TradeTheNews.com Weekly
Market Update: Markets Drift Sideways, Looking Ahead to Jackson Hole
Fri, 19 Aug 2016 16:07 PM EST
Major equity indices retreated slightly from record highs in light summer
trading, while the 10-year Treasury yield crept up toward 1.6% this week. Crude
futures continued to march higher with Brent breaking above $50/bbl for the
first time since early July and WTI topping $48/bbl, even as the Baker Hughes
rig count rose for the eighth straight week. The greenback hit seven-week lows
against the Yen and Euro before mounting a small recovery on Friday. For the
week, the DJIA lost 0.1%, the S&P500 slipped less than 0.1%, and the Nasdaq
edge up 0.1%.
The economic data this week was mostly unremarkable, though US July core CPI
came in one-tenth weaker than expected. Meanwhile UK inflation data saw some
fallout from the Brexit vote and post-referendum sterling fall: July CPI hit a
20-month high at 0.6% y/y and manufacturers saw the biggest jump in PPI in 3
years. On Friday, a report said that Prime Minister May would invoke EU Article
50 and start the 2-year Brexit process by next April.
In corporate news, Cisco beat earnings expectations but was weighed on by a 7%
workforce reduction announcement. Private prison operators Corrections Corp and
Geo Group were subject to hard time this week after the DOJ said it would phase
out their contracts, hitting their shares by as much as 50% on Thursday.
A raft of Fed speakers set a somewhat more hawkish tone as markets look ahead
for signals about rate tightening at the Jackson Hole symposium next week. Most
notably, the normally dovish NY Fed President Dudley said the time for a rate
hike is getting closer and would not rule out a September move. The minutes of
the July FOMC meeting released this week indicated that Fed members are still
divided on the future course of action and wanted more data before making a
decision.
Monday
(US) AUG EMPIRE MANUFACTURING: -4.2 V +2.0E
(US) AUG NAHB HOUSING MARKET INDEX: 60 V 60E
(US) JUNE TOTAL NET TIC FLOWS: -$202.8B V -$11.0B PRIOR; NET LONG-TERM TIC
FLOWS: -$3.6B V +$42BE
Tuesday
BLT.UK: Reports FY16 Net loss $6.39B v profit $1.91B y/y, Underlying profit
$1.22B v $1.04Be; Rev $30.9B v $52.3B y/y
(UK) JULY CPI M/M: -0.1% V -0.1%E; Y/Y: 0.6% (20-month high) V 0.5%E; CPI CORE
Y/Y: 1.3% V 1.4%E
(UK) JULY RPI M/M: +0.1% V -0.1%E; Y/Y: 1.9% V 1.7%E
(UK) JULY PPI INPUT M/M: 3.3% V 1.0%E; Y/Y: 4.3% V 2.0%E (largest annual rise
since July 2013)
(DE) GERMANY AUG ZEW CURRENT SITUATION SURVEY: 57.6 V 50.2E; EXPECTATIONS
SURVEY: 0.5 V 2.0E
HD: Reports Q2 $1.97 v $1.96e, R$26.5B v $26.4Be
(US) JULY CPI M/M: 0.0% V 0.0%E; CPI EX FOOD AND ENERGY M/M: 0.1% V 0.2%E; CPI
NSA: 240.647 V 240.805E
(US) JULY HOUSING STARTS: 1.211M V 1.180ME; BUILDING PERMITS: 1.152M V 1.160ME
TJX: Reports Q2 $0.84 v $0.80e, R$7.88B v $7.87Be
(US) JULY INDUSTRIAL PRODUCTION M/M: 0.7% V 0.3%E; CAPACITY UTILIZATION: 75.9%
V 75.6%E
(US) Fed's Dudley (dove, FOMC voter): Getting closer to the time for a rate
hike, Sept rate hike is possible; Bond market is looking a bit stretched,
10-year yield is looking a bit low, given the circumstances - TV interview
(US) Fed's Lockhart (moderate, non-voter): would not rule out at least one rate
hike this year; not committed to any particular timing on rate hike
(US) Atlanta Fed GDPnow: raises Q3 GDP forecast to 3.6% from 3.5% on Aug 12th
(US) EPA finalizes greenhouse gas requirements for medium and heavy duty
trucks; 2027 model year trucks to be 25% more efficient
F: Targets fully autonomous vehicle for ride sharing in 2021
Wednesday
CARLB.DK: Reports H1 adj Net DKK1.41B v DKK1.80B, EBIT DKK3.45B v DKK3.54Be,
Rev DKK31.2B v DKK31.5Be
(UK) JULY JOBLESS CLAIMS CHANGE: -8.6K V +9.0KE; CLAIMANT COUNT RATE: 2.2% V
2.2%E
(UK) JUN ILO UNEMPLOYMENT RATE 3M/3M: 4.9% V 4.9%E
(UK) JUN AVERAGE WEEKLY EARNINGS 3M/Y/Y: 2.4% V 2.4%E; WEEKLY EARNINGS (EX
BONUS) 3M/Y/Y: 2.3% V 2.3%E
700.HK: Reports Q2 Net CNY10.7B v CNY9.52Be, Rev CNY35.7B v CNY23.4B y/y
MON: Reportedly allows Bayer limited access to confidential company
information; Bayer has not yet signed confidentiality agreement with Monsanto
and ongoing talks described as "difficult" - press
(PT) Canadian ratings agency DBRS analyst: agency is 'comfortable' with current
Portugal BBB rating - press
(US) FOMC MINUTES FROM JULY 26-27TH MEETING: FED OFFICIALS SPLIT, WANT MORE
DATA BEFORE DECISION ON RATE HIKE
CSCO: Reports Q4 $0.63 v $0.60e, R$12.6B v $12.5Be; to eliminate up to 5.5K
positions (7% of global workforce)
992.HK: Reports Q1 $0.02 v $0.01e; Net $173M v $111Me, Rev $10.1B v $9.9Be
(CN) CHINA JULY PROPERTY PRICES M/M: FALL IN 16 OUT OF 70 CITIES VS FALL IN 10
PRIOR; Y/Y: FALL IN 11 OUT OF 70 CITIES V FALL IN 12 PRIOR
(AU) AUSTRALIA JULY EMPLOYMENT CHANGE: +26.2K V +10.0KE; UNEMPLOYMENT RATE:
5.7% V 5.8%E
Thursday
(UK) JULY RETAIL SALES (EX AUTO FUEL) M/M: 1.5% V 0.3%E; Y/Y: 5.4% V 3.9%E
(UK) JULY RETAIL SALES (INCLUDING AUTO FUEL) M/M: 1.4% V 0.1%E; Y/Y: 5.9% V
4.2%E
(EU) EURO ZONE JULY CPI M/M: -0.6% V -0.5%E; Y/Y: 0.2% V 0.2%E V 0.2% ADVANCE;
CPI CORE: 0.9% V 0.9%E
(US) INITIAL JOBLESS CLAIMS: 262K V 265KE; CONTINUING CLAIMS: 2.175M V 2.14ME
(US) AUG PHILADELPHIA FED BUSINESS OUTLOOK: 2.0 V 2.0E
HOG: US regulators file suit over emission control defeat devices, claims
Harley Davidson violated Clean Air Act - press
(US) Dept of Justice to end its use of private prisons due to safety and
security issues - Washington Post
(US) Fed's Williams (moderate, non-voter): calls for rate hike sooner rather
than later; raising interest rates makes sense
AMAT: Reports Q3 $0.50 v $0.47e, R$2.82B v $2.83Be
GPS: Reports Q2 $0.60 v $0.58e, R$3.85B v $3.81Be
Friday
(UK) JULY PUBLIC FINANCES (PSNCR): -£2.1B V +£13.5B PRIOR; PUBLIC SECTOR NET
BORROWING: -£1.5B V -£2.2BE
(ID) INDONESIA CENTRAL BANK (BI) LEAVES 7-DAY REVERSE REPO RATE (new benchmark
rate) UNCHANGED AT 5.25% (not expected)
(UK) UK govt reportedly likely to trigger Brexit by April 2017 - press
(US) Weekly Baker Hughes Rig Count: 491 v 481 w/w (+2%) (8th straight week of
increase)
