TradeTheNews.com Weekly
Market Update: Equity Rally Holds while US Data Disappoints and Central Banks
Stay the Course for Now
Fri, 14 Jul 2017 16:11 PM EST
Equity markets moved up early in the week while interest rates appeared to stabilize.
Stocks quickly brushed aside volatility induced by the latest revelations out
of Washington D.C. that President Trump’s son met with Russian operatives
during the 2016 election. By Wednesday, Fed Chair Yellen’s testimony was seen
largely in a dovish light when she noted the federal funds rate would not have
to rise all that much further to get to a neutral policy stance. Global bond
prices continued to rise even in the face of various press reports suggesting
the ECB is close to signaling its own QE taper. By Friday, soft readings for
both US consumption and consumer prices cemented the week's tone of a lower US
dollar, stabilizing global rates, and rising equity valuations. The Dollar
index finished the week at its lowest level since September, while gold prices
rose to the highest point in about 2 weeks. WTI crude prices rose 5% helped by
larger than expected draw downs in US inventories. By Friday, the VIX dipped
back below 10, closing near a record low, while the Transports, S&P 500 and
Russel 2000 all finished the week at an all time closing high. The NASDAQ had
its best week in almost 3 months. For the week the S&P gained 1.4%, Dow
added 1% and the NASDAQ jumped 2.6%.
In corporate news this week, Target raised its Q2 guidance and indicated a broad-based
improvement in traffic, giving a much-needed boost to the beaten-down retail
sector. Amazon saw a huge spike in Echo sales during its annual Prime Day
promotion, with demand for the smart speaker reaching seven times last year’s
levels. And as banks kicked off earnings season, JPMorgan reported profits came
in well above consensus, and CEO Dimon pointed to strong loans and deposits
growth, as well as double-digit boosts to card sales and merchant processing
volumes. Citi posted an earnings beat on notable strength in its fixed-income
segment. Wells Fargo earnings also topped Street estimates, but disappointed on
revenues and warned costs may remain inflated in the short term.
SUNDAY 7/9
07/09 (US) Reportedly Donald Trump Jr set up a meeting in June 2016 between top
Trump campaign aides and Russian lawyer Natalia Veselnitskaya – US press
*(CN) CHINA JUN CPI M/M: -0.2% V -0.1% PRIOR; Y/Y: 1.5% V 1.6%E
*(CN) CHINA JUN PPI Y/Y: 5.5% V 5.5%E
MONDAY 7/10
*(FR) BANK OF FRANCE MAY BUSINESS SENTIMENT: 103 V 106E
*(EU) EURO ZONE JULY SENTIX INVESTOR CONFIDENCE: 28.3 V 28.1E
(US) June Labor Market Conditions Index Change: 1.5 v 2.5e
(CN) China Passenger Car Association (PCA): Jun vehicle sales +4.6% y/y; YTD
sales -0.2% y/y
TUESDAY 7/11
(UK) PM May: Reiterates her commitment to Britain - London speech on reform
*(US) MAY JOLTS JOB OPENINGS: 5.67M V 5.95ME
(US) Donald Trump Jr posts email chain in which Russian govt intermediaries
offer to help Trump campaign and Trump Jr agrees to arrange meeting - press
(US) Fed's Harker (hawk, voter): still considering if third rate increase is
appropriate this year; inflation below target gives pause to policy path -
press interview
(US) Atlanta Fed cuts Q2 GDP to 2.6% from 2.7% on 7/6
(US) Senate planning to cancel first 2 weeks of Aug recess to give more time to
work on legislation - press
(US) White House reportedly increasingly unlikely to re-nominate Fed Chair
Yellen to second term; White House adviser Gary Cohn reportedly top candidate
to replace her - Politico
WEDNESDAY 7/12
BRBY.UK Reports Q1 Retail Sales £478M v £471Me
PMO.UK Announces significant new 1 Billion barrel oil discovery offshore Mexico
*(UK) JUN JOBLESS CLAIMS CHANGE: 6.0K V 7.3K PRIOR; CLAIMANT COUNT RATE: 2.3% V
2.3% PRIOR
*(UK) MAY AVERAGE WEEKLY EARNINGS 3M/Y/Y: 1.8% V 1.8%E; WEEKLY EARNINGS (EX
BONUS) 3M/Y/Y: +2.0% V 1.9%E
(UK) May ILO Unemployment Rate 3M/3M: 4.5% v 4.6%e (lowest level since 1975)
*(IN) INDIA JUN CPI Y/Y: 1.5% (record low) V 1.6%E
(US) Fed Chair Yellen: Inflation running below goal, has declined recently;
Reiterates gradual rate increases will be needed to sustain economic expansion
- Congressional testimony text
AMZN Reports 'Prime Day' 2017 up 60% y/y with sales by small business and
entrepreneurs grew by even more
*(UK) ONS ISSUES CORRECTION ON CLAIMANT COUNT RATE DATA: CLAIMANT COUNT: +5.9K
(REVISED FROM +6.0K)
*(CA) BANK OF CANADA (BOC) RAISES INTEREST RATES BY 25BPS TO 0.75%; AS EXPECTED
(US) Fed Chair Yellen Q&A: focused on trying to achieve 2% inflation target
and there has been no discussions on raising it
NVS FDA advisory panel votes 10-0 in support of approval for personalized CAR-T
therapy for cancer
*(KR) BANK OF KOREA (BOK) LEAVES REPO RATE UNCHANGED AT 1.25%; AS EXPECTED
(12TH CONSECUTIVE HOLD)
*(CN) CHINA H1 TRADE BALANCE CNY1.28T, -17.7% y/y
*(CN) CHINA JUN TRADE BALANCE: $42.8B V $42.7BE
THURSDAY 7/13
*(ES) SPAIN JUN FINAL CPI M/M: 0.0% V 0.0%E; Y/Y: 1.5% V 1.5%E
TGT Raises Q2 above "high end of prior" $0.95-1.15 v $1.03e, SSS
'modest increase" (prior "low single digit decline")
DAL Reports Q2 $1.68 v $1.65e, Rev $10.8B v $10.8Be
*(EU) Reportedly ECB's Draghi could discuss plans for winding down QE at the
Fed's Jackson Hole symposium in late August - press
(DE) ECB sends trial balloon as German 10-year Bund futures fall from session
highs after ECB sourced reports indicate the ECB could announce a QE unwind in
Sept after Draghi attends the Jackson Hole meeting in August
*(US) JUN FINAL DEMAND PPI M/M: 0.1% V 0.0%E; Y/Y: 2.0% V 1.9%E
(US) Fed Chair Yellen: Volcker rule is complicated and we could find ways to
ease its burden - testifies before Senate Banking Panel
(US) Medicare Independent Payment Advisory Board (IPAB) cost cut board was not
triggered in trustees report, as had been anticipated last year - press
(CL) S&P cuts Chile long-term foreign currency rating one notch to A+ from
AA-; outlook Stable
*(SG) SINGAPORE Q2 ADVANCED GDP Q/Q: 0.4% V 1.1%E; Y/Y: 2.5% V 2.7%E
*(CN) FITCH AFFIRMS CHINA SOVEREIGN RATING AT A+; OUTLOOK STABLE
FRIDAY 7/14
EZJ.UK Update on European airline AOC; Co's positioning ahead of Brexit
outcomes
JPM Reports Q2 $1.82 v $1.57e, Rev $26.4B (managed) v $24.8Be
C Reports Q2 $1.28 v $1.21e, Rev $17.9B v $17.3Be
*(US) JUN ADVANCE RETAIL SALES M/M: -0.2% V +0.1%E; RETAIL SALES EX AUTO M/M:
-0.2% V 0.2%E
*(US) JUN CPI M/M: 0.0% V 0.1%E; CPI EX FOOD AND ENERGY M/M: 0.1% V 0.2%E; CPI
INDEX NSA: 244.955 V 245.105E
(US) Jun Industrial Production M/M: 0.4% v 0.3%e; Capacity Utilization: 76.6% v
76.8%e
(US) JULY PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 93.1 V 95.0E
(US) New York Fed Nowcast: cuts Q2 GDP forecast to 1.9% from 2.0% on 7/7;
maintains Q3 GDP forecast at 1.8%, unchanged from 7/7
(US) Atlanta Fed cuts Q2 GDP to 2.4% from 2.6% on 7/11
