TradeTheNews.com Weekly
Market Update: Markets pause as Brexit and China trade negotiations go into
overtime
Fri, 01 Mar 2019 16:09 PM EST
Equity markets took a breather on fairly low volatility despite another heavy
week of corporate earnings to be digested. Potential progress on some global
issues hit snags as President Trump cut short his Hanoi summit without reaching
any new agreement with North Korea, and as PM May reportedly conceded that the
Brexit will have to be delayed from March 29 even if the Parliament supports
her plan later this month. Washington was gripped by Congressional testimony
from former Trump fixer Michael Cohen, as well as hearings with Fed Chair
Powell and US Trade Rep Lighthizer who agreed that the economy looks healthy
and would be helped by a resolution to trade tensions.
The dollar index dipped mid-week but basically ended flat, while the British
pound was strong through most of the week as fears of a ‘no deal’ Brexit
receded. WTI crude futures moved sideways until Friday when they dipped 2.5%
following disappointing US manufacturing and consumer confidence indicators,
and a tepid first look at Q1 GDP from Atlanta and New York Fed officials. The
week was capped off with a risk-on rally sparked by some better than expected
data out of China and Europe, and on reports that the White House is seeking to
reach an endgame in China trade talks within weeks. For the week, the S&P
gained 0.4% and closed above 2,800 for the first time since November 8, while
the DJIA was flat, and the Nasdaq rose 0.9%.
In corporate news this week, some key earnings emerged from the retail space.
JCPenney shares lifted after posting stronger than anticipated earnings and
laying out a plan to shutter some stores. L Brands tumbled after missing on
earnings and guiding a disappointing FY19 EPS number. Macy’s Q4 beat on the top
and bottom line and the company announced it would trim 100 management
positions and cut $100M in annual costs. Gap Inc. notched a profit beat and
announced plans to spin off its Old Navy division to separate into two
independent publicly traded companies. A spate of M&A deals hit the
corporate news space this week. Roche boosted its gene therapy portfolio with
its acquisition of Spark Therapeutics for $4.3B. GE sold off its life sciences
business to Danaher for $21.4B. eBay initiated a strategic review of its asset
portfolio amid pressure from investors. The grocery store sector slumped on
Friday after a report that Amazon is reportedly launching a new line of grocery
stores with a lower price point than its Whole Foods division. Shares of Tesla
sold off sharply after the car company made good on its long-promised $35K
price point for a pared down version of the Model 3 sedan.
SUNDAY, FEB 24
(UK) PM May said to be considering plan that would delay Brexit by 2-months;
rules out meaningful vote on EU withdrawal in Commons this week - Telegraph
MONDAY, FEB 25
ONCE To be acquired by Roche for $114.50/share in cash valued at $4.8B
GE Danaher to acquire the biopharma business of General Electric Life Sciences
for $21.4B
*(US) FEB DALLAS FED MANUFACTURING ACTIVITY INDEX: 13.1 V 4.7E
(US) Atlanta Fed raises Q4 GDP forecast to 1.9% from 1.4%
TSLA SEC said to ask judge to hold Musk in contempt for violating deal, cites
Feb 19th Tweet by Musk regarding production - US financial press
TUESDAY, FEB 26
BAS.DE Reports Q4 adj Net €348M v €502Me, Adj EBIT €630M v €552Me, Rev €15.6B v
€15.1Be; raises dividend
*(DE) GERMANY MAR GFK CONSUMER CONFIDENCE: 10.8 V 10.8 PRIOR
HD Reports Q4 $2.09 v $2.16e, Rev $26.5B v $26.6Be; Announces $15.0B share
buyback; Raises Quarterly dividend 32% to $1.36 from $1.03 (indicated yield
2.86%)
M Reports Q4 $2.73 v $2.51e, Rev $8.46B v $8.46Be; launches restructuring
program to fund reinvestment in the business; streamlines management structure
*(US) DEC HOUSING STARTS: 1.078M V 1.256ME (lowest since Sept 2016); BUILDING
PERMITS: 1.326M V 1.290ME
*(US) FEB RICHMOND FED MANUFACTURING INDEX: 16 V 5E
*(US) FEB CONSUMER CONFIDENCE: 131.4 V 124.9E
WEDNESDAY, FEB 27
RIO.AU Reports FY18 underlying Net $8.81B v $8.63B y/y; EBITDA $18.1B v $18.6B
y/y; Rev $40.5B v $41.9B y/y; declares $4.0B special dividend
TSLA CEO Elon Musk tweets: Thursday 2pm. California. Some Tesla news
*(EU) EURO ZONE FEB BUSINESS CLIMATE INDICATOR: 0.69 V 0.66E; CONSUMER
CONFIDENCE (FINAL): -7.4 V -7.4E
LOW Reports Q4 $0.80 v $0.80e, Rev $15.6B v $15.7Be
(US) President Trump and North Korea leader Kim meet in Hanoi; Kim says have
"overcome obstacles" since last meeting
BBY Reports Q4 $2.72 v $2.57e, Rev $14.8B v $14.7Be; Raises Quarterly dividend
11.1% to $0.50 from $0.45 (indicated yield 3.32%)
*(US) DEC FINAL DURABLE GOODS ORDERS: 1.2% V 1.2% PRELIM; DURABLES EX
TRANSPORTATION: 0.1% V 0.1% PRELIM
(US) Association of American Railroads weekly rail traffic report for week
ending Feb 23rd: 522.6K, -1.1% y/y
CELG Wellington Management does not support Bristol-Myers Squibb’s acquisition
of Celgene
*(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.75%; AS
EXPECTED
THURSDAY, FEB 28
ABI.BE Reports Q4 $0.80 v $0.90e, Rev $14.3B v $13.9Be
(KR) White House: Hanoi Summit ends, no agreement reached but talks
constructive ; US and North Korea teams to meet in future
*(FR) FRANCE FEB PRELIMINARY CPI M/M: 0.0% V 0.4%E; Y/Y: 1.3% V 1.5%E
*(DE) GERMANY FEB CPI SAXONY M/M: +0.3% V -1.0% PRIOR; Y/Y: 1.4% V 1.4% PRIOR
(DE) GERMANY FEB PRELIMINARY CPI M/M: 0.5% V 0.4%E; Y/Y: 1.6% V 1.5%E
*(US) Q4 ADVANCE GDP PRICE INDEX : 1.8% V 1.7%E; CORE PCE Q/Q: 1.7% V 1.6%E
(US) Q4 ADVANCE GDP ANNUALIZED Q/Q: 2.6% V 2.2%E; PERSONAL CONSUMPTION: 2.8% V
3.0%E
(US) Nevada reports Jan casino gaming Rev $984.5M, -3% y/y; Las Vegas strip Rev
$532.2M, -4% y/y
GPS Reports Q4 $0.72 v $0.68e, Rev $4.62B v $4.71Be; to spin off Old Navy; to
close 230 stores over next 2 years
TLSA Confirms Model 3 with a 220 mile range will now price as low as $35K
FRIDAY, MARCH 1
(CN) US officials said to be preparing a final trade deal that President Trump
and his Chinese counterpart Xi Jinping could sign in weeks - financial press
*(ES) SPAIN FEB MANUFACTURING PMI: 49.9 V 51.7E (first contraction in 64
months; lowest since Nov 2013)
*(DE) GERMANY FEB UNEMPLOYMENT CHANGE: -21K V -5KE; UNEMPLOYMENT CLAIMS RATE:
5.0% V 5.0%E
*(UK) FEB PMI MANUFACTURING: 52.0 V 52.0E (31st month of expansion)
*(EU) EURO ZONE JAN UNEMPLOYMENT RATE: 7.8% V 7.9%E (matches lowest level since
Dec 2008)
*(EU) EURO ZONE FEB ADVANCE CPI ESTIMATE Y/Y: 1.5% V 1.5%E; CPI CORE Y/Y: 1.0%
V 1.1%E
*(US) JAN PERSONAL INCOME: -0.1% V +0.3%E
*(US) FEB FINAL MARKIT MANUFACTURING PMI: 53.0 V 53.7E (lowest since Aug 2017)
*(UK) FEB PMI MANUFACTURING: 52.0 V 52.0E (31st month of expansion)
*(US) FEB ISM MANUFACTURING: 54.2 V 55.8E; PRICES PAID: 49.4 V 51.8E (lowest
manufacturing PMI since Nov 2016)
(US) New York Fed Nowcast: cuts Q1 forecast to 0.9% from 1.2%
(US) Atlanta Fed forecasts initial Q1 GDP growth at 0.3%
AMZN Reportedly readying to launch new grocery store chain at a lower
price point than Whole Foods - press
(UK) EU's Barnier: we are ready to give Britain further guarantees that Irish
backstop is only temporary - German press
