TradeTheNews.com Weekly
Market Update: Markets await signals from G20 and OPEC meetings
Fri, 28 Jun 2019 16:05 PM EST
US equity markets largely consolidated the June gains signaling continued
optimism into the Xi/Trump sit down at the G20 meeting this weekend. President
Trump suggested his team remains hopeful trade negotiations could get back on
track as market speculation about some sort of truce or reset gathers momentum.
US manufacturing data lost momentum suggesting the recent Fed pivot towards
cutting rates will likely have legs. Fed speakers, including Chairman Powell,
continued to indicate they are open to cuts but are not panicking and want to
see more data. Inflation figures globally showed some improvement but remained
significantly below central bank targets. Oil prices saw modest gains, helped
by the largest drawdown in US crude inventories in more than a year, and amid
growing expectations that OPEC+ will roll over production cuts when they meet
next week. The dollar index found support at the 96 which appears to be a key
level in the wake of last week’s FOMC meeting. The US 10-year yield remained
pinned at 2%, suggesting lingering uncertainty surrounding the outcome of trade
talks. For the week, the S&P fell 0.3%, the DJIA lost 0.5%, and the Nasdaq
slipped 0.3%.
In corporate news this week, AbbVie reached a deal to acquire Botox maker
Allergan for $63B in the second-biggest pharma takeover this year. Eldorado
Resorts agreed to buy Caesars in a cash-and-stock deal worth $17B, including
assumption of debt. Micron lifted the semis space after an earnings beat amid
signs of recovery, highlighting the ability of the memory giant to resist
US-China trade dispute effects. Lennar beat estimates on its top and bottom
line, helped by a Q2 recovery in the housing market. Boeing’s trouble continued
as reports indicated that a new flaw had been discovered in the MAX 737 computer
system which would likely further delay the aircraft’s full return to the
skies.
MONDAY JUNE 24
*(DE) GERMANY JUN IFO BUSINESS CLIMATE: 97.4 V 97.4E; CURRENT ASSESSMENT: 100.8
V 100.3E
(US) Jun Dallas Fed Manufacturing Activity: -12.1 v -2.0e (lowest since Jun
2016)
(IR) Pres Trump confirms signing executive order on further Iran sanctions;
calls them 'strong' sanctions to target Supreme Leader Ayatollah Khamenei and
those in his office
*(US) Fed's Kaplan (dove, non-voter): concerned a rate cut now could fuel
imbalances; wise to take time to consider if we need to change rates
TUESDAY JUNE 25
LEN Reports Q2 $1.30 v $1.13e, Rev $5.56B v $5.11Be
AGN Confirms to be acquired by Abbvie for 0.8660 shares and $120.30 in cash per
share, in deal valued at $63B
(US) JUN RICHMOND FED MANUFACTURING INDEX: 3 V 2E
*(US) JUN CONSUMER CONFIDENCE: 121.5 V 131.0E (lowest since Sept 2017)
*(US) MAY NEW HOME SALES: 626K V 684KE
(US) Fed's Bullard (dove, voter, dissenter): a 50bps cut in July would be
overdone; 50bps cut is not called for right now
(US) Fed Chair Powell: Monetary policy shouldn't overreact to short-term swings
in sentiment; doing so would risk adding even more uncertainty to the outlook
(US) Senior Trump Administration official: no broad trade deal is expected to
be made at the G20 meeting between Trump and Xi; US is not willing to come to
the Trump-Xi meeting with concessions on trade
FDX Reports Q4 $5.01 v $4.89e, Rev $17.8B v $18.0Be
*(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED
AT 1.50%; AS EXPECTED; MEMBERS DISCUSSED A RATE CUT AT THIS MEETING
(US) Philadelphia Energy Solutions (PES) expected to close oil refinery
indefinitely after recent fire (335K bpd capacity, largest refinery on east
coast) - press
WEDNESDAY JUNE 26
FB Pres Trump: perhaps US will sue Google and Facebook; Twitter makes it hard
for people to follow me; these execs are all Democrats - Fox News interview
(US) Association of American Railroads weekly rail traffic report for week
ending June 22nd: 525K, -5.8% y/y (has fallen for 19 consecutive weeks)
BA Confirms and agrees with the FAA's decision and request, and is working on
the required software to address the FAA's request - 8K filing
MU Reports Q3 $1.05 v $0.80e, Rev $4.79B v $4.72Be
THURSDAY JUNE 27
*(EU) EURO ZONE JUN BUSINESS CLIMATE INDICATOR: 0.17 V 0.29E
(CN) China's President Xi said to present US President Trump with terms for
settling trade fight including precondition of lifting Huawei ban - U.S.
financial press
WBA Reports Q3 $1.47 v $1.43e, Rev $34.6B v $34.5Be
*(DE) GERMANY JUN PRELIMINARY CPI M/M: 0.3% V 0.2%E; Y/Y: 1.6% V 1.4%E
*(US) Q1 FINAL GDP PRICE INDEX: 0.9% V 0.8%E; CORE PCE Q/Q: 1.2% V 1.0%E
*(US) Q1 FINAL GDP ANNUALIZED Q/Q: 3.1% V 3.2%E; PERSONAL CONSUMPTION: 0.9% V
1.3%E
(CH) Switzerland enacts stock exchange countermeasures against European Union,
to take effect July 1st - press
BA CNBC's LeBeau: Boeing exec source says they're looking to have 737 MAX fix
done in Sept
AAPL Chief Design Officer Jony Ive to depart and form independent design
company with Apple as a client; effective later this year
FRIDAY JUNE 28TH
(US) MAY PERSONAL INCOME: 0.5% V 0.3%E; PERSONAL SPENDING: 0.4% V 0.5%E
(US) May PCE CORE M/M: 0.2% V 0.2%E; Y/Y: 1.6% V 1.5%E
(US) JUN CHICAGO PURCHASING MANAGERS (PMI): 49.7 V 53.5E (lowest reading since
Feb 2016)
(US) JUN FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 98.2 V 97.9E; inflation
expectations tick up
(US) USDA Q2 Grain Stocks Report (bu): Corn 5.20B v 5.33Be; Soybean 1.79B v
1.86Be; Wheat 1.07B v 1.10Be
(EU) EU and Mercosur trade bloc reach agreement on a draft Free-Trade Agreement
- press
(IR) EU statement: new special EU vehicle that allows trade with Iran and circumvents
US sanctions is now operational
