Friday, March 24, 2017

‘Trump Bump’ Wobbles as Healthcare Bill Dies

TradeTheNews.com Weekly Market Update: ‘Trump Bump’ Wobbles as Healthcare Bill Dies
Fri, 24 Mar 2017 16:09 PM EST

The week saw a reversal in sentiment as investors grew concerned about the ability of the White House to push through the healthcare reform bill in the House and began to sell risk. Tuesday, the Dow lost more than 1%, its biggest one-day loss since last September. Stocks sold off on Friday morning as it appeared the Republicans didn’t have the votes to pass the bill, raising concerns about the Trump administration’s effectiveness in moving forward on the rest of its legislative agenda, including tax reform and infrastructure spending plans. Just before the close on Friday, the GOP pulled the healthcare bill, and stocks saw a relief rally led by the hospitals and healthcare sector. For the week, the S&P500 lost 1.4%, the DJIA dropped 1.5%, and the Nasdaq slipped 1.2%.

China's central bank intervened in the open market to add liquidity, as various financial institutions failed to meet payments. The Bank also tightened rules on borrowing and using corporate bonds as collateral, requiring a AAA rating on bonds as of April 7th. China may be starting to see the effects of financial stress typically associated with extremely high levels of credit-to-GDP ratios. However, the Shanghai Composite closed up on the week by 0.9%, bucking the global trend.

UK PM May set March 29th as the date to trigger the start of the Brexit negotiation process. Article 50 of the EU Treaty states that a member wishing to leave has two years from the date it officially triggers the process. Fears of a ‘hard Brexit’ have driven the Pound to recent lows, while the FTSE has reached new all-time highs. With the Brexit looming, however, the FTSE lost 1.2% over the week in sympathy with the US stock market, joining the sell-off of global stock indices as the Trump trade faded.

In corporate news, Nike shares fell following a mixed quarterly report and disappointing Q3 worldwide futures orders guidance. The sports retailer’s revenues disappointed the Street, despite a beat on earnings, which analysts mostly attributed to tighter expense management and shortening the production process length, amid increasing competition domestically from Under Armour and Adidas. Ford stock also slumped after guiding Q1 earnings below consensus, noting higher costs and unfavorable exchange rates, amid increasing sector worry about fast-falling used car prices. Micron closed out the week on a positive note, posting a big beat on earnings, as well as guiding much higher revenue and profit next quarter, citing strong demand and limited industry supply combined with a successful cost reduction plan.


SUNDAY 3/19
(CN) CHINA FEB PROPERTY PRICES M/M: RISE IN 56 OUT OF 70 CITIES VS 45 PRIOR; Y/Y: RISE IN 67 OUT OF 70 CITIES V 66 PRIOR
(CN) China property sector said to be more sensitive to rising interest rates - Chinese press

MONDAY 3/20
DBK.DE Guides FY17 Income to remain 'in comparison' y/y, Rev 'broadly flat' y/y; Plans to reorganise business into three divisions; Plans to recommend at least the minimum dividend - annual report
(US) FBI Director Comey: confirms that FBI is investigating Russian govt efforts to interfere in election, including potential links between Trump campaign and Russia - testimony to House Intel Committee
(UK) Report by PA Consulting Group found that a hard Brexit could increase the cost of making a car in the UK by £2,400

TUESDAY 3/21
BMW.DE Guides FY17 EBIT, Rev and Sales volume to see 'slight rise' y/y
*(UK) FEB CPI M/M: 0.7% V 0.5%E; Y/Y: 2.3% V 2.1%E; CPI CORE Y/Y: 2.0% V 1.7%E; inflation above BOE target for 1st time since Dec 2013
(UK) MAR CBI INDUSTRIAL TRENDS TOTAL ORDERS: 8 V 5E
(US) Mar Philadelphia Fed Non-Manufacturing General Business Conditions: 35.4 v 29.3 prior
NKE Reports Q3 $0.68 v $0.52e, R$8.43B v $8.45Be
- Gross margin 44.5% v 45.9% y/y
FDX Reports Q3 $2.35 v $2.63e, R$15.0B v $15.0Be

WEDNESDAY 3/22
RMS.FR Reports FY16 Net €1.1B v €1.1Be, Op profit €1.70B v €827M y/y; confirms mid-term Rev targets
700.HK Reports Q4 Net CNY10.5B v CNY11.0Be, Op CNY13.9B v CNY10.9B y/y; Rev CNY43.9B v CNY44.2Be
(US) FEB EXISTING HOME SALES: 5.48M V 5.55ME
(UK) Shots reportedly fired outside of UK Parliament building - press
(US) Association of American Railroads weekly rail traffic report for week ending March 18th: 495.3K carloads and intermodal units, +2.4% y/y (10th straight week of gains)
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED

THURSDAY 3/23
(DE) GERMANY APR GFK CONSUMER CONFIDENCE: 9.8 V 10.0E
(PH) PHILIPPINES CENTRAL BANK (BSP) LEAVES OVERNIGHT BORROWING RATE UNCHANGED AT 3.00%; AS EXPECTED
(GR) ECB raises emergency liquidity assistance (ELA) cap for Greece banks from €46.2B to €46.6B (1st hike since Jun 2015)
(EU) ECB PUBLISHES ECONOMIC BULLETIN: Reiterates March monetary policy stance
(TW) TAIWAN CENTRAL BANK (CBC) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.375%; AS EXPECTED
(UK) FEB RETAIL SALES (EX-AUTO FUEL) M/M: 1.3% V 0.3%E; Y/Y: 4.1% V 3.2%E V
(EU) ECB ALLOTS €233.5B IN FINAL TLTRO-2 OPERATION VS. €110BE (last auction of an unconventional tool)
*(US) INITIAL JOBLESS CLAIMS: 258K V 240KE; CONTINUING CLAIMS: 2.00M V 2.04ME
F Guides Q1 $0.30-0.35 v $0.45e - filing ahead of analyst event
(US) FEB NEW HOME SALES: 592K V 564KE
MU Reports Q2 $0.90 v $0.81e, R$4.65B v $4.65Be - filing
(JP) JAPAN MAR PRELIMINARY PMI MANUFACTURING: 52.6 V 53.3 PRIOR (7th month of expansion)

FRIDAY 3/24
CSGN.CH Revises Q4 Net loss CHF2.62B* v CHF2.35B prior reported following CHF272M charge after NCUA settlement on toxic mortgage securities - annual report
(FR) FRANCE MAR PRELIMINARY MANUFACTURING PMI: 53.4 V 52.4E (6th month of expansion)
(DE) GERMANY MAR PRELIMINARY MANUFACTURING PMI: 58.3 V 56.5E (28th month of expansion and highest since Apr 2011)
(EU) EURO ZONE MAR PRELIMINARY MANUFACTURING PMI: 56.2 V 55.3E (45th month of expansion and highest since Apr 2011)
(RU) RUSSIA CENTRAL BANK (CBR) CUTS 7-DAY AUCTION RATE BY 25BPS TO 9.75%; NOT EXPECTED
(US) FEB PRELIMINARY DURABLE GOODS ORDERS: 1.7% V 1.3%E; DURABLES EX-TRANSPORTATION: 0.4% V 0.6%E
(US) MAR PRELIMINARY MARKIT MANUFACTURING PMI: 53.4 V 54.8E (lowest since Oct)
(US) Atlanta Fed raises Q1 GDP to 1.0% from 0.9% on 3/16
(US) Labor Dept corrects jobless claims for March 18th week to 261K from 258K prior release
(US) New York Fed Nowcast: raises Q1 GDP forecast to 3.0% from 2.8% on 3/17; raises Q2 GDP forecast to 2.7% from 2.5%
(US) GOP congressional aide: GOP leaders are not confident they have votes to pass AHCA bill; now planning what to do next if healthcare bill fails - press
(US) US President Trump says the GOP has just pulled the healthcare bill - press