10Jul2019 Pre-Market Commentary: Wall Street Futures Slip Ahead Of Powell’s Testimony, DOW Futures Flat, WTI Crude Rises Into The $59 Handle, US Dollar Showing Strength

Here is the current market situation from CNN Money

European markets are mixed. The CAC 40 is higher by 0.04%, while the DAX is leading the FTSE 100 lower. They are down 0.51% and 0.10% respectively.

American Airlines raises forecast for key revenue measure

American Airlines Group Inc on Wednesday raised its second-quarter forecast for unit revenue, a closely watched performance measure for carriers, as the grounding of Boeing Co’s 737 MAX jets reduced its overall fleet size.

Bond yields creep higher as markets wait for Fed signals

Shares were treading water on Wednesday while rising Treasury yields kept the dollar steady, as investors waited to hear whether the world’s most powerful central banker would confirm or confound expectations for a U.S. rate cut this month.

Deutsche Bank looks to boost wealth management as part of reinvention

With other parts of its business facing hefty cuts, Deutsche Bank wants to expand its European operations handling the assets of rich clients and take market share from rivals after staunching the outflow of assets.

Oil gains on U.S. inventory drawdown, Gulf of Mexico storm

Oil prices rose more than 2% on Wednesday after industry data showed U.S. inventories fell more than expected and as major U.S. producers evacuated rigs in the Gulf of Mexico before a storm.

Volvo solves autonomous revenue riddle with package deals

Swedish truckmaker AB Volvo’s first commercial autonomous truck deal shows how it is bundling services to generate revenue from a technology that is years away from wide deployment.

Euro zone growth, inflation outlook cut as risks from U.S. trade grow

The European Commission lowered its estimates on Wednesday for euro zone growth and inflation, saying uncertainty over U.S. trade policy posed a major risk to the bloc.

Futures slip ahead of Powell’s testimony

U.S. stock futures fell on Wednesday, as investors eyed Federal Reserve Chairman Jerome Powell’s remarks later in the day for clues on the central bank’s interest rate policy direction.

Sewing faces skeptical Deutsche Bank investors on revamp roadshow

Deutsche Bank investors will press Chief Executive Christian Sewing on how he will deliver on revenue growth targets during a global roadshow to win backing for his 7.4 billion euro ($8.4 billion) ‘reinvention’ plan.

Elliott outspends rivals as corporate activism turns to Germany

Elliott Management Corp has invested more than rivals in its push for corporate change so far this year and there has been an increasing focus among activist investors on German companies.

Trump Asked Fed Board Nominees For Their Views On The Dollar

President Trump has renewed his attacks on the greenback lately by ratcheting up pressure on the Fed to deliver a steep rate cut this month (which, in Trump’s mind, would help Powell stay one step ahead of the uber-dove Mario Draghi and his probable successor, Christine Lagarde), and accusing Europe and China of manipulating their currencies to disadvantage the US.

Bombshell: Alex Acosta Reportedly Claimed Jeffrey Epstein “Belonged To Intelligence”

Authored by Mike Krieger via Liberty Blitzkrieg blog,

To appreciate the significance of what I’m about to share, you really need to go back and read yesterday’s post: The Jeffrey Epstein Rabbit Hole Goes a Lot Deeper Than You Think.

Here’s A Stock And Bond Trader’s Game Plan For Powell

Authored by Bloomberg macro commentator and former Lehman trader, Mark Cudmore

No spoilers but the outcome of Federal Reserve Chair Jerome Powell’s testimony is shaping up to be an 0.5% fall for U.S. stocks and a 6bps rise for 2-year Treasury yields. Well, according to my Bayesian beer mat calculations.

Attempting to quantify a nuanced situation, I’ve estimated the probabilities and possible one-day asset returns stemming from the three key focal points of his testimony. It’s just a framework to approach the event, not a conclusive assertion of how assets will react

1. A July rate cut is priced as a sure thing, so either:

A) Powell validates market pricing = 90% probability

S&P 500 E-mini futures rise 0.2%

or B) Powell raises doubt over July cut = 10%

E-minis fall 1.5%

2. On the post-July policy path, where more than two further rate cuts are priced in over the subsequent 12 months:

A) Powell is interpreted as being reluctant to cut rates too quickly (hawkish) = 50% probability

E- minis fall 1.5% and 2-year yields rise 13bps

B) Powell channels Alan Greenspan and manages to leave rate pricing largely undisturbed = 20%

E-minis climb 0.5% with no change in yields

C) Powell is interpreted as willing to be aggressive on rate cuts (dovish) = 30%

See below

3. In scenario 2C, where Powell is interpreted as being dovish, what is the narrative explanation?

A) Pressure from President Trump seen as main driver = 30% probability

E-minis rally 0.8% in what is seen as a sustainable move, 2-year yields fall 8bps

B) Powell seen as reacting to a worrying economic outlook = 20%

E-minis fall 0.5% even though 2-year yields slide 6bps
…

Global Markets Extend Drop As Traders Await Powell

With yesterday’s late ramp failing to push the Dow into the green, the Industrial Average is set to open lower for the 4th day – it’s longest stretch of losses since March – as global stocks treaded water on Wednesday amid depressed volumes while Treasury yields rose around the globe and the dollar was steady, as investors waited to hear whether the world’s most powerful central banker would confirm or confound expectations for a U.S. rate cut this month. As a reminder, all eyes are on Powell today, as he kicks off two days of testimony in Congress, with traders hoping for further signals on the direction of Fed rates as markets price in a quarter-point reduction in July.

Explained: What went wrong between IndiGo founders

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What income tax changes mean for you

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Bengaluru hit by Deutsche Bank layoffs

Bengaluru hit by Deutsche Bank layoffsAn unknown number of employees from the MNC’s Bengaluru operations have received pink slips.

Deep Dive: Banks should shine among S&P 500 stocks this earnings season

Analysts expect earnings to decline for most sectors, but large U.S. banks should buck that trend.

General News: It’s the ultimate in narcissism — personalizing your beer with a selfie

Cupids have also been using the new technology to print phone numbers on the top of drinks that they then pass to people they like.

Need to Know: Weak U.S. data could trigger 10% stock plunge, says strategist

Looking for surprises? Watch the data not the monetary policy says our call of the day from Elia Lattuga, the deputy head of strategy research at UniCredit.