TradeTheNews.com Weekly
Market Update: Markets Rebound As Inflation Fears Ease
Fri, 16 Feb 2018 16:12 PM EST
Stock indices began the week riding the momentum of the sharp technical
reversal of the S&P 200-day moving average last Friday. Stock markets gapped
up on Monday and rode the winning streak to 6 sessions by week’s end. The
narrative that inflation concerns and higher rates were at theroot of the
extreme volatility experienced earlier this month largely dissipated. The US
10-year yield reached a fresh 4-year high midweek in the midst burgeoning US
Treasury coupon sales and a string of significantly hotter than expected
inflation readings, headlined by the Jan CPI data. The US Dollar stayed soft,
perplexing some market watchers by not reacting to the move up in Treasury
yields, but leading others to theorize it may be signaling are calibration to
higher than expected future inflation levels. By Friday,Treasury yields backed
off the recent highs, the dollar bounced after making fresh multiyear lows, and
the VIX retreated back below 20 while stocks made back more than half of the
recent losses off the top. For the week, the S&P500 and DJIA each rebounded
4.3% and the Nasdaq rose 5.3%.
In corporate news this week, US metals producers rallied on Commerce Department
recommendations for actions to protect US steel and aluminum makers as part of
its Section 232 probe, though no final decision has been made yet by President
Trump. Investors cheered Chipotle for naming former Taco Bell CEO Brian Niccol
as its new chief,noting his expertise in digital technologies, restaurant ops
and branding.Cisco Systems lifted on a bottom-line beat and shareholder return
plans. Fossil Group surged 90% after earnings came in higher than anticipated,
with the company pointing to improved wearable sales. AmerisourceBergen shares
rose on a report that Walgreens was in early stage talks to acquire the drug
wholesaler.IT solutions provider CSRA also popped on news it would be acquired
by General Dynamics for $40.75/share in cash.
MONDAY 2/12
HEIA.NL Reports FY17 Net(beia) €2.25B v €2.10B y/y, Op €3.76B v €3.65Be, Rev
€21.9B v €20.8B y/y;Raises dividend 9.7% to €1.47/shr
CSRA To be acquired byGeneral Dynamics for $40.75/shr valued at $9.6B inc debt
ABC Walgreens said to bein early stage talks to acquire the company - US
financial press
TUESDAY 2/13
*(UK) JAN CPI M/M: -0.5%V -0.6%E; Y/Y: 3.0% V 2.9%E; CPI CORE Y/Y: 2.7% V 2.6%E
CAT Reports Jan dealerstatistics: Total Machines +34% y/y
(US) Pres Trump: Willprobably not end up having a 'reciprocal tax'
BIDU Reports Q4 $2.29 v$2.05e, Rev $3.62B v $3.56Be; Submits F-1 for iQIYI
Video unit IPO
CMG Names Taco Bell CEOBrian Niccol as new CEO, effective March 5th; Chairman,
CEO and Founder SteveElls, will become executive chairman
FOSL Reports Q4 $0.64adj v $0.39e, Rev $921M v $890Me
WEDNESDAY 2/14
TKA.DE Reports Q1 Net€91M v -€6M y/y, adj EBIT €444M v €438Me, Rev €9.82B v
€10.2Be
ACA.FR Reports Q4underlying Net €878M v €737Me, Rev €4.65B v €4.65Be
*(DE) GERMANY Q4PRELIMINARY GDP Q/Q: 0.6% V 0.6%E; Y/Y: 2.9% V 3.0%E; GDP NSA
Y/Y:2.3% V 2.2%E
*(SE) SWEDEN CENTRALBANK (RIKSBANK) LEAVES REPO RATE UNCHANGED AT -0.50%; AS
EXPECTED; maintainsrepo rate path outlook
(IT) ITALY Q4PRELIMINARY GDP Q/Q: 0.3% V 0.4%E; Y/Y: 1.6% V 1.7%E
(EU) EURO ZONE Q4PRELIMINARY GDP Q/Q: 0.6% V 0.6%E; Y/Y: 2.7% V 2.7%E
(US) JAN CPI M/M: 0.5% V0.3%E; CPI EX FOOD AND ENERGY M/M: 0.3% V 0.2%E; CPI
INDEX NSA: 247.867 V247.551E
*(US) JAN ADVANCE RETAILSALES M/M: -0.3% V +0.2%E; RETAIL SALES EX AUTO M/M:
0.0% V 0.5%E
(US) Treasury SecMnuchin: IRS will ban hedge fund tax loophole on carried
interest
(US) Association ofAmerican Railroads weekly rail traffic report for week
ending Feb 10th: 519.5Kcarloads and intermodal units, +1.6% y/y
AMAT Reports Q1 $1.06 v$0.97e, Rev $4.20B v $4.10Be; Raises Quarterly dividend
100% to $0.20 from$0.10 (indicated yield 1.54%); increases share repurchase
authorization by$6.0B (11% of market cap)
CSCO Reports Q2 $0.63 v$0.59e, Rev $11.9B v $11.8Be; Raises Quarterly dividend
13.8% to $0.33 from$0.29 (indicated yield 3.14%); approves $25B stock buyback
increase (12% ofmarket cap)
(JP) Japan Fin Min Aso:JPY currency (Yen) strength was NOT strong enough to
require intervention -parliament
THURSDAY 2/15
AIR.FR Reports FY17 Net€2.87B v €995M y/y, Adj EBIT €4.25B v €4.00Be, Rev
€67.0B v €67.1Be
SU.FR Reports FY17 Net€2.15B v €2.10Be, adj EBITA €3.65B v €3.66Be; Rev €24.7B
v €24.8Be
NESN.CH Reports FY17(CHF) Net 7.2B v 8.5B y/y, Op 14.7B v 13.3Be, Rev 89.8B v
90.1Be; Raisesdividend 2.2% to CHF2.35/shr
(ZA) South Africaformally declares Ramaphosa as its new President - financial
press
(US) FEB EMPIREMANUFACTURING: 13.1 V 18.0E
(US) JAN FINAL PPIDEMAND M/M: 0.4% V 0.4%E; Y/Y: 2.7% V 2.4%E
(US) FEB PHILADELPHIAFED BUSINESS OUTLOOK: 25.8 V 21.6E
(US) JAN INDUSTRIALPRODUCTION M/M: -0.1% V +0.2%E; CAPACITY UTILIZATION: 77.5%
V 78.0%E
(US) Treasury to sell$$28B 2-year, $35B 5-year and $29B 7-year notes
(US) DEC TOTAL NET TICFLOWS: -$119.3B V +$33.5B PRIOR; NET LONG-TERM TIC FLOWS:
$27.3B V $57.5B PRIOR
PNB.IN Notifies exchangeabout fraud equal to INR113.9B; India Finance Ministry
discloses probe intoformer bank officials; other Indian banks comment on
exposures
FRIDAY 2/16
*(UK) JAN RETAIL SALES(EX AUTO/FUEL) M/M: 0.1% V 0.6%E; Y/Y: 1.5% V 2.4%E
DE Reports Q1 $1.31 v$1.16e, Total Net Sales and Rev $6.91B v $6.40Be
(US) JAN IMPORT PRICEINDEX M/M: 1.0% V 0.6%E; Y/Y: 3.6% V 3.0%E
*(US) JAN HOUSINGSTARTS: 1.326M V 1.234ME; BUILDING PERMITS: 1.396M V 1.300ME
(US) Atlanta Fedmaintains Q1 GDP estimate at 3.2%, unchanged from Feb 14th
GOOGL Waymo unitreportedly developing ride hailing service to directly compete
with Uber;approved to operate as transportation network company in Arizona -
Quartz Media
(US) Commerce Deptformerly releases steel and aluminum recommendations on official
website,confirming earlier reports
(US) Weekly Baker HughesUS Rig Count: 975 v 975 w/w (unchanged w/w)
