United States

Dispensing his usual dose of optimistic crude oil buzzkill, Bloomberg energy strategist Julian Lee points out something troubling to both OPEC, and those who are hoping that the latest dip in oil will finally lead to a sharp rally. He writes that while at first glance, this year’s diminishing U.S. oil stockpiles appear to support the notion OPEC is finally getting the global crude glut under control. Surging exports mean that the market should treat that idea with caution.

Another day, another warning of market froth, only this time not from the (widely ignored) Federal Reserve, but from Mikihiro Matsuoka, chief economist at Deutsche Bank who in a note released on Monday says that he believes that "the equity market in developed countries begins to show symptoms of ‘froth’. A simple average of the standard deviation of the stock market capitalization as percentage of GDP of seven major developed countries has been approaching very close to the previous peaks of 2000 and 2008.

China, Russia Alliance Deepens Against American Overstretch

• World stocks rally, dollar up to two-month high against yen (Reuters)
• Oil Prices Fall Amid Rising U.S. Production (WSJ)
• Trump’s ‘America First’ Policy Proves to Be an Immovable Object at G-20 (WSJ)
• Russia says joint cyber unit with U.S. will take time to set up (Reuters)
• Senate Health Bill Fails to Pick Up Support After Week of Recess (BBG)
• Trump’s Massive Tax-Cut Plan Faces ‘Train Wreck’ of a Calendar (BBG)
• Trump's push to replace Obamacare faces trouble as U.S. Congress returns (Reuters)

In a quiet overnight session, S&P 500 futures are fractionally in the green (2,426, +0.2%) with European and Asian stocks as oil drops second day after an initial ramp higher amid speculation that LIbya and Nigeria may be asked to cap their production. Nasdaq 100 Index are again higher, following the biggest daily advance in more than a week, up 0.4% as of 6:20 a.m. in New York.