TradeTheNews.com Weekly
Market Update: Trade Tensions Simmer; OPEC Adjusts Coordinated Supply Agreement
Fri, 22 Jun 2018 16:08 PM EST
Trade and tariffs continued to loom large over markets this week as the US
administration held the line in ongoing negotiations with China and western
allies alike. Nowhere was it more evident than the Dow Jones Industrial average
which carried an eight session losing streak into Friday. The weakness in large
cap industrial names and their potential exposure to an escalating trade spat
was juxtaposed against new all-time highs in the NASDAQ and small cap Russel
2000. US treasury markets largely traded sideways but yield differentials in
the belly of the curve held perilously close to inverting before rates lifted
on Friday. US Jun manufacturing data softened and missed expectations lending
to modest selling in the Greenback. Most notably the British Pound appreciated
after the BOE indicated rates could rise again as soon as next month. Finally
oil producers meet in Vienna, where OPEC leaders cajoled various members and
reached an agreement that could potentially bring an additional ~600K bpd onto
the market. The decision largely met market expectations but nevertheless WTI
crude popped above the 50 moving average to a one month high.
In corporate news this week, Sarepta soared higher on positive DMD drug early
trial results that analysts said “meaningfully beat even the highest of
expectations.” Tesla ended lower after an odd week that included fires on its
factory floor, speculated sabotage from a former technician, and the closing of
some solar facilities. Starbucks shares cooled after cutting guidance and
shuttering some underperforming stores. E-commerce names saw relatively muted
reaction to a Supreme Court online sales tax ruling. Disney improved its bid to
acquire Fox assets to $38/shr, up from its prior offer of $28/shr and ahead of
Comcast’s $35/shr proposal. Perry Ellis agreed to be taken private for
$27.50/shr, while Rent-A-Center accepted a raised acquisition offer from
Vintage Capital at $15/shr.
MON 6/18
SQ New York Dept of Financial Services (DFS) has granted Square a virtual
currency license
(UK) PM May defeated in House of Lords over plans to give lawmakers
"meaningful vote" over final Brexit agreement - press (as expected)
Ministerial meeting of the 33 member Global Forum on Excess Steel Capacity
scheduled for Wednesday in Paris has been cancelled due to trade tensions -
Nikkei
AAPL Trump said to have told CEO Cook that iPhones will be excluded from China
tariffs - NYT
(CN) China Commerce Ministry (MOFCOM): US threats on $200B tariffs list
disobeys negotiation and consensus reached previously between the two
countries: to take qualitative and quantitative measures if US publishes additional
tariffs list
TUES 6/19
*(US) MAY HOUSING STARTS: 1.350M V 1.311ME; BUILDING PERMITS: 1.301M V 1.350ME
(US) Atlanta Fed cuts Q2 GDP forecast to 4.7% from 4.8% prior
ORCL Reports Q4 $0.99 v $0.94e, Rev $11.3B v $11.2Be
SBUX Guides Q3 SSS +1% y/y v +2.9%e; Raises Quarterly dividend 20% to $0.36
from $0.30 (indicated yield 2.51%)
FDX Reports Q4 $5.91 v $5.72e, Rev $17.3B v $17.2Be
WEDS 6/20
MU Reports Q3 $3.15 v $3.14e, Rev $7.80B v $7.70Be
(UK) UK govt wins vote in parliament, defeating Brexit 'meaningful vote'
amendment (As expected after compromise made earlier)
(US) Association of American Railroads weekly rail traffic report for week
ending June 16th: 558.1K, +4.1% y/y
(TH) THAILAND CENTRAL BANK (BOT) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT
1.50%, AS EXPECTED
(US) Atlanta Fed cuts Q2 GDP forecast to 4.7% from 4.8% prior
ORCL Reports Q4 $0.99 v $0.94e, Rev $11.3B v $11.2Be
SBUX Guides Q3 SSS +1% y/y v +2.9%e; Raises Quarterly dividend 20% to $0.36
from $0.30 (indicated yield 2.51%)
FDX Reports Q4 $5.91 v $5.72e, Rev $17.3B v $17.2Be
THURS 6/21
(FR) FRANCE JUN BUSINESS CONFIDENCE: 106 V 106E; MANUFACTURING CONFIDENCE: 110
V 108E
*(CH) SWISS NATIONAL BANK (SNB) LEAVES SIGHT DEPOSIT INTEREST RATE UNCHANGED AT
-0.75%; AS EXPECTED
(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.50%; AS
EXPECTED
*(UK) BANK OF ENGLAND (BOE) LEAVES INTEREST RATES UNCHANGED AT 0.50%; AS
EXPECTED
(UK) BOE JUN MINUTES: VOTED 6-3 TO KEEP POLICY STEADY (McCafferty, Saunders
again dissented calling for 25bps hike, chief economist Haldane joins ranks to
hike)
(US) JUN PHILADELPHIA FED BUSINESS OUTLOOK: 19.9 V 29.0E (lowest since Nov
2016)
(US) Supreme Court rules that states can require collection of sales taxes on
all online purchases, even if companies have no physical presence in a state
FED BANK STRESS TEST RESULTS: ALL 35 BANKS EXCEED MINIMUM CAPITAL REQUIREMENTS
OPEC+ committee supports 1M bpd production increase "on paper" -
press
(JP) JAPAN MAY NATIONAL CPI Y/Y: 0.7% V 0.6%E; CPI EX FRESH FOOD (CORE): 0.7% V
0.7%E
FRI 6/22
(FR) FRANCE JUN PRELIMINARY MANUFACTURING PMI: 53.1V 54.0E (21st month of
expansion)
(DE) GERMANY JUN PRELIMINARY MANUFACTURING PMI: 55.9 V 56.3E (42nd month of
expansion and lowest since Dec 2016)
(EU) EURO ZONE JUN PRELIMINARY MANUFACTURING PMI: 55.0 V 55.0E (59th straight
month of growth but lowest since Dec 2016)
(EU) ECB: banks to repay early €11B in TLTRO-2 loans - press
*(US) JUN PRELIMINARY MARKIT MANUFACTURING PMI: 54.6 V 56.1E (7-month low)
(US) Trump tweets: "Based on the Tariffs and Trade Barriers long placed on
the U.S. and it great companies and workers by the European Union, if these
Tariffs and Barriers are not soon broken down and removed, we will be placing a
20% Tariff on all of their cars coming into the U.S. Build them here!"
