ECB Punts; Earnings Reports Mixed

TradeTheNews.com Weekly Market Update: ECB Punts; Earnings Reports Mixed
Fri, 21 Oct 2016 16:07 PM EST

With Q3 earnings releases ratcheting up and a plethora of M&A stories hitting the tape, investors poured over a steady flow of corporate news throughout the week. Banks and financial companies continued to report generally strong quarterly results, highlighted by Bank of America and American Express. Generally, managements struck a cautiously-optimistic tone on their conference calls pointing to a December rate hike as a likely catalyst. Major industrial names were much more subdued in their commentary as sluggish global growth and a resurgent US dollar remain impediments. General Electric and Illinois Tool Works saw share price declines as investors were underwhelmed with their guidance. Early season technology reports painted a divergent picture for several industry bellwethers. Netflix, PayPal, and Microsoft surged on growth prospects for the cloud and digital media consumption, while old line names like IBM and Intel continued to see their share prices lag behind. Finally, by Friday talk of major industry consolidation was rampant as reports circulated that AT&T was closing in on a deal to acquire Time Warner. The news came amidst a flurry of M&A announcements and speculation across a variety of industries including consumer staples, retail, pharmaceuticals, and of course technology.

The US dollar spent the better part of the week pushing to multi-month highs. The Euro touched its lowest level since March after the ECB left rates and QE unchanged, and kicked the decision on extending QE down the road to the December meeting. The British Pound continues to be hounded by Brexit implementation concerns: Cable remained under pressure, ending the week around 1.22. The Chinese Yuan has stayed near 6-year lows following a week economic data that suggested not much has changed for the trajectory of the world's second largest economy. US economic data was generally in line to slightly better than expectations while the final Presidential debate appeared to do little to change the calculus for next month's election. Treasury prices moved up modestly but the benchmark US 10-year yield has stayed pegged around 1.75%, pre Brexit levels. Crude prices moved up mid-week on more bullish inventory statistics but fell back towards the end of the week to finish little changed. Stocks went sideways, and for the week the S&P500 added 0.4%, the DJIA was flat, and the Nasdaq gained 0.8%.


MONDAY 10/17
(EU) EURO ZONE SEPT FINAL CPI M/M: 0.4% V 0.4%E; Y/Y: 0.4% V 0.4%E; CPI CORE Y/Y: 0.8% V 0.8%E
BAC: Reports Q3 $0.41 v $0.34e, R$21.6B v $20.8Be
(US) SEPT INDUSTRIAL PRODUCTION M/M: 0.1% V 0.2%E; CAPACITY UTILIZATION: 75.4% V 75.6%E
IBM: Reports Q3 $3.29 v $3.21e, R$19.2B v $19.0Be
F: Plans shutdown at four plants in next weeks to align production with demand and inventory goals - press

TUESDAY 10/18
BN.FR: Reports Q3 Rev €5.54B v €5.55Be
BRBY.UK: Reports H1 Rev £1.16B v £1.17Be
(CN) CHINA SEPT NEW YUAN LOANS (CNY): 1.22T (3-month high) V 1.00TE
(UK) SEPT PPI INPUT M/M: 0.0% V 0.4%E; Y/Y: 7.2% V 7.4%E
(UK) Govt attorney Eadie: New Brexit treaty likely to be voted on by both Houses
GS: Reports Q3 $4.88 v $3.86e, R$8.17B v $7.56Be
S: Reports prelim Q2 Net loss $142M v loss $585M y/y, R$8.25B v $7.97Be
(US) SEPT CPI M/M: 0.3% V 0.3%E; CPI EX FOOD AND ENERGY M/M: 0.1% V 0.2%E; CPI NSA INDEX: 241.428 V 241.498E
(US) OCT NAHB HOUSING MARKET INDEX: 63 V 63E
(US) AUG TOTAL NET TIC FLOWS: $73.8B V $140.6B PRIOR; NET LONG-TERM TIC FLOWS: $48.3B V $103.9B PRIOR
INTC: Reports Q3 $0.80 (adj) v $0.73e, R$15.8B v $15.6Be
(CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 3.50%; AS EXPECTED
BHP.AU: Reports Q1 iron ore production 57.6Mt v 56.3e, flat y/y
(CN) CHINA Q3 GDP Q/Q: 1.8% V 1.8%E; Y/Y: 6.7% V 6.7%E
(CN) CHINA SEPT INDUSTRIAL PRODUCTION Y/Y: 6.1% V 6.4%E; YTD Y/Y: 6.0% V 6.1%E
(CN) CHINA SEPT RETAIL SALES Y/Y: 10.7% (8-month high) V 10.7%E; YTD Y/Y: 10.4% V 10.3%E

WEDNESDAY 10/19
ASML.NL: Reports Q3 Net €396M v €407Me, Rev €1.81B v €1.73Be
CA.FR: Reports Q3 Rev €21.8B v €21.7Be
(UK) AUG AVERAGE WEEKLY EARNINGS 3M/Y: 2.3% V 2.3%E; WEEKLY EARNINGS 3M/Y (EX BONUS): 2.3% V 2.1%E
(UK) SEPT JOBLESS CLAIMS CHANGE: +0.7K V +3.2KE; CLAIMANT COUNT RATE: 2.3% V 2.2%E
(UK) AUG ILO UNEMPLOYMENT RATE 3M/3M: 4.9% V 4.9%E
(US) SEPT HOUSING STARTS: 1.047M V 1.18ME; BUILDING PERMITS: 1.225M V 1.17ME
(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 0.50%; AS EXPECTED
LHA.DE: Reports 9-month adj EBIT €1.68B v €1.69B y/y, Rev €23.9B v €24.3B y/y
GOOGL: Reportedly in advanced talks with Fox and Disney for web TV service; has already signed up CBS for the service - CNBC
(BR) BRAZIL CENTRAL BANK (BCB) CUTS SELIC RATE BY 25BPS TO 14.00%; AS EXPECTED
RIO.AU: Reports Q3 Pilbara iron ore production 68.5Mt (attributable) v 70.6Mte; 83.2Mt (100% basis), +2% y/y; shipments 80.9Mt (100% basis), -5% y/y
(AU) AUSTRALIA SEPT EMPLOYMENT CHANGE: -9.8K (2nd straight decline, biggest decline since Apr 2015) V +15.0KE; UNEMPLOYMENT RATE: 5.6% (3-year low) V 5.7%E

THURSDAY 10/20
ROG.CH: Reports 9M Rev CHF37.5B v CHF37.7Be
NESN.CH: Reports 9M Rev CHF65.5B v CHF66.0Be
(UK) SEPT RETAIL SALES (EX AUTO FUEL) M/M: 0.0% V 0.2%E; Y/Y: 4.0% V 4.4%E
(UK) SEPT RETAIL SALES (INC AUTO FUEL) M/M: 0.0% V 0.3%E; Y/Y: 4.1% V 4.7%E
(ID) INDONESIA CENTRAL BANK (BI) CUTS 7-DAY REVERSE REPO BY 25BPS TO 4.75%; NOT EXPECTED
941.HK: Reports 9M Net CNY88.1B v CNY85.4B y/y, EBITDA CNY200.4B v CNY192B y/y, Op Rev CNY542.7B v CNY513B y/y
(EU) ECB LEAVES MAIN REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED; reiterates view on rate guidance and QE program
(US) INITIAL JOBLESS CLAIMS: 260K V 250KE; CONTINUING CLAIMS: 2.06M V 2.05ME
(US) OCT PHILADELPHIA FED BUSINESS OUTLOOK: 9.7 V 5.0E
(EU) ECB chief Draghi: Reiterates ECB interest rates to remain at present or lower levels for an extended period of time; monthly asset purchases of €80B are intended to run until the end of March 2017, or beyond - Prepared remarks
(EU) ECB chief Draghi: ECB will announce what its plans for future months are at its Dec meeting after considering council technical work Q&A
(US) SEPT EXISTING HOME SALES: 5.47M V 5.35ME
BAC: CEO: consumers spending 5% more YTD y/y; we feel good about the US - TV interview
MSFT: Reports Q1 $0.76 adj v $0.68e, R$22.3B v $21.5Be
SLB: Reports Q3 $0.25 v $0.22e, R$7.02B v $7.13Be
(US) NORTH AMERICA Sept SEMI BOOK/BILL RATIO: 1.05 V 1.03 prior (above parity for 10th straight month)

FRIDAY 10/21
SAP.DE: Reports Q3 Net €725M v €895M y/y, Op profit €1.64B v €1.66Be, Rev €5.38B v €5.30Be
DAI.DE: Reports Q3 Net €2.73B v €2.42B y/y, EBIT €4.01B v €3.77Be, Rev €38.6B v €38.4Be
(UK) SEPT PUBLIC FINANCES (PSNCR): £13.3B V £0.7B PRIOR; PUBLIC SECTOR NET BORROWING: £10.1B V £8.2BE
CNBC's Faber: sources say NXPI and Qualcomm in handshake deal for $110/shr; some details remain to be worked out
TWX: AT&T reportedly in "advanced" talks to acquire Time Warner - financial press
(US) Weekly Baker Hughes US Rig Count: 553 v 539 w/w (+2.6%) (5th straight weekly increase)