Reuters Insider - Inside the News: Fitch Downgrades Portugal; U.S. Stocks Flat

First Hydrogen

13/06/2016 11:00

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 Source:             Thomson Reuters                                   
                                                                       
 Description:        Fitch downgrades Portugal to A+, U.S. stocks are  
                     flat despite a preholiday flurry of data, and the 
                     FTSE hits the 6000 level for the first time since 
                     June 2008.                                        
 
 
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Transcript (May be auto-generated)

                 Let's go Inside the News at noon. Fitch has just downgraded Portugal to A+ and 
put it on negative outlook. The ratings agency says this reflects the slower 
reduction in the country's current account deficit. This news has sent the Euro 
down against the Dollar and the Swiss Franc. US stocks are flat despite a 
pre-holiday flurry of data reinforcing views of solid economic growth. In the 
meantime, the FTSE 100 hit the psychologically important 6,000 mark. That was 
the first time since June 2008. 

The index closed below it though in thin trading. In treasuries, prices are down
sending yields higher as dealers prepare for a new supply next week. Around $99 
billion worth of 2-year, 5-year and 7-year notes will be auctioned between 
Monday and Wednesday. In the meantime, dealers are seeking a discount to take on
the debt in holiday trading. The bond market closes today at 2PM ahead of the 
Christmas Eve holiday. Reuters Quantitative Analyst Mike Tarsala has been 
analyzing short squeeze plays. He says Assured Guaranty is a prime candidate and
one of the very few 

companies that could be poised to take advantage of volatility in the municipal 
bond market. What are you saying there Mike? Well, as you know, Assured 
Guaranty, monoline insurer of munis; lots of headline risk. It's under attack as
potentially the next bubble in the markets. And if you take a look at this stock
chart, everybody's technical person would be saying wow, this thing is just 
about to break down. I don't think that's the case. And here's the reason why: 
It has greater short squeeze potential, but 94% of the stocks in North America 
according to a proprietary model in StarMine, has 6.3% short interest right now.
That's been on the rise about a point in the past two weeks. Again, lots of 
headline risks and that's why the short interest is up but I think if the Build 
America Bond program is canned, there's a great opportunity for the monoline 
insurers to come back and this is a prime candidate. So in the near term, I 
think 

the greed overtakes the fear. Alright. Mike, thanks for that. Nat gas prices 
slightly down despite some bullish EIA data. This morning, there was a larger 
than expected draw in natural gas of 184 billion cubic feet versus expectations 
of 179 bcf. Reuters Commodities Specialist Christopher Henwood says prices 
should have risen and the market still remain weak. Any rally has got to get 
above 4.185. That's key resistance, has been for a while in this market. That's 
gonna look to continue. Bottom-line is downside potential for natural gas is 
much greater than the upside potential. So we're gonna be you know, keeping an 
eye on how we fill out this winter but it doesn't look like it's going up 
anytime soon. And at 1PM, Chris will have his latest analysis on heating oil. 
Then at 1:15, find out why Reuters Equities Analyst John Kozey says 
Toronto-based US gold is poised to move higher. I'm Rhonda Schaffler. This is 
Reuters Insider