Friday, September 15, 2017

Markets Blow Off Real and Geopolitical Storms, Still Eying Tax Reform

TradeTheNews.com com Weekly Market Update: Markets Blow Off Real and Geopolitical Storms, Still Eying Tax Reform
Fri, 15 Sep 2017 16:12 PM EST

US stock markets forged ahead to fresh all-time highs this week as investors maintained a healthy risk appetite despite a host of ongoing risks. Massive Florida power outages following landfall from Hurricane Irma, fallout from the unprecedented Equifax credit breach, more provocative actions from the North Korean regime, and another terrorist attack in London did little to impede sentiment. Washington taking further baby steps towards tax reform likely offset some of those risks. The President's perceived willingness to reach across the aisle on key issues like immigration spurred hopes for a tax deal, while Republicans pledged to release a detailed reform package by the end of the month. For the week, the the DJIA gained 2.2%, the S&P500 rose 1.6%, and the Nasdaq added 1.4%.



Treasury yields moved up alongside three disappointing auctions and a host of corporate supply announcements. Bond sellers appeared to be rewarded by a hotter than expected US August CPI print, but despite a 15+ basis point move in UST, yields remained at depressed levels. The Bank of England met and indicated the recent data may force them to begin withdrawing accommodation faster than the market currently anticipates despite the uncertainty surrounding Brexit talks that are moving along at a glacial pace. Cable traded to the highest levels since the days after last summer’s Brexit vote, while the Dollar index tried to bottom along with the upswing in rates. Copper prices retreated some 7% from recent highs, helped by softer than expected Chinese industrial production data.



The major corporate news this week came from Apple’s product event, where the tech giant introduced its next-gen Apple Watch 3 with cellular capability and confirmed the release of its premium iPhone X (‘ten’) product with improved graphics and face ID technology. Oracle reported a Q1 beat on earnings and cloud revenue, but shares fell after the company guided Q2 numbers below consensus. Nordstrom shares popped this week on reports that the founding family was moving closer to a going private deal. Steel producer Nucor guided its Q3 earnings below Street estimates, noting import pressures have not allowed pricing to keep pace with increasing raw material costs.



MON 9/11

(FR) BANK OF FRANCE AUG BUSINESS SENTIMENT: 104 V 106E

*(KR) UN SECURITY COUNCIL VOTES IN FAVOR OF INCREASING SANCTIONS AGAINST NORTH KOREA; Sanctions now impact more than 90% of all reported exports

(UK) Parliament votes against opposition labor party attempt to block EU withdrawal bill; passes first parliamentary hurdle

TUES 9/12

(UK) AUG CPI M/M: 0.6% V 0.5%E; Y/Y: 2.9% V 2.8%E; CPI CORE Y/Y: 2.7% V 2.5%E (annual pace matches highest level since Jun 2013)

(IN) INDIA AUG CPI Y/Y: 3.4% V 3.2%E

(US) JULY JOLTS JOB OPENINGS: 6.17M V 6.00ME (record high)

JWN Nordstrom family reportedly nearing deal with PE firm to take company private - CNBC

AAPL Introduces next gen Apple Watch 3 (available Sept 22): confirms it includes built in cellular (untethered from iPhone); can receive calls on the same number as your phone; Introduces iPhone 8 and 8 Plus (Prices start at $699 and $799, shipping Sept 22) - iPhone 8 event

WEDS 9/13

(UK) JULY AVERAGE WEEKLY EARNINGS 3M/Y: 2.1% V 2.3%E; WEEKLY EARNINGS EX BONUS 3M/Y: 2.1% V 2.2%E

(UK) AUG JOBLESS CLAIMS CHANGE: -2.8K V -2.9K PRIOR; CLAIMANT COUNT RATE: 2.3% V 2.3% PRIOR

(UK) JULY ILO UNEMPLOYMENT RATE: 4.3% V 4.4%E (lowest level since 1975)

(US) AUG PPI FINAL DEMAND M/M: 0.2% V 0.3%E; Y/Y: 2.4% V 2.5%E

(US) Association of American Railroads weekly rail traffic report for week ending Sep 9th: 486.5K carloads and intermodal units, +0.8% y/y

ARAMCO.IPO May delay IPO to 2019 - financial press

THURS 9/14

RMS.FR Reports H1 Net €605M v €603Me, Op profit €931.3M v €919Me, Rev €2.71B v €2.44B y/y

(CH) SWISS NATIONAL BANK (SNB) LEAVES SIGHT DEPOSIT RATE UNCHANGED AT -0.75%; AS EXPECTED

(UK) BOE LEAVES INTEREST RATES UNCHANGED AT 0.25%; AS EXPECTED

(UK) BOE SEPT MINUTES: MPC VOTED 7-2 TO LEAVE INTEREST RATES UNCHANGED AT 0.25%

(TR) TURKEY CENTRAL BANK (CBRT) LEAVES BENCHMARK REPURCHASE RATE UNCHANGED AT 8.00%; AS EXPECTED

VZ CEO: We have moved on from looking at cable companies; Big content deal coming by end of Sep - Goldman conf

(US) AUG CPI M/M: 0.4% V 0.3%E; CPI EX FOOD AND ENERGY M/M: 0.2% V 0.2%E; CPI NSA: 245.519 V 245.350E

(UK) Bank of England's (BOE) Carney: May need to adjust BOE interest rate in the coming months (in-line with Sept policy statement)

ORCL Reports Q1 $0.62 v $0.61e, Rev $9.21B v $9.02Be

*(CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 2.50%; AS EXPECTED

(KR) North Korea fires a missile from Pyongyang towards the east, missile passes over Japan - South Korea press

(KR) UN Security Council to meet at 3 pm EDT on Friday, Sept 15thregarding the most recent North Korea missile test

FRI 9/15

*(CN) CHINA AUG NEW YUAN LOANS (CNY): 1.09T V 950.0BE

*(CN) CHINA AUG AGGREGATE FINANCING (CNY): 1.48T V 1.280TE

(UK) BOE’s Vlieghe (dove): May need to adjust BOE interest rate in the coming months (in-line with MPC majority) - comments from London

(RU) RUSSIA CENTRAL BANK (CBR) CUTS 1-WEEK AUCTION RATE BY 50BPS TO 8.50%; AS EXPECTED

*(US) AUG ADVANCE RETAIL SALES M/M: -0.2% V +0.1%E; RETAIL SALES EX AUTO M/M: 0.2% V 0.5%E

*(US) SEPT EMPIRE MANUFACTURING: 24.4 V 18.0E

(US) AUG INDUSTRIAL PRODUCTION M/M: -0.9% V +0.1%E; CAPACITY UTILIZATION: 76.1% V 76.7%E

NUE Guides Q3 $0.75-0.80 v $1.06e

(US) SEPT PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 95.3 V 95.0E

(US) New York Fed Nowcast: cuts Q3 GDP forecast to 1.3% from 2.1% on 9/8; cuts Q4 GDP forecast at 1.8% from 2.6% on 9/8

(US) Atlanta Fed cuts Q3 GDP to 2.2% from 3.0% on 9/6

(UK) Prime Min May: raising national threat level to 'critical' from 'severe'; category indicates a further attack may be imminent