Some say that the common currency prevents less productive economies from cheating by weakening their national currencies and forces them to become more efficient and competitive. Industrial production data shows that it is not the case. Italy, France, Greece and Portugal have not only stopped producing more; they are producing now less than in 1990! The decay started immediately after the introduction of the euro in 2002!
European, Asian stocks and S&P futures are all up again in early trading, a repeat of the Monday session, buoyed by a generally upbeat corporate earnings season, rising economic confidence and signs of improvement in the world’s biggest economies. After Charles Evans' hawkish comments on Monday, the market is now pricing in a 71% chance of a rate increase this year, up from 68% last week.
Global stocks jumped around the globe, with Europe's Stoxx 600 and US equity futures rising more than 0.5% on a surge in merger announcements over the weekend including the $85 billion mega takeout of AT&T for Time Warner, the $6.4 billion acquisition of B/E Aerospace by Rockwell Collins, the $2.7 billion deal targeting Genworth by China Oceanwide and the just announced $4 billion purchase of Scotttrade by Ameritrade.
Asian stocks and S&P futures fall modestly and European shares are little changed as traders digested the surprising reticence from yesterday's ECB meeting. The dollar jumped to 7 month highs, pressuring EM currencies and pushing the euro to its weakest level since March and below the Brexit lows, after Mario Draghi shut down talk of tapering, while the Yuan dropped to the lowest since 2010.
There was some long overdue good news for Netflix longs, when moments ago NFLX reported that in Q3 revenue and EPS of $2.29 billion and $0.12 beat expectatations of $2.28 billion and $0.06 respectively. But the reason why the stock is surging 20% after hours is because the growth appears to be back as a result of a surge in Q3 streaming subscribers, which jumped by370K domestically and 3.2million internationally, far above the 300K and 2.0 million expected.
The key economic releases this week include industrial production on Monday, CPI on Tuesday, and housing starts on Wednesday. There are several scheduled speeches from Fed officials this week. The Beige Book for the November FOMC period will be released on Wednesday.
The United States is geographically vast and diverse, and population is spread out and unevenly distributed. This means production and innovation are both concentrated in some areas of the country, while other parts are clearly more rural. How can we account for these differences to get a more accurate view of the U.S. economic engine?
French Prime Minister Manuel Valls, wants to transform the EU into the United States of Europe, complete with its own European defense force. “Member states have a choice: give up on the EU or transform it,” writes Manuel Valls.
Global markets and US equity futures fell on Samsung Galaxy Note 7 contagion concern, while the dollar rose to its strongest level in 11 weeks and U.S. bonds declined as investors boosted wagers that the Federal Reserve will raise interest rates this year.
[The establishment] needs no reminder of the historical record, but it bears noting that more than a dozen advanced economies received debt relief in one form or another during the depression of the 1930s. The approach to unwinding current debts is likely to vary considerably across countries, but it is time to place greater emphasis on debt restructuring (which comes with a menu of options) than on accumulating more debt.
Italy’s economy is weak. There is no growth. The banking system is in bad shape. Unemployment is high. There is substantial public unrest, and Renzi’s standing is weakening. Italy has been somewhere between recession and stagnation since 2008. After eight years, the situation shows no signs of improving... The faster they get out of the EU the better.
So Germany ignores all the FSB rules and regulations and bails Deutsche bringing it into government ownership/protection – call it what you like. In so doing it demolishes the entirety of European policy regarding bail-ins, government debts and austerity. The Bundesbank, Berlin and the ECB would have no authority at all. Every country would have a green light to do the same for their flag carriers.It would be the end the European experiment.
Asked to name the next big short, Eisman initially declined. “I’m not in such a rush to do it again,” he said. “It took years off my life.” Then he relented, saying, “The only big short out there is when the world loses confidence in QE.”