08Feb2019 Pre-Market Commentary: Wall Street Futures Fall, Pessimism Builds On Growth, DOW To Open Down Triple Digits, Investors Eye Earnings Reports

Here is the current market situation from CNN Money

European markets are lower today with shares in Germany off the most. The DAX is down 0.55% while France’s CAC 40 is off 0.26% and London’s FTSE 100 is lower by 0.12%.

Darkening ‘global economic skies’ pull stocks lower

Global stocks fell for a third straight day on Friday, and were set for their first weekly loss in seven, as investors worried about a broadening global economic slowdown and the lack of any sign of a resolution to the U.S.-China trade row.

Exclusive: U.S. considers withdrawal of zero tariffs for India – sources

India could lose a vital U.S. trade concession, under which it enjoys zero tariffs on $5.6 billion of exports to the United States, amid a widening dispute over its trade and investment policies, people with close knowledge of the matter said.

Activist Elliott tells Pernod there is still work to do

Activist investor Elliott kept up the pressure on French spirits group Pernod Ricard, welcoming this week’s first-half results but calling for boardroom changes and better margins.

Shell leads cash race but Exxon catching up

Royal Dutch Shell widened its lead over Exxon Mobil as king of cash among the world’s top oil and gas companies last year but its U.S. rival could catch up with its investment drive in new production.

Deutsche Bank, Commerzbank merger talk ‘speculation’: German finance minister

German Finance Minister Olaf Scholz said on Friday he was in talks with banks about their future and called reports of a merger of Deutsche Bank and Commerzbank “speculation”.

Crypto bear market threatens to last as potential token supply weighs

Cryptocurrencies may be facing a prolonged bear market.

Fifty years on, Boeing’s 747 clings to life as cargo carrier

Boeing’s 747 jumbo jet, an aircraft that democratized global air travel in the 1970s but fell behind modern twin-engine passenger jets, has bounced back from near death to mark its 50-year flying anniversary on Saturday, thanks to a cargo market boom fueled by online shopping.

U.S. Steel wins tax breaks from one of America’s poorest cities

United States Steel Corporation founded Gary, Indiana in 1906 – naming it after co-founder Elbert Henry Gary – and the city’s fortunes have been closely tied to the company ever since.

Brookfield in talks with India’s Reliance Industries to buy tower, fibre assets: report

Canadian private equity firm Brookfield Asset Management is in preliminary talks with India’s Reliance Industries to buy a stake in its optical fibre and telecom tower assets, The Times of India newspaper reported on Friday.

Telltale Signs Of Recession

Authored by Charles Hugh Smith via OfTwoMinds blog,

I’m seeing lifestyles that are out of stock and no longer available, even in China.

Though every recession is unique, all recessions manifest in similar ways in the real economy. By real economy, I mean the on-the-ground economy we observe with our own eyes, as opposed to the abstract statistical model reflected in official declarations of when recessions begin and end.

One characteristic that never makes it into the abstract statistical representation of recession is the light switch phenomenon: business suddenly dries up, as if someone turned a light switch off. This is especially visible in discretionary purchases, which include everything from smart phones to vehicles to eating out.

Other telltale signs of recession include:

Dead giveaway #1: businesses that seemed established and doing well suddenly close. The customers are surprised, the employees are not; they knew sales were eroding while costs were rising, and the financial situation was becoming increasingly precarious.

Dead giveaway #2: new businesses that would have thrived a few years ago close within a few months. Maybe it was the multitude of competitors, or the high rents; but for whatever combination of factors one attributes the demise to, an enterprise that seemed to have all the ingredients for success fails quickly.

Dead giveaway #3: advertising and marketing / promotion no longer move the needle. Campaigns that reliably increased sales no longer work.

Dead giveaway #4: Matriarchs and patriarchs of established enterprises retire. They typically offer rote explanations for their abrupt retirement–to spend time with the family, to enjoy the leisure they never had …

EU Won’t Block Controversial Nord Stream 2 Pipeline

Update: Following reports that France would effectively kill the controversial Nord Stream 2 pipeline, EU officials including German Chancellor Angela Merkel affirmed on Friday that an agreement has been reached which will allow construction of the pipeline to move forward – handing a major victory to Germany and Russia (and a stunning defeat for President Trump).

At a meeting in Brussels on Friday, EU diplomats advanced a draft gas-market law, initially proposed in late 2017, while greatly cutting back a provision that would have effectively blocked the pipeline.

The deal will allow negotiations with the European Parliament on a final version of the legislation to begin. Both sides are aiming for an official agreement as soon as next week, and no later than the end of May.

* * *

As The European Union and the US struggle to block the controversial international pipeline project Nord Stream 2, a 760-mile pipeline that would allow Russia to export natural gas directly to Germany – depriving Ukraine of badly needed gas transit fees along the current route for Russian supplies – France on Friday officially announced its opposition to the project, revealing that it would vote with a bloc of EU nations seeking to torpedo the project.

Earlier reports suggested that the opposition in Paris is rooted in the fear that the pipeline would confer too much “strategic power” on Moscow, potentially complicating its relationship with Brussels. Reuters has previously reported that Paris’s vote against the project could rob Germany of the blocking minority it needs to move the project forward.

But later on Friday, German Chancellor Angela Merkel said a deal had been reached on Nord Stream 2.

A vote is expected to be held next week on an amendment to the EU’s gas directive that could allow the European Commission to cancel the pipeline project, according to

Bezos Investigator Believes Texts Were Leaked By “Government Entity”

With the world suddenly transfixed by the leaked Jeff Bezos text and “dick-pic” drama, which overnight the world’s richest man (at least until his soon to be ex-wife pockets half his equity stake in Amazon) revealed were used in an extortion attempt by the National Enquirer, a Washington Post reporter said that the investigator hired by the Amazon CEO, Gavin de Becker, believes that text messages leaked to the National Enquirer between Bezos and his girlfriend may have been sent to the magazine by someone in government.

In an appearance on MSNBC on Thursday, Post reporter Manuel Roig-Franzia said that Bezos’s security consultant Gavin de Becker believes that National Enquirer obtained text messages from Bezos through inappropriate means.

“They have begun to believe, the Bezos camp, that this publication by the National Enquirer might have been politically motivated,” Roig-Franzia said Thursday.

“Gavin de Becker told us that he does not believe that Jeff Bezos’s phone was hacked, he thinks it’s possible that a government entity might have gotten hold of his text messages,” he added, strongly hinting that the administration may have been instrumental in the leak of the embarrassing text messages.

Washington Posts @RoigFranzia says Bezos’ team thinks it’s possible that the text leaks were politically motivated and that a “government entity” accessed the Bezos texts and hoo boy that’s certainly something pic.twitter.com/MQuzNFbCed

— Andrew Lawrence (@ndrew_lawrence)

Wirecard Tumbles After Singapore Police Raid Company Office

One day after the FT published an explosive story (with the help of a company “whistleblower”) detailing allegations of brazen accounting fraud at German payments company (and market darling) Wirecard, Singapore police have raided the company’s offices in the city-state.

The raid is the first sign that authorities are looking into criminal charges against the company following details from a law firm’s internal investigation were leaked to the FT, calling the company’s metrics about usage of its payments network into question. After news of the raid broke, media reports surfaced claiming Munich prosecutors have opened a market manipulation probe into Wirecard.

“The Singapore police has raided the premises of Wirecard in Singapore today,” a police spo …

Rail Week Ending 02 February 2019: Another Bad Week

Written by Steven Hansen

Week 5 of 2019 shows same week total rail traffic (from same week one year ago) declined according to the Association of American Railroads (AAR) traffic data. The economically intuitive sectors rolling averages remain insignificantly positive.

Market Snapshot: Stock-index futures point lower as trade, economic growth worries persist

U.S. stock futures pointed to another tough session for Wall Street on Friday, with investors unable to quell their fears over U.S-China trade relations and global growth and taking money off the table in the process.

Capitol Report: Republicans argue against ‘weaponizing’ tax code as Democrats press for Trump’s returns

The first congressional hearing over disclosing presidential tax returns began with a clash Thursday as Republicans criticized publicizing such documents and Democrats said Americans want to see them.

Malpass could ‘undermine’ World Bank’s mission, Pelosi says

House Speaker Nancy Pelosi late Thursday criticized the nomination of David Malpass as president of the World Bank, saying he “threatens to undermine the institution’s mission.”