. stocks set to open higher, but Nike nosedives after earnings

U.S. stock futures on Wednesday are pointing to a small rise at the open, as analysts say the market is stabilizing after a four-session skid for the Dow industrials.

Tesla car population will explode within a few years, Morgan Stanley says

Analysts at Morgan Stanley reach new heights of optimism about Tesla, predicting millions of Tesla vehicles on the road in short order.