Markets Climb Another Rung Higher on the Wall of Worry

TradeTheNews.com Weekly Market Update: Markets Climb Another Rung Higher on the Wall of Worry
Fri, 21 Sep 2018 16:07 PM EST

Key US stock indices finally broke into new uncharted territory despite no headway being made in either US trade or Brexit negotiations. Investors hardly batted an eye at the Trump administration’s announcement that another $200B in Chinese imports would subject to tariffs beginning next week, or China’s promise to retaliate when those new US tariffs take effect. Stocks moved up along with interest rates as bond markets saw a modest decline resulting in marginal curve steepening. The US 10-year yield neared the May high stopping just shy of 3.1% while emerging market stability and an overall improvement in investor risk appetite enveloped markets. Copper prices along with overseas stocks rallied aggressively into the week’s end. The BOJ left rates on hold on Wednesday but the 30-year JGB touched the highest level about a year on Friday after the central bank trimmed daily purchases. Crude prices held a bid keeping WTI above $70 heading into this weekend’s OPEC+ meeting where some speculation emerged producers could allow more barrels to reach the market. For the week, the S&P500 gained 0.8%, the DJIA rose 2.2%, and the Nasdaq added 0.3%.

In corporate news this week, the DOJ granted clearance to Cigna’s acquisition of Express Scripts, which bodes positively for the other proposed merger in the pharmacy space currently before the Justice Department, the Aetna-CVS deal. The DOJ also reportedly opened a criminal probe over Tesla CEO Musk’s tweets in August about securing funding for a go-private transaction. EU antitrust chief Vestager said her agency has opened a preliminary probe of Amazon data collection practices from rival retailers and merchants. Adobe announced plans to acquire Marketo for $4.75B in a bid to strengthen its position in the enterprise marketing space to better compete with Salesforce, Oracle, and Microsoft. FedEx shares slumped on earnings call comments that pointed to a slowing in European and Chinese economies and tariff disputes putting a damper on activity. Oracle’s stock dropped after missing revenue estimates and guiding Q2 slightly below consensus. The recent furor in cannabis stocks was stoked by a report that Coca-Cola has opened talks with Canada’s Aurora Cannabis to develop drinks infused with CBD, a non-psychoactive cannabis-based chemical.


MONDAY 9/17
ACB.CA Reportedly Coca Cola in to talks with Co to develop drinks infused with CBD (cannabis) - press
(US) SEPT EMPIRE MANUFACTURING: 19.0 V 23.0E
(SY) Russia Pres Putin: In discussion with Turkey Pres Erdogan we decided to create a DMZ between rebels and Syrian govt forces in Idlib; Russian and Turkish forces will patrol the DMZ
(US) Pres Trump tweets supports for legislation to remove pharmacy gag clauses, urges congressional action
ESRX DOJ grants clearance to Cigna’s acquisition of Express Scripts
ORCL Reports Q1 $0.71 v $0.68e, Rev $9.20B v $9.28Be; increases share repuchase authorization by $12B (6% of market cap)
FDX Reports Q1 $3.46 v $3.78e, Rev $17.1B v $16.9Be
(CN) WHITE HOUSE CONFIRMS WILL IMPOSE TARIFFS ON $200B OF CHINA IMPORTS, EFFECTIVE SEPT 24TH: tariff rate will start at 10% and go up to 25% at the end of 2018

TUESDAY 9/18
(CN) China Commerce Ministry (MOFCOM): To levy US retaliatory tariffs, forced to retaliate, simultaneously with the US; tariffs bring new uncertainties to talks between the two countries
(CN) China reportedly to levy tariffs on $60B worth of US goods at 5-10% rates effective Sept 24th
TSLA US DOJ reportedly opens criminal probe over Musk going private tweets - press
(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%, AS EXPECTED

WEDNESDAY 9/19
(JP) Japan BOJ Gov Kuroda: Will maintain negative yield policy, 10 year yield target - post rate decision press conference
DANSKE.DK Investigations report findings related to branch in Estonia
(UK) AUG CPI M/M: 0.7% V 0.5%E; Y/Y: 2.7% V 2.4%E (6-month high)
(UK) UK PM May reportedly rejecting EU Barnier's improved Irish Border offer - press
SKY.UK Reportedly take over for company may end in one-day auction - press
(US) AUG HOUSING STARTS: 1.28M V 1.24ME; BUILDING PERMITS: 1.23M V 1.31ME
AMZN EU antitrust chief Vestager: have opened a preliminary probe of Amazon data collection from rival retailers, merchants
(US) Atlanta Fed maintains Q3 GDP forecast at 4.4%, unchanged from prior
(UK) EU's Juncker: EU and UK are still far away from a Brexit deal - press
AMZN Reportedly aims to open as many as 3,000 'Amazon Go' cashierless stores by 2021 - press
(BR) BRAZIL CENTRAL BANK (BCB) LEAVES SELIC TARGET RATE UNCHANGED AT 6.50%; AS EXPECTED
(US) Pres Trump to nominate former Fed economist Nellie Liang for Board of Governors seat - press
(UK) Prime Min May reportedly told EU leaders that extending Brexit talks is not an option; there will not be a second referendum; Northern Ireland cannot have a separate customs regime

THURSDAY 9/20
(CN) China said to plan a 'broad' import tax cut as soon as October for the majority of its trading partners - press
DGE.UK Issues Q1 trading update: trading in line with forecasts: sees Op and Rev impact from currencies, affirms medium-term organic Op margin outlook
(CH) SWISS NATIONAL BANK (SNB) LEAVES SIGHT DEPOSIT INTEREST RATE UNCHANGED AT -0.75%; AS EXPECTED
(NO) NORWAY CENTRAL BANK (NORGES) RAISES DEPOSIT RATES 25BP TO 0.75%, AS EXPECTED
(TR) Turkey Fin Min Albayrak announces Medium-Term Economic Plan: Expects inflation to keep surging, cuts GDP growth forecasts
(UK) AUG RETAIL SALES (EX AUTO FUEL) M/M: 0.3% V -0.2%E; Y/Y: 3.5% V 2.4%E
SKY.UK UK's takeover panel reportedly announces maximum three rounds for announced auction takes place on Sept 21-22
(IT) Italy Economy Ministry reportedly will Cut 2018 and 2019 GDP forecasts materially - press
005930.KR Reportedly looking at cutting memory chip growth next year to keep supply tight - press
(US) SEPT PHILADELPHIA FED BUSINESS OUTLOOK: 22.9 V 18.0E
(ZA) SOUTH AFRICA CENTRAL BANK (SARB) LEAVES INTEREST RATES UNCHANGED AT 6.50%; AS EXPECTED
(UK) EU President Tusk: Chequers plan won't work; reiterates there will be no Brexit agreement without an Irish backstop; Oct 18th is the moment of truth - Salzburg press conf
(UK) Prime Min May: we had a productive summit; EU's Tusk confirmed commitment to reach a deal; EU has provided no counter-proposal - post Salzburg meeting comments
(US) AUG EXISTING HOME SALES: 5.34M V 5.37ME
(US) Fed Reports Q2 Financial Accounts: Household Change in Net Worth: $2.191T v $1.028T prior
MU Reports Q4 $3.53 v $3.32e, Rev $8.44B v $8.25Be
ADBE Confirms to acquire Marketo for $4.75B

FRIDAY 9/21
(FR) France Q2 Final GDP Q/Q: 0.2% v 0.2%e; Y/Y: 1.7% v 1.7%e
(FR) FRANCE SEPT PRELIMINARY MANUFACTURING PMI: 52.5 V 53.3E (3 Month low)
(DE) GERMANY SEPT PRELIMINARY MANUFACTURING PMI: 53.7 V 55.7E
(EU) EURO ZONE SEPT PRELIMINARY MANUFACTURING PMI: 53.3 V 54.5E
(ZA) South Africa President Ramaphosa announces details of stimulus package (confirms setup of ZAR400B infrastructure fund)
(EU) ECB: banks to repay early €3.6B in TLTRO-2 loans - press
(UK) PM May: Brexit talks are at an impasse; both sides still want a deal; EU shouldn't reject proposal with no explanation or counteroffer - Brexit negotiations statement
(US) SEPT PRELIMINARY MARKIT MANUFACTURING PMI: 55.6 V 55.0E (4-month high)
OPEC source: OPEC and non-OPEC countries are mulling potential production boost by another 500K bpd - press
(UK) EU President Tusk: the EU position on Chequers plan was known to the British govt for weeks ahead of summit; UK's stance at Salzburg summit was uncompromising
(US) Deputy AG Rosenstein reportedly suggested that he secretly recorded Pres Trump to expose chaos in administration; discussed seeking to recruit cabinet members to invoke 25th Amendment to remove Trump from office - NY Times
Weekly Market Update: Markets Climb Another Rung Higher on the Wall of Worry
Fri, 21 Sep 2018 16:07 PM EST

Key US stock indices finally broke into new uncharted territory despite no headway being made in either US trade or Brexit negotiations. Investors hardly batted an eye at the Trump administration’s announcement that another $200B in Chinese imports would subject to tariffs beginning next week, or China’s promise to retaliate when those new US tariffs take effect. Stocks moved up along with interest rates as bond markets saw a modest decline resulting in marginal curve steepening. The US 10-year yield neared the May high stopping just shy of 3.1% while emerging market stability and an overall improvement in investor risk appetite enveloped markets. Copper prices along with overseas stocks rallied aggressively into the week’s end. The BOJ left rates on hold on Wednesday but the 30-year JGB touched the highest level about a year on Friday after the central bank trimmed daily purchases. Crude prices held a bid keeping WTI above $70 heading into this weekend’s OPEC+ meeting where some speculation emerged producers could allow more barrels to reach the market. For the week, the S&P500 gained 0.8%, the DJIA rose 2.2%, and the Nasdaq added 0.3%.

In corporate news this week, the DOJ granted clearance to Cigna’s acquisition of Express Scripts, which bodes positively for the other proposed merger in the pharmacy space currently before the Justice Department, the Aetna-CVS deal. The DOJ also reportedly opened a criminal probe over Tesla CEO Musk’s tweets in August about securing funding for a go-private transaction. EU antitrust chief Vestager said her agency has opened a preliminary probe of Amazon data collection practices from rival retailers and merchants. Adobe announced plans to acquire Marketo for $4.75B in a bid to strengthen its position in the enterprise marketing space to better compete with Salesforce, Oracle, and Microsoft. FedEx shares slumped on earnings call comments that pointed to a slowing in European and Chinese economies and tariff disputes putting a damper on activity. Oracle’s stock dropped after missing revenue estimates and guiding Q2 slightly below consensus. The recent furor in cannabis stocks was stoked by a report that Coca-Cola has opened talks with Canada’s Aurora Cannabis to develop drinks infused with CBD, a non-psychoactive cannabis-based chemical.


MONDAY 9/17
ACB.CA Reportedly Coca Cola in to talks with Co to develop drinks infused with CBD (cannabis) - press
(US) SEPT EMPIRE MANUFACTURING: 19.0 V 23.0E
(SY) Russia Pres Putin: In discussion with Turkey Pres Erdogan we decided to create a DMZ between rebels and Syrian govt forces in Idlib; Russian and Turkish forces will patrol the DMZ
(US) Pres Trump tweets supports for legislation to remove pharmacy gag clauses, urges congressional action
ESRX DOJ grants clearance to Cigna’s acquisition of Express Scripts
ORCL Reports Q1 $0.71 v $0.68e, Rev $9.20B v $9.28Be; increases share repuchase authorization by $12B (6% of market cap)
FDX Reports Q1 $3.46 v $3.78e, Rev $17.1B v $16.9Be
(CN) WHITE HOUSE CONFIRMS WILL IMPOSE TARIFFS ON $200B OF CHINA IMPORTS, EFFECTIVE SEPT 24TH: tariff rate will start at 10% and go up to 25% at the end of 2018

TUESDAY 9/18
(CN) China Commerce Ministry (MOFCOM): To levy US retaliatory tariffs, forced to retaliate, simultaneously with the US; tariffs bring new uncertainties to talks between the two countries
(CN) China reportedly to levy tariffs on $60B worth of US goods at 5-10% rates effective Sept 24th
TSLA US DOJ reportedly opens criminal probe over Musk going private tweets - press
(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%, AS EXPECTED

WEDNESDAY 9/19
(JP) Japan BOJ Gov Kuroda: Will maintain negative yield policy, 10 year yield target - post rate decision press conference
DANSKE.DK Investigations report findings related to branch in Estonia
(UK) AUG CPI M/M: 0.7% V 0.5%E; Y/Y: 2.7% V 2.4%E (6-month high)
(UK) UK PM May reportedly rejecting EU Barnier's improved Irish Border offer - press
SKY.UK Reportedly take over for company may end in one-day auction - press
(US) AUG HOUSING STARTS: 1.28M V 1.24ME; BUILDING PERMITS: 1.23M V 1.31ME
AMZN EU antitrust chief Vestager: have opened a preliminary probe of Amazon data collection from rival retailers, merchants
(US) Atlanta Fed maintains Q3 GDP forecast at 4.4%, unchanged from prior
(UK) EU's Juncker: EU and UK are still far away from a Brexit deal - press
AMZN Reportedly aims to open as many as 3,000 'Amazon Go' cashierless stores by 2021 - press
(BR) BRAZIL CENTRAL BANK (BCB) LEAVES SELIC TARGET RATE UNCHANGED AT 6.50%; AS EXPECTED
(US) Pres Trump to nominate former Fed economist Nellie Liang for Board of Governors seat - press
(UK) Prime Min May reportedly told EU leaders that extending Brexit talks is not an option; there will not be a second referendum; Northern Ireland cannot have a separate customs regime

THURSDAY 9/20
(CN) China said to plan a 'broad' import tax cut as soon as October for the majority of its trading partners - press
DGE.UK Issues Q1 trading update: trading in line with forecasts: sees Op and Rev impact from currencies, affirms medium-term organic Op margin outlook
(CH) SWISS NATIONAL BANK (SNB) LEAVES SIGHT DEPOSIT INTEREST RATE UNCHANGED AT -0.75%; AS EXPECTED
(NO) NORWAY CENTRAL BANK (NORGES) RAISES DEPOSIT RATES 25BP TO 0.75%, AS EXPECTED
(TR) Turkey Fin Min Albayrak announces Medium-Term Economic Plan: Expects inflation to keep surging, cuts GDP growth forecasts
(UK) AUG RETAIL SALES (EX AUTO FUEL) M/M: 0.3% V -0.2%E; Y/Y: 3.5% V 2.4%E
SKY.UK UK's takeover panel reportedly announces maximum three rounds for announced auction takes place on Sept 21-22
(IT) Italy Economy Ministry reportedly will Cut 2018 and 2019 GDP forecasts materially - press
005930.KR Reportedly looking at cutting memory chip growth next year to keep supply tight - press
(US) SEPT PHILADELPHIA FED BUSINESS OUTLOOK: 22.9 V 18.0E
(ZA) SOUTH AFRICA CENTRAL BANK (SARB) LEAVES INTEREST RATES UNCHANGED AT 6.50%; AS EXPECTED
(UK) EU President Tusk: Chequers plan won't work; reiterates there will be no Brexit agreement without an Irish backstop; Oct 18th is the moment of truth - Salzburg press conf
(UK) Prime Min May: we had a productive summit; EU's Tusk confirmed commitment to reach a deal; EU has provided no counter-proposal - post Salzburg meeting comments
(US) AUG EXISTING HOME SALES: 5.34M V 5.37ME
(US) Fed Reports Q2 Financial Accounts: Household Change in Net Worth: $2.191T v $1.028T prior
MU Reports Q4 $3.53 v $3.32e, Rev $8.44B v $8.25Be
ADBE Confirms to acquire Marketo for $4.75B

FRIDAY 9/21
(FR) France Q2 Final GDP Q/Q: 0.2% v 0.2%e; Y/Y: 1.7% v 1.7%e
(FR) FRANCE SEPT PRELIMINARY MANUFACTURING PMI: 52.5 V 53.3E (3 Month low)
(DE) GERMANY SEPT PRELIMINARY MANUFACTURING PMI: 53.7 V 55.7E
(EU) EURO ZONE SEPT PRELIMINARY MANUFACTURING PMI: 53.3 V 54.5E
(ZA) South Africa President Ramaphosa announces details of stimulus package (confirms setup of ZAR400B infrastructure fund)
(EU) ECB: banks to repay early €3.6B in TLTRO-2 loans - press
(UK) PM May: Brexit talks are at an impasse; both sides still want a deal; EU shouldn't reject proposal with no explanation or counteroffer - Brexit negotiations statement
(US) SEPT PRELIMINARY MARKIT MANUFACTURING PMI: 55.6 V 55.0E (4-month high)
OPEC source: OPEC and non-OPEC countries are mulling potential production boost by another 500K bpd - press
(UK) EU President Tusk: the EU position on Chequers plan was known to the British govt for weeks ahead of summit; UK's stance at Salzburg summit was uncompromising
(US) Deputy AG Rosenstein reportedly suggested that he secretly recorded Pres Trump to expose chaos in administration; discussed seeking to recruit cabinet members to invoke 25th Amendment to remove Trump from office - NY Times