TradeTheNews.com Weekly
Market Update: Global growth shows signs of recovery as US/China trade talks
advance
Fri, 05 Apr 2019 16:10 PM EST
Investors pushed stock prices higher this week as lingering worries about stagnating
global growth were eased by improving PMI readings out of China and continental
Europe midweek. Optimism that US/China trade talks are in their final stages
also contributed to the positive tone. The improving sentiment surrounding
growth and trade offset continued uneasiness related to Brexit. UK PM May was
forced to turn to the opposition Labour party in an effort to secure an
agreement with majority support, but expectations remained low. Many Tory
Brexiteers felt betrayed by the PM’s end run, while by Friday some Labour MPs
suggested she offered little in the way of compromise. Friday also saw the US
jobs report rebound nicely from the soft February reading, including a modest
upward revision to last month’s payrolls. Trade talks appeared to make headway
as China’s Vice Premier Liu spent three days in Washington, leading President
Trump to speculate a deal could reach its final stages in about a month.
Treasury yields backed up for much of the week as risk appetite held up and the
Dollar Index was modestly higher. WTI crude broke above the 200-day moving
average for the first time since last fall, but inflation concerns remained
subdued. For the week, the S&P gained 2.1%, the DJIA added 1.9%, and the
Nasdaq rose 2.7%.
In corporate news this week, Delta boosted the airline sector on Tuesday after
raising its Q1 outlook, reporting healthy demand and less expensive non-fuel
costs than it had anticipated. The widely-anticipated Lyft IPO hit the skids
after a promising opening above $88, soon falling below its $72 initial
pricing. Walgreens reported a miss on its quarterly numbers and cut its outlook
citing continued margin pressures and consumer market challenges. Tesla Q1
deliveries disappointed investors, as the carmaker blamed the miss on 'massive backlogs'
in China and Europe. Shares of Constellation Brands bubbled higher after it
reported a solid earnings beat and confirmed the divestiture of 30 lower-end
wine and spirits brands. Concerns about Jeff Bezos control over Amazon were put
to bed after his ex-wife agreed to give him 75% of their stock and full voting
control of her Amazon shares.
SUNDAY 3/31
*(JP) JAPAN Q1 TANKAN LARGE MANUFACTURING INDEX: 12 V 13E (lowest since March
2017); OUTLOOK SURVEY: 8 V 12E; LARGE ALL INDUSTRY CAPEX: 1.2% V 0.7%E
MONDAY 4/1
*(ES) SPAIN MAR MANUFACTURING PMI: 50.9 V 49.7E (moves back into expansion)
*(UK) MAR PMI MANUFACTURING: 55.1 V 51.2E (32nd month of expansion and highest
reading since Feb 2018)
*(EU) EURO ZONE FEB UNEMPLOYMENT RATE 7.8% V 7.8%E (matches lowest reading
since Dec 2008)
*(EU) EURO ZONE MAR ADVANCE CPI Y/Y: 1.4% V 1.5%E; CORE CPI Y/Y: 0.8% V 0.9%E
*(US) MAR ISM MANUFACTURING 55.3 V 54.5E; PRICES PAID: 54.3 V 52.5E
AAPL Said to reduce prices of iPhone, iPads, Macs and AirPod models in China by
as much as 6% - CNBC
(US) Atlanta Fed raises Q1 GDP forecast to 2.1% v 1.7% prior
*(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT
1.50%; AS EXPECTED
TUESDAY 4/2
WBA Reports Q2 $1.64 v $1.70e, Rev $34.5B v $34.9Be
(UK) PM May: We need a further extension of Article 50; will try and find an
arrangement with Labour to put to EU next week
WEDNESDAY 4/3
*(UK) MAR SERVICES PMI: 48.9 V 50.9E (1st contraction in 32 months and lowest
since July 2016)
(US) Association of American Railroads weekly rail traffic report for week
ending Mar 30th: 510K, -4.6% y/y (has fallen for 7 consecutive weeks)
*(US) MAR ISM NON-MANUFACTURING INDEX: 56.1 V 58.0E (LOWEST SINCE AUG 2017)
(US) Conference Board March Experimental Help Wanted OnLine Index (HWOL) at
102.3 v 104.0 m/m
PPG Announces price increase on automotive refinish products in China due to
higher prices for raw materials, logistics and freight
(UK) PM May reportedly to next week pave way to a longer Brexit extension if
she's unable to secure her deal - UK's Telegraph
(CN) US reportedly wants to set 2025 target for China to meet trade pledges and
wants timetable for purchases of goods and market access, as China Vice Premier
Liu He and US Trade Rep Lighthizer begin talks - press
STZ To divest 30 brands from its wine and spirits portfolio to E&J Gallo
for $1.7B
THURS 4/4
*(IN) INDIA CENTRAL BANK (RBI) CUTS REPURCHASE RATE BY 25BPS TO 6.00%; AS
EXPECTED
STZ Reports Q4 $1.84 v $1.71e, Rev $1.80B v $1.73Be; Raises dividend 1.4% to $0.75/shr
(1.67% yield)
AMZN Mackenzie Bezos dissolves marriage with CEO Jeff Bezos, to give
Jeff 75% of their Amazon stock and full voting control of her Amazon shares
(CN) Pres Trump: China trade deal could be within the next four weeks;
something 'very monumental' could come soon
FRI 4/5
066570.KR Reports prelim Q1 (KRW) Op 900B v 808Be, Rev 14.9T v 15.3Te
(UK) Details of PM May letter to Tusk being released; UK to ask for an
extension to Article 50 until Jun 30th (as speculated)
(US) MAR CHANGE IN NONFARM PAYROLLS: 196K V +177KE
(US) Mar Unemployment Rate: 3.8% v 3.8%e
*(US) MAR AVERAGE HOURLY EARNINGS M/M: 0.1% V 0.3%E; Y/Y: 3.2% V 3.4%E; AVERAGE
WEEKLY HOURS: 34.5 V 34.5E
(US) New York Fed Nowcast: raises Q1 forecast to 1.4% from 1.3%; raises Q2
forecast to 1.9% from 1.7%
BA CEO: to temporarily slow production of 737MAX aircraft to 42/month
from 52/month starting mid-April
