TradeTheNews.com Weekly
Market Update: Election Jitters Overshadow More Confident Fed
Fri, 04 Nov 2016 16:07 PM EST
Global equity markets entered into some rough waters this week as anxiety over
next week's US Presidential election ramped up. Polls narrowed considerably in
the wake of the FBI reopening the investigation surrounding Hillary Clintons'
email scandal. The VIX shot back above 20 to trade at levels not seen since the
June Brexit vote and gold found buyers. The S&P dipped back below 2100 and
got within a point its 200-day moving average for the first time since July.
Investors appeared to look for protection in the event a Trump surprise victory
or a severely hampered Clinton Administration. Declining oil prices may have
also weighed on investor sentiment when prices fell back towards the September
lows. US crude inventories continued to swell and OPEC has yet to reach
agreement on member output levels with less than a month until the November
meeting. Sovereign bond yields drifted lower, but remained within recently
elevated levels. Generally solid economic data points complimented rate
announcements from the US Fed and BOE that suggested officials are becoming
more confident in their ability to move toward slowly withdrawing stimulus. The
S&P extended its longest losing streak since 1980 with its ninth
consecutive decline on Friday. For the week the S&P500 lost 1.9%, the DJIA
gave up 1.5%, and the Nasdaq fell 2.8%.
Earnings season reached its crescendo with a majority of the S&P 500's
components reporting by week's end. Healthcare stocks remained under
substantial pressure, in large part due to political concerns, including the
report this week of a DOJ probe of price fixing in the generics market, that
were seen factoring into some managements' outlooks. Facebook shares slumped on
Thursday after its CFO warned the street to take down ad growth projections and
prepare for increased capital spend next year. Deals continued to get
consummated but not quite at the same degree. Brocade confirmed a $5.9B deal to
be bought by Broadcom. Lattice Semi and Metaldyne Performance each found
suitors willing to pay more than $1B while there was a slew of smaller
transactions, many of which were in the US oil patch.
SUNDAY 10/30
OPEC talks in Vienna yielded NO DEAL to limit oil output; Iraq and Iran remain
in dispute about production cuts, not ready to freeze output - press
MONDAY 10/31
(EU) EURO ZONE OCT ADVANCE CPI ESTIMATE Y/Y: 0.5% V 0.5%E; CPI CORE Y/Y: 0.8% V
0.8%E
(EU) EURO ZONE Q3 ADVANCE GDP Q/Q: 0.3% V 0.3%E; Y/Y: 1.6% V 1.6%E
LVLT: To be acquired by Centurylink for $66.50/shr in cash and stock deal
valued at $34B
(US) SEPT PERSONAL INCOME: 0.3% V 0.4%E; PERSONAL SPENDING: 0.5% V 0.4%E
(US) SEPT PCE CORE M/M: 0.1% V 0.1%E; Y/Y: 1.7% V 1.7%E
(US) SEPT PCE DEFLATOR M/M: 0.2% V 0.2%E; Y/Y: 1.4% V 1.2%E
(US) OCT CHICAGO PURCHASING MANAGER: 50.6 V 54.0E (lowest since May)
(CN) CHINA OCT MANUFACTURING PMI (GOVT OFFICIAL): 51.2 V 50.3E; 3rd straight
expansion; 2-year high
(CN) CHINA OCT CAIXIN PMI MANUFACTURING: 51.2 V 50.1E; 4th consecutive
expansion; highest since July 2014
(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER)
UNCHANGED AT -0.10% (as expected); AGAIN PUSHES BACK TIME FRAME TO ACHIEVE 2%
INFLATION TARGET BY ONE YEAR UNTIL IN/AFTER FY18/19
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET AT 1.50%; AS
EXPECTED
TUESDAY 11/1
(HK) Macau Oct casino revenue 21.8B Patacas v 18.4B m/m, y/y: +8.8% (3rd
straight increase after 26 months of decline) v 7.4% prior
RDSA.NL: Reports Q3 Basic CCS EPS $0.70 v $0.54e, CCS earnings (ex items)
$2.79B v $1.79Be, Rev $61.9B v $68.0Be
BP.UK: Reports Q3 Net $933M v $719Me, Underlying replacement cost profit $1.66B
v $1.35Be, Total Rev $48.0B v $46.0Be
STAN.UK: Reports Q3 Pre tax profit $458M v $520Me, Op Income $3.47B v $3.68B
y/y
(UK) OCT PMI MANUFACTURING: 54.3 V 54.5E (3rd month of expansion)
EMR: Reports Q4 $0.96 v $0.89e, R$5.50B v $5.51Be
(US) OCT FINAL MARKIT MANUFACTURING PMI: 53.4 V 53.2E (highest reading since
Oct 2015)
(US) OCT ISM MANUFACTURING: 51.9 V 51.7E; PRICES PAID: 54.5 V 54.3E
X: Reports Q3 $0.40 v $0.88e, R$2.69B v $2.84Be
(NZ) NEW ZEALAND Q3 UNEMPLOYMENT RATE: 4.9% (8-year low) V 5.1%E; EMPLOYMENT
CHANGE Q/Q: 1.4% V 0.5%E; Y/Y: 6.1% V 5.4%E
WEDNESDAY 11/2
LHA.DE: Reports 9-month Net €1.85B v €1.75B y/y, adj EBIT €1.68B v €1.69B y/y,
Rev €23.9B v €24.3B y/y
MAERSKB.DK: Reports Q3 adj Net $426M v $490Me, EBIT $805M v $870Me, Rev $9.18B
v $9.38Be
(US) OCT ADP EMPLOYMENT CHANGE: +147K V +165KE; Discloses revisions to model to
better predict NFP
NYT: Reports Q3 $0.06 v $0.05e, R$363.5M v $365Me
DAL: Reports Oct Load factor 85.1%, -1.8% y/y
(US) DOE CRUDE: +14.4M V +1ME; GASOLINE: -2.2M V -1ME; DISTILLATE: -1.8M V
-1.5ME (largest crude build on record)
(US) Association of American Railroads weekly rail traffic report for week
ending Oct 29th: 545K carloads and intermodal units, -0.8% y/y
(US) FOMC HOLDS TARGET RATE RANGE AT 0.25-0.50%: CASE FOR RATE HIKE HAS
CONTINUED TO STRENGTHEN
FB: Reports Q3 $1.09 (adj) v $0.98e, R$7.01B v $6.92Be
FB: CFO: expect to see ad revenue growth rates come down meaningfully -
earnings call comments
2202.HK: Reports Oct contracted sales CNY49.0B v CNY25.4B m/m
(CN) CHINA OCT CAIXIN CHINA SERVICES PMI: 52.4 V 52.0 PRIOR; 4-month high
THURSDAY 11/3
GLE.FR: Reports Q3 Net €1.1B v €790Me, Op €1.58B v €1.82B y/y, Rev €6.01B v
€5.9Be
CSGN.CH: Reports Q3 Net profit CHF41M v loss CHF150Me; Pretax profit CHF222M,
+12% y/y; Rev CHF5.40B v CHF5.1Be
RMS.FR: Reports Q3 Rev €1.26B v €1.23Be
GLEN.UK: Reports Q3 own-sourced copper production 1.06Mt v kte
992.HK: Reports Q2 Net $157M v $87.6Me, Rev $11.2B v $12.2B y/y
(EU) EURO ZONE SEPT UNEMPLOYMENT RATE: 10.0% V 10.0%E (matches lowest level
since Sept 2011)
(UK) BANK OF ENGLAND (BOE) LEAVES INTEREST RATES UNCHANGED AT 0.25%; AS
EXPECTED
(UK) BANK OF ENGLAND (BOE) NOV MINUTES: VOTED UNANIMOUS (9-0) TO LEAVE INTEREST
RATES UNCHANGED
(UK) BANK OF ENGLAND (BOE) QUARTERLY INFLATION REPORT (QIR)
(US) INITIAL JOBLESS CLAIMS: 265K V 256KE; CONTINUING CLAIMS: 2.03M V 2.04ME
(US) Q3 PRELIMINARY NONFARM PRODUCTIVITY: 3.1% V 2.1%E; UNIT LABOR COSTS: 0.3%
V 1.2%E
(UK) BOE Gov Carney: There are limits to tolerance for CPI overshoot; BOE
monitoring inflation expectations - post rate decision press conference
(US) OCT FINAL MARKIT SERVICES PMI: 54.8 V 54.8E
(US) OCT ISM NON-MANUFACTURING COMPOSITE: 54.8 V 56.0E
(US) SEPT FINAL DURABLE GOODS ORDERS: -0.3% V -0.1%E; DURABLES EX
TRANSPORTATION: 0.1% V 0.1%E
FRIDAY 11/4
BMW.DE: Reports Q3 Net €1.82B v €1.58B y/y, EBIT €2.38B v €2.37Be, Rev €23.4B v
€23.2Be
HUM: Reports Q3 $3.18 v $2.99e, R$13.7B v $13.4Be
(CA) CANADA OCT NET CHANGE IN EMPLOYMENT: 43.9K V -15.0KE; UNEMPLOYMENT RATE:
7.0% V 7.0%E
(US) OCT UNEMPLOYMENT RATE: 4.9% V 4.9%E
(US) OCT AVERAGE HOURLY EARNINGS M/M: 0.4% V 0.3%E; Y/Y: 2.8% V 2.6%E; AVERAGE
WEEKLY HOURS: 34.4 V 34.4E
(US) OCT CHANGE IN NONFARM PAYROLLS: +161K V +173KE
(US) Atlanta Fed GDPNow: raises Q4 GDP forecast to 3.1% from 2.3% Nov 1st
