Sunday, March 31, 2019

Brexit Anxiety Rises; Markets Calibrate to Slower Growth Expectations

TradeTheNews.com Weekly Market Update: Brexit Anxiety Rises; Markets Calibrate to Slower Growth Expectations
Fri, 29 Mar 2019 16:10 PM EST

Stocks managed to look past a host of worries this week and move higher. The Brexit saga rolled on, with the UK Parliament unable to coalesce around any particular way forward setting up another round of indicative votes early next week. The risk of the UK crashing out of the EU has not been taken off the table, despite MPs' insistence it will not happen. Global inflation readings continued to miss central bank targets allowing growth jitters to persist, particularly in Europe. Treasury yields slipped to fresh lows mid-week with markets continuing to fixate on inversions along the US curve and the burgeoning amount of global sovereign debt carrying negative interest rates once again. Emerging market currencies saw renewed pressures highlighted by a spike in Turkish swap rates rekindling concerns about potential contagion. Ultimately the investor anxiety, mainly emanating from Europe, was more than offset by optimism on the US China trade front. On Friday, the US Treasury Sec Mnuchin wrapped up a week of negotiations in Beijing by emphasizing discussions remained constructive and will continue in DC next week. WTI crude finished the week above $60, holding at roughly 5-month highs. The Greenback lifted and the Euro slumped. The DJ Transports had a particularly strong showing, outperforming the broader indexes in 3 of the 5 trading sessions to a 3.5% rally. For the week, the S&P rose 1.2%, the Dow added 1.7% and NASDAQ gained 1.1%.

In corporate news, Apple held a press event to announce its entrance into the video streaming market with its upcoming Apple TV+ product, as well as introducing an Apple Card digital credit card service and magazine subscription app Apple News+. Samsung weighed upon semi names after warning its Q1 will be lower than market expectations, noting a decline in memory chip and display prices that were larger than expected. Boeing shares lifted after it announced three software changes for its beleaguered 737 MAX aircraft, and the company said that the software upgrade could be installed within days following its approval from regulators. Wells Fargo CEO Tim Sloan announced he would retire, effective June 30th, while the Board pledged to find an outsider to replace him. Lyft’s long-awaited IPO opened for trade, quickly drifting below its opening price but finishing well above its $72/shr pricing.

SUNDAY 3/24
*(US) US Attorney General Barr releases special counsel Mueller report findings: Finds no collusion with Russia on 2016 Presidential elections but falls short of calling him innocent; identifies two Russian influences
386.HK Reports FY18 (CNY) 61.6B v 51.2B y/y; Op 82.3B v 71.5B y/y; Rev 2.89T v 2.36T y/y (update)
AVYA Evaluating offer from private equity that could value the company at over $20.00/shr, or over $5B - US press

MONDAY 3/25
ADM Extreme weather to affect Q1 NA operations by neg $50-60M in pretax operating profits
*(US) MAR DALLAS FED MANUFACTURING ACTIVITY INDEX: 8.3 V 8.0E
AAPL Introduces 'Apple Card', digital credit card services as part of Apple Pay product - Apple product event
005930.KR Guides Q1 to be lower than market expectations; decline in memory chip and display prices larger than expected

TUESDAY 3/26
*(DE) GERMANY APR GFK CONSUMER CONFIDENCE 10.4 V 10.8E
*(US) FEB HOUSING STARTS 1.162M V 1.210ME; BUILDING PERMITS: 1.296M V 1.305ME
*(US) MAR RICHMOND FED MANUFACTURING INDEX 10 V 10E
*(US) MAR CONSUMER CONFIDENCE INDEX 124.1 V 132.5E
BA Southwest Boeing 737 Max reportedly makes emergency landing at Orlando airport on its way to be grounded - local press
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED; revises forward guidance to dovish from neutral

WEDNESDAY 3/27
(US) Fed's Kaplan (dove, non-voter): Too soon for Fed to consider lowering rates - press interview
LEN Reports Q1 $0.74 v $0.75e, Rev $3.87B v $4.08Be
(EU) ECB said to be working on models for tiered Deposit Rate - press
(US) Association of American Railroads weekly rail traffic report for week ending Mar 23rd: 503K, -4.5% y/y (has fallen for 6 consecutive weeks)
*(UK) PM May told Tory MPs in her Statement to 1922 Tory party committee that she'll hand over leadership once Brexit is delivered; does not offer a specific timetable for stepping down - press
BA Exec: Announces three software changes for 737 MAX; sees 737 MAX upgrade installed within days of software approval; working with regulators on a 737 MAX patch and training
(US) Pres Trump asks agencies to end conservatorship of Fannie and Freddie; will sign Trump reform memo
*(UK) UK Parliament indicative votes: no majority reached on any indicative votes (as expected); MP Letwin proposes parliament should vote again on Monday to reconsider these matters
(CN) Trump Administration Official: China tariffs will be key sticking point and will be resolved as part of the deal; no specific time frame set for trade deal, talks could conclude anytime from April to June

THURSDAY 3/28
(DE) GERMANY MAR CPI SAXONY M/M: 0.5% V 0.3% PRIOR; Y/Y: 1.4% V 1.4% PRIOR
(EU) EURO ZONE MAR BUSINESS CLIMATE INDICATOR: 0.53 V 0.68E
*(US) Q4 FINAL GDP PRICE INDEX: 1.7% V 1.8%E; CORE PCE Q/Q: 1.8% V 1.7%E
*(US) Q4 FINAL GDP ANNUALIZED Q/Q: 2.2% V 2.3%E; PERSONAL CONSUMPTION: 2.5% V 2.6%E
(RU) Russia and OPEC might agree to three-month extension of oil supply reductions at June meeting; Energy Min Novak said to tell Saudis he can't promise extension until end of 2019 - press
(US) Nevada reports Feb casino gaming Rev $1.01B, -0.6% y/y; Las Vegas strip Rev $591.7M, -2.0% y/y
(BR) Brazil Econ Min Guedes: pension reform will pass; has full support of Lower House President Maia
(UK) Northern Ireland's DUP party confirms they will vote against withdrawal agreement approval motion just announced - Sky News
WFC CEO and President Tim Sloan to retire, effective June 30th; Board of Directors elects General Counsel Allen Parker as interim CEO and President

FRIDAY 3/29
*(DE) GERMANY MAR UNEMPLOYMENT CHANGE: -7K V -10KE; UNEMPLOYMENT CLAIMS RATE: 4.9% V 4.9%E
(US) Treasury Sec Mnuchin: have concluded constructive talks in Beijing; looking forward to continuing the negotiations in Washington DC next week
*(US) FEB PERSONAL INCOME 0.2% V 0.3%E
*(US) FEB NEW HOME SALES 667K V 620KE
(US) Fed's Kaplan (dove, non-voter): yield curve is indicative of skepticism on growth; did not pencil in a rate increase for 2019
*(UK) UK PARLIAMENT VOTES 286-344 AGAINST WITHDRAWAL AGREEMENT
(US) Atlanta Fed raises Q1 GDP forecast to 1.7% v 1.5% prior
(US) New York Fed Nowcast: maintains Q1 forecast at 1.3%; cuts Q2 forecast to 1.6% from 1.7%
LYFT IPO opens for trade at $87.24