TradeTheNews.com Weekly
Market Update: Global growth concerns mount; US government agrees to reopen
Fri, 25 Jan 2019 16:11 PM EST
Investor sentiment remained buoyed for much of the holiday shortened week
despite the US government shutdown looming large. Amid reports of air traffic
controller shortages causing airport disruptions on Friday, President Trump
agreed to a three week spending bill to reopen the government and to return to
the negotiating table on border security funding. Global growth concerns
stayed front and center after China GDP data confirmed deceleration for that
economy and the IMF took down its world growth outlook. By Thursday the ECB
officially acknowledged the growing impediments to economic activity, saying
risks had moved to the “downside” from balanced. On Friday, the PBOC launched
its first ever perpetual bond after announcing a new bill swap program to
provide additional liquidity while US press speculated Fed officials were
considering an earlier-than-expected end to the bond portfolio runoff. With the
US/China trade talks set to resume next week in Washington conflicting reports
surfaced about behind the scenes progress and was at least partially attributed
to mid-week stock volatility. Bond yields stayed confined well with in the
recent ranges offering further support for stocks with most of the major US
indices finding traction above their 50-day moving averages with the middle of
Q4 earnings season approaching. The Greenback lost momentum into week’s end
resulting in buying pressure in precious metals markets while emerging market
stocks exhibited relative strength globally. For the week, the S&P fell
0.3%, and the DJIA and Nasdaq each rose 0.1%.
As earnings season got into high gear, a stream of quarterly reports led
corporate headlines this week. Stanley Black and Decker topped on profit and
revenue, but its 2019 guidance disappointed, pressuring the home hardware
sector early on in the week. United Technologies beat estimates by a wide
margin on strength in the aerospace sector. IBM’s quarter came in above
consensus, and the tech giant announced solid FY19 guidance. Proctor &
Gamble reported its Q2 organic sales rose 4% and saw its sales outlook rise,
noting it hasn’t seen a slowdown in the China market. Starbucks beat consensus
and reported better than anticipated global comp growth. Xilinx and Lam
Research lifted the semis sector after posting solid earnings results and
commentary, but they were somewhat undercut by cautious guidance from Intel,
which blamed headwinds from geopolitics and slowing smartphone sales.
SUNDAY 1/20
*(CN) CHINA Q4 GDP Q/Q: 1.5% V 1.5%E; Y/Y: 6.4% V 6.4%E
MONDAY 1/21
IMF updates its World economic Outlook (WEO): Cuts Global GDP growth forecast
from 3.7% to 3.5% citing no-deal Brexit and trade concerns (three-year low)
*(UK) PM May: Presents ‘plan B’ on Brexit
(UK) Labour leader Corbyn endorsed plans for a second Brexit referendum, and
wants the govt to provide MPs the final approval next week on a second vote -
Telegraph
TUESDAY 1/22
UBSG.CH Reports Q4 Net $696M v $729Me, adj Pretax $860M v $1.08B y/y; Rev
$6.97B v $7.21B y/y (1st quarter reporting in USD); targeting share buyback of
$1.0B in 2019
*(UK) NOV AVERAGE WEEKLY EARNINGS 3M/Y: 3.4% V 3.3%E; WEEKLY EARNINGS (EX
BONUS) 3M/Y: 3.3% V 3.3%E
*(UK) DEC JOBLESS CLAIMS CHANGE: +20.8K V +24.8K PRIOR; CLAIMANT COUNT RATE:
2.8% V 2.8% PRIOR
(DE) GERMANY JAN ZEW CURRENT SITUATION SURVEY: 27.6 V 43.0E; EXPECTATIONS SURVEY:
-15.0 V -18.5E
SWK Reports Q4 $2.11 v $2.11e, Rev $3.60B v $3.60Be
*(US) DEC EXISTING HOME SALES: 4.99M V 5.24ME (lowest level since Nov 2015)
(US) Trump Administration reportedly turned down Chinese offer to send
ministers for preparatory trade talks - FT
(CN) White House Adviser Kudlow: earlier trade story about canceled China trade
meeting is not true; there was never a planned meeting for junior ministers
IBM Reports Q4 $4.87 v $4.81e, Rev $21.8B v $21.7Be
*(CN) CHINA PBOC CONDUCTS CNY257.5B 1-YEAR TARGETED MEDIUM-TERM LENDING
FACILITY (TMLF) AT 3.15% v 3.30% at last MLF (1st use of targeted MLF)
*(JP) BOJ LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%;
AS EXPECTED
WEDNESDAY 1/23
UTX Reports Q4 $1.95 v $1.51e, Rev $18.0B v $16.8Be
PG Reports Q2 $1.25 v $1.21e, Rev $17.4B v $17.2Be
(US) JAN RICHMOND FED MANUFACTURING INDEX: -2 V -2E
(US) Association of American Railroads weekly rail traffic report for week
ending Jan 19th: 543.1K, +6.9% y/y
TSLA Spokesperson: Tesla reduced Model S, Model X production after dropping 75
Kwh version - press
CP Reports Q4 C$4.55 v C$4.25e, Rev C$2.0B v C$1.94Be
TXN Reports Q4 $1.27 v $1.24e, Rev $3.72B v $3.75Be
(AU) AUSTRALIA DEC EMPLOYMENT CHANGE: +21.6K V +18.0KE; UNEMPLOYMENT RATE: 5.0%
V 5.1%E (lowest level since May 2011)
THURSDAY 1/24
(FR) FRANCE JAN PRELIMINARY MANUFACTURING PMI: 51.2 V 50.0E (moves back into
expansion)
*(DE) GERMANY JAN PRELIMINARY MANUFACTURING PMI: 49.9 V 51.5E (1st contraction
in 49 months and lowest since Nov 2014)
(EU) EURO ZONE JAN PRELIMINARY MANUFACTURING PMI: 50.5 V 51.4E (67th month of
expansion but lowest since Nov 2014)
(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.75%; AS
EXPECTED
*(EU) ECB LEAVES 7-DAY MAIN REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED
(CN) China PBoC to introduce bills swap to provide liquidity support to
perpetual bonds
FCX Reports Q4 $0.11 v $0.21e, Rev $3.68B v $3.85Be
(EU) ECB’s Draghi: Risks moved to the downside from broadly balanced; Reiterates
forward guidance - Prepared remarks
*(US) JAN PRELIMINARY MARKIT MANUFACTURING PMI: 54.9 V 53.5E (2-month high)
*(US) DOE CRUDE: +8.0M V -0.5ME; GASOLINE: +4.1M V +2.5ME; DISTILLATE: -0.6M V
+0.5ME
(CN) China PBOC: Banking system liquidity at 'relatively high' level after
second stage of RRR cut
FRIDAY 1/25
VOD.UK Reports Q3 Rev £11.0B v £11.8B y/y; Service Organic Rev +0.1% v -0.7%e;
affirms outlook
SNP Reports prelim FY18 Net CNY 62.4B v 51.2B y/y, Rev 2.88T v 2.36T y/y
(US) Fed official said to weigh earlier-than-expected end to bond portfolio
runoff - financial press
(US) US President Trump former adviser Roger Stone arrested in Florida as part
Mueller investigation this morning - statement
(US) FAA reportedly halts some flights into LaGuardia Airport in NYC due to air
traffic controller staff shortages – press
(US) Atlanta Fed cuts Q4 GDP forecast to 2.7% from 2.8% prior
*(US) PRES TRUMP: WE HAVE REACHED DEAL TO END SHUTDOWN AND REOPEN FEDERAL GOVT
for 3 weeks to allow negotiation on border security funding
