Oil Falls to 12-Year Low as IEA Says Supply Could `Drown' Market

---

Crude dropped to the lowest in more than 12-years in New York after the International Energy Agency said the global market could “drown in oversupply.”

West Texas Intermediate futures fell 3.3 percent. The IEA cut 2016 estimates for global oil demand as China’s economic growth weakens, and raised forecasts for output outside the Organization of Petroleum Exporting Countries. The removal of restrictions on Iranian crude sales is seen prolonging the supply glut. Brent futures rebounded as data showed Chinese growth was in line with government targets.

Oil is down 23 percent this year amid volatility in Chinese markets and an expected surge in Iranian exports. The International Monetary Fund cut its world growth outlook for 2016 to 3.4 percent from 3.6 percent as the commodities slump and political gridlock push Brazil deeper into recession, plunging oil prices hobble Middle East crude producers, and the rising dollar curbs U.S. prospects.

WTI for February delivery, which expires Wednesday, slipped 96 cents to close at $28.46 a barrel on the New York Mercantile Exchange. It was the lowest settlement since September 2003. The more-active March future decreased 82 cents to $29.57. Monday’s transactions were booked with Tuesday’s because of the Martin Luther King Jr. holiday. Total volume traded was 68 percent higher than the 100-day average at 2:45 p.m.

Brent for March settlement climbed 21 cents, or 0.7 percent, to end the session at $28.76 a barrel on the London-based ICE Futures Europe exchange. The contract fell 1.4 percent to $28.55 on Monday, the lowest close since December 2003. Brent closed at an 81-cent discount to March WTI.

Source : bloomberg

Yen Weakens as China Stocks Rally on Stimulus Bets Damps Demand

---

The yen fell versus most of its major peers while currencies of commodity exporters extended their advance on speculation China may increase economic stimulus.

The Australian dollar jumped, while the Shanghai Composite Index rallied 3.2 percent after a Chinese report showed that the world’s second-largest economy slowed in December. The Canadian dollar halted a 12-day decline.

The yen was little changed at 117.33 per dollar as of 2:17 p.m. in New York after declining 0.3 percent on Monday. Japan’s currency is still about 2 percent stronger this year, as concern China’s economy was slowing triggered a rout in stocks around the world and fueled demand for haven assets.

Implied three-month volatility for the yen also dropped for a second day, to 9.70 percent, after rising to 10.34 percent on Jan. 15, the most on a closing basis since October.

Source : Bloomberg

S&P 500 Little Changed as Energy Slides, Consumer Shares Advance

---

The Standard & Poor’s 500 Index closed little changed as consumer shares led an advance, offsetting fresh signs of weakness in crude oil and corporate earnings after economic data in China helped ease some investor concern over a hard landing there.

The Standard & Poor’s 500 Index gained less than 0.1 percent to 1,881.35 at 4 p.m. in New York, after a whipsaw session that saw the gauge rise as much as 1.1 percent and fall 0.8 percent.

In contrast to U.S. shares, European and Asian stocks rose amid speculation of further Chinese state aid after a report showed gross domestic product in the world’s second-largest economy expanded 6.9 percent in 2015, just shy of the government’s 7 percent target, and the least since 1990.

The last time the RSI slipped below that level was on Jan. 13, the day before a 1.7 percent rally. The time prior to that was on Aug. 25, when the S&P 500 hit a bottom and rallied 6.5 percent over the next three days.

Corporate earnings are gathering more attention with investors weighing the health of the U.S. economy. Analysts project profits for index members fell 7 percent in the fourth quarter.

Source: Bloomberg

U.S. Stocks Rise After China Data While Crude Slide Caps Gains

---

U.S. stocks rose from their lowest levels in nearly five months, as Chinese economic-growth data eased investor concern over a hard landing while still leaving open the possibility of government stimulus.

Consumer shares paced the advance, with Procter & Gamble Co. and Altria Group Inc. up at least 1.2 percent. Morgan Stanley increased 1.7 percent after reporting quarterly profit and revenue that exceeded estimates. Bank of America Corp. weighed, falling 2.6 percent, even as its results exceeded estimates. Crude prices remained an influence on fragile sentiment, with equity gains tracking today’s fluctuations in oil.

The Standard & Poor’s 500 Index added 0.3 percent to 1,886.57 at 12:17 p.m. in New York, after earlier rising as much as 1.1 percent. The Dow Jones Industrial Average climbed 59.58 points, or 0.4 percent, to 16,047.66. The Nasdaq Composite Index was little changed. Trading in S&P 500 shares was 26 percent above the 30-day average for this time of the day.

European and Asian stocks rose amid speculation of further Chinese state aid after a report showed gross domestic product expanded 6.9 percent in 2015, just shy of the government’s 7 percent target, and the least since 1990.

The S&P 500 on Friday slid to its lowest level since Aug. 25. The index was off to its worst-ever start to a year, amid concerns that China’s policy interventions won’t be enough to stoke growth in the world’s second-biggest economy, while oil tumbled to a 12-year low.

The equity benchmark is down more than 11 percent from its record set last May, and has slumped 9 percent since the Federal Reserve raised interest rates last month for the first time since 2006. Meanwhile, a measure of volatility has jumped the most since a selloff in August which sent the S&P 500 into its first correction in four years.

Association of Home Builders/Wells Fargo builder sentiment index held at 60 in January after the prior month was revised down a point, figures from the Washington-based group showed.

As corporate earnings gather more attention with investors weighing the health of the U.S. economy. Netflix Inc. and International Business Machines Corp. are also among those posting results today after markets close. Analysts project profits for index members fell 7 percent in the fourth quarter.

Eight of the 10 main groups in the S&P 500 advanced, boosted by a rebound among consumer staples stocks, which gained 1 percent. The group fell 1.6 percent Friday to close at a two-month low. Modelez International Inc. and Campbell Soup Co. added more than 2 percent today.

Viacom Inc. and Macy’s Inc. helped power a rally in consumer discretionary shares after the group fell for a sixth week out of seven. Macy’s rose 3.3 percent after David Einhorn’s Greenlight Capital LLC reported a new position in the retailer. Greenlight said in a letter that a private equity firm and a real estate investment trust could team up to purchase the company and "unlock the value" of its land and buildings. Meanwhile, Viacom advanced 5.4 percent after the media giant was said to be targeted by an activist investor.

Health care stocks were also among the biggest gainers in the U.S. benchmark. Tenet Healthcare Corp. climbed 2.4 percent after the hospital operator added two members of Glenview Capital Management to its board. Johnson & Johnson rose 1.2 percent amid its plan to cut 3,000 jobs to improve its lagging medical-device unit.

The second-biggest U.S. lender, Bank of America said profit rose 9.4 percent thanks to fixed-income trading revenue. Still, shares erased earlier gains, falling as much as 2.7 percent. Meanwhile, Morgan Stanley climbed 1.7 percent, paring an earlier 4.5 percent surge, after its better-than-estimated earnings and plans for cutting at least $1 billion in costs by next year.

Source : Bloomberg

European Stocks Rebound From One-Year Low on China Stimulus Bets

---

European stocks rose the most in three weeks amid optimism China will act to support its weakening economy.

The Stoxx Europe 600 Index climbed 1.3 percent at the close of trading. It rose as much as 2.4 percent earlier after a report showed China’s economy grew at an annual pace that was just shy of a government target, while leaving open the possibility of further stimulus. Europe’s benchmark pared its advance as oil-and-gas producers gave up some gains amid a drop in crude.

Concern over a slowdown in the world’s second-biggest economy and deepening oil losses have weighed on investor sentiment this year, dragging the Stoxx 600 down as much as 10 percent to its lowest level since December 2014.

The Stoxx 600 fell 21 percent from an April record through yesterday, after entering a bear market at the end of last week. That left its companies trading at 14.2 times estimated profit, near a one-year low.

Investors are also focusing on corporate earnings this week. Unilever added 3 percent after its quarterly revenue beat estimates. Software AG jumped 13 percent after posting annual operating profit that exceeded its forecasts.

RWE AG and EON SE jumped 7.6 percent or more after Germany deferred a debate on the country’s phase-out of coal-fired power. Prudential Plc rose 3.4 percent after the insurer disclosed details of its capital strength and named a new chief executive officer for the U.K. and Europe.

Credit Agricole SA climbed 2.5 percent after the lender seeking to bolster capital confirmed it’s exploring selling stakes in more than three dozen regional banks. Ocado Group Plc rallied 6.9 percent after the Daily Mail reported speculation that the online grocer will partner with Amazon.com Inc. in Britain.

Novozymes A/S tumbled 8.5 percent after the Danish biotechnology company abandoned an annual sales-growth target.

Source: Bloomberg