Global News January 7, 2016

  1. Bloomberg News
  2. Global News January 7, 2016

Bloomberg Business

-Rebound: The MSCI Asia-Pacific Index jumped by the most in four weeks, led by gains in Japan and Hong Kong while the Europe Stoxx 600 was trading 1.4 percent higher at 11:00 a.m. London time. U.S. index futures indicate the equity rebound will extend to a third day with contracts on the S&P 500 expiring in March adding 0.8 percent at 5:52 a.m. in New York. The only real blot on the global equity copybook was China, with the Shanghai Composite Index closing down 2.4 percent and falling below the 3,000 level for the first time since the peak of the August selloff.

-Commodity recovery: Both Brent and WTI are trading higher than $31 a barrel this morning, reversing much of yesterday’s selloff which briefly saw a barrel of West Texas Intermediate drop below $30. The Bloomberg Commodity Index, which measures the returns on raw materials – it is not a spot index – fell to its lowest level since 1991 yesterday, but is trading 0.6 percent higher this morning.

-Inflation returns – to Greece: After three years of falling prices Greece reported a 0.4 percent increase in November. While the positive number can be seen as a move in the right direction for Greece, much of the increase in prices was driven by a new sales tax. The country is still waiting to complete the current review of its most recent bailout, a process that will take months, rather than weeks, according to Jeroen Dijsselbloem’s latest assessment.

-U.S. politics: The U.S. Presidential election has seen some noteworthy events in the last 24 hours. While yesterday’s State of the Union address was perhaps a little over-optimistic, and a little overshadowed by events in the Persian Gulf, it can be seen as launch of the democratic campaign to keep the White House. On the Republican side, the latest Bloomberg poll shows it is very much Cruz vs. Trump in Iowa.

-Gundlach’s bearish outlook: Jeffrey Gundlach, who has generally been negative on the economy and the market says there’s more bad news ahead. “This is a capital-preservation market, not a money-making environment,” said Gundlach, co-founder of Los Angeles-based DoubleLine Capital. His 2015 calls were mostly right, so perhaps best not to dismiss him immediately.



CNN Money

-Oil: Crude futures are bubbling up around 1% to above $31 a barrel after oil briefly sank below $30 for the first time since December 2003. The selling on Tuesday left crude down 19% this year alone, and 72% from its June 2014 peak of almost $108. Traders will closely watch a weekly update on U.S. crude inventories that is due at 10:30 am ET.

-Stock market movers — Metlife, Yum Brands, Ford, BP, VW: Metlife (MET) shares surged more than 7% Tuesday night after The Wall Street Journal reported it’s planning to separate or sell its U.S. life insurance operations. KFC and Taco Bell owner Yum Brands (YUM) was trading 3% higher premarket, while Ford (F) shares dropped 3%. BP (BP) shares are up 2.5% a day after it slashed another 4,000 jobs amid low oil prices. Volkswagen (VLKPY) shares are up more than 2.5% despite ongoing confusion surrounding the emissions scandal and whether the auto giant «lied» to regulators.

– International markets overview: European markets are up in early trading, with Paris jumping nearly 1.5% at the start. Asian markets ended mixed with the Nikkei closing up nearly 3% while Shanghai fell 2.4%.

-Tuesday market recap: The Dow Jones industrial average was up 0.7%, while the S&P 500 gained 0.8% and the Nasdaq added 1%.

-$10 oil: Crazy or the real floor beneath the oil crash?:Oil prices crashed below $30 a barrel on Tuesday for the first time since December 2003. It’s also a stunning 72% plunge from levels just 18 months ago. Few Wall Street firms saw the oil glut that has caused prices to collapse coming. Goldman Sachs infamously predicted in 2008 that an oil shortage would cause the commodity to skyrocket to $200 a barrel. But doom-and-gloom is all the rage now — and price estimates keep falling. Just this week Morgan Stanley warned that the super-strong U.S. dollar could drive crude oil to $20 a barrel. Not to be outdone, Royal Bank of Scotland said $16 is on the horizon, comparing the current market mood to the days before the implosion of Lehman Brothers in 2008. Standard Chartered doesn’t think those dire predictions are dark enough. The British bank said in a new research report that oil prices could collapse to as low as $10 a barrel — a level unseen since November 2001.