TradeTheNews.com Weekly
Market Update: Markets Sanguine Amid Prospects of Tax Reform and Monetary
Policy Normalization
Fri, 29 Sep 2017 16:03 PM EST
US stocks finished the week at fresh all-time highs, though volumes remained
uninspiring and volatility stayed at historically low levels. Breadth expanded
with the Transports, Russell 2000 and the NASDAQ joining the S&P at new
highs. The Dow held back some, which may have been partially due to quarter-end
profit taking and rotation out of large caps. Small caps and banks, in
particular, benefited by an aggressive push by President Trump and
congressional republicans to get a tax reform package approved by the end of
this year. The growing hopes for fiscal stimulus reignited support for the
reflation trade resulting in a move higher in rates and notable bounce in the
Greenback. Treasury yields backed up and curves steepened. Central bank speak
was pervasive with officials on both sides of the Atlantic indicating a
continued willingness to push ahead with the admittedly gradual pace of
normalization. Markets appeared to be heartened on Friday, when it became clear
that President Trump will make a decision on an appointment to the Fed chairman
post in the next few weeks. The data was mixed with certain inflation readings
and housing figures missing expectations once again, while manufacturing
continued to exhibit strength highlighted by the Richmond and Chicago PMIs. WTI
crude prices reached the highest level since mid-May, which may have had some
influence on the US weekly oil rig count rising for the first time since
mid-August. For the week the DJIA gained 0.2%, the S&P500 added 0.7%, and
Nasdaq was up 1.1%.
In corporate news this week, Nike posted a big Q1 beat on its bottom line,
noting strong sales growth in its international divisions, but the apparel
giant saw waning revenue in North America. Target announced it would boost its
minimum hourly wage for employees to $11/hour this year, with an aim to reach
$15/hour by 2020. Equifax’s CEO stepped down amid ongoing blowback from its
massive data hack. The Saudi Finance Minister reportedly informed bond
investors that the Aramco IPO will go forward in 2018 as planned, despite
rumors of a delay to 2019. Bombardier shares were hit after the US announced it
would slap hefty tariffs on its jets, and the move also registered complaints
from the Canadian and UK governments.
SUN 9/24
(DE) Germany exit polls suggest Merkel's party finishes 1st in German election;
anti-migrant party to enter parliament; AFD Party to enter parliament for first
time - tweet by financial press
(NZ) New Zealand Election Results: Ruling National Party 46.6%; Labour 35.5%;
neither party wins enough seats to have a majority in parliament, will have to
use nationalist New Zealand First Party to form a coalition
MON 9/25
(DE) GERMANY SEPT IFO BUSINESS CLIMATE: 115.2 V 116.0E; CURRENT ASSESSMENT:
123.6 V 124.7E
TGT Affirms Q3 $0.75-0.95 v $0.85e, FY17 $4.34-4.54 v $4.50e; Raises min wage
base 10% to $11/hour (last $10/hr OCT16)
ARAMCO.IPO Saudi Fin Min reportedly has told bond investors that Aramco IPO
will go forward in 2018 as planned - press
(US) SEPT DALLAS FED MANUFACTURING ACTIVITY: 21.3 V 11.5E
(KR) North Korea Foreign Min: Pres Trump's comments over the weekend amount to
declaration of war - comments in NY
TUES 9/26
(FR) FRANCE SEPT BUSINESS CONFIDENCE: 109 V 110E; MANUFACTURING CONFIDENCE: 110
V 111E
EFX Chairman and CEO Richard Smith retires; Paulino do Rego Barros appointed
interim CEO; company to initiate CEO search
(US) SEPT RICHMOND FED MANUFACTURING INDEX: 19 V 13E
(US) AUG NEW HOME SALES: 560K V 585KE
(US) CONSUMER CONFIDENCE: 119.8 V 120.0E
(KR) North Korea interlocutors reportedly have approached Republican Party
analysts on how to deal with Pres Trump - Wash Post
(US) Fed Chair Yellen: it would be imprudent to leave rates on hold until
inflation reaches 2%; there are considerable odds inflation won't stabilize at
2% for next few years - comments in Cleveland
(US) Sen Roberts (R-KS): It would appear there will be no vote on the
Graham-Cassidy healthcare bill
MU Reports Q4 $2.02 v $1.84e, Rev $6.14B v $5.97Be
NKE Reports Q1 $0.57 v $0.48e, Rev $9.1B v $9.06Be
WEDS 9/27
(TH) THAILAND CENTRAL BANK (BOT) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT
1.50% (AS EXPECTED)
(EU) EURO ZONE AUG M3 MONEY SUPPLY Y/Y: 5.0% V 4.6%E
(CZ) CZECH CENTRAL BANK (CNB) LEAVES REPURCHASE RATE UNCHANGED AT 0.25%; AS
EXPECTED
(US) AUG PRELIMINARY DURABLE GOODS ORDERS: +1.7% V +1.0%E; DURABLES EX
TRANSPORTATION: 0.2% V 0.2%E
(US) AUG PENDING HOME SALES M/M: -2.6% V -0.5%E; Y/Y: -3.1% V -0.5%E
(US) Atlanta Fed cuts Q3 GDP to 2.1% from 2.2% on 9/19
(US) Association of American Railroads weekly rail traffic report for week
ending Sep 23rd: 548.2K carloads and intermodal units, +1.6% y/y
(US) Pres Trump: middle class would be biggest winners under GOP tax plan; no
reason tax reform can't be bipartisan effort - prepared remarks on tax reform
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED
AT 1.75%; AS EXPECTED
(CN) Tianhong's Yu'e Bao money market fund said to adjust portfolio for new
liquidity rules - Chinese Press
THURS 9/28
(DE) GERMANY OCT GFK CONSUMER CONFIDENCE: 10.8 V 11.0E
(DE) GERMANY SEPT CPI SAXONY M/M: 0.2% V 0.2% PRIOR; Y/Y: 2.0% V 1.9% PRIOR
(DE) Germany Sept CPI Brandenburg M/M: 0.2% v 0.1% prior; Y/Y: 1.6% v 1.8%
prior
(DE) Germany Sept CPI Bavaria M/M: 0.2% v 0.2% prior; Y/Y: 1.8% v 1.8% prior
(DE) Germany Sept CPI Hesse M/M: 0.3% v 0.0% prior; Y/Y: 2.1% v 1.8% prior
(DE) GERMANY SEPT CPI NORTH RHINE WESTPHALIA M/M: 0.1% V 0.1% PRIOR; Y/Y: 1.9%
V 1.9% PRIOR
(EU) EURO ZONE SEPT BUSINESS CLIMATE INDICATOR: 1.34 V 1.12E; FINAL CONSUMER
CONFIDENCE: -1.2 V -1.2E
(DE) GERMANY SEPT CPI BADEN WUERTTEMBERG M/M: 0.3% V 0.1% PRIOR; Y/Y: 1.9% V
1.9% PRIOR
(DE) GERMANY SEPT PRELIMINARY CPI M/M: 0.1% V 0.1%E; Y/Y: 1.8% V 1.8%E
(US) Q2 FINAL GDP ANNUALIZED (3RD READING) Q/Q: 3.1% V 3.0%E; PERSONAL
CONSUMPTION: 3.3% V 3.3%E
(US) Q2 FINAL GDP PRICE INDEX: 1.0% V 1.0%E; CORE PCE Q/Q: 0.9% V 0.9%E
(MX) MEXICO CENTRAL BANK (BANXICO) LEAVES OVERNIGHT RATE UNCHANGED AT 7.00%; AS
EXPECTED
FRI 9/29
(FR) FRANCE SEPT PRELIMINARY CPI M/M: -0.1% V -0.2%E; Y/Y: 1.0% V 1.0%E
(DE) GERMANY SEPT UNEMPLOYMENT CHANGE: -23K V -5KE; UNEMPLOYMENT RATE: 5.6%
(record low) V 5.7%E
(UK) Q2 FINAL GDP Q/Q: 0.3% V 0.3%E; Y/Y: 1.5% V 1.7%E
(EU) EURO ZONE SEPT ADVANCE CPI ESTIMATE Y/Y: 1.5% V 1.6%E; CPI CORE Y/Y: 1.1%
V 1.2%E
(US) AUG PCE CORE M/M: 0.1% V 0.2%E; Y/Y: 1.3% V 1.4%E
(US) AUG PCE DEFLATOR M/M: 0.2% V 0.3%E; Y/Y: 1.4% V 1.5%E
(US) AUG PERSONAL INCOME: 0.2% V 0.2%E; PERSONAL SPENDING: 0.1% V 0.1%E
(US) Nevada reports Aug casino gaming Rev $989.5M, +14.9% y/y; Las Vegas strip
rev $545.5M, +21.4% y/y
(US) SEPT CHICAGO PURCHASING MANAGER: 65.2 V 58.7E (highest since June)
(US) SEPT FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 95.1 V 95.3E
(US) Pres Trump: will make Fed Chair decision in next 2 to 3 weeks
