Friday 11 Dec 2015
VERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH16 -0.86%) are down -0.77% at a 3-1/2 week low and European stocks are down -1.52% at a 1-3/4 month low on concern over a slowdown in China after China Nov new loans rose less than expected. Also, energy producers are lower as the price of crude oil (CLF16 -1.33%) fell to a fresh 6-3/4 year low after the IEA said the global oil surplus will last until late next year as demand growth slows and OPEC shoes "renewed determination" to maximize output. Asian stocks settled mostly lower: Japan +0.97%, Hong Kong -1.11%, China -0.61%, Taiwan -1.22%, Australia -0.16%, Singapore -0.49%, South Korea -0.10%, India -0.82%. Japanese stocks went against the trend and closed higher as raw-material stocks rallied and led the overall market after industrial metals rose with copper (HGH16 +1.54%) at a 3-week high.
The dollar index (DXY00 -0.17%) is down -0.20%. EUR/USD (^EURUSD)is up +0.27% after ECB Executive Board member Coeure said the Eurozone deflation risk is now "off the table." USD/JPY (^USDJPY) is down -0.14%.
Mar T-note prices (ZNH16 +0.26%) are up +7.5 ticks.
China Nov new yuan loans rose 708.9 billion yuan, less than expectations of 735.0 billion yuan.
ECB Executive Board member Coeure said the Eurozone risk is now "off the table" as the ECB "sees a recovery in the Eurozone, which is firming now. Growth is accelerating. It remains weak but it is going in the right direction."
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Nov retail sales (expected +0.2% and +0.3% ex autos, Oct +0.1% and +0.2% ex autos), (2) Nov final-demand PPI (expected unch m/m and -1.4% y/y, Oct -0.4% m/m and -1.6% y/y) and Nov PPI ex food & energy (expected +0.1% m/m and +0.2% y/y, Oct -0.3% m/m and +0.1% y/y), (3) Oct business inventories (expected +0.1%, Sep +0.3%), (4) preliminary-Dec University of Michigan U.S. consumer sentiment index (expected +0.7 to 92.0, Nov +1.3 to 91.3).
None of the Russell 1000 companies report earnings today.
U.S. IPO's scheduled to price today: none.
Equity conferences today include: none.
http://www.barchart.com/newsletters/usmorningcall
-----------
As goes oil, so goes the US equity market' appears to bethe new mantra. Just as yesterday's pump-and-dump tracked oil, so in the pre-market, WTI Crude plunged back to fresh 7-year lows after IEA warned that the oil glut will worsen, with prices lower for longer as demand remains subdued through at least 2017. This in turn sent US equities tumbling with Dow futures down 200 points (down 330 from Thursday highs).
-------
Futures down sharply as oil hits seven-year low (Reuters)
Oil slides to new seven-year low as IEA warns of worse glut (Reuters)
But... but... they all said... Cheap Oil Gives Little Help to U.S. Spending (WSJ)
Disappearances in China Highlight Ruling Party Detention System (BBG)
China’s Credit Rebounds as Stimulus Helps Boost Loan Demand (BBG)
Junk Fund’s Demise Fuels Concern Over Bond Rout (WSJ)
No cheer as China yuan hits four-and-a-half-year low, oil at seven-year low (Reuters)
--------
firm founded by legendary vulture investor Martin Whitman is barring investor withdrawals while it liquidates its high-yield bond fund, an unusual move that highlights the severity of the monthslong junk-bond plunge that has swept Wall Street.
The decision by Third Avenue Management means investors in the $789 million Third Avenue Focused Credit Fund may not receive all their money back for months, if not more.
Third Avenue said poor bond-market trading conditions made it almost impossible to raise sufficient cash to meet redemption demands from investors without resorting to fire sales of assets.
Securities attorneys said Third Avenue’s decision to wind down the mutual fund without giving investors all their cash back could have significant repercussions for both the company and the mutual-fund industry, which for decades has thrived by promising to allow investors to take a long-term view of the markets while retaining the right to cash out shares at any time.
While hedge-funds have occasionally prevented investors from taking out their money, such a move is uncommon for a mutual fund.
The move is also a sign of how much the market for corporate debt is deteriorating following a long boom. Since the financial crisis, investors have sought higher-returning assets, and companies raised funds for business investment as well as for mergers, acquisitions and share buybacks. High-yield bond assets at US mutual funds hit $305 billion in June 2014, according to Morningstar data, triple their level in 2009.
But investors have pulled money lately. Outflows in November were $3.3 billion, the most since June, according to Morningstar data.
The yield spread between junk-rated debt and US Treasurys narrowed to a multi-year low in mid-2014, reflecting investors’ confidence in companies’ business prospects. But spreads have since risen, reflecting lower prices, as the energy bust intensified questions about junk-rated companies’ ability to repay debts. All 30 of the largest high-yield bond funds tracked by Morningstar have lost money this year, reflecting price declines as investors shied away from risk.
http://www.efinancialnews.com/story...nd-demise-concern-over0bond-rout?mod=rss-home
