#PreMarket Primer: Wednesday, October 15: Falling Oil Prices Threaten Global Stability

Oil prices plunged on Tuesday, posting their largest one-day decline in about two years. The sharp fall was due in large part to the International Energy Agency’s decision to trim its global demand growth forecast for this year and the next amid a growing supply glut.

Though demand is sinking, output around the world has been high with the U.S. shale oil boom contributing to the over-supplied market.
Dissension within OPEC has also been a cause for concern as some of the organization’s members, like Venezuela, are calling for a supply cut in order to boost prices. Meanwhile others, like Saudi Arabia and Iran, have said they are willing to accept low prices for a long period in order to regain market share.

Both WTI and Brent fell markedly lower on Tuesday, and most analysts are expecting to see prices continue to decline, possibly below $80, until they are low enough to reignite demand.
Top News
In news around the markets:

AbbVie Thinks Twice About Shire Acquisition

The Wall Street Journal reported that AbbVie Inc ABBV is considering walking away from a merger deal with Shire PLC SHPG. AbbVie’s planned $45 billion takeover offer has become less attractive to the company’s board as new Treasury rules on corporate inversions have made the deal less lucrative. Though Abbvie has said its desire to acquire Shire was not based solely on tax benefits, relocating the new company’s headquarters to the U.K. would have reduced its tax rate from 22 percent to 13 percent.

WHO 
The World Health Organization cautioned that the Ebola outbreak is worsening on Tuesday, saying that it is killing about 70 percent of those who become infected. The WHO forecast that the world may see up to 10,000 new cases per week as soon as December if the spread is not contained.

Protests in Hong Kong flared up on Wednesday after a video of police beating an unarmed protester went viral overnight. In an attempt to clear blockades that have been blocking traffic in downtown Hong Kong for more than a week, police arrested 45 protesters using only pepper spray. However, TV broadcaster TVB caught officers beating a handcuffed protester for several minutes before dropping him in a corner near the protest site. Officials have said the officers responsible have been removed from their positions, but the incident is likely to garner support for the protesters’ push for full democracy in Hong Kong.

On Wednesday, U.S. President Barack Obama is set to hold a conference with his counterparts in the U.K., France, Germany and Italy to discuss how to move forward with the military offensive against ISIS. Islamic State militants have continued their attempts to overtake Kurdish towns near Syria’s border with Turkey, causing worries that the fighting could spill over. However, the Turkish government has been reluctant to interfere in Syria to protect the Kurds, which has caused several riots to break out in Turkey among the nation’s Kurdish population.
Asian Markets
Asian markets were mostly higher with the exception of the KOSPI, which fell 0.17 percent. The NIKKEI was up 0.92 percent, the Shanghai composite gained 0.63 percent, the Shenzhen composite rose 0.41 percent and the Hang Seng index rose 0.92 percent.
European Markets
European markets were down across the board; the FTSE lost 1.22 percent, the STOXX 600 fell 0.71 percent, the DAX lost 0.45 percent and the CAC 40 was down 0.53 percent.
Commodities
Energy futures continued to decline; Brent futures fell 1.61 percent and WTI futures were down 1.42 percent. Gold lost 0.86 percent and silver was down 1.91 percent, while industrial metals were mixed. Copper fell 0.52 percent and tin was down 2.48 percent, but aluminum gained 0.26 percent and zinc was up 0.51 percent.
Currencies
The euro gained some momentum on Wednesday, up 0.04 percent against the dollar and 0.23 percent against the yen.The dollar went higher against the yen, up 0.18 percent, but lost 0.03 percent to the pound and 0.16 percent to the Australian dollar.
Earnings
Notable reports released on Monday included:
JPMorgan Chase & Co. JPM reported third quarter EPS of $1.36 on revenue of $24.25 billion, compared to last year’s loss of $0.17 on revenue of $23.88 billion.
Citigroup Inc C reported third quarter EPS of $1.15 on revenue of $19.98 billion, compared to last year’s EPS of $1.00 on revenue of $18.22 billion.
Intel Corporation INTC reported third quarter EPS of $0.66 on revenue of $14.60 billion, compared to last year’s EPS of $0.58 on revenue of $13.48 billion.
CSX Corporation CSXreported third quarter EPS of $0.51 on revenue of $3.20 billion, compared to last year’s EPS of $0.46 on revenue of $3.00 billion.
#PreMarket Movers
Stocks moving in the #PreMarket included:

Shire PLC SHPG is down more than 20 percent in the premarket on the news that AbbVie is reconsidering it's takover of the company. 

Intel Corporation INTC is up about 1.5 percent in the premarket after the company reported better-than-expected earnings. 
Earnings
Notable releases expected on Tuesday include:
Bank of America Corp BAC is expected to report a third quarter loss of $0.09 on revenue of $21.36 billion, compared to last year’s loss of $0.20 on revenue of $21.53 billion.
eBay Inc EBAY is expected to report third quarter EPS of $0.67 on revenue of $4.37 billion, compared to last year’s EPS of $0.64 on revenue of $3.89 billion.
Netflix, Inc. NFLX is expected to report third quarter EPS of $0.93 on revenue of $1.41 billion, compared to last year’s EPS of $0.52 on revenue of $1.11 billion.
PNC Financial Services Group Inc PNC is expected to report third quarter EPS of $1.71 on revenue of $3.80 billion, compared to last year’s EPS of $1.79 on revenue of $3.92 billion.
Economics
Notable economic releases expected on Wednesday include the Spanish current account, German CPI, the British unemployment rate, U.S. PPI and U.S. retail sales.
For a recap of Tuesday’s market action, click here.
Tune in to Benzinga’s #PreMarket Prep show with Fari Hamzei, Hardeep Walia & Ron Bernstein here.