19Oct2018 Pre-Market Commentary: Wall Street Stock Index Futures Point To A Higher Opening, WTI Crude Trends Higher To 69.34, US Dollar Steady, Gold Index Trending Higher, But Volatile

Here is the current market situation from CNN Money

European markets are mixed. The FTSE 100 is higher by 0.36%, while the CAC 40 is leading the DAX lower. They are down 0.66% and 0.16% respectively.

Investors sell Italian bonds, bank shares as EU warns on Italy budget

Investors shed Italian bonds on Friday, driving their yields to 4-year highs while the euro fell to a 2-month low as the European Union called Rome’s draft budget an “unprecedented” breach of EU fiscal rules.

Clash over Trump tariffs heats up with barrage of WTO litigation

Disputes over U.S. tariffs and retaliatory moves by other states have sparked 12 requests for adjudication at the World Trade Organization, signalling an escalation in global trade tensions.

P&G, Honeywell soothe Wall St. after sell-off

U.S. stock futures ticked higher on Friday as a handful of major U.S. corporations beat results forecasts, offsetting concerns about political and growth risks in Europe, China and Saudi Arabia that drove a 1 percent fall a day earlier.

Facebook hires Nick Clegg as head of global affairs: FT

Facebook Inc has hired former U.K. deputy prime minister Nick Clegg as head of the social network’s global affairs and communications team, the Financial Times reported on Friday.

China moves to lift confidence as economic growth hits weakest pace since 2009

China’s economic growth cooled to its weakest quarterly pace since the global financial crisis, with regulators moving quickly to calm nervous investors as a years-long campaign to tackle debt risks and the trade war with the United States began to bite.

Procter & Gamble posts surprise sales rise, profit beats

Procter & Gamble Co reported a surprise rise in first-quarter sales on Friday on strong demand for its beauty products and cleaning supplies, helping it in its fight against competition from cheaper store-branded products.

Tesla launches new $45,000 Model 3

Tesla Inc on Thursday introduced a new $45,000 version of its Model 3 sedan on its website, launching the car as U.S. tax breaks for Tesla cars are about to decrease.

UK should bring forward new petrol and diesel car ban to 2032 – lawmakers

Britain should bring forward a ban on the sale of new petrol and diesel cars and vans by eight years to 2032 to help the country reduce its greenhouse gas emissions, a parliamentary committee said on Friday.

Schlumberger profit rises, fueled by higher oilfield services demand

Schlumberger NV’s third-quarter profit rose 18.2 percent on higher oilfield services demand and the company said it expects the current pipeline bottlenecks in the Permian basin to be addressed within the next 12 to 18 months.

31 Years Ago Today, “It Felt Really Scary” – The Fed Remembers ‘Black Monday’

Via FederalReserveHistory.org,

Authored by Donald Bernhardt and Marshall Eckblad, Federal Reserve Bank of Chicago

The first contemporary global financial crisis unfolded in the autumn of 1987 on a day known infamously as “Black Monday.”

A chain reaction of market distress sent global stock exchanges plummeting in a matter of hours. In the United States, the Dow Jones Industrial Average (DJIA) dropped 22.6 percent in a single trading session, a loss that remains the largest one-day stock market decline in history. At the time, it also marked the sharpest market downturn in the United States since the Great Depression.

The Black Monday events served to underscore the concept of “globalization,” which was still quite new at the time, by demonstrating the unprecedented extent to which financial markets worldwide had become intertwined and technologically interconnected.

Tesla Releases “Lower Cost” Model 3 For $45,000 As Full Self-Driving Option Mysteriously Vanishes

Tesla has finally released a $35,000 Model 3. The only problem? It costs $45,000. On top of that, the often touted $3,000 add-on option for “Full Self Driving” capability has mysteriously disappeared from the company’s website, leaving those who have already paid for it or put down deposits on vehicles assuming they could get it wondering what, exactly, is going on.

This all started on Thursday when Elon Musk tweeted that Tesla would now be offering a “low cost” $45,000 mid-range Model 3 that, according to him, would cost $31,000 after tax credits and “gas savings”.

Costs $35k after federal & state tax rebates in California, but true cost of ownership is closer to $31k after gas savings

— Elon Musk (@elonmusk) October 18, 2018

This move has left analysts, Tesla owners and Wall Street asking obvious questions. Has higher priced Model 3 demand finally collapsed? Could this be Musk’s move to keep cars rolling off the production line for another quarter? Does Elon Musk think this is just as good as offering the $35,000 Model prior to incentives? While the reasoning for offering this model now isn’t clear, it’s likely that the reality of the situation is a widening delta from Elon Musk’s perceived reality.

First, the Model 3 was pitched to the public (and reservations were taken) under the guise that it would be available for $35,000 prior to tax incentives. This model still doesn’t exist, and we are getting ready to turn the calendar to 2019.

Second, the Federal Income Tax Credit that Musk pitches is slated to disappear in 2020. For the first half of 2019, it will be halved, and then halved …

Saudi Royal Family Considering Replacement For Crown Prince bin Salman: Report

The major French daily Le Figaro on Thursday published a bombshell story which reports the Saudi royal family is actively considering a replacement to crown prince Mohammed bin Salman (MbS) as next in line to succeed his father King Salman as the kingdom finds itself under the greatest international pressure and scrutiny it’s faced in its modern history over the murder of journalist Jamal Khashoggi — widely believed to have been killed on orders of MbS himself.

The Li Figaro report’s unnamed diplomatic source says the Allegiance Council, which is historically the body responsible for approving the order of succession to the throne, is currently meeting in secret (translation from the French):

For several days, the Allegiance Council for the ruling Saudi family is meeting in the utmost discretion, says a diplomatic source to Le Figaro in Paris. The information has been confirmed by a Saudi Arabian contacted in Riyadh. Composed of a delegate representing each of the clans — at least seven — of the royal family, this body, responsible for inheritance problems, examines the situation created by the disappearance, still unresolved, more than a fortnight ago, of the journalist dissident Jamal Khashoggi at the Saudi consulate in Istanbul.

The report in France’s oldest top three national newspapers further suggests the ruling family is seeking to replace the 33-year old MbS with his much less ambitious and more predictable brother, Prince Khalid bin Salman.

Trump, Xi “Tentatively Agree” To Talks At G-20 Summit In Nov.

After a week that has been dominated by the diplomatic crisis over the presumed murder of Saudi journalist and US resident Jamal Khashoggi, investors were wondering when the next headline about the ongoing US-China trade war would hit to redirect focus.

The answer was “today”, because after a series of conflicting reports last week, the South China Morning Post reported Friday that President Trump and Chinese President Xi Jinping have “tentatively” agreed to talks in November at the G-20 summit in Buenos Aires. Notably, this apparent confirmation that the Chinese have dropped their resistance to engaging with the US over its protectionist agenda comes just hours after China reported its weakest quarterly GDP print since 2009.

If confirmed, it would be the first face-to-face meeting between the two leaders in nearly a year and suggest both Washington and Beijing were ready to de-escalate the trade tensions. According to the report, a date has been set for Nov. 29, the day before the summit formally begins.

Quoted by SCMP, Chinese Vice-Premier Liu He, one of Xi’s top economic aides, told state media on Friday that Beijing and Washington “are contacting each other at present.” His comments came as Beijing is trying to shore up investor confidence in its stock market and economy. But the impact of the trade war on Chinese stocks was “more psychological than real,” he said.

The (repeat) news of the upcoming meeting sent US stock futures to their highs of the day, while the US dollar weakened as a risk-on mood made a prompt return.

Consumer Giants’ Have an Emerging Market Problem

Big footprints in emerging markets are often considered the crown jewels of European consumer-products giants like Nestlé and Unilever. But the downside is apparent.

Wall Street’s Fear Gauge Flashes Green Again

Panic in the stock market is officially over—at least according to derivatives markets.

The Table Is Rigged Against Macau Stocks

Shares in major casino operators in the world’s largest gambling market have been tumbling, but it isn’t time for investors to up their bets.

Economic Report: Mortgage rates retreat, but housing supply crunch won’t let up

Rates for home loans edged lower in the most recent week, but a few basis points of financing relief won’t help the housing market as much as fresh inventory would.

Mark Hulbert: The stock market is overdue for a one-day 5% or 10% plunge

An academic study finds the stock market will experience a 5% daily drop every 1.6 years, on average, and a 10% drop every 13 years.

CryptoWatch: Bitcoin in the doldrums, can’t shake $6,500 range

Major digital currency prices are trading at or near Thursday’s closing levels,