TradeTheNews.com Weekly Market Update: Risk-On Returns, Unfazed by Manchester Attack or Ho-Hum OPEC Meeting
Fri, 26 May 2017 16:04 PM EST
Markets began the week putting last Wednesday’s brief bout of risk aversion and elevated volatility further back in the rear view mirror. Even another heinous terrorist attack in Europe did little to upset trading. US stock indices marched onward to fresh all-time highs as technical/momentum-buying emerged as seasonality and thin volumes once again played a significant role heading towards the long holiday weekend. The Dollar continued to serve as a tailwind for stocks as well. Wednesday’s FOMC minutes were seen to have a somewhat dovish tilt keeping the Dollar index from rebounding significantly from last week’s six month low. The VIX dropped back below 10 and US Treasury markets barely budged despite the new highs for equites. Oil prices moved up ahead of the OPEC meeting on Thursday, but WTI slid back below $50/bbl when ministers failed to offer up anything in the form of a surprise. The energy complex suffered with many stocks dropping to the lows of the year, but that too had little effect on overall trade or sentiment. For the week the S&P500 added 1.4%, DJIA gained 1.3%, and the Nasdaq rose 2.1%.
There were a few notable earnings reports this week. Shares of luxury goods retailer Tiffany & Co. dropped over 8% as Q1 revenues missed expectations, with management blaming continued marcoeconomic challenges, geopolitical uncertainty, and a strong USD. Video game producer Take-Two Interactive saw its share up 10% this week on the back of blow out earnings. GM took a hit after a class action lawsuit was filed accusing the automaker of employing VW-like emissions test defeat devices in some diesel trucks.On the M&A front, shares of Bunge were sharply higher on reports that Glencore had made an informal approach about a potential merger or partnership.
SUNDAY 5/21
(IR) Iran President Hassan Rouhani wins second term with 57% of the vote (update)
(CN) China regulators order new round of housing curbs in Hunan - Chinese press
MONDAY 5/22
05/22 (UK) Explosion heard near Manchester Arena, large police response seen
05/22 (CN) China Baoding city in the northern Hebei province will suspend sales of 3rd homes to local residents
*(JP) JAPAN MAY PRELIMINARY PMI MANUFACTURING: 52.0 V 52.7 PRIOR (9th consecutive expansion but at a 6-month low)
(US) President Trump's budget said to seek $3.6T in US spending cuts over 10 years; Seeks to sell half of US strategic petroleum reserve (SPR) to raise $16.5B
CLN.CH Confirms all stock merger of equals with Huntsman; Combined enterprise value of ~$20B
TUESDAY 5/23
*(DE) GERMANY Q1 FINAL GDP Q/Q: 0.6% V 0.6%E; Y/Y: % V 1.7%E; GDP NSA Y/Y: % V 2.9%E
*(FR) FRANCE MAY BUSINESS CONFIDENCE: 105 V 105E; MANUFACTURING CONFIDENCE: 109 V 108E
*(FR) FRANCE MAY PRELIMINARY MANUFACTURING PMI: 54.0 V 55.2E (8th month of expansion)
(DE) GERMANY MAY PRELIMINARY MANUFACTURING PMI: 59.4 V 58.0E (30th month of expansion and highest since Apr 2011)
(EU) EURO ZONE MAY PRELIMINARY MANUFACTURING PMI: 57.0 V 56.5E (46th straight month of growth and highest since April 2011)
(DE) GERMANY MAY IFO BUSINESS CLIMATE: 114.6 V 113.1E; CURRENT ASSESSMENT: 123.2 V 121.0E (highest level since 2011)
*(US) MAY PRELIMINARY MARKIT MANUFACTURING PMI: 52.5 V 53.0E
*(US) MAY RICHMOND FED MANUFACTURING INDEX: +1 V 15E (lowest since Sep 2016)
(US) APR NEW HOME SALES: 569K V 610KE
(US) Weekly API Oil Inventories: Crude: -1.5M v +0.9M prior
(CN) MOODY'S CUTS CHINA SOVEREIGN RATING TO A1 FROM AA3 (one notch); revises outlook from negative to stable (first Moody's cut since 1989)
WEDS 5/24
(DE) GERMANY APR JUN GFK CONSUMER CONFIDENCE: 10.4 V 10.2E (highest since 2001)
*(TH) THAILAND CENTRAL BANK (BOT) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.50%; AS EXPECTED
TIF Reports Q1 $0.74 v $0.70e, R$900M v $916Me
OPEC Committee statement: recommends 9 month cut extension (as expected)
(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 0.50%; AS EXPECTED
*(US) APR EXISTING HOME SALES: 5.57M V 5.65ME
(US) Senate Maj Leader McConnell: currently lacks votes to approve a Senate healthcare bill, but it remains a top priority - press interview
(US) FOMC MINUTES FROM MAY 3 MEETING: MOST PARTICIPANTS VIEWED MARCH SOFT INFLATION AS TRANSITORY; STAFF PRESENTED PHASED IN BALANCE SHEET RUN OFF PLAN
(US) Association of American Railroads weekly rail traffic report for week ending May 20th: 534.9K carloads and intermodal units, +5.5% y/y (19th straight week of gains) (update)
*(KR) BANK OF KOREA (BOK) LEAVES REPO RATE UNCHANGED AT 1.25%; AS EXPECTED (11th consecutive hold)
THURS 5/25
992.HK Reports Q4 Net $107M v $98Me, Op $74M v $248M y/y; R$9.6B v $9.7Be
(UK) Q1 PRELIMINARY GDP Q/Q: 0.2% V 0.3%E; Y/Y: 2.0% V 2.1%E
BBY Reports Q1 $0.60 v $0.40e, R$8.53B v $8.26Be
(ZA) SOUTH AFRICA CENTRAL BANK (SARB) LEAVES INTEREST RATES UNCHANGED 7.00%; AS EXPECTED
GM Lawsuit accuses GM of employing VW-like emissions test defeat devices in some diesel trucks - press
FRI 5/26
*(US) Q1 PRELIMINARY GDP ANNUALIZED Q/Q: 1.2% V 0.9%E; PERSONAL CONSUMPTION: 0.6% V 0.4%E
*(US) APR PRELIMINARY DURABLE GOODS ORDERS: -0.7% V -1.5%E; DURABLES EX TRANSPORTATION: -0.4% V 0.4%E
*(US) Q1 PRELIMINARY GDP PRICE INDEX: 2.2% V 2.3%E; CORE PCE Q/Q: 2.1% V 2.0%E
