TradeTheNews.com Weekly
Market Update: Trade rhetoric overshadows March employment report
Fri, 06 Apr 2018 16:05 PM EST
US stocks indices saw wild swings this week after trade war concerns were
rekindled in earnest. The President's latest musings about potentially adding
an additional $100M in Chinese tariffs sparked the latest round, and potential
escalation in the back-and-fourth between the two nations. A reprisal of the
good cop/bad cop roles for various administration officials steadied sentiment
early on, but as the week progressed markets reacted less and less to walk
backs from the President’s confidants. Friday’s March employment report did
little to change the momentum after the payrolls number came in well below
expectations, though many attributed the deceleration largely to poor weather.
The selling intensified into and after Fed Chairman Powell spoke in Chicago
late on Friday pushing the S&P towards its first weekly close below the
200-day since 2016 before bouncing back into the bell. Volumes remained
relatively muted considering the outsized move by many indices with the buyback
quiet period remaining in effect ahead earnings season. Treasuries sold off and
the Dollar firmed early on before risk off flows pushed yields lower. For the
week the S&P fell 1.4%, the Dow dropped 0.7% and the NASDAQ lost 2%.
Corporate news was relatively light this week as markets awaited the new
earnings season. All eyes were on Amazon as Pres Trump dispatched a slew of
negative tweets and comments about the company and its CEO Bezos, though White
House advisers insist no action against Amazon is forthcoming. News resurfaced
that MGM may consider acquiring Wynn if the price were right, as Wynn reels
from scandals involving its now-resigned namesake CEO. Humana rose on a report
of Walmart interest in acquiring the health insurer. The Big Three automakers
lifted after posting big beats in their March sales figure. Tesla deliveries
impressed investors despite not hitting Model 3 output expectations yet, though
the company continues to expect the rate to increase “rapidly” through Q2.
Viacom shares were weighed on by reports that CBS submitted a bid below their
current market value.
SUNDAY APRIL 1
(HK) Macau Mar Gaming Rev MOP25.9B, y/y: 22.2% v 16.6%e
MONDAY APRIL 2
*(US) MAR ISM MANUFACTURING: 59.3 V 59.7E; PRICES PAID: 78.1 V 72.5E (prices
paid highest since 2011)
TUESDAY APRIL 3
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT
1.50%; AS EXPECTED
(EU) ECB’s Liikanen (Finland) said to have emerged as a compromise candidate
for the job as head of ECB - financial press
(UK) MAR MANUFACTURING PMI: 55.1 V 54.7E (20th month of expansion)
(US) Fed confirms to name San Francisco Fed Pres Williams to New York Fed,
effective June 18th
*(US) USTR announces $50B list of specific tariffs against China over IP trade
violations; proposing 25% tariff on 1,300 categories of imports
WEDNESDAY APRIL 4
(CN) China Commerce Ministry (MOFCOM): To levy reciprocal tariffs on 106 US
good totaling $50B on imports - Chinese press
LEN Reports Q1 $1.11 v $0.82e, Rev $2.98B v $2.65Be
*(US) MAR ADP EMPLOYMENT CHANGE: +241K V +210KE
(US) Conference Board March Total online job ads 4.82M v 4.72M m/m v 4.65M y/y;
New ads 2.03M v 2.02M m/m v 2.02M y/y
THURSDAY APRIL 5
(CN) China Vice Fin Min Zhu Guangyao: China Govt not considering reducing its
US Treasury holdings any time soon - speaking to CNBC
(UK) MAR SERVICES PMI: 51.7 V 54.0E (20th month of expansion but lowest since
July 2016)
(IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 6.00%; AS
EXPECTED
*(US) INITIAL JOBLESS CLAIMS: 242K V 225KE; CONTINUING CLAIMS: 1.81M V 1.84ME
(US) FEB TRADE BALANCE: -$57.6B V -$56.8BE (widest monthly deficit since 2008)
(US) Pres Trump: Amazon does not use a level playing field and it has to be
level for everyone; studying the issue and will take a serious look at changes
that might affect Amazon
(CN) US PRESIDENT TRUMP ORDERS USTR TO CONSIDER $100B IN ADDITIONAL CHINA
TARIFFS
005930.KR Reports prelim Q1 (KRW) Op 15.6T v 14.5Te v 9.9T y/y (record high),
Rev 60.0T v 61.6Te (v 50.0T y/y)
WYNN MGM Resorts said to show interest in Wynn - NY Post
FRIDAY APRIL 6
(CN) China Commerce Ministry (MOFCOM): To take ‘new comprehensive’ measures to
safeguard interests; willing to pay any cost and firmly fight back - comments
after Trump’s call for an additional $100B in tariff
(US) MAR CHANGE IN NONFARM PAYROLLS: +103K V +185KE
(CA) CANADA MAR NET CHANGE IN EMPLOYMENT: +32.3K V +20.0KE; UNEMPLOYMENT RATE:
5.8% V 5.8%E
(US) Weekly Baker Hughes US Rig Count: 1,003 v 993 w/w (+1%)
(US) Treasury Sec Mnuchin: There is potential for a trade war, but we aren't
there yet; administration objective is not to get into a trade war - CNBC
interview
