Friday, May 12, 2017

Mixed Data, Retail Woes, and Political “Fires” Leave Markets Unmoved

TradeTheNews.com Weekly Market Update: Mixed Data, Retail Woes, and Political “Fires” Leave Markets Unmoved
Fri, 12 May 2017 16:04 PM EST

The trading week opened in a relatively listless manner. Global markets appeared to have priced in the Macron victory and with much of the key April economic data and Q1 earnings season in the rear view mirror investors were forced to steer through a more than two-decade low in the VIX volatility index. The trading environment did little to mimic the raft of headlines that continued to come out of Washington DC. Markets seemed to pay little attention to the surprise announcement that President Trump fired FBI Director Comey. However, the White House’s inconsistent explanations of what led to the firing intensified press scrutiny of the event, and largely overshadowed a promising provisional trade agreement that could potentially open up Chinese markets to more US exports.

The economic data this week stuck to a now familiar pattern. US CPI and retail sales figures missed expectations while European numbers largely bested expectations and supported a third straight week of better performance by many overseas stock markets. US rates backed up for much of the week while Treasury refunding supply was met with tepid demand and various Fed officials affirmed their belief that two more rate hikes this year remained plausible. On Friday though, UST prices bounced and yields dropped along with the Dollar index following the softer than expected sales and inflation readings. Crude prices held the support levels found late last week but have had a tough time pushing away from the Nov 2016 lows despite continued reports OPEC and non-OPEC producers are moving towards an agreement to extend production cuts for at least six more months. Gold prices have held above the $1,200 mark while a surge in bitcoin to fresh all-time highs above $1,700 garnered quite a bit of attention. Reports circulated that Chinese regulators are nearing the formal publication of bitcoin regulations that could further legitimize the digital currency. For the week the S&P500 fell 0.4%, the DJIA lost 0.5%, while the Nasdaq gained 0.3%.

In corporate news this week, the woes of the retail sector remained a focus. Macy’s shares plunged to their lowest level in more than five years after reporting big misses on both the top and bottom line, as consumers continue to shift purchases to online from mall-based outlets. Nordstrom shares dropped double-digit percentages as it reported quarterly same-store sales dropped 0.8% y/y, coming in below estimates, even though it maintained its full-year outlook, noting stronger demand at its off-price Nordstrom Rack stores. Kohl’s missed on revenue but beat on profits, and saw significant improvement in traffic and sales for March and April. The Dow was weighed down on Tuesday by investor reaction to Disney earnings, as the media giant was hurt by persistent worries about its ESPN business. On the M&A front, Verizon snapped up Straight Path for $184/share in a bid to gain a key advantage in the race to deploy a 5G network. Coach agreed to acquire rival Kate Spade for $18.50/share in cash, giving the luxury fashion name ownership of an accessories manufacturer with access to a younger demographic.


SUN 5/7
(CN) CHINA APR FOREIGN RESERVES: $3.030T V $3.020TE (UPDATE); 5-month high; 3rd straight increase (first 3-month streak since mid-2014)
(HK) Macau Govt Official: Chinese UnionPay ATM cardholders will be asked to present their China ID cards and face recognition check before they can withdraw cash in Macau
(CN) CHINA APR TRADE BALANCE (CNY): 262.3B V 197.2BE ; 3-month high
(CN) CHINA APR TRADE BALANCE: $38.1B V $35.2BE

MON 5/8
(EU) EURO ZONE APR SENTIX INVESTOR CONFIDENCE: 27.4 V 25.2E (highest since July 2007)
KATE To be acquired by Coach for $18.50/shr in cash valued at $2.4B
(US) Fed Q1 senior loan officer survey: banks saw weaker commercial and industrial property loan demand in Q1
(CN) China Passenger Car Association (PCA): Jan-Apr vehicle sales 7.27M units, -1.7% y/y

TUES 5/9
(FR) BANK OF FRANCE BUSINESS SENTIMENT: 104 V 103E
VRX Reports Q1 +$1.79 (Gaap) v -$1.08 y/y, R$2.11B v $2.16Be
(US) Atlanta Fed cuts Q2 GDP to 3.6% from 4.2% on 5/4
(US) Commerce Sec Ross: haven't decided whether renegotiation on NAFTA will happen on bilateral or trilateral basis - press
DIS Reports Q2 $1.50 v $1.45e, R$13.3B v $13.5Be
- FCF $2.56B v $2.38B y/y
(US) Weekly API Oil Inventories: Crude: -5.8M v -4.2M prior; 2nd straight draw and largest draw since Jan 4th
(US) President Trump fires FBI Director Comey - financial press
WSTC To be Acquired by Certain Funds Affiliated With Apollo Global Management for $23.50/shr cash, enterprise value $5.1B (~discount of 2.5% to closing price*)
(CN) CHINA APR CPI M/M: +0.1% V -0.3% PRIOR; Y/Y: 1.2% V 1.1%E (both readings at 3-month highs)
(CN) CHINA APR PPI Y/Y: 6.4% V 6.7%E; 8th consecutive y/y increase; slowest increase in 4-months

WEDS 5/10
(FR) FRANCE MAR INDUSTRIAL PRODUCTION M/M: 2.0% V 1.0%E; Y/Y: 2.0% V 0.6%E
(US) APR IMPORT PRICE INDEX M/M: 0.5% V 0.1%E; Y/Y: 4.1% V 3.6%E
(US) Association of American Railroads weekly rail traffic report for week ending May 6th: 515.3K carloads and intermodal units, +4.6% y/y (17th straight week of gains)
BA Halts 737 MAX test flights for engine inspections after cracks found in low pressure turbine section - Aviation Week
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED
(CA) Moody's downgrades 6 banks in Canada by 1 notch, outlook negative

THURS 5/11
DPW.DE Reports Q1 Net €633M v €639M y/y, EBIT €885M v €918Me, Rev €14.9B v €13.9B y/y
ACA.FR Reports Q1 Net €845M v €702Me; Rev €4.70B v €3.80B y/y
DTE.DE Reports Q1 adj Net €747M v €791Me, adj EBITA €5.55B v €5.46Be, Rev €18.7B v €18.7Be
MAERSKB.DK Reports Q1 Net $253M v $199Me, EBITDA $1.71B v $1.82Be, R$8.96B v $9.14Be
(UK) MAR INDUSTRIAL PRODUCTION M/M: -0.5% V -0.4%E; Y/Y: 1.4% V 2.0%E
STRP Verizon confirms agreement to acquire for fixed price of $184.00/shr in all stock deal; to terminate agreement with AT&T
*(UK) BANK OF ENGLAND BANK (BOE) LEAVES INTEREST RATES UNCHANGED AT 0.25%; AS EXPECTED
(UK) BANK OF ENGLAND BANK (BOE) MAY MINUTES: VOTED 7-1 TO LEAVES INTEREST RATES UNCHANGED AT 0.25% (Forbes again voted for a 25bps increase)
(UK) BANK OF ENGLAND BANK (BOE) QUARTERLY INFLATION REPORT (QIR)
M Reports Q1 $0.24 v $0.35e, R$5.34B v $5.47Be
(US) APR PPI FINAL DEMAND M/M: 0.5% V 0.2%E; Y/Y: 2.5% V 2.2%E
(US) Pres Trump: I decided to fire FBI Director Comey before meeting with Attorney Gen Sessions and Dep Attorney General Rosenstein
(PE) PERU CENTRAL BANK (BRCP) CUTS REFERENCE RATE BY 25BPS TO 4.00%; NOT EXPECTED - first rate cut since Jan 2015
(CN) China Apr vehicle sales 2.1M units, -2.2% y/y v +4.0% in Mar; Biggest decline since Aug 2015 - China Association of Automobile Manufacturers
(US) US and China announce Initial Results of the 100-Day Action Plan of the US/China Comprehensive Economic Dialogue

FRIDAY 5/12
TKA.DE Reports Q2 *adj Net €64M v €108M y/y, adj EBIT €412M v €390M y/y, Rev €11.0B v €10.4Be
MT.NL Reports Q1 Net $1.00B v -$416M y/y, EBITDA $2.23B v $2.01Be, R$16.1B v $16.6Be
(DE) GERMANY Q1 PRELIMINARY GDP Q/Q: 0.6% V 0.6%E; Y/Y: 1.7% V 1.7%E; GDP NSA Y/Y: 2.9% V 2.8%E
(US) APR ADVANCE RETAIL SALES M/M: 0.4% V 0.6%E; RETAIL SALES EX AUTO M/M: 0.3% V 0.5%E
(US) APR CPI M/M: 0.2% V 0.2%E; CPI EX FOOD AND ENERGY M/M: 0.1% V 0.2%E; CPI INDEX NSA: 244.524 V 244.610E
(US) MAY PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 97.7 V 97.0E
(US) Atlanta Fed maintains Q2 GDP at 3.6%, unchanged from 5/9
(US) New York Fed Nowcast: raises Q2 GDP forecast to 1.9% from 1.8% from 5/5


Sunday, May 7, 2017

May-June 2017 Outlook: 100 Days

TradeTheNews.com May-June 2017 Outlook: 100 Days
Sat, 06 May 2017 11:13 AM EST

In the 100 days since President Trump took the oath of office, the new Administration's efforts to recode the government genome and rewrite the diplomatic playbook have kept it at the center of geopolitical focus. Allies and adversaries alike are trying to get a read on the unpredictable new President even as Trump himself is starting to realize that the American political process cannot be changed so easily.

Though three months is not a lot of time on the political scale, the President's domestic agenda has not made much progress, bogged down by infighting in the Republican Party. Yet markets remain optimistic that at the very least tax reform will materialize. Simultaneously, Trump has thrown out the established foreign policy regime as he aggressively takes on trade issues and presses for greater military spending.

Outside of Washington, impending elections in France and the UK will help shape the future of Europe, and oil producers will decide whether tepid energy prices demand an extension of their output cutting deal. Meanwhile North Korea appears to be accelerating its weapons testing programs in light of increased pressure from the US and now China. Altogether, these political affairs will dictate the narrative of the next several months and to some extent will overshadow economic issues even as central banks are taking their monetary policy out of emergency mode after handling a decade of fallout from the financial crisis.

May Days

The first hurdle for the markets on the immediate horizon is the French election. The final round vote on Sunday, May 7, has been cast as a referendum on the future of a united Europe. The expected defeat of the nationalist candidate Marine LePen, who has pledged to withdraw France from the euro, will be an important moment for European solidarity.

LePen has consistently trailed Emmanuel Macron by 20 points in second round polling. That could lead to complacency on election day - less enthusiastic Macron voters might stay at home in the belief that the election is sewn up, which could make the final result much closer. Still it would take a huge turn of events - like a major scandal for Macron or a large scale terrorist attack - to swing enough voters toward LePen to create an upset.

Since the polls remain stable with just days until the election, a LePen win would be even more shocking than the Brexit or Trump victories (which were within statistical margins of error) and would likely throw markets into chaos. But if Macron wins as expected, it may blunt the momentum of the global populist wave that produced those upsets in the UK and US. In the short term at least, it should allay fears about the EU and euro zone coming apart and discourage nationalists that hoped to gain power in other European elections coming up this year. It should be noted however, that although Macron is pro-Europe, he is also an insurgent 'change' candidate, and his election would still be a rebuke of the two traditional parties in France who were shut out of the second round vote. It also remains to be seen if Macron can live up to the name of his party, En Marche ('on the move'), or if novice politician ends up supporting the status quo.

The expected French election result will remove an immediate existential threat to the euro zone, giving the EU a stronger hand in the Brexit negotiations. But the other near-term electoral event in Europe is expected to pull in the other direction. After the government in London invoked Article 50 in late March, mainland Europe made it clear that the divorce proceedings would take several weeks to get started. That afforded UK Prime Minister May the political opportunity to affirm her mandate by calling for a snap election on June 8. With the UK opposition party in disarray, the vote is expected to give the Tory PM a bigger majority in the House of Commons, and more importantly give May the stamp of popular approval after she ascended to leadership in a closed party vote last summer. If everything goes as expected, this should give the PM more confidence of domestic support during the Brexit negotiations, showing that the UK is resolved to follow through on the separation plan.

The Brexit negotiations will get underway in earnest soon after the snap election. Officials on both sides are predicting tense talks, and major points of contention are already appearing. The EU's open bid was for up to €60 billion in exit payments by the UK to cover EU budget obligations, as well as outstanding pension liabilities and loan guarantees. This demand has since reportedly been upped to over €100 billion over 10 years. London has countered that it will not pay any exit bill without a concurrent agreement on a new trade deal with the bloc, while the EU insists that trade talks come later. In the months ahead, there are sure to be some dramatic headlines leak out of the talks as both sides send up trial balloons or issue threats.

The Next 100 Days

Tough negotiations are going to be the name of the game in Washington for the next several months as well. A number of major legislation initiatives are on the front burner, but it appears each measure will have to go through the crucible of a factional Republican House before moving on to a Senate that will have to reshape the bills to attract some Democratic support in the face of remaining filibuster rules.

In the symbolic first 100 days of the Administration, the White House hasn't managed to pass any of Trump's signature policy pledges. But there are some signs that the Administration might finally be getting its sea legs, and could actually start making some headway. After the embarrassing aborted attempt to rush through an Obamacare replacement in April, the House leadership managed to scrape together enough Republican votes to pass its stripped down healthcare bill. Ultimately this may only be a symbolic victory for the House Republicans that made repealing Obamacare their central campaign issue for the last seven years. Senate Republicans are already making noises about a complete rewrite of the House bill, which could stretch the process well into next year. Republicans may get more fodder to support their pitch for healthcare reform in the weeks ahead as insurers are required to declare by June 21 whether they will sell coverage on the Obamacare marketplaces.

The biggest achievement of the administration to date may be the $1.1 trillion omnibus spending bill that avoided a government shutdown, funding federal operations through the end of September. The deal showed that bipartisanship is not dead in D.C., even though it meant putting off some of Trump's budget demands including funding for border wall construction. The budget deal demonstrated that Republicans can attract some of the Democratic votes in the Senate they will need if they hope to pass legislation on tax reform and infrastructure spending later this year. Any spark of bipartisanship was dashed, however, when the President tweeted out a threat to shutdown the government in October after he felt Democrats crowed too loudly about the compromises they had won in the short term funding agreement.

The markets could take heart if an infrastructure spending bill gets on track. The concept of a $1 trillion infrastructure stimulus package was floated earlier this year, but since then the initiative has gotten short shrift. Businesses that depend on shipping would be happy to see a capital investment plan for improving highways and bridges, but even if Congress expedites the legislation it could suffer from a lack of "shovel ready" projects and could take years to have a real economic impact.

Even if some items on Trump's legislative agenda don't make headway, markets are still counting on tax reform later this year to keep the reflation trade alive. A brief outline of the tax plan was released late last month, envisioning a 15% corporate tax rate with government revenue losses partly offset by closing tax loopholes. Taxes for individuals would also be modestly lowered and greatly simplified. Tax reform has the potential to draw in some Democratic support if the bill is carefully crafted, but nearly every line of the complex federal tax code has its own entrenched special interest supporters, so the tax overhaul may not come easy. There is also the question of the impact on government revenues and the deficit. It appears that the Wall Street wing of the White House has scuttled the idea of a border adjustment tax (BAT), a hobbyhorse of the economic nationalists on team-Trump. This is likely to leave a big shortfall in government revenue even if the promised three-percent-plus GDP growth is achieved. That could further balloon the deficit, which will draw the ire of fiscal hawks in Congress.

It remains unclear when any of these bills will reach the President's desk. After the initial false start on healthcare, the White House has learned to be more cautious about setting dates-certain. Recently Treasury Secretary Mnuchin admitted that his original timeline for passing tax reform by the August legislative break was "highly aggressive to not realistic at this point." He now says he's hopeful about passing it this year. If the process appears to stall, markets could get nervous and extract some of the "Trump reflation trade" that has already been priced in.

Arguably the Trump administration has had a little more success on the foreign policy front. Trump has ruffled the feathers of old allies with demands for more help with paying for collective defense, successfully prodding NATO allies into reviewing their defense budgets. The White House team has also been stirring the pot on 'fair' trade issues, most notably with its NAFTA neighbors. Most of the rhetoric has been aimed at Mexico, with talk of the border taxes and building 'The Wall', but Trump lowered the boom first on Canada, imposing a 20% tariff on Canadian timer. The Commerce Department is pursuing trade investigations of the steel and aluminum markets, self-initiating the process without waiting for a US company to file a complaint.

In the geopolitical sphere, Trump's strategy of approaching China to corral North Korea seems to be bearing some fruit. The Trump administration declined to label China a currency manipulator and has dangled the promise of more generous trade terms in exchange for China's help with its neighbor. China has used its position as North Korea's largest trading partner to put economic pressure on Pyongyang, enough that the state news agency recently issued a statement warning China not to "test the limits" of North Korea's patience. Some of this diplomatic progress may be undercut, however, if the White House follows through on plans to cut funding to the State Department.

Adding to the complexity of the situation, South Korea's President Park has been ousted by a corruption scandal, leaving the country rudderless even as tensions between the two Koreas are at their worst in decades. An election on May 9 will choose a new President, and the front-runner, Moon Jae-in, the candidate from the left-leaning Democrats, has called for a renegotiation of the US deployment of THAAD missile defenses. That could disrupt efforts to apply steady pressure on the North.

6 More Months

Instability is also starting to creep back into the energy market. Four months into the six-month agreement between oil producers to reduce output, crude futures seemed to level off at around the $50/bbl level. But in recent days oil has been sinking to lows not seen since last summer, before oil producers sealed the deal on their output cutting agreement. The energy market has been hit by a relentless rise in US oil rig counts, a more stable Libya getting production back online, as well as technical factors all conspiring to take WTI crude back down to the low $40's.

If the oil market continues to deteriorate it could force a flashback to some of last year's key issues. Low energy prices hampered any progress against weak inflation for most of last year. There were also concerns about energy companies collapsing in a low price environment, and worries about the banks that hold the debt of the more speculative drilling equipment companies.

All in all, the six-month production curb agreed to by key OPEC and non-OPEC nations has been beneficial to the industry, as affirmed by energy equipment suppliers who have broadly declared a trough in deliveries of rigs and other capital equipment. But with the original agreement set to expire at the end of June, all eyes will be on the May 25 OPEC semi-annual meeting. It's at that conclave that producers will make their final decision about extending the production quotas for another six months.

There are already strong indications that the deal will be extended through the end of the year. Numerous reports have indicated that Saudi Arabia and its Gulf allies have agreed the best course of action is to keep the curbs in place, and other big producers like Iraq and Russia also seem resigned to keeping a lid on production. One report suggested that Saudi is prepared to keep the cuts in place even longer, in part to keep energy prices up until after the eagerly awaited Saudi Aramco IPO in 2018.

Oil ministers remain cagy, saying the decision will not be taken until the day of the OPEC meeting. And there is always the chance that political tensions between the Saudis and Iranians will collapse a renewal agreement.

Another wildcard is Venezuela, where anti-government unrest is growing as lower oil prices have exposed the ineffectiveness of the government. Weeks of protests have moved the unpopular President Maduro to announce the creation of a new popular assembly with the ability to rewrite the constitution, which the opposition has labeled a power grab. If the protests against Maduro grow, it could lead to disruptions in Venezuela's two million barrels-per-day supply of oil and send energy prices higher. In the months ahead, Maduro could take more drastic measures to hold onto power, or he could potentially be ousted. Both scenarios would likely crimp Venezuela oil production in the short term (ironically helping prices), but if a new leader from outside of Maduro's Socialist party should rise to power, it could lead to a more free-market policy for the country that could spur significantly more oil output.

10 Months to Go

In a much less permanent way, Janet Yellen is also on her way out. With under 10 months left on the Fed Chair's term, she has turned the FOMC toward the normalization process. Despite some tentative signs that President Trump is warming up to the Fed Chair, it's doubtful that he will reappoint Yellen to a fresh four-year term. Under the circumstances, she could have easily left the heavy lifting to her successor, but it appears that Yellen is determined to maintain the collegial spirit of the Fed and get the wind down of accommodation well underway before she leaves office.

In a sense, all of the attention that fiscal policy is getting in Washington has helped bail out the Fed - now that the Fed is not the only stimulus game in town it can finally focus on a steady unwind of accommodative monetary policy. After three rate hikes off the zero bound, including two since December, the Fed seems to finally be on track to tighten policy on a more consistent basis. The baseline expectation has been set at three hikes in 2017, with the next two earmarked for June and December. Fed officials have also left the door open to a potential fourth rate hike if the economic data dictate it.

At its early May meeting the Fed acknowledged that growth slowed in Q1, but brushed it off as "transitory", echoing the seasonality seen in the early part of the last several years. The April employment report gave credence to this case, showing a strong rebound in payrolls from the disappointing March reading, and notching a fresh decade low in unemployment. But inflation remains stubbornly weak, particularly in the wage data, and could disrupt the rate tightening schedule if inflation does not make progress toward the Fed target in the next few months.

The Fed believes it can avoid a new 'Taper Tantrum' by being transparent about its plans for the balance sheet reduction. Markets showed little reaction when the central bank announced earlier this year that it had begun deliberations on how to conduct the balance sheet run off, nor in the wake of Fed officials suggesting that the taper should probably start later this year. Market participants also seemed to approve of NY Fed President Dudley's suggestion that rate hikes could see a "little pause" when the central bank starts reducing bond holdings. Rates remain the primary tool for implementing monetary policy and the hope is that the balance sheet reduction will operate in the background, at a gradual pace.

In fact, Fed discussions around the balance sheet so far have already laid out much of what the final plan may consist of. Most Fed officials appear to agree that it is optimal to start by ending reinvestment and allowing maturing securities to roll off the books organically (rather than actively selling holdings). There is also a consensus that the balance sheet should be substantially reduced over time (in part so that the Fed will have QE as a tool for future recessions), perhaps more than halving the current $4.5 trillion balance sheet over time, though still keeping it well above the pre-crisis level.

It is likely that the Fed will continue to mull its tapering plan for at least a few more weeks, so no policy position is expected until later this year. June is a likely timeframe for an announcement on the balance sheet plan, unless the Fed wants to avoid overwhelming the markets with the expected rate hike AND simultaneous taper talk. That would set up the late July or mid-September FOMC meetings (or the intervening Jackson Hole conference) as the last chances for publicizing the balance sheet plan with enough time to let it sink in before beginning the implementation toward year end.

Oversight of the banking sector, which has been a big beneficiary of higher rates, also remains on the Fed's plate. After years of streamlining operations under a near-zero rate regime, the banks largely saw stronger than expected results in Q1. They could also benefit from getting a clean bill of health in the upcoming Comprehensive Capital Analysis and Review (CCAR). The big banks have now submitted their 2017 CCAR reports for analysis by the Fed which will reveal the results of the supervisory stress tests by June 30 (exact date TBA). In the meantime the banks will have to dodge tape bombs out of Washington, such as President Trump's recent offhand remark after a community banking event that he is "actively considering" breaking up the big banks.


CALENDAR

MAY
1: UK Manufacturing PMI; US PCE Price Index; US Personal Spending; US ISM Manufacturing; China Caixin Manufacturing PMI
2: German Unemployment; UK Construction PMI
3: UK Services PMI; Euro Zone Prelim Q1 GDP; US ISM Non-Manufacturing PMI; FOMC Policy Statement
4: US Nonfarm Productivity; US Trade Balance; US Factory Orders
5: US Payrolls & Unemployment

7: China Trade Balance; France Run-off Election
8: German Factory Orders
9: China CPI & PPI; South Korea Presidential Election
10: US JOLTS Job Openings
11: UK Manufacturing Production; BOE Policy Statement; US PPI
12: US CPI; US Retail Sales; Prelim University of Michigan Confidence

14: China Industrial Production
15: US Empire Manufacturing
16: UK CPI & PPI; Euro Zone Q1 GDP (2nd reading); German Zew Economic Sentiment; US Housing Starts & Building Permits; US Industrial Production
17: UK Claimant Count & Unemployment; Japan Prelim Q1 GDP
18: UK Retail Sales; Philadelphia Fed Manufacturing Index
19:

22:
23: Various Euro Zone Flash Manufacturing & Services PMIs; German Ifo Business Climate; UK Inflation Hearings; US New Home Sales
24: US Existing Home Sales; FOMC Minutes
25: UK Q1 GDP (2nd reading); ECB Minutes; OPEC semi-annual meeting
26: US Durable Goods Orders; US Preliminary Q1 GDP (2nd reading); G7 summit in Taormina, Sicily, Italy (ends May 27)

29: Japan Household Spending
30: US PCE Price Index; US Personal Spending; US Consumer Confidence; China Manufacturing & Non-manufacturing PMIs
31: German Retail Sales; German Unemployment; Euro Zone Flash CPI Estimate; Chicago PMI; China Caixin Manufacturing PMI
JUNE
1: UK Manufacturing PMI; US Nonfarm Productivity; US ISM Manufacturing PMI
2: UK Construction PMI; US Nonfarm Payrolls & Unemployment; US Trade Balance

5: UK Services PMI; US ISM Non-manufacturing PMI; US Factory Orders
6:
7: German Factory Orders; Japan Final Q1 GDP; China Trade Balance (tentative)
8: ECB Policy Statement; UK Snap Election; US JOLTS Job Openings; China CPI & PPI
9: UK Manufacturing Production

12: Japan Q2 Business Survey Index of Manufacturing
13: UK CPI & PPI; China Industrial Production
14: UK Claimant Count & Unemployment; US CPI; US Retail Sales; FOMC Policy Statement, Economic Projections, and Press Conference
15: UK Retail Sales; BOE Policy Statement; Philadelphia Fed Manufacturing Index; Empire State Manufacturing Index; US Industrial Production; BOJ Policy Statement
16: Euro Zone Final CPI; US Housing Starts & Building Permits; Preliminary University of Michigan Consumer Confidence

19:
20: German Zew Economic Sentiment
21: US Existing Home Sales
22: Various Euro Zone Flash Manufacturing and Services PMIs
23: US New Home Sales

26: German Ifo Business Climate; US Durable Goods Order
27: US Consumer Confidence
28: German Preliminary CPI
29: US Final Q1 GDP; Japan Household Spending; China Manufacturing & Non-manufacturing PMIs
30: German Retail Sales; German Unemployment; UK Current Account; UK Final Q1 GDP; Euro Zone Flash CPI Estimate; US Personal Spending; US Core PCE Price Index; Chicago PMI; OPEC production cut agreement expires (unless extended); Fed CCAR stress tests released by June 30


Barrons weekend summary

Barrons weekend summary: positive on AMZN, NVS, TJX, ROST, BURL, GM, Ford 
Cover story: Barron's list of the best ETFs for income was chosen by Michael Arone of State Street Global Advisors (IEF, CWB, SRLN, ITE, FCVT), Jay Hatfield of Infrastructure Capital Management (PFF, SDY, AMLP, AMZA, PFFR), Putri Pascualy of Paamco (EMB, BKLN, SJNK, SHYG), and Fran Rodilosso of VanEck (FLOT, EMLC, FLRN, FLTR). 

Features: 
1) Positive on AMZN: Shares could reach $1,000 by summer and $1,100 within a year, for a gain of close to 20%; By the end of the decade, the company's profits will balloon as revenues overwhelm costs and investments; 
2) Positive on TJX, ROST, BURL: Companies have managed to avoid being trounced by AMZN because they are in the off-price clothing business, and they stock stores opportunistically; 
3) Positive on NVS: "After a period of weak financial performance, Novartis could be poised for a multiyear run of earnings gains starting in 2018," driven by new drugs and a promising pipeline; 
4) Positive on GM, F: Shares are among the cheapest on a price/earnings basis in the S&P 500, but their valuations could rise in a turnaround, while TSLA's may drop if its Model 3 doesn't live up to expectations. 

Tech Trader: With AAPL, Wall Street is betting on momentum heading toward the next iPhone release, part of trend in which investors focus on a theme or narrative instead of how well the business is doing. 

Trader: Jason Pride of Glenmede says the final healthcare bill won't likely resemble what came out of the House, which passed by only the narrowest of margins; The stock buyback trend seems to be slowing, with $146B from S&P 500 companies through April 27, down 15% from the same period a year ago; Positive on REGN: Two issues face the company's investors: its valuation is high, and and it has been trading in a range for much of the year. 

Profile: Andy Johnson, manager of the Neuberger Berman Strategic Income fund, looks for stable income in a low-yield environment (top 10 sectors: mortgage-backed securities, U.S. investment grade credit, U.S. high yield, non-agency RMBS, U.S. nominal Treasury, U.S. TIPS, bank loans, global Treasuries, emerging market). 

Small Caps: Positive on OCFC: In a sector that offers less value than in the past, OceanFirst is worth considering because of an attractive, low-cost deposit base, modest credit costs, and good profitability. 

Follow-Up: Positive on MHK: Shares of world's largest flooring company are down following second-quarter results, a pullback that offers a fresh opportunity to buy. 

European Trader: Large integrated oil majors such as BP, Royal Dutch Shell, and Statoil have had a tough few years, but strong Q1 results are a sign cost-cutting and streamlining efforts are bearing fruit. 

Asian Trader: The upcoming presidential election in South Korea could boost inexpensive stocks, based on the winner's policies toward China, North Korea, and local chaebols. 

Emerging Markets: Greece's recent deal with the IMF for debt relief suggest it could be time for investors to consider the country's equities again. 

Commodities: "A cocoa glut has driven prices down near the lowest levels in 10 years, but analysts think prices need to weaken further to win back chocolate lovers." 

Streetwise: Stephanie Pomboy of MacroMavens thinks it's remarkable that AMZN is moving into the grocery business, since groceries as a percentage of retail sales are declining-has Jeff Bezos "run out of frontiers to conquer, or is it a hedge against what's to come?" 

Friday, May 5, 2017

Despite commodity softness stocks hold at lofty levels heading into the French election

TradeTheNews.com  Weekly Market Update:  Despite commodity softness stocks hold at lofty levels heading into the French election
Fri, 05 May 2017 16:12 PM EST

The week opened on a sleepy note, with many markets outside the US closed for the Mayday holiday. Washington DC stayed on the front lines, as White House administration officials continued to push the President's agenda. Congress came together and reached a tentative deal on a $1.1T omnibus spending bill to fund the govt through Sept 30th. By Thursday, House Republicans finally pushed through its bill repealing and replacing the Affordable Care Act as had been promised repeatedly during the election. European politics also may have aided sentiment after the final French presidential debate ahead of Sunday's runoff appeared to solidify the prospects for an Emmanual Macron victory.

The US economic data generally came in a bit softer than expected and lagged that of what we saw of out of Europe and Asia. The Euro moved up to a 5-month high, while the Dollar gained ground against the Yen, reaching a 1-month high. Wednesday's FOMC statement and Friday's jobs report largely affirmed the notion the Fed can and will stay on a path of gradually raising interest rates. Futures markets have continued to price in two more hikes this year, most likely starting in June. A chorus of Fed officials vocalized that same belief in speeches on Friday, as well. Assuming the French election goes as planned, ECB officials also hinted that they could steer the market towards their plans to withdraw stimulus in the near future. Treasury yields drifted higher following Wednesday's FOMC statement.

Commodities saw a wave of selling throughout much of the week that temporarily spooked equity markets. WTI crude prices dropped below the Nov low of $45.90 Wednesday to trade at levels not seen since last summer. The selling was exacerbated by technical levels but largely attributed to lingering concerns about steadily increasing NA supply and lackluster demand growth. Cooper, iron ore, and aluminum also declined, hurt by reports that the Chinese continue to crack down on a host of financing vehicles. Prices appeared to have stabilized late in the week, potentially helped by readthroughs from Q1 earnings season. A third of the S&P reported this week and executives from across an array of sectors talked confidently about growth they were seeing across both business lines and geographies. Many even talked about their belief that they can raise prices to offset input costs and painted an even more encouraging picture than the economic data has shown. For the week the Dow added 0.3%, S&P gained 0.6% and the NASDAQ rose 0.9%.

In corporate news this week, Apple shares were hit after disclosing some iPhone sales softness in its quarterly results, but the tech giant pared its losses as the market digested CEO Cook’s defense that it is likely just a pause in purchases while customers gear up to buy the new phone launching this fall. Tesla reported its revenue doubled y/y on record deliveries, but posted a larger loss than anticipated, and the automaker expressed some worry that the cheaper Model 3 model may be eating into sales of the pricier Model S. Facebook beat on the top and bottom line as its ad revenue jumped 51% y/y, and the social media behemoth told investors it will use GAAP figures instead of non-GAAP from now on so that it can include stock-based compensation in its calculations.

SUNDAY 4/30
04/30 (US) Congress negotiators from both parties said to have reached a tentative deal on $1.1T omnibus spending bill to fund the govt through Sept 30th - financial press

MONDAY 5/1
(HK) Macau Apr Gaming Rev MOP20.2B v MOP21.23B prior; +16.3% y/y v 14.0%e
05/01 *(US) MAR PCE DEFLATOR M/M: -0.2% V -0.2%E; Y/Y: 1.8% V 1.9%E
(US) MAR PERSONAL INCOME: 0.2% V 0.3%E; PERSONAL SPENDING: 0.0% V 0.2%E
*(US) MAR PCE CORE M/M: -0.1% V -0.1%E; Y/Y: 1.6% V 1.6%E
(US) APR FINAL MARKIT MANUFACTURING PMI: 52.8 V 52.8E (lowest since Sept)
*(US) APR ISM MANUFACTURING: 54.8 V 56.5E; PRICES PAID: 68.5 V 67.5E
(US) Atlanta Fed forecasts initial Q2 GDP growth at 4.3%
*(CN) CHINA APR CAIXIN PMI MANUFACTURING: 50.3 V 51.3E; 7-month low; 10th straight month of expansion

TUESDAY 5/2
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50% (AS EXPECTED)
BP.UK Reports Q1 adj Net $1.45B v $1.21Be, Underlying replacement cost profit $1.51B v $0.5B y/y, Total Rev $56.4B v $53.5Be
*(DE) GERMANY APR FINAL MANUFACTURING PMI: 58.2 V 58.2E (confirms its 29th month of expansion)
*(UK) APR PMI MANUFACTURING: 57.3 V 54.0E (9th month of expansion and highest since Apr 2014)
(EU) EURO ZONE MAR UNEMPLOYMENT RATE: 9.5% V 9.4%E (matches lowest level since 2009)
MRK Reports Q1 $0.88 v $0.83e, R$9.43B v $9.29Be
(CZ) Czech PM Sobotka: To submit government resignation to President and possible prepare for early election
(US) Pres Trump tweets: "Our country needs a good 'shutdown' in September to fix mess!"
AAPL Reports Q2 $2.10 v $2.02e, R$52.9B v $52.6Be; raises dividend 10.5% to $0.63 from $0.57 (indicated yield 1.71%); increases buyback program by $35B (4.4% of market cap) to $210B

WEDNESDAY 5/3
BNP.FR Reports Q1 Net €1.89B v €1.81B y/y, Rev €11.3B v €10.8B y/y
(UK) EU said to have raised Brexit bill to an upfront payment between €91-113B over 10 years would net to ~€55bn-€75B as Britain received share of EU spending and repaid loans - financial press
(DE) GERMANY APR UNEMPLOYMENT CHANGE: -15K V -11KE; UNEMPLOYMENT RATE: 5.8% V 5.8%E
(EU) EURO ZONE Q1 ADVANCE GDP Q/Q: 0.5% V 0.5%E; Y/Y: 1.7% V 1.7%E
(US) APR ADP EMPLOYMENT CHANGE: +177K V +175KE (lowest since Oct)
NYT Reports Q1 $0.11 v $0.06e, R$398.8M v $385Me; Digital subscribers surge
(US) APR FINAL MARKIT SERVICES PMI: 53.1 V 52.5E
(US) Puerto Rico Gov announces restructuring of $70B debt; to advance plan for bankruptcy-like case - press
(IR) Iran reportedly attempts missile launch from a mini submarine, 14 days prior to Sanctions trigger
(US) FOMC HOLDS TARGET RATE RANGE AT 0.75-1.00%, AS EXPECTED; GROWTH SLOWDOWN IN Q1 IS LIKELY TO BE TRANSITORY; EXPECTS ECONOMY TO WARRANT GRADUAL RATE HIKES
(US) Association of American Railroads weekly rail traffic report for week ending April 29th: 527.8K carloads and intermodal units, +5.1% y/y (16th straight week of gains)
TSLA Reports Q1 -$1.33 v -$0.55e, R$2.70B v $2.56Be
FB Reports Q1 $1.04 v $1.10e, R$8.03B v $7.85Be
(AU) AUSTRALIA MAR TRADE BALANCE (A$): +3.1B V +3.3BE (5th consecutive surplus)
(CN) CHINA APR CAIXIN PMI SERVICES: 51.5 V 52.2 PRIOR; 4th month of sequential decline and weakest level since May 2016

THURSDAY 5/4
HSBA.UK Reports Q1 Pretax profit (adj) $5.94B v $5.3Be, Underlying Rev $12.8B v $12.5B y/y
CARLB.DK Reports Q1 (DKK) Rev 13.7B v 13.4Be
SIE.DE Reports Q1 Net profit €1.45B v €1.44Be, Industrial Business profit €2.49B v €2.12Be, Rev €20.2B v €19.7Be
GLE.FR Reports Q1 Net €747M* v €863.2Me, Op €1.20B v €1.37B y/y, Rev €6.47B v €6.18Be
ABI.BE Reports Q1 $0.74 v $1.00e, EBITDA $4.49B v $4.90Be, R$12.9B v $12.9Be
BMW.DE Reports Q1 Net €2.15B v €1.64B y/y, EBIT €2.65B v €2.65B prelim, Rev €23.45B v €23.4B prelim; affirms forecast
RDSA.NL Reports Q1 adj Profit $3.75B v $3.01Be, Basic CCS EPS $0.41 v $0.13 y/y, R$71.8B v $64.8B y/y
*(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.50%; AS EXPECTED
USCR Reports Q1 $0.42 v $0.17e, R$299.1M v $282Me
FAST Reports Apr Net Sales $343.8M, +3.7% y/y
(CZ) CZECH CENTRAL BANK (CNB) LEAVES REPURCHASE RATE UNCHANGED AT 0.05%; AS EXPECTED
*(US) Q1 PRELIMINARY NONFARM PRODUCTIVITY: -0.6% V -0.1%E; LABOR COSTS: +3.0% V 2.7%E
(BR) Brazil Apr PMI Services: 50.3 v 47.7 prior (1st expansion in 26 months)
*(US) MAR FINAL DURABLE GOODS ORDERS: 0.9% V 0.7%E; DURABLES EX TRANSPORTATION: 0.0% V -0.2% PRELIM
WTI Crude breaks Nov low below $46.00 (lowest level since April 2016)
(US) Atlanta Fed cuts Q2 GDP to 4.2% from 4.3% on 5/1
(US) House of Representatives passes ACHA Obamacare healthcare replacement bill
IBM Buffett said to have sold 33% of IBM stake in Q1 and Q2, but has stopped selling shares - CNBC
(HK) HONG KONG APR COMPOSITE PMI: 51.1 V 49.9 PRIOR; 1st expansion in 4 months, 3-year high
(NZ) NEW ZEALAND Q2 INFLATION EXPECTATION SURVEY: 2-YEAR INFLATION EXPECTATION 2.17% (highest since Q3 of 2014) V 1.92% PRIOR

FRIDAY 5/5
(CZ) Czech PM Sobotka changes mind and will NOT submit his resignation (withdraws offer); proposes to dismiss his finance minister
(US) APR UNEMPLOYMENT RATE: 4.4% V 4.6%E (lowest since May 2007)
(CA) CANADA APR NET CHANGE IN EMPLOYMENT: 3.2K V +10.0KE; UNEMPLOYMENT RATE: 6.5% V 6.7%E
(US) APR CHANGE IN NONFARM PAYROLLS: +211K V+190KE
(US) APR AVERAGE HOURLY EARNINGS M/M: 0.3% V 0.3%E; Y/Y: 2.5% V 2.7%E; AVERAGE WEEKLY HOURS: 34.4 V 34.4E
(US) New York Fed Nowcast: cuts Q2 GDP forecast to 1.8% from 2.3% from 4/28


Sunday, April 30, 2017

Barron's Saturday summary

Barron's Saturday summary: Positive CAT, NEE, COH; Cautious ESRX, CMG 
Cover story: Positive on CAT; Company has taken a hit from a drop in commodity prices and a number of ill-fated acquisitions, but is getting back on track; Few companies are likely to benefit as much as Caterpillar from Trump administration policies, and shares are likely to rebound. 

Tech Trader: Fiber-optic stocks rose during the dot-com bubble and have since imploded, but a new generation of them—including OCLR, ACIA, NPTN and LITE—stand to benefit from trends such as cloud computing, even though their shares are currently down. 

Trader: If the GOP can push a tax plan through, it will probably mean a further boost for corporate earnings, especially if the border-adjusted tax remains sidelined; Despite recent gains in tech stocks such as GOOGL, MSFT, and AMZN, their valuations don’t seem worrisome; Positive on COH: Shares are down amid slumping retail sales, but they’re set to reverse course because of the company’s strong brand and wide range of products. 

Profile: Philippe Langham of RBC Global Asset Management looks for companies around the world that can produce sustainable, long-term growth (top 10 holdings: Housing Development Finance, Samsung Electronics, Naspers, TWM, AIA Group, DRY, UL, Antofagasta, BBD, SM Investments). 

Interview: Paul Wick, manager of the Columbia Seligman Communications and Information fund, thinks tech stocks aren’t in a bubble and that fundamentals appear to be in excellent shape (picks: LRCX, MU, WDC; pans: IBM, NFLX, TSLA). 

Features: 
1) Donald Trump’s tax plan would likely benefit banks, restaurants, retailers, telecoms, and health insurers, industries that have a domestic focus; The plan includes good ideas, such as cutting corporate taxes, but could cost too much revenue; 
2) Positive on NEE: Even if the company fails to acquire Texas-based Oncor Electric, it remains well-positioned in the energy sector, with a balanced portfolio of stable and growing businesses and a strong dividend yield; 
3) Barron’s annual Big Money poll found that top money managers favor the tech and finance sectors, and more are bullish about the outlook for stocks than in the prior two polls; 
4) Large money managers “are upbeat about the global economy, and see U.S. economic growth accelerating modestly in coming months” amid higher interest rates and tax cuts. 

Follow Up: Cautious on ESRX: Shares of the pharmacy benefit manager will probably continue to drop because of ongoing problems related to ANTM and the growing strength of lower-cost rivals; Cautious on CMG: Shares of the food chain have risen, but it needs to keep spending on food safety and advertising to return to growth, and investors for now should stay away; Cautious on Home Capital: Even at C$8.00, the risk in the troubled company’s shares is to the downside, and they could eventually hit zero. 

European Trader: “Old-World markets rebounded last week as fears of a European Union breakup eased, and investors focused instead on the region’s generally improved economic outlook.” 

Asian Trader: The Hong Kong market is up 200% since the financial crisis, but amid the euphoria some experts think the good times are about to end. 

Emerging Markets: “Venezuela has about $10B left, mostly gold, to pay its debts as inflation mounts, imports dwindle, and basic supplies disappear from shelves.” 

Commodities Corner: Rice is set for a rally because of a combination of low levels of usable inventory and the light likelihood that poor growing conditions could cause futures prices to go up. 

Streetwise: Real estate stocks can serve as an inflation hedge and as an income source, especially if weak economic growth keeps interest rates lower for longer. 

Friday, April 28, 2017

French Election and Solid Earnings Restore Reflation Trade

TradeTheNews.com Weekly Market Update: French Election and Solid Earnings Restore Reflation Trade
Fri, 28 Apr 2017 16:08 PM EST

The week opened with a bang as markets breathed a sigh of relief that the polls accurately predicted Emmanuel Macron’s win in the first round of the French election, sparking a global scramble for risk assets. Global indices surged Monday and into Tuesday, Treasury yields moved up, and gold prices backed down from the $1,300 level. The VIX careened back down to briefly touch the lowest level since 2007 as traders unwound hedging trades from last week. The NASDAQ crossed above 6K for the first time ever, as the technology sector took center stage during earnings season, while other indices got back within striking distance of their all-time highs. For the week, the DJIA gained 1.9%, the S&P added 1.5%, and the Nasdaq rose 2.3%.

By Wednesday, focus shifted back to Washington DC, as speculation of a revived healthcare agreement picked up and the Trump administration unveiled an outline for its massive tax cut plans. But the winds coming from Washington were not entirely helpful to sentiment when the Trump administration repeatedly struck an aggressive posture on foreign trade, including setting tariffs on Canadian timber, initiating a trade investigation of the aluminum market, and a threat to withdraw from NAFTA. Equity trading leveled off into week's end, and Treasury yields made little headway to the upside.

In corporate news this week, tech names seemed to be the big winner on earnings boosted by the cloud. Amazon, Microsoft, and Alphabet all said that their cloud computing divisions were growing faster than their larger, mainline businesses, with Amazon notably making most of its profits from its AWS unit. Twitter reported a reassuring beat on its top and bottom line, as its user numbers spiked surprisingly, and the social media giant noted it’s seeing less abuse reported across the service. General Motors posted its highest profits since emerging from bankruptcy in 2009, thanks partly to an increase in North American sales, while Ford saw a 35% drop in profit due to the effects of recalls and rising material prices, and it warned about pricing falling for new and used cars. Caterpillar reported surprisingly strong results and raised guidance, but did caution that geopolitical and market uncertainty along with volatility in commodity prices continue to present risks for the rest of the year.

SUNDAY 4/23
BCR: BD to acquire Bard for $317.00/shr in cash and stock in a $24B deal

MONDAY 4/24
(DE) GERMANY APR IFO BUSINESS CLIMATE: 112.9 V 112.4E (highest since summer 2011); CURRENT ASSESSMENT: 121.1 V 119.2E
(UK) APR CBI INDUSTRIAL TRENDS TOTAL ORDERS: 4 V 6E
AA Reports Q1 $0.63 v $0.55e, R$2.7B v $2.97Be; Raises 17 demand outlook
(CA) US President Trump warns may put import tax on Canada dairy products - financial press
Hynix Semiconductor Reports Q1 Net KRW1.9T v KRW1.8Te; Op KRW2.5T v KRW2.4Te; Rev KRW6.3T v KRW6.0Te

TUESDAY 4/25
NOVN.CH Reports Q1 $1.13 v $1.10e, Core Op profit $3.01B v $3.26B y/y, R$11.54B v $11.6Be
SAP.DE Reports Q1 Non-IFRS Net €887M v €886Me, non-IFRS Op profit €1.20B v €1.23Be, Rev €5.29B v €5.18Be
(FR) FRANCE APR BUSINESS CONFIDENCE: 104 V 104E; MANUFACTURING CONFIDENCE: 108 V 105E
LMT Reports Q1 $2.61 v $2.76e, R$11.1B v $11.3Be
CAT Reports Q1 $1.28 v $0.62e, R$9.8B v $9.36Be
FCX Reports Q1 $0.15 adj v $0.17e, R$3.34B v $3.52Be
(US) Apr Philadelphia Fed Non-Manufacturing General Regional Business Conditions: 30.1 v 35.4 prior
(US) APR RICHMOND FED MANUFACTURING INDEX: 20 V 16E
(US) MAR NEW HOME SALES: 621K V 584KE
(US) APR CONSUMER CONFIDENCE: 120.3 V 122.5E
(US) Goldman Sachs chief economist Hatzius: not expecting US to reach 3% GDP growth in 2017 or 2018
TXN Reports Q1 $0.97 v $0.83e, R$3.40B v $3.30Be
(US) Trump administration drops support for border adjustment tax (BAT) on imports - NYT
BHP.AU Reports Q3 iron ore production 54.0Mt v 57.0Mte; Updates on US shale asset sale
(AU) AUSTRALIA Q1 CONSUMER PRICES (CPI) Q/Q: 0.5% V 0.6%E; Y/Y: 2.1% (highest since Q2 of 2014) V 2.2%E; TRIMMED MEAN Q/Q: 0.5% V 0.5%E ; Y/Y: 1.9% (5-quarter high) V 1.8%E

WEDNESDAY 4/26
SAN.ES Reports Q1 Net €1.87B v €1.73Be, Rev €12.0B v €11.1B q/q
CSGN.CH Reports Q1 Net CHF596M v CHF336.1Me, Pretax profit CHF889M v CHF648Me, Rev CHF5.5B v CHF5.39Be; Announces CHF4B rights offering, to retain full ownership of Swiss Bank
(FR) FRANCE APR CONSUMER CONFIDENCE: 100 V 100E
STAN.UK Reports Q1 Adj Pretax profit $1.05B v $850Me, Op Income $3.61B v $3.64Be
TWTR Reports Q1 $0.11 v $0.02e, R$548M v $512Me; DAU +14% y/y, +11% q/q
(TR) TURKEY CENTRAL BANK (CBRT) LEAVES BENCHMARK REPURCHASE RATE UNCHANGED AT 8.00%; AS EXPECTED
(US) Freedom Caucus says group is now in support of House Obamacare replacement bill following modifications - press
(US) Association of American Railroads weekly rail traffic report for week ending April 22nd: 515.1K carloads and intermodal units, +4.7% y/y (15th straight week of gains)
(US) White House econ adviser Cohn: look forward to working with House and Senate on tax proposal in weeks ahead; in agreement on the core principles
(US) White House: President Trump agrees to not terminate NAFTA at this time after conversations with Mexico's Nieto and Canada's Trudeau
(JP) BOJ LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10% AND 10-YEAR JGB YIELD TARGET AT AROUND 0.0%; AS EXPECTED

THURSDAY 4/27
AIR.FR Reports Q1 Adj EBIT €240M v €326Me, Rev €13.0B v €12.2B y/y
BAS.DE Reports Q1 EPS €1.97 v €1.81e, EBIT (before items) €2.46B v €2.38Be, Rev €16.9B v €15.7Be
ROG.CH Reports Q1 Rev CHF12.9B v CHF12.7Be
NOK1V.FI Reports Q1 adj Net €203M v €164Me, adj Op €341M v €329.5Me, Rev €5.39B v €5.28e
DBK.DE Reports Q1 Net €575M v €475Me, Pretax €878M v €579M y/y, Rev €7.34B v €8.07B y/y
BAYN.DE Reports Q1 Net profit €2.08B (adj) v €1.51M y/y, EBITDA adj €3.89B v €3.67Be, Rev €13.2B v €12.7Be; CFO Johannes Dietch to leave company effective end of May, 2018
ORA.FR Reports Q1 EBITDA €2.60B v €2.55B y/y, Rev €10.1B v €9.99B y/y
(DE) GERMANY APR GFK CONSUMER CONFIDENCE: 10.2 V 9.9E (matches highest level since Oct 2001)
RMS.FR Reports Q1 Rev €1.35B v €1.32Be
AZN.UK Reports Q1 Core EPS $0.99 v $0.82e, Rev $5.41B v $5.41Be
LLOY.UK Reports Q1 PBT £1.30B v £654M y/y, Underlying profit £2.08B v £1.96Be, Total Income £4.41B v £4.38B y/y
(DE) GERMANY APR CPI SAXONY M/M: -0.1% V +0.2% PRIOR; Y/Y: 2.1% V 1.8% PRIOR
(SE) SWEDEN CENTRAL BANK (RIKSBANK) LEAVES REPO RATE UNCHANGED AT -0.50%; AS EXPECTED
(SE) SWEDEN CENTRAL BANK (RIKSBANK) AMENDS QE BOND BUYING SCHEME; extends QE by SEK15B during H2 of 2017
(EU) EURO ZONE APR BUSINESS CLIMATE INDICATOR: 1.09 V 0.82E; CONSUMER CONFIDENCE (FINAL): -3.6 V -3.6E
(IT) ITALY DEBT AGENCY (TESORO) SELLS TOTAL €5.25B VS. €4.25-5.25B INDICATED RANGE IN 5-YEAR AND 10-YEAR BTP BONDS
POT Reports Q1 $0.18 v $0.10e, R$1.11B v $928Me
DOW Reports Q1 $1.04 v $0.99e, R$13.2B v $12.4Be
F Reports Q1 $0.39 v $0.34e, R$39.1B v $34.7Be
(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED
UPS Reports Q1 $1.32 v $1.30e, R$15.3B v $15.2Be
(DE) GERMANY APR PRELIMINARY CPI M/M: 0.0% V -0.1%E; Y/Y: 2.0% V 1.9%E
(US) MAR PRELIMINARY DURABLE GOODS ORDERS: 0.7% V 1.3%E; DURABLES EX-TRANSPORTATION:-0.2 % V +0.4%E
(EU) ECB chief Draghi: Reiterates forward guidance that rates to stay low or lower for an extended period beyond the end of QE until ECB sees a sustain pick up in inflation - Prepared remarks
(EU) ECB chief Draghi: Things are going better but did not discuss any exit strategy at today's meeting- Q&A
(US) Atlanta Fed cuts Q1 GDP to 0.2% from 0.5% on 4/18
AMZN Reports Q1 $1.48 v $1.03e, R$35.7B v $35.4Be
GOOGL Reports Q1 $7.73 v $7.48e, R$24.8B (includes $4.6B TAC) v $19.7Be
INTC Reports Q1 $0.66 v $0.65e, R$14.8B v $14.8Be; approves $10B increase to buyback program (5.7% of market cap)
MSFT Reports Q3 $0.73 v $0.69e, R$22.1B v $23.6Be
BIDU Reports Q1 $1.00 v $0.85e, R$2.45B v $2.32Be; CFO to step down, effective on appointment of successor
(JP) JAPAN MAR JOBLESS RATE: 2.8% V 2.9%E (matches lowest rate since Jun 1994)
(US) President Trump: North Korea is my biggest worry; Would love to resolve situation diplomatically, but it's "very difficult" - press interview

FRIDAY 4/28
UBSN.CH Reports Q1 Net CHF1.27B v CHF953Me, Adj Pretax profit CHF1.93B v CHF1.37B y/y, Adj Op Rev CHF7.53B v CHF7.06B y/y
(FR) FRANCE Q1 ADVANCE GDP Q/Q: 0.3% V 0.4%E; Y/Y: 0.8% V 0.9%E
SAN.FR Reports Q1 Business EPS €1.42 v €1.26e, Business Op €2.44B v €2.12B y/y, Rev €8.65B v €8.38Be
(UK) APR NATIONWIDE HOUSE PRICES M/M: -0.4% V +0.1%E; Y/Y: 2.6% V 3.3%E
RBS.UK Reports Q1 Net profit £259M v loss £968M y/y, adj Op £1.37B v £931M y/y, Rev £3.21B v £3.06B y/y
BARC.UK Reports Q1 Net £190M* v £433M y/y, adj Pretax £1.68B v £793M y/y, Core Net Rev £5.82B v £5.04B y/y
(FR) FRANCE APR PRELIMINARY CPI M/M: 0.1% V 0.1%E; Y/Y: 1.2% V 1.2%E
(EU) EURO ZONE MAR M3 MONEY SUPPLY Y/Y: 5.3% V 4.7%E
(UK) Q1 ADVANCE GDP Q/Q: 0.3% V 0.4%E; Y/Y: 2.1% V 2.2%E
(EU) EURO ZONE APR ADVANCE CPI ESTIMATE Y/Y: 1.9% V 1.8%E (returns to ECB target); CPI CORE Y/Y: 1.2% V 1.0%E (highest level since mid-2013)
GM Reports Q1 $1.70 v $1.45e, R$41.2B v $40.3Be
(US) Q1 EMPLOYMENT COST INDEX (ECI): 0.8% V 0.6%E
(US) Q1 ADVANCE GDP ANNUALIZED Q/Q: 0.7% V 1.0%E; PERSONAL CONSUMPTION: 0.3% V 0.9%E
(US) Q1 Advance GDP Price Index: 2.3% v 2.0%e; Core PCE Q/Q: 2.0% v 2.0%e
(US) APR CHICAGO PURCHASING MANAGER: 58.3 V 56.2E
(US) APR FINAL MICHIGAN CONFIDENCE: 97.0 V 98.0E
(US) New York Fed Nowcast: maintains Q1 GDP forecast at 2.7%, unchanged from 4/21; raises Q2 GDP forecast to 2.3% from 2.1% from 4/21


Saturday, April 22, 2017

Barrons weekend summary

Barrons weekend summary: Positive on top US banks, JNJ, MGM, SRPT, SRG, ORLY; Cautious on ARNC, HOG, INFY 
Cover story: MORN has exerted an outsize influence on the mutual fund industry for 30 years, but under new chief executive Kunal Kapoor it will continue to undergo a transition with a move beyond data and research as passive investing grows more dominant. 

Tech Trader: Tiernan Ray talks about the growing trend among tech companies of delivering products in beta form, so that “the future is not delivered anymore so much as teased,” as with GOOGL’s Google Glass or FB’s recent announcement about augmented reality. 

Trader: The results of the French election could have a major effect on markets this week, says MS strategist Michael Wilson; Positive on JNJ: Company’s “revenue miss could be a buying opportunity now that its shares look more reasonably priced”; Positive on MGM: When the gaming giant reports earnings Thursday it won’t likely miss, and a drop in share price presents an opportunity for investors. 

Features: 
1) Positive on BAC, C, GS, JPM, MS, WFC: Six major banks trade at a discount to the S&P 500 after a selloff sparked by economic and political concerns, but their profit outlook is improving and the shares look like buys; 
2) Positive on SRPT: Shares should appeal to investors because there’s a good chance company’s Duchenne muscular dystrophy drug, Exondys 51, will ramp up this year, making Sarepta an acquisition target; 
3) Positive on SRG: The REIT spun off from SHLD is signing on new tenants who pay substantially more than shuttered Sears stores, and it offers the opportunity for significant long-term growth; 
4) Positive on ORLY: Shares are down on an earnings miss and concerns about a move into auto parts by AMZN, but the company should be able to get past its problems, and cheap shares are a good long-term bet. 

Profile: David Brown of Hawk Ridge Fund monitors companies carefully for catalysts, such as a change in regulation or a division with unseen promise (long: AAN, EHTH, RACE, FOGO, Opera Software; short: CVGW). 

Interview: Paul Hickey and Justin Walters of Bespoke talk about their ten years in business and what they think about the bull market (picks: SOM, TRVG, ZTS; pans: BURL, P). 

Follow-Up: Cautious on ARNC: The ouster of chief Klaus Kleinfeld and an upcoming proxy fight make shares of sister company AA a better bet for now; Cautious HOG: Iconic motorcycle maker faces declining ridership and an aging consumer base, making shares a risky bet despite their recent uptick. 

European Trader: France’s presidential election is the most important European vote in years, more critical than the Brexit referendum, and it could dictate the future of the EU and the euro. 

Asian Trader: Cautious on INFY, Tata Consultancy Services: Donald Trump’s executive order on H-1B work visas is more bad news for struggling Indian infotech outsourcers. 

Emerging Markets: “Fixed-income investment in emerging markets has traditionally been dominated by sovereign Eurobonds, but yield-hungry investors are widening their horizons to corporate debt, with good results.” 

Commodities: Gold has regained strength after a drop, reflecting concerns about the U.S. economy and worries about the European elections. 

Streetwise: “An April survey of global money managers by Bank of America Merrill Lynch showed 83% of respondents consider U.S. stocks overvalued, the highest on record.” 

Friday, April 21, 2017

Risk-On Returns as Leaders Jawbone Reform Efforts

TradeTheNews.com Weekly Market Update: Risk-On Returns as Leaders Jawbone Reform Efforts
Fri, 21 Apr 2017 16:04 PM EST

Trading resumed this week with investors looking to add back some of the risk taken out of their portfolios ahead of the long Easter break. A lack of escalation surrounding the Korean Peninsula and renewed hopes of forthcoming Congressional reform legislation spurred some early buying in equities and helped put a floor in bond yields. The IMF modestly raised its global growth outlook for 2017 to 3.5% as G20 finance ministers and central bankers met in Washington and produced mostly upbeat commentary about diminishing risks. The surprise move by UK PM May to call snap elections and the impending French election kept sentiment muted. Cable moved up roughly 2.5% and held most of those gains after the election announcement. For the week the DJIA rose 0.5%, the S&P gained 0.9%, and the Nasdaq added 1.8%.

US economic readings retreated from the recent higher levels and largely came up short of expectations. Overseas data, with the exception of the UK, revealed some relative strength which helped pressure the US Dollar Index to the its lowest levels in nearly a month. US Treasury yields hovered near their lowest levels since November and gold prices made a run at $1,300 early on before consolidating. On Friday, WTI crude slipped back below the $50 mark to levels not seen since March on what traders largely attributed to technical selling pressures. Regardless, US rig counts and total NA production continued to rise, overshadowing reports that OPEC is likely headed towards a six month extension of coordinated production cuts.

In corporate news this week, earnings season commenced with some big financial names. Goldman disappointed investors with a first quarter sales and earnings miss, sending the stock on its biggest one-day post-earnings selloff since going public in 1999. Morgan Stanley delivered a rebuke to its rival’s quarter, reporting a Q1 beat on both top and bottom lines, helped by a boost in bond trading revenue following the Fed's interest rate hike. Bank of America reported solid results, but they, along with several regional banks, exhibited slower loan growth in the quarter. American Express led the Dow higher on Thursday after its earnings beat indicated it might be finding ways to overcome last year’s Costco portfolio loss. In tech names, Netflix beat on earnings but missed on revenues, as streaming net new additions came in below management’s own guidance. IBM revenues came in below expectations, but its CFO said that was mostly due to increasing forex headwinds, and the hardware giant affirmed its full year outlook. On Friday Honeywell and Visa put up outstanding quarters yet again leading to new 52-week highs while GE meandered lower after missing quarterly cash flow projections.


SUNDAY 4/16
(TR) Turkey passes referendum on changing the constitution to replace its parliamentary system with the executive presidency with 51.5% v 48.7%; opposition to challenge result
(CN) CHINA Q1 GDP Y/Y: 6.9% V 6.8%E (fastest growth since the third quarter of 2015)
(CN) CHINA MAR RETAIL SALES Y/Y: 10.9% (3-month high) V 9.7%E; YTD Y/Y: 10.0% V 9.6%E
(CN) CHINA MAR INDUSTRIAL PRODUCTION Y/Y: 7.6% (highest since Dec 2014) V 6.3%E; YTD 6.8% V 6.3%E
(CN) CHINA MAR FIXED ASSETS EX RURAL YTD Y/Y: 9.2% (10-month high) V 8.8%E

MONDAY 4/17
US Federal Communications Commission (FCC) reportedly considering lifting a ban on telecoms companies engaging in merger talks - financial press
(US) APR EMPIRE MANUFACTURING: 5.2 V 15.0E
(US) APR NAHB HOUSING MARKET INDEX: 68 V 70E
(US) FEB TOTAL NET TIC FLOWS: $19.3B V $121.2B PRIOR; NET LONG-TERM TIC FLOWS: $53.4B V $5.9B PRIOR
NFLX Reports Q1 $0.40 v $0.38e, R$2.64B v $2.64Be
UAL Reports Q1 $0.41 (adj) v $0.37e, R$8.42B v $8.36Be
(CN) CHINA MAR PROPERTY PRICES M/M: RISE IN 62 OUT OF 70 CITIES VS 56 PRIOR; Y/Y: RISE IN 68 OUT OF 70 CITIES V 67 PRIOR
(JP) Japan nominates Goshi Kataoka and Hitoshi Suzuki to BOJ board; will replace BOJ dissenters Sato and Kiuchi

TUESDAY 4/18
(UK) PM MAY STATEMENT: CALLS FOR GENERAL ELECTION JUNE 8TH (as speculated); needs a stronger mandate to negotiate Brexit with EU
BAC Reports Q1 $0.41 v $0.35e, R$22.2B v $21.5Be
GS Reports Q1 $5.15 v $5.38e, R$8.03B v $8.37Be; Increases dividend 15% to $0.75/shr (implied yield 1.3%); authorizes additional $50M share buyback (0.6% of market cap)
*IMF UPDATES WORLD ECONOMIC OUTLOOK (WEO): Raises 2017 global growth forecast from 3.4% to 3.5%
*(US) MAR HOUSING STARTS: 1.22M V 1.25ME; BUILDING PERMITS: 1.26M V 1.25ME
(US) MAR INDUSTRIAL PRODUCTION M/M: 0.5% V 0.4%E; CAPACITY UTILIZATION: 76.1% V 76.1%E
(US) Atlanta Fed maintains Q1 GDP at 0.5%, unchanged from 4/14
IBM Reports Q1 $2.38 v $2.34e, R$18.2B v $18.5Be

WEDNESDAY 4/19
(HK) Macau reports Easter Weekend visitors 427K, +5.6% y/y
ASML.NL Reports Q1 Net €452M v €403Me, Rev €1.94B v €1.82Be
BRBY.UK Reports H2 Rev £1.61B v £1.61Be; SSS +3% v +3.8%e
HEIA.NL Reports Q1 Net €293M v €265M y/y
(EU) EURO ZONE MAR CPI M/M: 0.8% V 0.8%E; Y/Y (FINAL READING): 1.5% V 1.5%E; CPI CORE Y/Y(FINAL READING): 0.7% V 0.7%E
(US) Association of American Railroads weekly rail traffic report for week ending April 15th: 519.3K carloads and intermodal units, +3.9% y/y (14th straight week of gains)
CP Reports Q1 C$2.50 adj v C$2.50 y/y, rev C$1.6B v C$1.59B y/y
CSX Reports Q1 $0.51 v $0.43e, R$2.87B v $2.73Be
RIO.AU Reports Q1 global iron ore production 66.2Mt, -2% y/y, -10% q/q; Shipments 80.8Mt, +11% y/y

THURSDAY 4/20
NESN.CH Reports Q1 Rev CHF21.0B v CHF21.3Be
SU.FR Reports Q1 Rev €5.84B v €5.84Be, organic sales 3.1% y/y
UNA.NL Reports Q1 Rev €13.3B v €13.2Be; raises dividend 12% to €0.3585/shr
BMW.DE Reports prelim Q1 PBT €3.0B v €2.37B y/y, EBIT €2.65B v €2.46B y/y, Rev €23.4B v €20.9B y/y
*(ID) INDONESIA CENTRAL BANK (BI) LEAVES 7-DAY REVERSE REPO RATE UNCHANGED AT 4.75%; AS EXPECTED (6th straight pause in current easing cycle)
(US) APR PHILADELPHIA FED BUSINESS OUTLOOK: 22.0 V 25.5E (lowest since Dec)
(US) MAR LEADING INDEX: 0.4% V 0.2%E
BN.FR Reports Q1 Rev €5.46B v €5.31B y/y; raises FY outlook
KND Reportedly considering sale of nursing division, but also getting M&A interest for the whole company - M&A blog
V Reports Q2 $0.86 v $0.79e, R$4.48B v $4.30Be; announces $5B buyback (2% of market cap)
(JP) JAPAN APR PRELIMINARY PMI MANUFACTURING: 52.8 V 52.4 PRIOR (8th month of expansion)

FRIDAY 4/21
(FR) FRANCE APR PRELIMINARY MANUFACTURING PMI: 55.1 V 53.1E (7th month of expansion and and highest since Apr 2011)
*(DE) GERMANY APR PRELIMINARY MANUFACTURING PMI: 58.2 V 58.0E (29th month of expansion)
(EU) EURO ZONE APR PRELIMINARY MANUFACTURING PMI: 56.8 V 56.0E (46th month of expansion and highest since Apr 2011)
(UK) MAR RETAIL SALES (EX AUTO FUEL) M/M: -1.5% V -0.5%E; Y/Y: 2.6% V 3.8%E
GE Reports Q1 $0.21 v $0.17e, R$27.7B v $26.4Be
SLB Reports Q1 $0.25 v $0.25e, R$6.89B v $7.01Be
(US) APR PRELIMINARY MARKIT MANUFACTURING PMI: 52.8 V 53.8E
(US) MAR EXISTING HOME SALES: 5.71M V 5.60ME


Saturday, April 15, 2017

Barrons weekend summary

Barrons weekend summary: Cover story features REGN, VRTX; positive on HBI, WAB 
Cover story: Drug-price increases are likely to ease because of market-based forces and government policy tweaks; Investors should focus on companies that are increasing revenue through new drugs and growing customer bases, such as REGN and VRTX, and not on serial price hikers such as ABBV, AMGN, and BIIB. 

Features: 
1) Positive on HBI: Demand for undergarments remains strong, and as retail inventories stabilize and Hanes sees cost savings from debt reduction and acquisitions, shares could rise 25%; 
2) Positive on WAB: Company has completed about 50 acquisitions during the past decade, creating a diverse and less volatile business; shares could rise 20% in a year. 

Tech Trader: Some people on Wall Street think AAPL should buy DIS to create a tech and media powerhouse, but it's a terrible idea, says columnist Tiernan Ray, since the companies are pursuing vastly different missions. 

Trader: "The rally impetus from the so-called Trump trade seems depleted," and investors are worried the president will be unable to implement his economic policies; Positive in F: The stock's recent weakness reflects several concerns, but the automaker is sitting on a strong balance sheet, shares look cheap, and the company has a secure high dividend; Cautious on DAL: Carrier, considered the best-managed among top American rivals, could see its shares move higher if it can demonstrate earnings consistency and growth. 

Advisor Rankings: Top 100: Barron's list of the top 100 financial advisors is topped by Andy Chase, Gregory Vaughan, Lyon Polk, and Brian Pfeifler of Morgan Stanley Private Wealth Management and Mark Curtis of Graystone Consulting; Barron's list of the top consultants to institutional investors is led by Graystone, UBS International Consulting Group, and Sheridan Road Financial. 

Small Caps: Positive in Linamar (LNR.CA): Canadian company is well-positioned in a slowing auto market, and its engine and transmission components are poised to grow well above the market clip. 

Profile: Rob Lanphier and Karl Brewer of the William Blair

 Small-Mid Cap fund look for companies with a market value of $500M to $10B in sectors with double-digit weightings in the Russell 2500 Growth Index (top 10 holdings: CPRT, CSGP, LGND, SIX, TSCO, JCOM, MMS, BWXT, VEEV, BAH). 

Interview: Michael Hartner, investment strategist at Merrill Lynch, discusses the "Icarus trade"-the idea that stocks will return to normal after years of monetary policy. 

Follow-Up: 
1) Positive in WFM: Shares could rise if grocer heeds advice from activist hedge fund Jana Partners to improve operations, shake up the board, and consider a sale; 
2) Cautious on P: Internet radio station is struggling to remake its streaming business, but the brand has value and the worst could be over for shares. 

European Trader: Investors want to know what strategies Akzo Nobel will employ to deliver more value as it faces increasing pressure to accept an acquisition bid from PPG. 

Asian Trader: China's next business and commercial hub, the city of Xiong'an in Hebei province, could attract up to $350B in investment in the coming years, says Morgan Stanley.

Emerging Markets: "Long term, South Africa has little to cheer about," with president Jacob Zuma the target of corruption probes and his party moving toward more populist polices that will foster economic stagnation. 

Commodities: Strong demand for cotton from abroad led to higher prices last year, but higher plantings this year should put downward pressure on them. 

Streetwise: The autopilot approach of passive investing may be fine for young people, but retirees who need to navigate turbulent markets may prefer a skilled advisor. 

Thursday, April 13, 2017

Risk Assets Fall Out of Favor During Holiday Shortened Week

TradeTheNews.com Weekly Market Update: Risk Assets Fall Out of Favor During Holiday Shortened Week
Thu, 13 Apr 2017 16:03 PM EST

Investors' risk appetite faded this week. Traders didn't necessarily attribute the change in sentiment to one headline; re-positioning ahead of Q2 earnings season and the French election, enhanced geopolitical concerns surrounding North Korea and Syria, combined with waning confidence in Washington DC's ability to deliver on promised economic reforms remained underlying themes. Volumes were noticeably muted, with the Easter calendar providing a bit of a lull in terms of both trader participation and likely catalysts. Against that backdrop the VIX jumped more than 20% touching levels not seen since the US election. For the week the Dow finished down 1%, the S&P lost 1.1%, and the NASDAQ slipped 1.2%.

Treasuries rallied throughout the week, and stocks fell out of favor. Today the US 10-year note yield fell to its lowest level this year at 2.21% before closing slightly higher. Medium term notes and long bonds auctioned over the week also saw average yields decline significantly from previous tenders. Gold and the Yen were also in high demand as alternative havens to fixed income. Gold moved up to levels not seen since November rising 2.6% over the week. The Yen surged to highest level against the US dollar since the November election after President Trump commented he was concerned about the Greenback getting too strong globally.

In corporate news for this shortened week, AT&T announced Monday it would acquire Straight Path for $95.63/share in a $1.6B all-stock deal. The telecom giant is aiming to strengthen its 5G service potential, as Straight Path is one of the largest holders of 28 GHz and 39 GHz millimeter wave spectrum, bands which have received FCC approval to carry 5G. AT&T and other telecoms, acquired additional spectrum for their 5G build out via a $20B FCC-run auction on Thursday. T-mobile spent just under $8B to capture about 45% of the low band spectrum being sold off by broadcasters. Swift Transportation acquired Knight Transportation in an all-stock transaction that will create the industry's largest full truckload company, with a combined EV of $6B. The deal would be the largest in the trucking sector since the $3B Con-way/XPO merger in 2015. Tesla may soon be supplying those truckers with autonomous semi-trucks, announcing that it will unveil its version of the big rig in September. Tesla also hit a financial milestone this week, surpassing General Motors in market cap to become the most valuable U.S. automaker. Late in the week, steel stocks were pressured after the US Commerce Department imposed preliminary duties on South Korean steel that were lower than had been anticipated.

SUNDAY APRIL 9TH
04/09 (HK) Macau’s biggest junket operator Suncity reports 1st half of March was +40% y/y

MONDAY APRIL 10th
(FR) BANK OF FRANCE MAR BUSINESS SENTIMENT: 103 V 104E
(EU) EURO ZONE APR SENTIX INVESTOR CONFIDENCE: 23.9 V 21.0E
Gartner: Cuts 2017 global IT spending forecast +1.4% y/y (prior 2.7%)
STRP To be acquired by AT&T for $95.63/shr in $1.6B all-stock deal
(US) Mar Labor Market Conditions Index Change: 0.4 v 1.0e
(US) Fed Chair Yellen: US economy now is pretty healthy - comments in Michigan

TUESDAY APRIL 11TH
(UK) MAR CPI M/M: 0.4% V 0.3%E; Y/Y: 2.3% V 2.3%E; CPI CORE Y/Y: 1.8% V 1.9%E
(DE) GERMANY APR ZEW CURRENT SITUATION SURVEY: 80.1 V 77.5E; EXPECTATIONS SURVEY: 19.5 V 14.8E
(SA) Saudi Arabia said to push for extension of OPEC production cuts - press
(CN) CHINA MAR CPI M/M: -0.3% (2nd straight decline) v -0.2% PRIOR; Y/Y: 0.9% V 1.0%E
(CN) CHINA MAR PPI Y/Y: 7.6% V 7.5%E; 7th consecutive increase
(KR) US Commerce Dept found South Korean steel producers have been dumping tubular steel, imposes preliminary duties of 2.76% to 24.9%

WEDNESDAY APRIL 12TH
TSCO.UK Reports FY16/17 adj PBT £729M v £335M y/y, adj Op £1.28B v £1.26Be, Rev (Inc Fuel) £55.9B v £55.7Be
(UK) FEB AVERAGE WEEKLY EARNINGS 3M/Y: 2.3% V 2.2%E; WEEKLY EARNINGS (EX BONUS) 3M/Y: 2.2% V 2.1%E
(UK) FEB ILO UNEMPLOYMENT RATE 3M/3M: 4.7% V 4.7%E
(UK) MAR JOBLESS CLAIMS CHANGE: +25.5K V -6.1K PRIOR; CLAIMANT COUNT RATE: 2.2% V 2.1% PRIOR
OPEC MONTHLY REPORT: OPEC oil production at 31.928M bpd, -153K bpd m/m
DAL Reports Q1 $0.77 v $0.73e, R$9.15B v $9.16Be
(US) MAR IMPORT PRICE INDEX M/M: -0.2% V -0.2%E; Y/Y: 4.2% V 4.0%E
(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 0.50%; AS EXPECTED
(US) Association of American Railroads weekly rail traffic report for week ending April 8th: 513.0K carloads and intermodal units, +7.1% y/y (13th straight week of gains)
(US) Pres Trump: US dollar is getting too strong; Will not label China a currency manipulator - press interview

THURSDAY APRIL 13th
CA.FR Reports Q1 Rev €21.3B v €21.3Be
JP Morgan Reports Q1 $1.65 v $1.51e, R$25.6B (managed) v $24.6Be; core loans +9% y/y, +1% q/q
Citigroup Reports Q1 $1.35 v $1.24e, R$18.1B v $17.8Be
(US) MAR PPI FINAL DEMAND M/M: -0.1% V 0.0%E; Y/Y: 2.3% V 2.4%E
(US) APR PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 98 V 96.5E
(US) Forces in Afghanistan struck ISIS tunnels with "the mother of all bombs", largest conventional bomb ever used by the US military – press
(US) FCC announces preliminary results of $19.8B spectrum auction; largest winners include T-Mobile, Dish, Comcast, U.S. Cellular
TSLA Elon Musk tweets: "Tesla Semi truck unveil set for September."