Modestly green.
Markets:
The Shanghai Composite Index rose 1.48% while Taiwan rallied 1.4% as both markets reopened after a holiday.
"Lower-emissions rule will strain fuel supply, retrofit expense -- Could halt ships from fleet handling 90% of global trade"
$60 billion is a pretty big potential headwind. With a VAT on the table suddenly, it could add up to a massive global tax on consumption.
Note the new "rule" is imposed by the International Maritime Organization, an unelected UN-agency.
Slippery slope here. Shipping emissions, due to low-grade bunker fuel, are indeed massive. But so are the implications of the UN eventually running our lives.
In this case, low-priced junk from China will cost more while air pollution will decrease globally. Hard to argue with it.
Mood:
Largest ever restaurant deal, at hefty valuations, another sign of peaking social mood.
Privately-owned German company JAB (headquartered in Luxembourg) will purchase Panera Bread for $315 per share -- a 20% premium -- in a deal valued at about $7.5 billion, and an incredible 18x LTM EBITDA.
"If completed, the transaction would mark the largest M&A deal for a US restaurant company, and the second-largest in North America after the 2014 acquisition of Tim Horton's."
Dining out becomes a veritable sport at mood peaks.
FX:
JPY, SEK, and MXN weaker. GBP getting a lift.
Treasuries:
Day Two of price weakness when follow through is needed.
Nikkei -- "Ultralow rate driving Japan's public pension fund out of JGBs"
This couldn't come at a worse time. The Japanese government could soon become the only buyer of JGBs. Dangerous.
Energy:
Recipe for higher prices: "CME Cuts Margin Requirement for Front-Month WTI Oil by 6.9%."
WTI crude up over 1% while NG lower.
We'll see. Oil inventories at 10:30am.
Metals:
Platinum, palladium, and copper are higher along with base metals which are ripping on news that China will develop an economic zone -- another Ghost City? -- in Xiongan, Hebei province.
Commodities such as coking coal, iron ore and steel rebar soared along with zinc, nickel, and iron ore.
Gold and silver down. Gold failed its 1264.90 swing point.
S&P Outlook:
A rally into the S&P 2376-2380 area is still an option, and the NDX 100 closed above a minor swing point. So both are in synch for the time being. NDX has more relative strength, but should be watched closely for any break of it.
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