TradeTheNews.com Weekly
Market Update: Indices roller coaster ride ends after unemployment rate finally
drops below 4%
Fri, 04 May 2018 16:06 PM EST
Investor uneasiness towards equities showed throughout much of the trading
week. A confluence of decelerating growth readings, particularly in Europe,
along with lingering concerns about US trade relations and the new headwind of
a suddenly appreciating US dollar led to an increase in volatility. Earnings
season rolled on with many of the same themes holding; companies that missed or
offered disappointing outlooks got punished while firms like Apple where
expectations had already been downgraded significantly saw relief rallies when
results topped expectations. The FOMC’s change of inflation language only
confirmed the expectation the Fed will be hiking at least two more times this
year, including at the next meeting. After touching 3.3% last week the US 10-year
yield backed off below three percent when money flowed away from stocks and
into bonds. By midweek both the Dow and S&P had retested their respective
200-day moving averages for the second and third times. Buyers stepped in
aggressively following the Fed meeting and into Friday’s jobs report which
failed to fan an inflation fears while indicating slack in the US job market
continues to come out. The Dollar Index closed the week above 92.5 for the
first time since mid- December, while WTI crude finished the week at the
highest level going back to 2015. For the week the S&P fell 0.2%, the Dow
lost 0.2% and the NASDAQ gained 1.25%.
In corporate news this week, markets digested a spate of M&A news. The US’s
third- and fourth-largest wireless companies, T-Mobile and Sprint, came to a
merger agreement after years of talks, and Sprint CEO Legere intends to take
over as CE0 of the new entity. Walmart shares were boosted after reaching a
deal to merge Asda with Sainsbury's in a deal valuing Asda at £7.3B. Twitter
announces a live programming agreement with Disney that may include new content
from ESPN, ABC, Disney Channel and Marvel. Facebook announced it would add new
dating features to its platform, which roiled Match Group and IAC shares. Snap
disappointed investors by reporting anemic quarterly daily active user growth
and a sequential drop in revenue. Kellogg and Kraft were rare earnings bright
spots for consumer staples, while Tesla fell after its Q1 report and subsequent
confrontational conference call.
SUNDAY APR 29
Sprint confirms agreement to merge with T-Mobile in all stock transaction with
enterprise value of $146B; John Legere named CEO
MONDAY APR 30
(HK) Macau Mar Hotel Occupancy Rate: 87.0%, +4.3ppts y/y
WMT Confirms to merge Asda with Sainsbury's in a deal valuing Asda at £7.3B;
Walmart to receive £2.98B in cash and hold 42% of combined company
ANDV Confirms be acquired by Marathon Petroleum Corp for ~$152.27/shr in cash
or stock deal valued at $23.3B
(DE) GERMANY APR PRELIMINARY CPI M/M: 0.0% V -0.1%E; Y/Y: 1.6% V 1.5%E
(US) MAR PERSONAL INCOME: 0.3% V 0.4%E; PERSONAL SPENDING: 0.4% V 0.4%E
(US) Nevada reports March casino gaming Rev $1.02B, +3.4% y/y; Las Vegas strip
Rev $573.9M, +9.1% y/y
(US) MAR PENDING HOME SALES M/M: 0.4% V 0.5%E; Y/Y: -4.4% V -4.7% PRIOR
(US) APR DALLAS FED MANUFACTURING ACTIVITY: 21.8 V 25.0E
(US) Atlanta Fed forecasts initial Q2 GDP at 4.1%
(IR) Israel PM Netanyahu: tonight we will reveal Iran's secret nuclear files:
Iran lied about its weapons program after signing the nuclear accord - remarks
in Tel Aviv
TWTR Announces live content and ad agreement with Disney; to announce specific
live shows in development this week
TUESDAY MAY 1
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50%;
AS EXPECTED
CARLB.DK Reports Q1 (DKK) Rev 12.7B v 12.8Be
(HK) Macau Apr Gaming Rev MOP25.7B v MOP24Be, y/y: 27.6% v 20.2%e (21st
consecutive month of growth)
BP.UK Reports Q1 Adj Net (underlying RC profit) $2.59B v $2.12Be, Total Rev
$68.2B v $67.8B y/y
(UK) APR MANUFACTURING PMI: 53.9 V 54.8E (21st month of expansion but lowest
since Nov 2016)
MRK Reports Q1 $1.05 v $0.99e, Rev $10.0B v $10.1Be
AUD/USD AUD currency moves below the 0.75 level, lowest since Jun 2017 -
dealers
(US) APR ISM MANUFACTURING: 57.3 V 58.4E; PRICES PAID: 79.3 V 78.5E
(US) Atlanta Fed maintains Q2 GDP forecast at 4.1%
FB CEO: To add features to Facebook around dating and building long-term
relationships - F8 conf comments
SNAP Reports Q1 -$0.17 v -$0.17e, Rev $230.7M v $249Me
AAPL Reports Q2 $2.73 v $2.69e, Rev $61.1B v $61.1Be; Raises dividend 16%; Adds
$100B to buyback plan (11.6% of market cap), prior $210B buyback to be
completed in Q3
WEDNESDAY MAY 2
STAN.UK Reports Q1 Adj Pretax profit $1.26B v $1.3Be, Op Income $3.87B v $3.9Be
(EU) EURO ZONE Q1 ADVANCE GDP Q/Q: 0.4% V 0.4%E; Y/Y: 2.5% V 2.5%E
(US) APR ADP EMPLOYMENT CHANGE: +204K V +198KE
(US) Treasury's to sell $31B 3-year, $25B 10-year notes and $17B 30-year bonds
- quarterly refunding announcement
Euro breaks below 200-day exponential moving average
(US) Conference Board April Total online job ads 4.75M v 4.82M m/m v 4.62M y/y;
New ads 2.01M v 2.03M m/m v 1.99M y/y
(UK) UK core cabinet said to make no decision on post-Brexit customs during
ministers meeting; Hybrid customs union idea appears dead - press
TSLA Reports Q1 -$3.35 v -$3.37e, Rev $3.41B v $3.17Be
THURSDAY MAY 3
BAYN.DE Reports Q1 adj €2.28 v €2.08e, adj EBITDA €2.9B v €2.8Be, Rev €9.14B v
€9.3Be
(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.50%; AS
EXPECTED
(UK) APR SERVICES PMI: 52.8 V 53.5E (21st month of expansion)
(US) Q1 PRELIMINARY NONFARM PRODUCTIVITY: 0.7% V 0.9%E; UNIT LABOR COSTS: 2.7%
V 3.0%E
(US) MAR TRADE BALANCE: -$49.0B V -$50.0BE
NYT Reports Q1 $0.17 v $0.11 y/y, Rev $413.9M v $398.8M y/y
(US) Mar Factory Orders: 1.6% v 1.4%e
(US) APR ISM NON-MANUFACTURING COMPOSITE: 56.8 V 58.0E (4 month low)
(US) Atlanta Fed cuts Q2 GDP forecast to 4.0% from 4.1% prior
FRIDAY MAY 4
GLE.FR Reports Q1 adj Net €1.20B v €1.39B y/y, Op €1.57B v €1.83B y/y, Rev
€6.29B v €6.48Be
BAS.DE Reports Q1 Adj €1.93 v €1.97e, EBIT €2.51B v €2.50Be, Rev €16.6B v
€16.9Be
(US) APR NON-FARM PAYROLLS: +164K v +192Ke
(AR) ARGENTINA CENTRAL BANK RAISES 7-DAY REPO REFERENCE RATE BY 675BPS TO
40.00% (third hike within past week)
