19Apr2018 Pre-Market Commentary: Wall Street Futures Dip As Chip Stocks, Apple Offset Rising Oil Prices, Fresh Corporate Earnings Flood In, Oil Stocks Jump As Global Crude Oil Rally Gains Steam

Here is the current market situation from CNN Money

European markets are mixed today. The FTSE 100 is up 0.11% while the CAC 40 gains 0.08%. The DAX is off 0.28%.

Futures dip as chip stocks, Apple offset rising oil prices

(Reuters) – U.S. stock index futures edged lower on Thursday, as the effect of higher oil prices was offset by declines in chipmakers, following a weak forecast from Taiwan Semiconductor, the world’s largest contract chipmaker.

U.S ban on sales to ZTE triggers patriotic rhetoric in China

HONG KONG (Reuters) – A U.S. ban on sales of American components to ZTE Corp has unleashed a patriotic backlash in China’s cyberspace, highlighting the growing tension between the world’s two largest economies.

Takeda makes $61 billion bid for drugmaker Shire: sources

LONDON (Reuters) – Takeda Pharmaceutical has made a bid for Shire that values the London-listed drugmaker at around $61 billion, two sources with direct knowledge of the matter told Reuters.

Oil climbs on Saudi price ambitions and U.S. stocks draw

LONDON (Reuters) – Oil prices kept rising to their highest since late 2014 as U.S. crude inventories declined, moving closer to five-year averages, and after sources told Reuters that top exporter Saudi Arabia aims to push prices even higher.

P&G quarterly results surpass estimates

(Reuters) – Procter & Gamble Co reported better-than-expected quarterly results on Thursday, boosted by strong demand for skincare products Olay and SK-II, as well as fabric and home care products such as Febreze.

P&G to buy German Merck’s consumer health unit for $4.2 billion

(Reuters) – Procter & Gamble Co (P&G) has agreed to acquire Merck KGaA’s consumer health unit for 3.4 billion euros ($4.2 billion), giving it vitamin brands such as Seven Seas and greater exposure to Latin American and Asian markets.

Daimler open to buying small stake in Volvo cars: Manager Magazin

FRANKFURT (Reuters) – Daimler is open to supplying Volvo with engines and could even take a small stake in the Swedish carmaker, Manager Magazin said, raising the possibility of increased cooperation between Mercedes-Benz and China’s Geely [GEELY.UL].

Qualcomm concessions insufficient to clinch NXP deal: commerce ministry

BEIJING (Reuters) – U.S. chipmaker Qualcomm will have to do more to complete its proposed takeover of NXP Semiconductors , a commerce ministry spokesman said on Thursday.

Exxon faces setback in Iraq as oil and water mix

LONDON/BASRA, Iraq (Reuters) – Talks between Exxon Mobil and Iraq on a multi-billion-dollar infrastructure contract have reached an impasse, Iraqi officials and two industry sources said, in a potential setback to the oil major’s ambitions to expand in the country.

Gartman: “We Were Badly Wrong Regarding Crude Oil And We Were Stopped Out”

As we first pointed out yesterday, it took just a few hours to go from this latest Dennis Gartman recommendation:

We wish to sell WTI and Brent Crude short this morning upon receipt of this commentary, predicated upon the massive narrowing of the backwardation in both and predicated of course upon the “reversals” suffered by both. We’ll have stops in tomorrow’s TGL, but for now we’ll risk $1.20/barrel from the current level, looking for $5-$7/barrel to the downside and one unit of each shall suffice.

… to this:

… which in our opinion was enough to lead to perhaps the fastest stop out in Dennis Gartman reco history.

As it turns out, we were right and Gartman was “badly wrong” as he notes,oh, about 3 times in the following paragraph:

CRUDE OIL PRICES HAVE SOARED AND WE WERE AND ARE BADLY WRONG, and we were made badly wrong yesterday when the EIA reported a somewhat surprising drop in crude oil inventories, but more importantly, we were made …

GOP Chairman To Subpoena DOJ Over Comey Memos

While a criminal referral has been sent to the DOJ for James Comey, Hillary Clinton and others involved in the 2016 US presidential election, House Judiciary Committee Chairman Bob Goodlatte (R-VA) is expected to subpoena the Department of Justice (DOJ) as early as this week in order to obtain copies of James Comey’s memos – a major catalyst in the appointment of Robert Mueller as special counsel.

Chairman Goodlatte wants lawmakers to be able to review the seven memos Comey created allegedly documenting his interactions with President Trump, according to two people familiar with the matter in comments to The Hill.

The chairman on Wednesday notified the ranking Democrat, Rep. Jerrold Nadler (N.Y.), that a subpoena is forthcoming. Under Judiciary committee rules, the chairman must consult the ranking member …

Blain: “More And More Folk Muttering Darkly About ‘Late Cycle’ Drift”

Submitted by Bill Blain of Mint Partners

“Late Cycle”, thin markets and boom to bust fears stifle activity

“Well, I’ve been foolish too many times, now I’m determined, I’m gonna get it right…..”

What’s going on in markets? A glance at price charts highlights the recent upside. But, if there is a theme to the market this morning, I’d say they are looking tired and unconvinced. Why? Phrase of the day is “Late Cycle”.

Take a look at the market numbers and ask if they really are “reasons to be cheerful?” The 10-year bond remains range bound at 2.85%, stock markets look top and tailed (with a worrying number of people who should know better saying daft things like: “its my strongest ever conviction trade – buy stocks”), and oil prices remain strong at $70.

The current upside drift in markets is being fuelled by short-term positivity.

Geopolitics look sound: Nothing to worry. Korea is going to be solved – might even reap a peace dividend. The Russians have not kicked off after the Syria strikes. The prospects for negotiation on trade with China are looking stronger. Apparently.

Policy is looking strong: US tax cuts are positively impacting Q1 reporting results and therefore sentiment. European inflation is edging up – to the extent where QE is threatened. China has embarked on a massive liquidity into its economy to oil the financial sector.

Markets are buoyed by a massive wave of investment cash looking to play: hence much of the stock upside thinking.

However, the actual price action in stock markets doesn’t look convincing, and the volumes don’t look like a buying binge. More like covering positions. It feels like we’re still waiting for somethi …

FAA Orders Engine Inspections After Deadly Southwest Accident

Two days after a woman died and seven people were injured aboard Southwest Airlines flight 1380, the FAA has ordered inspections of fan blades on all CFM56-7B engines of the same type that were involved in Tuesday’s incident, NPR reported.

Meanwhile, information about the cause of death of Jennifer Riordan, the mother of two who was killed when she was partially sucked out a shattered jet window, has finally been released: Philadelphia’s medical examiner said Riordan was killed by blunt trauma to her head, neck and torso when she was partially blown out a cabin window shattered by engine debris. Federal inspectors say Riordan, 43, was wearing a seatbelt at the time of the accident.

So far, investigators have determined that the accident was caused by a propeller blade inside the engine tearing off midflight and wrecking the inside of the engine, showering the plane with the debris that broke Riordan’s window. The plane, which took off from New York, was forced to make an emergency landing in Philadelphia.

Apple Faces the Music

Music is key to growing Apple’s services base, but big profits will have to come from elsewhere.

Morgan Stanley Is a Standout and Priced Accordingly

Morgan Stanley’s first-quarter results pleased investors, and the bank will continue to return capital according to plan, but uncertainty past midyear leaves the shares fairly valued.

CSX Is Back on Track

CSX CEO Jim Foote went on what he called an “apology tour,” asking forgiveness of customers whose supply lines had been disrupted and promising improvements. After the company reported first quarter results, investors don’t need a similar show of atonement.

April 2018 Beige Book: Reading Between The Lines – Rate Of Economic Expansion Again Little Changed

Written by Steven Hansen

The consolidated economic report from the 12 Federal Reserve Districts (Beige Book) stated “Economic activity continued to expand at a modest to moderate pace across the 12 Federal Reserve Districts in March and early April.”. The previous report stated “economic activity expanded at a modest to moderate pace across the 12 Federal Reserve Districts in January and February”.

Need to Know: Watch for ‘violent selloff’ to thwart Saudis’ wish for $100 oil

Oil is back in the spotlight. Our call of the day looks at Saudi Arabia’s desire to see $100 oil, and while that may get investors excited, it’s not likely to happen anytime soon.

Young people apparently don’t realize these popular ‘crème brulée’ e-cigarettes contain nicotine

Only a minority of young people who were familiar with or had recently used the Juul knew that it contains the addictive stimulant.

Currencies: Dollar searches for catalyst as risk sentiment improves

Major currency pairs were looking for new catalysts amid improving risk conditions.