18Dec2018 Pre-Market Commentary: Wall Street To Open Moderately Higher, DOW Futures Up Triple Digits, WTI Prices Drop 4% Into The High 48 Handle, Feds Start 2 Day Meeting Today

Here is the current market situation from CNN Money

European markets are mixed. The DAX is higher by 0.37%, while the FTSE 100 is leading the CAC 40 lower. They are down 0.39% and 0.09% respectively.

Growth fears grip world markets ahead of Fed meeting

World stock markets, the U.S. dollar and oil prices tumbled on Tuesday as fears about a slowing global economy gripped investors, just as the U.S. Federal Reserve looks set this week to deliver its fourth interest rate hike of the year.

Trump pressures Fed before meeting, warns against ‘another mistake’

U.S. President Donald Trump on Tuesday further sought to pressure the Federal Reserve as the central bank prepared to start its two-day policy meeting, warning the Fed’s board not to “make yet another mistake” ahead of an expected interest rate hike.

Futures climb heading into Fed meeting

U.S. stock index futures climbed on Tuesday, following a rocky start to the week, as investors focus on a two-day meeting where the Federal Reserve is expected to raise interest rates for the fourth time this year and signal the path of future rate hikes.

Kroger starts use of unmanned vehicles for delivery in Arizona

U.S. supermarket chain Kroger Co said on Tuesday it has started using unmanned autonomous vehicles to deliver groceries Scottsdale, Arizona in partnership with Silicon Valley startup Nuro.

Renault-Nissan leaders to meet amid alliance crisis

The head of Nissan and acting CEO of Renault will hold talks during a two day meeting of their carmaking partnership starting on Tuesday, sources said, amid a crisis in relations sparked by the arrest of long-time alliance supremo Carlos Ghosn.

Oil drops 4 percent on oversupply, equities sell-off

Oil prices fell 4 percent on Tuesday after reports of swelling inventories and forecasts of record U.S. and Russian output combined with a sharp sell-off in stock markets as the outlook for global growth deteriorated.

Huawei to spend $2 billion over five years in cybersecurity push

Huawei Technologies [HWT.UL] on Tuesday said it would spend $2 billion over the next 5 years to focus on cybersecurity by adding more people and upgrading lab facilities, as it battles global concerns about risks associated with its network gear. The typically secretive Chinese technology giant made the comments at one of its most indepth press conferences at its Dongguan offices, after welcoming about two dozen international journalists into its new campus in the southern

Twitter tumbles on concerns about hacking activity

Twitter Inc shares fell almost 7 percent on Monday after the company said it was investigating unusual traffic that might be from state-sponsored hackers and, in what appeared to be an unrelated issue, a security firm said hackers used the platform to try to steal user data.

Indian regulator says Reuters report on J&J baby powder ‘under consideration’

India’s federal drug regulator said on Tuesday a Reuters report that Johnson & Johnson knew for decades that cancer-causing asbestos lurked in its baby powder was “under consideration”.

Goldman Partners Ignored ‘Red Flags’ While Pursuing 1MDB Deals: WSJ

As the legal scrutiny facing the infamous “Vampire Squid” intensifies (and the bank’s shares languish at two-year lows), slowly but surely, more details about the compliance shortcuts and – in some cases, outright negligence – countenanced by Goldman’s most senior employees during the bank’s pursuit of the 1MDB bond offerings that have landed Goldman at the center of one of the biggest financial fraud scandals in history are slowly dribbling out.

And in its latest expose, the Wall Street Journal, which helped expose the scandal back in 2015 with a series of groundbreaking reports connecting money in a bank account controlled by former Malaysian Prime Minister Najib Razak to the bankrupt fund, has published more details about how Goldman partners – who have traditionally been given wide latitude to operate without restraint – enabled the bank’s top bankers in Southeast Asia to work out a deal where Goldman would act as both financier and advisor for the fund, ignoring concerns about corruption raised by the bank’s compliance committee.

David Solomon

The first allowances were reportedly made during a meeting of senior partners …

Blain: This Is What The Big Market Theme Of 2019 Will Be

Blain’s Morning Porridge submitted by Bill Blain

“If you jump into your bed, quickly cover up your head, don’t lock the doors …”

As year-end approaches at speed – only 4 more business lunches, 2 dinners, a drinks reception, and a pub booze-up, to go till She-Who-is-Now-Mrs-Blain and I go on Holiday! – its time to work out what the overarching theme of 2019 is likely to be.

We will find out about the likely path for Fed hikes tomorrow – the language and guidance will be interesting. Or will it be global recession – something an increasing number of analysts, pundits, guessers and the yield curve are now predicting? Will it be Political risks and misjudgements? Europe or Brexit? Or could the risks be to the upside – a renewed rally in stocks now they look less fundamentally overpriced? Will it be an underestimation of the resilience of the bond markets or the pace of the global economy? Failing to spot the diamonds in the dust due to all the populist noise?

Corporate debt markets are on most people’s threat lists – which makes me pretty sure it won’t happen the way pundits expect. I’ve read a host of negative articles, including the FT noting there hasn’t been a single junk bond issue through December! Corporate debt will have to deal with 2 threats – declining confidence in the market as a result of credit fear, and that rising rates hit low yield bond disproportionately.

The perceived downside credit risks include over-leverage, the pernicious effects of the Great QE unwind, the threat of a liquidity crunch if bond and bank funding routes lock out simultaneously, the general decline in credit quality and, lax credit covenants and declining underwriting standards biting back, a lack of preparedness for the next recession, companies unable to react to the threats …

This Is The Worst December For Stocks Since The Great Depression

Authored by Michael Snyder via The Economic Collapse blog,

U.S. stocks have not fallen this dramatically during the month of December since the Great Depression of the 1930s.

On Monday, the Dow Jones Industrial Average lost another 507 points, and it is now down more than 1,000 points from Thursday’s close. This fresh downturn has pushed the Dow and the S&P 500 very firmly into correction territory, and the Russell 2000 is now officially in bear market territory. The ferocity of this stock market crash is stunning many of the experts, and many investors are beginning to panic. Back in early October, the Dow hit an all-time high of 26,951.81, but on Monday it closed at just 23,592.98. That means that the Dow has now plunged more than 3,300 points from the peak of the market, and many believe that this stock crash is just getting started.

When it was first being reported that the stock market was on pace for the worst December since the Great Depression, I have to admit that I was skeptical.

But

“Feel The Market”: Trump Warns Fed With Fed Not To Make Mistake And Hike Rates

As members of the FOMC gather at the Eccles building for the first day of the central bank’s December policy meeting, during which they’re widely expected to vote to raise the Fed funds rate for the fourth time this year, President Trump is once again urging the central bank to reconsider – this time urging Chairman Powell & Co. to read an editorial in Tuesday’s Wall Street Journal calling for a pause in rate hikes (which in turn followed a similar piece from Fed “hawks” Stanley Druckenmiller and Kevin Warsh).

I hope the people over at the Fed will read today’s Wall Street Journal Editorial before they make yet another mistake. Also, don’t let the market become any more illiquid than it already is. Stop with the 50 B’s. Feel the market, don’t just go by meaningless numbers. Good luck!

— Donald J. Trump (@realDonaldTrump) December 18, 2018

The tweet followed a similar message from Monday where Trump pointed out the incongruity in the Fed raising interest rates while “the world is blowing up.”

On the heels of Monday’s brutal selloff, which sent stocks to their lowest levels since October 2017, Trump warned “don’t let the market become any more illiquid than it already is. Stop with the 50 B’s.

Instead of blindly hiking, the Fed needs to “Feel the market, don’t just go by meaningless numbers. Good luck!”

His reference to “50 Bs” initially sparked some confusion on twitter:

Metals Stocks: Gold near 1-week high, underpinned by a weaker dollar as Fed update on tap

Gold is pinned near more than one-week highs early Tuesday, its action limited as a leading dollar index slips but stocks head for a tepid recovery.

Need to Know: Druckenmiller warns that the stock market is one big ‘mirage’ right now

Our call of the day comes from a guy once referred to as the “greatest investor of all time” — Stanley Druckenmiller who says the Fed is not reading this stock market right.

Earnings Outlook: Micron earnings: Hunkering down for the winter with hopes of a summer turnaround

Micron Technology Inc. will likely be playing a cleanup game when it reports earnings Tuesday, with hopes of a bounceback next year that proves any down cycle is a short one.