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
