The Morning Hammer: Tension Is On the Tape


European equities are down again this morning on bank weakness.

German Chancellor Angela Merkel ruled out state assistance for Deutsche Bank (DB) before next year's national election, which is hitting the stock hard, and in turn, other European banks.

DB faces a $14 billion bill from the Department of Justive related to MBS activities during the bubble. They are appealing, but shareholders are very concerned that the bank will have to raise cash.

The Euro Stoxx 600 is down -1.4% with financials down -2.0%.

The drama is driving demand for safety assets, and the yen, (BTW, you should read Kurt Capra's great work on USDJPY) German bunds, and US Treasuries are ticking higher.

Crude oil is near $45 after Algerian Energy Minister Noureddine Boutarfa said Sunday that Saudi Arabia offered to cut production to January levels.

But keep in mind that oil headlines are running wild ahead of the OPEC meeting this week, which is an “anything goes” event.

German business sentiment hit a 2-year+ high. However, UK mortgage approvals dropped sharply in August.

The Bank of Japan reported that corporate cash and household deposits hit an all-time high as business and consumers remain reluctant to spend.

On the deal front, CBOE (CBOE) is buying BATS Global (BATS) for $3.2 billion.

Funny, last week there was a rumor that CBOE itself could be in play — but I guess someone got their wires crossed.

Tonight, we'll have the first Presidential debate between Hillary Clinton and Donald Trump. If either candidate gets a decisive victory, we could see a real move in biotech tomorrow. (down if Clinton wins, up if Trump wins)

SPX futures are down in the early going, and I guess we're going to see if bears are ready to make a real stand.

Friday was a modestly ugly day, but the bears have been flopping bretty bad since June.

It's hard to tell when that will stop, but tension is starting to build on the tape again.