TradeTheNews.com Weekly
Market Update: Indices Gain on Softening Trade Rhetoric
Fri, 13 Apr 2018 16:06 PM EST
Coming into the week much of the focus remained on trade, but on Monday stock
markets were initially unsettled by another chemical attack in Syria and a
report the office of President Trump’s personal lawyer Cohen was raided by an
FBI filter team. Speculation that China was gearing up to devalue the Yuan were
quickly pushed aside by more conciliatory comments from President Xi. His
speech on Tuesday opened the door for softer rhetoric from President Trump
encouraging investors to step back into equity markets. Facebook shares bounced
that day as well helping overall FANG sentiment as CEO Zuckerberg appeared in
Washington largely deflecting key questions from Congress. Volumes remained
light though, as it was another week characterized by 1%+ intraday swings in
the indices largely attributed to evaporating bids and offers more so than
aggressive positioning. Stocks turned lower on Friday after key bank earnings
failed to maintain the rally and ongoing handwringing over the President and is
growing contempt for figures at the Dept of Justice. Treasury yields moved up
modestly but the curve continued to flatten. Economic data stayed on the softer
side, particularly in Europe offsetting what some viewed as mildly hawkish FOMC
minutes. WTI crude has consolidated above $67 and is looking at the highest
weekly close since 2014 heading into the weekend and a potential Trump decision
regarding Syria. For the week the S&P gained 2% led by the energy complex,
NASDAQ bounced 2.8% on a tech rebound and the Dow added 1.8%.
In corporate news this week, earnings season kicked off with the release of
some bank quarterly reports. JPMorgan, Citi, and Wells Fargo shares drifted
lower as investors weighed modest loan growth against rising deposit betas.
Delta lifted on a positive earnings release, while American and United
descended after offering Q1 guidance. Shares of Bayer and Monsanto jumped when
reports indicated that the DOJ was prepared to approve their merger, following
the EU issuing its own approval this week of the deal’s modifications. Verifone
charged forward after reaching a $3.4B deal to be taken private by Francisco
Partners. Biotech firm Avexis announced it would be acquired by Novartis for
$218/shr in a cash transaction valued at $8.7B, which lifted other names in the
gene therapy sector. And cloud-based software provider Zuora’s IPO opened for
trade on the NYSE at $20.00/shr, 42% above its pricing
MON APRIL 9TH
*(CN) CHINA TO STUDY CNY CURRENCY (YUAN) DEVALUATION AS A TOOL IN TRADE SPAT -
financial press
*(EU) EURO ZONE APR SENTIX INVESTOR CONFIDENCE: 19.6 V 20.8E
MON Dept of Justice reportedly will approve Bayer/Monsanto deal in exchange for
additional concessions - press
(US) FBI raids office of Trump's longtime personal lawyer Michael Cohen; search
doesn't appear to be directly related to Mr. Mueller’s investigation - New York
Times
PAY To be acquired by Francisco Partners for $3.4B at $23.04/shr in cash, which
includes Verifone’s net debt
(CN) China President Xi: China to lower auto and auto product import tariff
later this year, open sector to higher foreign ownership; China reform and
opening will definitely succeed, world should push for free trade - remarks at
Boao conference
TUES APRIL 10TH
*(US) MAR PPI FINAL DEMAND M/M: 0.3% V 0.1%E; Y/Y: 3.0% V 2.9%E
(EU) ECB spokesperson: Nowotny's views are his own and do not represent the
view of the Governing Council
TMUS Reportedly Sprint and T-Mobile have restarted deal talks; discussions are
in preliminary stage - press
WEDS APRIL 11TH
TSCO.UK Reports FY17/18 adj PBT £1.30B v £145M y/y, adj Op £1.64B v £1.60Be,
Rev (Inc Fuel) £57.5B v £57.7Be; declares annual dividend of 3.0p/shr
(UK) FEB INDUSTRIAL PRODUCTION M/M: 0.1% V 0.4%E; Y/Y: 2.2% V 2.9%E
FAST Reports Q1 $0.61 v $0.61e, Rev $1.19B v $1.18Be; Reports March Daily Net
Sales $19.0M, +13.1% y/y
(US) President Trump tweets " Russia vows to shoot down any and all
missiles fired at Syria. Get ready Russia, because they will be coming, nice
and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who
kills his people and enjoys it!"
(US) MAR CPI M/M: -0.1% V 0.0%E; CPI EX FOOD AND ENERGY M/M: 0.2% V 0.2%E; CPI
NSA: 249.554 V 249.588E
(US) Speaker of House Ryan (R-WI) reportedly will not run for re-election in
November - Axios
CA.FR Reports Q1 Rev €20.8B v €20.9Be
(SY) Prime Min May reportedly orders UK submarines within range of Syria -
press
BBBY Reports Q4 $1.48 v $1.41e, Rev $3.72B v $3.67Be
(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.50%; AS EXPECTED
(CN) China said to be planning to raise fuel prices Friday; Gasoline by
CNY55/ton; Diesel by CNY50/t - Chinese press
THURS APRIL 12TH
9983.JP Reports Q2 Net ¥25.6B v 26.5Be, Op ¥56.6B v ¥48.2Be
(SE) SWEDEN MAR CPI M/M: 0.3% V 0.3%E; Y/Y: 1.9% V 2.0%E
(IT) ITALY DEBT AGENCY (TESORO) SELLS TOTAL €9.17B VS. €7.25-9.25B INDICATED
RANGE IN 2021, 2025, 2038 AND 2048 BTP BONDS
MDR Reports prelim Q1 $0.15-0.17 v $0.05e, Rev $600-610M v $591Me
DAL Reports Q1 $0.74 v $0.73e, Rev $9.76B v $9.88Be
*(EU) ECB ACCOUNT OF MARCH POLICY MEETING (MINUTES): Council broadly agreed
that not enough evidence that inflation is sustained
*(US) INITIAL JOBLESS CLAIMS: 233K V 230KE; CONTINUING CLAIMS: 1.871M V 1.84ME
(US) MAR IMPORT PRICE INDEX M/M: 0.0% V 0.1%E; Y/Y: 3.6% V 3.8%E
ZUO IPO opens for trade at $20.00
(US) Sen Roberts (R-KS): During meeting Trump indicated he assigned Larry
Kudlow and other advisers to take another look at Trans Pacific Partnership
(TPP)
(MX) MEXICO CENTRAL BANK (BANXICO) LEAVES OVERNIGHT RATE UNCHANGED AT 7.50%; AS
EXPECTED
*(SG) SINGAPORE MONETARY AUTHORITY (MAS) SEMIANNUAL MONETARY POLICY STATEMENT:
TO 'INCREASE SLIGHTLY' SLOPE OF S$NEER POLICY BAND (vs. zero pct appreciation
policy prior); First tightening measure since April 2012
*(CN) CHINA JAN-MARCH (Q1) TRADE BALANCE (CNY): +326.2B, (surplus narrows 21.8%
y/y)
*(CN) CHINA MAR TRADE BALANCE (USD): -$4.98B V +$27.9BE (first deficit in
13-months)
*(CN) CHINA MAR TRADE BALANCE (CNY): -29.8B V +160.0BE
FRI APRIL 13TH
(BE) ECB's Smets (Belgium): Weak inflation remains a lingering concern
JPM Reports Q1 $2.37 v $2.28e, Managed Rev $28.5B v $27.7Be
C Reports Q1 $1.68 adj v $1.61e, Rev $18.9B v $18.9Be
*(US) APR PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 97.8 V 100.5E
(CN) China reportedly plans to postpone deal reviews due to US trade tensions -
press
(US) Weekly Baker Hughes US Rig Count: 1,008 v 1,003 w/w (+0.5%) (highest in 3
years)
