TradeTheNews.com Weekly
Market Update: Trump Heads to Europe, Stocks Head Higher
Fri, 13 Jul 2018 16:04 PM EST
Stocks rose this week despite another brief midweek reversal predicated on
resurfacing trade concerns. President Trump was again at the epicenter of a
host of geopolitical headlines that stock markets largely looked past. Before
heading off Europe to meet with NATO and UK Prime Minister May it was reported
his administration would announcement an additional $200B in tariffs on Chinese
goods, resulting in swift rhetorical pushback from China, but no immediate
threat of more counter-tariffs. Despite the trade jitters, by week’s end the
S&P was testing key resistance at 2,800 once again as traders anticipate a
solid earnings season. Treasury yields continued to drift sideways-to-lower on
both sides of the Atlantic amid the uncertain geopolitics resulting in
persistent handwringing about flattening yield curves. Mixed inflation data out
of Europe along with rising US June CPI figures facilitated continued strength
in the Greenback. The Yen touched a fresh 6-month low against the dollar.
Copper prices held a key technical level just below $2.75 while WTI oil prices
lost significant ground, backing of towards the $70 mark. For the week, the
S&P500 gained 1.5%, the DJIA added 2.3%, and the Nasdaq rose 1.8%.
As earning season begins anew, some banks announced mixed results, with
JPMorgan and Citi beating estimates, while Wells Fargo disappointed as it
continues to struggle to bounce back from its regulatory issues. Pfizer delayed
previously announced price hikes by six months following a discussion with
President Trump prompted by his tweet that drugmakers “should be ashamed” about
raising prices. Broadcom shares plunged as its $18.9B all-cash acquisition
announcement of software developer CA Inc puzzled investors and analysts. Delta
announced a beat on both its top and bottom line, but cut its full year outlook
on expectations that higher prices for fuel will eat into profits. Papa John’s
distanced itself from its titular chairman ‘Papa John’ Schnatter after reports
that he used a racist slur on a conference call, and the company announced it
would be removing his image from further marketing material.
MON 7/9
*(EU) EURO ZONE JUL SENTIX INVESTOR CONFIDENCE: 12.1 V 9.0E
(UK) Prime Min May accepts resignation of Foreign Sec Boris Johnson - press
*(US) MAY CONSUMER CREDIT: $24.6B V $12.0BE
TUES 7/10
*(DE) GERMANY JULY ZEW CURRENT SITUATION: 72.4 V 78.1E; EXPECTATIONS SURVEY:
-24.7 V -18.9E
BZH Reports Q3 prelim Homebuilding Rev $507M, new home orders 1.45K; guides
initial FY19 EPS >$2.50 v $2.25e
(CN) US reportedly preparing list of $200B in additional tariffs on Chinese
goods; an announcement may come as early as Tuesday night- press
(CN) US Senior Administration Official: Confirms 10% tariff on additional $200B
in China goods; will try to avoid impacting consumer goods, new list of China
tariffs will include products that China identified in its 2025 report; US will
not implement tariffs on new list for 2-months
PFE Confirms to delay prices increases, will defer the drug price increases
that were effective on July 1st; deferring the price increases until President
Trump's drug price plan is effective or the end of the year, whichever is
sooner
WEDS 7/11
(EU) ECB policymakers split of first rate hike, meaning of through summer; see
rate hike only in Autumn 2019 - press
*(US) JUNE PPI FINAL DEMAND M/M: 0.3% V 0.2%E; Y/Y: 3.4% V 3.1% PRIOR
(CN) China reportedly considering non-trade measures to retaliate against U.S.
tariffs; could delay merger approvals as one such tactic - press
*(CA) BANK OF CANADA (BOC) RAISES INTEREST RATE BY 25BPS TO 1.50%; AS EXPECTED
*(US) DOE CRUDE: -12.6M V -3.5ME; GASOLINE: -0.7M V -1ME; DISTILLATE: +4.1M V
+1ME (largest crude draw since Sept 2016)
(US) Atlanta Fed raises Q2 GDP forecast to 3.9% from 3.8% prior
(US) Association of American Railroads weekly rail traffic report for week
ending July 7th: 485.2K, +8.6% y/y
CA Broadcom confirms to acquire co. for $18.9B in cash or $44.50/share;
Broadcom sees the deal as immediately accretive to non-GAAP EPS , closing
expected in fourth calendar quarter of 2018
THURS 7/12
*(IT) ITALY DEBT AGENCY (TESORO) SELLS TOTAL €6.5B VS. €4.5-6.5B IN 2021, 2025,
2033 AND 2038 BTP BONDS
DAL Reports Q2 $1.77 v $1.73e, Rev $11.8B v $11.7Be; Raises Quarterly dividend
14.8% to $0.35 from $0.305 (indicated yield 2.81%)
*(EU) ECB ACCOUNT OF JUN POLICY MEETING (MINUTES): Again leave QE extension on
the table; policymakers were unanimous of policy proposals put forward by Praet
*(UK) UK Government publishes Brexit Whitepaper; Seeks Association Agreement,
would ensure the new settlement is sustainable – working for the citizens of
the UK and the EU now and in the future
*(US) JUNE CPI M/M: 0.1% V 0.2%E; CPI EX FOOD AND ENERGY M/M: 0.2% V 0.2%E; CPI
NSA: 251.989 V 252.092E
(UK) Pres Trump reportedly warned PM May that soft Brexit would 'probably kill'
potential for future trade deal with US - UK press
*(SG) SINGAPORE Q2 ADVANCE GDP Q/Q: 1.0% V 1.3%E; Y/Y: 3.8% V 4.1%E
*(CN) CHINA PBOC CONDUCTS CNY188.5B 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF) V
CNY200B PRIOR AT 3.30% V 3.30% PRIOR; Confirms it has skipped daily open market
operation (OMO)
(CN) China H1 Trade Balance (CNY): +901.3B, -26.7% y/y
(CN) CHINA JUNE TRADE BALANCE (CNY): +261.9B V +187.0BE
(CN) CHINA JUNE TRADE BALANCE: $41.6B V $27.7BE
FRI 7/13
JPM Reports Q2 $2.29 v $2.22e, Managed Rev $27.8B v $27.6Be
C Reports Q2 $1.63 v $1.54e, Rev $18.5B v $18.4Be
(US) Pres Trump: whatever the UK does on Brexit is OK with me - press conf with
PM May
(US) July Preliminary University of Michigan Confidence: 97.1 v 98.0e
(US) DOJ set to announce new indictment in Mueller probe; indictments relate to
12 Russian intelligence officers with hacking into DNC and Clinton campaign and
disseminating info in 2016
(US) Weekly Baker Hughes US Rig Count: 1,054 v 1,052 w/w (+0.2%) (second
straight weekly rise)
(US) Trump Administration reportedly considering releasing oil from Strategic
Petroleum Reserve to curb gasoline prices ahead of fall elections - press
