18Jun2018 Pre-Market Commentary: Wall Street Pointing Towards An Negative Opening, DOW To Open Over 200 Points Lower, Trade Tensions Linger, Global Oil Prices Mixed, Trade War Could Throw Wrench Into Tech Stock Rally

Here is the current market situation from CNN Money

European markets are broadly lower today with shares in Germany off the most. The DAX is down 1.53% while France’s CAC 40 is off 1.42% and London’s FTSE 100 is lower by 0.38%.

Global stocks, oil suffer as U.S.-China trade spat heats up

LONDON (Reuters) – Global stocks slid on Monday and U.S. oil prices slumped after U.S. President Donald Trump announced tariffs on Chinese goods and Beijing responded with similar measures in an escalating trade dispute.

Head of VW’s Audi arrested in Germany over diesel scandal

FRANKFURT (Reuters) – German authorities arrested the head of Volkswagen’s luxury arm Audi on Monday, the most senior company official so far to be detained over the carmaker’s emissions test cheating scandal.

How U.S. tax reform rewards companies that shift profit to tax havens

(Reuters) – The corporate tax cut passed by U.S. President Donald Trump and fellow Republicans that was in part designed to help dissuade U.S. companies from moving profits overseas may instead make the practice a lot more rewarding.

Billionaire Slim, America Movil, could profit from election of Mexican leftist

MEXICO CITY (Reuters) – Billionaire Carlos Slim has had harsh words for Mexico’s presidential frontrunner, saying recently he is “concerned and afraid” about what leftist Andres Manuel Lopez Obrador might do if elected.

Exclusive: Airbus weighs new long-range A321 version in Boeing challenge

PARIS (Reuters) – Airbus is considering bumping up the range of the most powerful version of its A321 passenger jet in the latest effort to pre-empt a potential new mid-market jet being studied by U.S. rival Boeing , industry sources said.

Goldman sees slightly easier China monetary policy amid trade tiff with U.S

SHANGHAI (Reuters) – Goldman Sachs said it expected China to adopt a slightly easier monetary stance in the face of tit-for-tat tariffs between Beijing and Washington that, while likely to have limited immediate impact on the economy, were at risk of escalating.

Select few emerging Asian economies comfortable with Fed hikes

HONG KONG (Reuters) – Higher U.S. rates are rattling many emerging markets in much the same way past tightening cycles did, but the Federal Reserve’s hawkishness could also bring cheer for a small group of Asian economies that wouldn’t mind seeing their currencies weaken.

Google to invest $550 million in Chinese e-commerce giant JD.com

SINGAPORE (Reuters) – Google will invest $550 million in Chinese e-commerce powerhouse JD.com, part of the U.S. internet giant’s efforts to expand its presence in fast-growing Asian markets and battle rivals including Amazon.com.

Lufthansa in contact with Norwegian as airlines size up deals

BERLIN/OSLO (Reuters) – Lufthansa is in contact with Norwegian Air Shuttle, which is also the subject of bid interest from British Airways owner IAG, as the German airline looks to get involved in an expected wave of deals in the sector, its CEO told a newspaper.

“Can’t Work With That Woman Anymore”: Merkel Handed A Two-Week Ultimatum On Her “D-Day”

Adding insult to injury, one day after Germany’s historic loss to Mexico, Europe’s most important country is facing the “Destiny Day” to a political crisis like no other in recent history.

For almost 13 years as chancellor, Handeslblatt writes this morning, Angela Merkel managed to outmaneuver all rivals, schemers and plotters. But her time could finally be up. Two of her Christian-Democratic predecessors, Konrad Adenauer and Ludwig Erhard, fell from power not after losing the electorate, but after losing the support of their own parliamentary bloc. That may now be Merkel’s fate, too.

Today, the top brass of her party, the CDU, and its Bavarian frenemies, the CSU, are meeting separately in Berlin and Munich, to agree on a common course about the coming days and weeks, however chances of a deal appear increasingly remote: according to Handelsblatt, Horst Seehofer, the CSU’s boss, federal interior minister and perennial Merkel gadfly, told one newspaper that he “can’t work with that woman anymore.”

Horst Seehofer and Angela Merkel. Photo: DPA

The issue is, as it has been since the crisis of 2015, refugees.

If Seehofer, acting as interior minister, …

Preview Of Friday’s “All-Important” OPEC Meeting

Heading into Friday’s much anticipated OPEC meeting in Vienna, the focus has shifted from (declining) global demand-side concerns to specific supply-side actions, and while it is broadly expected to conclude with an oil production increase – the first since the historic production cut agreement in late 2016, is set to be contentious with members Iran, Venezuela and Iraq arguing against a hike proposed by Saudi Arabia and non-member Russia.

Here is a brief summary of what to expect:

Weekend reports noted that Russian Energy Minister Novak stated that, in conjunction with Saudi Arabia, OPEC and non-OPEC countries will discuss raising oil output by 1.5MMb/d in Q3 only.

Meanwhile, Iran said on Sunday that 3 OPEC members – Iran, Iraq and venezuela – would veto the proposed increase.

That counters Saudi Arabia’s oil minister who said on June 14 that it’s “inevitable” that OPEC and its allies will decide to boost output gradually.

Saudi officials have been discussing different scenarios that would raise production of OPEC and allied producers by between 500k b/d and 1m b/d, Bloomberg reported last week.

However, countering this, a Monday morning report from Bloomberg noted that OPEC is said to discuss an output hike of only 300k-600k bpd, while Saudi and Russia are said to work on making the oil alliance permanent. Furthermore, OPEC members are said to be looking for a compromise to overcome the Iran dissent

According to a Bloomberg survey, OPEC and allies will probably boost output:

18 out of 31 analysts predicted an increase in the June 12 poll

Most predicted +500k b/d; …

Audi CEO Arrested As Diesel-Emissions Scandal Spreads

Munich prosecutors have arrested Audi CEO Rupert Stadler, also a member of parent company Volkswagen’s board, on concerns he might try to suppress evidence, in what is the highest-profile arrest of a Volkswagen executive since the diesel emissions scandal exploded into public view nearly three years ago.

The arrest comes a month after Audi admitted that another 60,000 A6 and A7 models with diesel engines could have “software emissions issues,” and more than two months after Volkswagen CEO Matthias Mueller stepped down and was replaced by Herbert Diess, formerly the CEO of the company’s core VW unit, according to the BBC.

While former VW Group CEO Martin Winterkorn has been charged by US authorities, Stadler is the first executive to be taken into custody, and perhaps it’s about time: the emissions scandal provided ample evidence that Volkswagen had probably the worst executive oversight in Europe, and that a real criminal conspiracy had unfolded in the highest ranks of the company. The only real surprise is that it’s taken this long: US authorities blew the lid off the company’s emissions test-defeating software in September 2015 – nearly three years ago. Since then, the scandal has spread from the VW unit to other Volkswagen subsidiaries, and beyond: BMW and Daimler have also faced allegations of emissions cheating, as has American car maker General Motors.

Global Stocks, Futures Tumble On Trade War, Merkel Shock; Oil Volatile Ahead Of Meeting

Bulletin Headline Summary from RanSquawk:

Oil rebounds on OPEC source reports mentioning an output hike of 300k-600k bpd (vs. 1.5mln bpd touted previously)

The Dollar is mixed overall, but the index did revisit 95.000+ ytd peaks (around 95.150)

Looking ahead, highlights include comments from Fed’s Dudley, Bostic and Williams, BoC’s Deputy Governor and ECB President Draghi

Global stocks and US index futures are a sea of red this morning amid growing concerns over the escalating trade war between China and the U.S., which on Friday launched tit-for-tat $50BN in tariffs, coupled with the growing risk that Merkel’s government is on the edge of collapse.

As Bloomberg notes, it’s pretty risk-off this morning no matter where you look: it’s blow for blow in the U.S.-China trade spat sending European and Asian stocks sharply lower, metals have been melting, EM currencies remain under pressure with Argentina’s peso sinking further.

Global trade is (once again) back at the top of the wall of worry, with investors afraid that the confrontation between the U.S. and China can escalate out of control, hitting both the global economy and corporate earnings. On Friday, China immediately responded after President D …

Goodbye ECB Bond-Buying, Hello Forward Guidance

The ECB hasn’t finished surprising investors yet. Thursday it brought the end of its massive bond-buying program closer, but pushed any interest-rate increases further out. The more dovish message won, sending the euro sinking against the dollar.

Big Tech Already Has the Best Show in Town

Tech companies have shown they don’t need to own large media agencies to establish a strong presence in the business.

Apple’s Display Plan Won’t Give Screen Makers Much Relief

The iPhone maker is delaying its full transition to a new screen technology, but that won’t help most Asian manufacturers for long.

Market Snapshot: What the stock market’s most crucial week of the year tells us about the road ahead

Stock-market investors navigate a veritable gauntlet of central-bank gatherings, a historic summit between President Donald Trump and North Korean Kim Jong Un, and flared-up trade tensions virtually unscathed.

Market Snapshot: Dow futures fall more than 200 points as trade worries persist

U.S. stock futures lose ground Monday, putting the Dow industrials on track for a fifth losing session in a row as trade-war fears dog global markets.

The Wall Street Journal: Apple to push fix for locating 911 callers

Apple Inc. is partnering with a startup to tackle a problem that has long vexed 911 operators: locating cellphone callers.