TradeTheNews.com Weekly
Market Update: Firmer Inflation and Hawkish Talk Push Rates Higher
Fri, 30 Jun 2017 16:06 PM EST
An aggressive backup in global interest rates headlined a week that also saw a
significant rebound in oil prices and bifurcated trading in US stocks. Hawkish
central bank commentary complemented hotter than expected CPI readings in
Europe, which induced a mid-week rotation out of sovereign bond markets,
driving up yields. The spread between European and US Treasury yields narrowed,
pressuring the Dollar Index, and pushing the Euro to a 1-year high. Higher
rates and encouraging CCAR announcements powered equity flows into the banks
and financials. In Washington, doubts about the fate of the Senate healthcare
bill injected more uncertainty about the Republican legislative agenda, as GOP
leaders continued to woo votes from their own caucus and were forced to push
back the vote until after the 4th of July break.
By Friday, WTI crude extended to a 7-day winning streak, adding 6.5% on the
week, and buoyed equity flows. Despite the positive sentiment in those sectors,
continued aggressive selling in the high beta, high profile technology stocks
resulted in another notable spike in NASDAQ volatility, allowing for a mid-week
dip in US stock trade. Much of the equities weakness was blamed on the
likelihood that algorithmic trading along with thin quarter end/holiday conditions
exacerbated a rotation out of big-cap tech into other areas of the stock
market. Ultimately, stock indices were lower on the week, with the DJIA off
0.2%, the S&P500 down 0.6%, and the Nasdaq falling 2%.
In corporate news, European Union regulators issued a record €2.4B fine against
Google to penalize the tech giant over improper search ordering of shopping
results. The amount surpassed the prior record €1.06B fine against Intel in
2009. FedEx and Maersk were among numerous multinationals who had operations
disrupted due to the spread of a ransomware virus known as GoldenEye or Petya.
No data breach is said to have occurred, but the event was among the largest
disruptions to ever hit global shipping. Micron delivered a solid beat on
quarterly earnings and revenue, and its CEO noted cost reduction plans and
favorable pricing were a boost to profits. Nike earnings topped Street
expectations amid strong international growth, and the sportswear giant
confirmed a new pilot program to sell a limited assortment of products on the
Amazon platform.
SUN 6/25
06/25 ISP.IT Italy approves emergency decree for Intesa acquisition, commits up
to €17B to buoy Veneto banks
MON 6/26
(DE) GERMANY JUN IFO BUSINESS CLIMATE: 115.1 (fresh record high) V 114.5E;
CURRENT ASSESSMENT: 124.1 V 123.2%E
(UK) PM May reaches governing deal to get Northern Irish DUP support for
minority government; govt to supply £1B in extra funding for Northern Ireland
as part of agreement - financial press
(US) Fed’s Dudley (dove, FOMC voter): Fed's taken very measured and careful
approach to shrinking bond portfolio - prepared remarks
(US) MAY PRELIMINARY DURABLE GOODS ORDERS: -1.1% V -0.6E; DURABLES EX
TRANSPORTATION: 0.1% V +0.4%E
(UK) Prime Min May: no EU citizen will be asked to leave after Brexit; EU
citizens lawfully in Britain will be treated as British citizens
(US) Atlanta Fed maintains Q2 GDP at 2.9%, unchanged from 6/16
(CN) China President Xi: Reform panel says offshore investment a matter of
national security, need enhanced statistics and monitoring of overseas
investments to strengthen supervision - Xinhua
TUES 6/27
(EU) ECB Chief Draghi: Sees Factors impacting inflation being temporary and
typically ones which the central bank can look through - Speaking at ECB Forum
(UK) Bank of England to raise counter cyclical buffer to 1% from 0.5% in
Novmeber - Biannual Financial Stability Report
GOOGL EU confirms issue record fine of €2.4B related to search ordering of
shopping results
(US) JUN RICHMOND FED MANUFACTURING INDEX: 7 V 5E
(US) JUN CONSUMER CONFIDENCE: 118.9 V 116.0E
(US) Fed Vice Chair Fischer: would be foolish to think all risks have been
eliminated; calls for close monitoring of rising risk appetites
(US) Sen Leader McConnell tells Senate GOP colleagues he will delay healthcare
vote until after July 4th break - CNN
(CN) China National Petroleum Corporation (CNPC) suspends fuel sales to North
Korea over concerns that it won’t get paid
WEDS 6/28
(EU) EURO ZONE MAY M3 MONEY SUPPLY Y/Y: 5.0% V 5.0%E
(EU) ECB Sources believe market misjudged Draghi comments yesterday - press
(UK) BOE Gov Carney: will debate issues around raising rates in coming months;
some removal of BOE stimulus may be necessary
(US) MAY PENDING HOME SALES M/M: -0.8% V +1.0%E; Y/Y: 0.5% V 0.5%E
FDX TNT Express operations disrupted due to computer virus; no data breach
known to have occurred; operations of all other FedEx companies are unaffected
(US) Association of American Railroads weekly rail traffic report for week
ending June 24th: 544.7K carloads and intermodal units, +3.6% y/y (24th
straight week of gains)
(US) FEDERAL RESERVE COMPREHENSIVE CAPITAL ANALYSIS AND REVIEW (CCAR): 34 OF 34
CAPITAL PLANS APPROVED
APRN Confirms 30M share IPO priced at $10/shr v $10.00-11.00/shr indicated range
THURS 6/29
(DE) GERMANY JULY GFK CONSUMER CONFIDENCE: 10.6 V 10.4E (highest since 2001)
(DE) GERMANY JUN CPI SAXONY M/M: 0.2% V -0.1% PRIOR; Y/Y: 1.7% V 1.6% PRIOR
(ES) SPAIN JUN PRELIMINARY CPI M/M: 0.0% V 0.0%E; Y/Y: 1.5% V 1.6%E
(EU) EURO ZONE JUN BUSINESS CLIMATE INDICATOR: 1.15 V 0.94E, FINAL CONSUMER
CONFIDENCE -1.3 V -1.3E
(CZ) CZECH CENTRAL BANK (CNB) LEAVES REPURCHASE RATE UNCHANGED AT 0.05%; AS
UNCHANGED AT 0.05%
(DE) GERMANY JUN PRELIMINARY CPI M/M: 0.2% V 0.0%E; Y/Y: 1.6% V 1.4%E
(US) Q1 FINAL GDP PRICE INDEX: 1.9% V 2.2%E; CORE PCE Q/Q: 2.0% V 2.1%E
(US) Q1 FINAL GDP ANNUALIZED (3RD READING) Q/Q: 1.4% V 1.2%E; PERSONAL
CONSUMPTION: 1.1% V 0.6%E
(US) Fed's Bullard (non-voter, dovish): Sees a small effect on inflation if
unemployment falls - comments in London
MU Reports Q3 $1.62 v $1.49e, Rev $5.57B v $5.37Be; Expects healthy industry
demand to persist into 2018
NKE Reports Q4 $0.60 v $0.49e, Rev $8.68B v $8.61Be
(JP) JAPAN MAY NATIONAL CPI Y/Y: 0.4% V 0.5%E ; CPI EX FRESH FOOD (CORE) Y/Y:
0.4% (2-year high, 5th straight month of increase) V 0.4%E
(JP) JAPAN MAY JOBLESS RATE: 3.1% V 2.8%E (5-month high)
(CN) CHINA JUNE MANUFACTURING PMI (GOVT OFFICIAL): 51.7 (3-month high) V 51.0E;
NON-MANUFACTURING PMI: 54.9 (3-month high) V 54.5 PRIOR
FRI 6/30
(FR) FRANCE JUN PRELIMINARY CPI M/M: 0.0% V 0.0%E; Y/Y: 0.7% V 0.7%E
(DE) GERMANY JUN UNEMPLOYMENT CHANGE: +7K V -10KE; UNEMPLOYMENT RATE: 5.7%E V
5.7%E
(UK) Q1 FINAL GDP Q/Q: 0.2% V 0.2%E; Y/Y: 2.0% V 2.0%E
(EU) EURO ZONE JUN CPI ESTIMATE Y/Y: 1.3% V 1.3%E; CPI CORE Y/Y: 1.1% V 1.0%E
(IT) ITALY DEBT AGENCY (TESORO) SELLS TOTAL OF €6.35B V €5.5-6.5B INDICATED IN
5-YEAR AND 10-YEAR BTP BONDS
(JP) Bank of Japan said to be considering lowering inflation outlook in July -
press
(US) MAY PCE DEFLATOR M/M: -0.1% V -0.1%E; Y/Y: 1.4% V 1.5%E
(US) MAY PERSONAL INCOME: 0.4% V 0.3%E; PERSONAL SPENDING: 0.1% V 0.1%E
(US) MAY PCE CORE M/M: 0.1% V 0.1%E; Y/Y: 1.4% V 1.4%E
(US) Atlanta Fed cuts Q2 GDP to 2.7% from 2.9% on 6/26
(US) New York Fed Nowcast: maintains Q2 GDP forecast at 1.9%, unchanged from
6/23; raises Q3 GDP forecast to 1.6% from 1.5% on 6/23
(US) Weekly Baker Hughes US Rig Count: 940 v 941 w/w (-0.1%) (first decline in
24 weeks)
Friday, June 30, 2017
Sunday, June 25, 2017
Barrons weekend summary
Barrons weekend summary: Positive on ORCL, CI, WHR, NCR, RHT, AIZ; Cautious on FL
Cover story: With the fiduciary rule becoming law, sales of annuities are down, and the slump is likely to continue, but innovation at annuity companies is likely to benefit investors; Barron’s looks at 50 of the most competitive contracts across different categories.
Tech Trader: Positive on ORCL: Company has put to rest fears it will be rendered obsolete by cloud computing; its cloud offerings are doing better than many observers expected, while its traditional software isn’t faring as poorly as many believe.
Trader: “The bond market is telling you one thing and the stock market is telling you something else,” says Barry Kupferberg of Trilogy Capital Management; “The latest biotech rally looks to be about something more than the group’s retirement as Washington’s punching bag,” and investors should buy on the dips; Positive on WHR: As chief Jeff Fettig prepares to step down after transforming the company into an international powerhouse, the shares still look cheap. Profile: Afsaneh Beschloss, chief executive of Rock Creek Group, discusses the outlook for hedge funds and opportunities in emerging markets (equity holdings: Aarti Drugs, TAL, EDU, Safaricom, Tenent Holdings, China Mobile, Sino-Thai Engineering and Construction, Beijing Enterprises Water Group).
Features:
1) The underperformance of Canadian stocks relative to the S&P 500 this year has drawn both long and short investors from the U.S., who need to heed differences in regulation and liquidity;
2) Cautious on Exchange Income Corp.: Canadian company, which began as a tax-sheltered income trust and still markets itself as a dividend play, has become the latest target of U.S. short sellers;
3) Positive on NCR: Software company’s shares are down this year on news a key investor sold a large stake, but earnings are up and shares—which could gain 30% this year—offer tech exposure at a decent price;
4) Positive on AIZ: Firm is in the midst of a transformation, focusing more on fee-based businesses rather than taking on more risk through underwriting, and shares could still double in price.
Follow Up: Positive on RHT: Company is benefiting from major cloud deals and shares are rising, but investors should hold off on taking profits given the potential for double-digit returns this year; Cautious on FL: A potential deal between AMZN and NKE could continue to dent the shoe retailer’s growth amid slowing same-store sales; Positive on CI: Although the fate of the Senate healthcare plan is unclear, an overhaul of the Affordable Care Act would help the company by removing a $14B tax in 2018 unrelated to any broad corporate tax cuts.
European Trader: Positive on Munich Re: Firm, “one of the world’s largest reinsurance companies, could be poised to deliver solid investment returns after weathering tough market conditions in recent years.”
Asian Trader: Chinese companies are increasingly looking for overseas opportunities; GS sees a number of good plays for investors on this theme, including BABA, Nexteer Automotive Group, and Han’s Laser Technology Industry Group.
Emerging Markets: Poland is the best-performing emerging market in the MSCI Emerging Markts ETF, followed by Turkey and South Korea; Russia, Qatar, and Pakistan round out the bottom.
Commodities: Iron ore prices are set to drop, primarily because of the situation in China, where the economy is slowing down, reducing demand for steel.
Streetwise: Low inflation can be good for stocks, but investors may be overlooking the corporate-profit squeeze that can occur if wages climb faster than prices.
Friday, June 23, 2017
Negotiations on Brexit and Senate Healthcare Bill Begin; Market Reaction Mixed
TradeTheNews.com Weekly
Market Update: Negotiations on Brexit and Senate Healthcare Bill Begin; Market
Reaction Mixed
Fri, 23 Jun 2017 16:03 PM EST
The markets had a mixed week, with the S&P and Dow ending about flat while the Nasdaq lifted nearly 2%, boosted by the best week for biotech and hospitals since the election, as the Republican Obamacare replacement bill hit some legislative snags in the Senate. US new and existing home sales data was a bright spot, coming in higher than expected and with record high home prices in May. Also the 34 largest financial institutions monitored by the Fed all passed their annual stress tests. Oil price declines dragged the energy sector to its worst week since February, with crude finishing lower for a fifth consecutive week and WTI closing at a 10-month low on Wednesday. Small-cap stocks gained Friday for the third time this week, and the Russell 2000 pared earlier losses to close the week almost flat amid the annual reconstitution of the Russell US Indexes. Despite higher volumes in the Nasdaq, volatility remained muted, with the VIX hitting a four-day low on Friday. For the week, the S&P rose 0.2%, the DJIA gained less than 0.1%, and the Nasdaq added 1.8%.
On the political front, Senate Republicans unveiled their ACA replacement bill on Thursday, but several members of the GOP caucus expressed reservations that it didn't go far enough, while others were concerned with what they saw as overly harsh cuts to Medicaid. The Senate majority leader is pushing for a quick vote, but can’t get the bill passed if he loses more than two Republican votes. Markets seemed to anticipate the status quo going forward, sending the S&P healthcare sector to its biggest weekly gain since late last year. Across the pond, the UK government remains in a state of flux, as Prime Minister May's Tory Party has yet to broker a deal with Northern Ireland's Democratic Unionist Party, despite Conservative Party sources many times indicating a deal would be announced soon. Amid the inter-party wrangling, PM May began Brexit divorce negotiations with her EU partners and laid out her proposal on citizens' rights post-Brexit, which German Chancellor Merkel deemed 'a good start' but noted there are many issues still to resolve. In France, President Macron’s upstart En Marche party won a large majority in National Assembly elections, endorsing his centrist reform platform.
In corporate news, MSCI announced it will include China A shares in its Emerging Markets Index next year, a landmark moment in Beijing's long-fought endeavor to draw international funds to its shores, and the news sent Chinese stocks to an 18-month high. Lennar shares hit a 52-week high after the homebuilder posted an earnings and revenue beat, riding the wave of surging prices and accelerating home sales. American Airlines announced it received a notice from Qatar Airways advising the stateside carrier of its intent to acquire up to a 10% stake. American executives were unenthused by the 'puzzling' offer.
SUNDAY 6/18
(CN) CHINA MAY PROPERTY PRICES M/M: RISE IN 56 OUT OF 70 CITIES VS 58 PRIOR; Y/Y: RISE IN 69 OUT OF 70 CITIES V 69 PRIOR
(FR) President Macron’s "En Marche" party (with centrist ally) said to take 361 out of the 577 seats in the National Assembly following 2nd round of parliamentary elections
MONDAY 6/19
(US) Fed’s Dudley (dove, FOMC voter): Confident that the current expansion has quite a long way to go; generally pleased with US economy
UPS Establishes new surge pricing surcharge for Nov-Dec residential, large packages and packages over maximum limits
(UK) UK and EU agree on terms of reference for Brexit talks - joint statement following first day of official discussions
TUESDAY 6/20
LEN Reports Q2 $0.91 v $0.78e, Rev $3.26B v $2.89Be
FDX Reports Q4 $4.25 v $3.89e, Rev $15.7B v $15.6Be
(CN) MSCI will include China A shares in Emerging Markets Index; sees adding 222 China A large cap stocks - press
WEDNESDAY 6/21
(US) MAY EXISTING HOME SALES: 5.62M V 5.55ME
(US) Association of American Railroads weekly rail traffic report for week ending June 17th: 543.2K carloads and intermodal units, +5.2% y/y (23nd straight week of gains)
IBB Biotech names break out to levels not seen since 2015
ORCL Reports Q4 $0.89 v $0.79e, Rev $10.9B v $10.5Be
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED
(US) Discussion draft of Senate healthcare bill reportedly is largely similar to the House bill, but would link insurance subsidies to age and cuts Medicaid expansion more gradually - Wash Post
HCG.CA Berkshire Hathaway to invest up to C$400M (42% of market cap) in Common Equity and provide new C$2B Credit Facility; Berkshire acquires 16M shares, representing 19.99% stake
THURSDAY 6/22
WANDA.IPO Dalian Wanda: operations are sound, refutes earlier speculation banks are dumping Wanda bonds
(FR) FRANCE JUN BUSINESS CONFIDENCE: 106 V 105E; MANUFACTURING CONFIDENCE: 108 V 109E
(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.50%; AS EXPECTED
(PH) PHILIPPINES CENTRAL BANK (BSP) LEAVES OVERNIGHT BORROWING RATE UNCHANGED AT 3.00%; AS EXPECTED
(TW) TAIWAN CENTRAL BANK (CBC) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.375%; AS EXPECTED
(UK) JUN CBI INDUSTRIAL TRENDS TOTAL ORDERS: 16 V 7E
AAL Received an unsolicited notice from Qatar Airways indicating intention to make a significant investment of ~10%
(US) MAY LEADING INDEX: 0.3% V 0.3%E
(MX) MEXICO CENTRAL BANK (BANXICO) RAISES OVERNIGHT RATE BY 25BPS TO 7.00%; AS EXPECTED
BBBY Reports Q1 $0.58 adj v $0.66e, Rev $2.74B v $2.80Be
FED BANK STRESS TEST RESULTS: ALL 34 BANKS EXCEED MINIMUM CAPITAL REQUIREMENTS
(JP) JAPAN JUNE PRELIMINARY PMI MANUFACTURING: 52.0 V 53.1 PRIOR; 9th straight month of expansion; 6-month low
FRIDAY
(FR) FRANCE JUN PRELIMINARY MANUFACTURING PMI: 55.0 V 54.0E (9th month of expansion)
(DE) GERMANY JUN PRELIMINARY MANUFACTURING PMI: 59.3 V 59.0E (31st month of expansion)
(EU) EURO ZONE JUN PRELIMINARY MANUFACTURING PMI: 57.3 V 56.8E (47th month of expansion)
(US) JUN PRELIMINARY MARKIT MANUFACTURING PMI: 52.1 V 53.0E
(US) MAY NEW HOME SALES: 610K V 590KE
Fri, 23 Jun 2017 16:03 PM EST
The markets had a mixed week, with the S&P and Dow ending about flat while the Nasdaq lifted nearly 2%, boosted by the best week for biotech and hospitals since the election, as the Republican Obamacare replacement bill hit some legislative snags in the Senate. US new and existing home sales data was a bright spot, coming in higher than expected and with record high home prices in May. Also the 34 largest financial institutions monitored by the Fed all passed their annual stress tests. Oil price declines dragged the energy sector to its worst week since February, with crude finishing lower for a fifth consecutive week and WTI closing at a 10-month low on Wednesday. Small-cap stocks gained Friday for the third time this week, and the Russell 2000 pared earlier losses to close the week almost flat amid the annual reconstitution of the Russell US Indexes. Despite higher volumes in the Nasdaq, volatility remained muted, with the VIX hitting a four-day low on Friday. For the week, the S&P rose 0.2%, the DJIA gained less than 0.1%, and the Nasdaq added 1.8%.
On the political front, Senate Republicans unveiled their ACA replacement bill on Thursday, but several members of the GOP caucus expressed reservations that it didn't go far enough, while others were concerned with what they saw as overly harsh cuts to Medicaid. The Senate majority leader is pushing for a quick vote, but can’t get the bill passed if he loses more than two Republican votes. Markets seemed to anticipate the status quo going forward, sending the S&P healthcare sector to its biggest weekly gain since late last year. Across the pond, the UK government remains in a state of flux, as Prime Minister May's Tory Party has yet to broker a deal with Northern Ireland's Democratic Unionist Party, despite Conservative Party sources many times indicating a deal would be announced soon. Amid the inter-party wrangling, PM May began Brexit divorce negotiations with her EU partners and laid out her proposal on citizens' rights post-Brexit, which German Chancellor Merkel deemed 'a good start' but noted there are many issues still to resolve. In France, President Macron’s upstart En Marche party won a large majority in National Assembly elections, endorsing his centrist reform platform.
In corporate news, MSCI announced it will include China A shares in its Emerging Markets Index next year, a landmark moment in Beijing's long-fought endeavor to draw international funds to its shores, and the news sent Chinese stocks to an 18-month high. Lennar shares hit a 52-week high after the homebuilder posted an earnings and revenue beat, riding the wave of surging prices and accelerating home sales. American Airlines announced it received a notice from Qatar Airways advising the stateside carrier of its intent to acquire up to a 10% stake. American executives were unenthused by the 'puzzling' offer.
SUNDAY 6/18
(CN) CHINA MAY PROPERTY PRICES M/M: RISE IN 56 OUT OF 70 CITIES VS 58 PRIOR; Y/Y: RISE IN 69 OUT OF 70 CITIES V 69 PRIOR
(FR) President Macron’s "En Marche" party (with centrist ally) said to take 361 out of the 577 seats in the National Assembly following 2nd round of parliamentary elections
MONDAY 6/19
(US) Fed’s Dudley (dove, FOMC voter): Confident that the current expansion has quite a long way to go; generally pleased with US economy
UPS Establishes new surge pricing surcharge for Nov-Dec residential, large packages and packages over maximum limits
(UK) UK and EU agree on terms of reference for Brexit talks - joint statement following first day of official discussions
TUESDAY 6/20
LEN Reports Q2 $0.91 v $0.78e, Rev $3.26B v $2.89Be
FDX Reports Q4 $4.25 v $3.89e, Rev $15.7B v $15.6Be
(CN) MSCI will include China A shares in Emerging Markets Index; sees adding 222 China A large cap stocks - press
WEDNESDAY 6/21
(US) MAY EXISTING HOME SALES: 5.62M V 5.55ME
(US) Association of American Railroads weekly rail traffic report for week ending June 17th: 543.2K carloads and intermodal units, +5.2% y/y (23nd straight week of gains)
IBB Biotech names break out to levels not seen since 2015
ORCL Reports Q4 $0.89 v $0.79e, Rev $10.9B v $10.5Be
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED
(US) Discussion draft of Senate healthcare bill reportedly is largely similar to the House bill, but would link insurance subsidies to age and cuts Medicaid expansion more gradually - Wash Post
HCG.CA Berkshire Hathaway to invest up to C$400M (42% of market cap) in Common Equity and provide new C$2B Credit Facility; Berkshire acquires 16M shares, representing 19.99% stake
THURSDAY 6/22
WANDA.IPO Dalian Wanda: operations are sound, refutes earlier speculation banks are dumping Wanda bonds
(FR) FRANCE JUN BUSINESS CONFIDENCE: 106 V 105E; MANUFACTURING CONFIDENCE: 108 V 109E
(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.50%; AS EXPECTED
(PH) PHILIPPINES CENTRAL BANK (BSP) LEAVES OVERNIGHT BORROWING RATE UNCHANGED AT 3.00%; AS EXPECTED
(TW) TAIWAN CENTRAL BANK (CBC) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.375%; AS EXPECTED
(UK) JUN CBI INDUSTRIAL TRENDS TOTAL ORDERS: 16 V 7E
AAL Received an unsolicited notice from Qatar Airways indicating intention to make a significant investment of ~10%
(US) MAY LEADING INDEX: 0.3% V 0.3%E
(MX) MEXICO CENTRAL BANK (BANXICO) RAISES OVERNIGHT RATE BY 25BPS TO 7.00%; AS EXPECTED
BBBY Reports Q1 $0.58 adj v $0.66e, Rev $2.74B v $2.80Be
FED BANK STRESS TEST RESULTS: ALL 34 BANKS EXCEED MINIMUM CAPITAL REQUIREMENTS
(JP) JAPAN JUNE PRELIMINARY PMI MANUFACTURING: 52.0 V 53.1 PRIOR; 9th straight month of expansion; 6-month low
FRIDAY
(FR) FRANCE JUN PRELIMINARY MANUFACTURING PMI: 55.0 V 54.0E (9th month of expansion)
(DE) GERMANY JUN PRELIMINARY MANUFACTURING PMI: 59.3 V 59.0E (31st month of expansion)
(EU) EURO ZONE JUN PRELIMINARY MANUFACTURING PMI: 57.3 V 56.8E (47th month of expansion)
(US) JUN PRELIMINARY MARKIT MANUFACTURING PMI: 52.1 V 53.0E
(US) MAY NEW HOME SALES: 610K V 590KE
Saturday, June 17, 2017
Barrons weekend summary
Barrons weekend summary: Positive on AMZN, GE, DLR, Wall Street banks
Cover story: Though Wall Street is concerned tech stocks are too pricey, too popular, and comprise too large a portion of the Nasdaq, the sector has delivered strong earnings growth for years and will continue to do so as tech encroaches into more areas of the economy.
Features:
1) Positive on AMZN: The e-commerce giant’s acquisition of WFM is likely to shake up the retail sector, affecting heavyweights such as KR, COST, TGT, WBA, WMT, as well as tangential companies such as MKC, CAG, and GIS;
2) Positive on GE: New chief executive John Flannery seems well suited to the job, and shares could top $32 in a year as he improves operating results and restores faith in guidance;
3) Positive on BAC, C, GS, JPM, MS: Large banks are likely to pass stress tests and announce plans for share buybacks and dividends, while earnings are rising, and shares are cheap.
Tech Trader: Positive on DLR: Company stands out as an alternative to the ‘FANG’ tech stocks; the REIT’s data centers are the foundation of online commerce, cloud computing, artificial intelligence, and other trends.
Trader: Investors seeking to make sense of the current market should step back and focus on fundamentals and valuations, says DB strategist Binky Chadha; Positive on GIS: For contrarian investors seeking a counterweight to tech and fast growth, the food giant could return 20% during the next 18 to 24 months, with little volatility; Positive on GWR: Railway provides another option for investors avoiding the tech sector; global growth, even if slow, should eventually give the moribund shares a boost.
Interview: Famed investor Sam Zell talks about real estate, Donald Trump, and how his immigrant parents gave him the foundation for success.
Profile: Lori Keith and Matthew Gershuny of the Parnassus Mid-Cap fund look for high-quality companies that generate high returns on capital and aren’t overburdened with debt (top 10 holdings: MSI, CRSK, CAH, XYL, CLX, PX, XRAY, PNR, SJR, FISV). Penta: Barron’s list of the top 100 hedge funds is topped by EQMC Europe Development Capital, Margrove Partners, and Segantii Asia-Pacific Equity Multi-Strategy; Interview with Francisco de Juan and Jacobo Llanza of EQMC; Andy Saperstein and Shelley O’Connor of Morgan Stanley Wealth Management talk about how they’re focused on reinventing the firm’s digital platform; “Proposed cuts in the pass-through tax rate will benefit the very rich more than small businesses”; Fiduciaries may be setting themselves up for lawsuits, and litigation targeting estate-related trusts and trustees is on the rise; “Luxury watch rentals have become a fast-growing business due to a generational difference in lifestyle priorities and interests”; Prices for vintage airplanes are dropping, making it a good time to buy; A look at three next-generation helicopters that are futuristically styled and feature smart technology.
Follow-Up: Positive on STRA, LOPE: Shares of for-profit education companies are on the rise under the Trump administration, and they have an ally in education secretary Betsy DeVos; Positive on ABB, ROBO, Kuku, Yaskawa Electronics, ROK: Shares of robotics companies remain attractive for long-term investors despite some concerns about the sector.
European Trader: Positive on Siemens, Schneider Electric: Companies provide investors with exposure to the growing robotics and automation business.
Asian Trader: Investors seem confident that the MSCI index will approve the inclusion of Chinese stocks in its widely tracked indexes.
Emerging Markets: Emerging markets will be the investment growth vehicle for the next decade, says PGIM, based on three key themes: the jump into the digital age, modernization of infrastructure and local markets, and spending by the EM middle class.
Commodities: With sugar supplies outstripping demand, prices have fallen by more then 30 percent this year, and a rebound isn’t likely on the horizon.
CEO Spotlight: KMB chief Thomas Falk has trimmed bureaucracy, resulting in $3B in cost savings, leaving the company well-positioned to deal with future challenges.
Streetwise: AMZN’s purchase of WFM should put heat on grocers to improve their operations, because the deal is likely to lead to slimmer profits in a sector where margins are already razor-thin.
Friday, June 16, 2017
Fed and BOE Get More Hawkish; Retail Stunned by Amazon Swallowing Whole Foods
TradeTheNews.com Weekly
Market Update: Fed and BOE Get More Hawkish; Retail Stunned by Amazon
Swallowing Whole Foods
Fri, 16 Jun 2017 16:04 PM EST
Global stock markets drifted higher during the first few trading sessions this week, shaking off fallout from the UK elections and lingering volatility in high-profile NASDAQ stocks. Even a horrific shooting at a congressional baseball practice on Wednesday did little to sway sentiment. US Treasury markets continued to march to their own beat, and yields touched the lowest levels since November after May CPI data was softer than expected. The soft data did little to sway the Fed though, who later that day raised rates and outlined a plan to begin shrinking its balance sheet sometime later this year. In her press conference Chair Yellen stressed she still held a high degree of confidence inflation readings would turn back higher towards the Fed target which will enable the continued normalization of policy. Rates bottomed and the Greenback firmed, a move that was aided by better than expected manufacturing data. The Bank of England leaned more hawkish than expected, disclosing two more dissenters joined the ranks of MPC members pushing for a cutback in stimulus when they met on Thursday.
Crude markets remained under pressure as faith in global oil markets coming into balance this year appears to be waning. Both the monthly OPEC and IEA reports forecast increased supply, accompanied with stable demand. Brent prices briefly dropped below the May low, while WTI stopped just above it. With that, the energy complex served as anchor for the S&P for much of the week. Banks and financials moved up into the Fed meeting. On Friday, equity markets were roiled by Amazon's surprise purchase of Whole Foods, putting pressure of a host of sectors tied to the supermarket space. For the week the DJIA gained 0.5%, the S&P500 added less than 0.1%, and the Nasdaq lost 0.9%.
In corporate news, GE started off the week with the announcement that longtime CEO Jeff Immelt would be stepping down to be succeeded by current healthcare division president John Flannery. Flannery is best known for overseeing a turnaround at GE’s $18B healthcare unit. Nike shares slipped Thursday after announcing a company reorganization and 2% workforce reduction. Booz Allen Hamilton shares plunged following their disclosure of a DOJ civil and criminal probe into cost accounting practices. Kroger dropped on a disappointing cut to FY guidance and a weak earnings report, with executives citing commodity cost deflation and intense price pressures in the quarter. And Amazon finished off the week with the bombshell $13.7B deal to acquire Whole Foods for $42/share in cash, signaling in a grand way the e-commerce behemoth’s entrance into the $300B grocery market and sending ripples throughout an array of sectors.
MONDAY JUNE 12
(FR) BANK OF FRANCE MAY BUSINESS SENTIMENT: 105 V 105E
GE Names John Flannery (55) Chairman and CEO; effective Aug 1st; Affirms FY17 forecast
(IN) INDIA MAY CPI Y/Y: 2.2% V 2.4%E (record low reading)
(CA) BOC's Wilkins: Bank of Canada to assess whether reduced stimulus is needed
(CN) China Ministry of Industry and Information Technology(MIIT) releases latest draft on New energy vehicle (NEV) credit policy/quota for comment
TUESDAY JUNE 13
(UK) MAY CPI M/M: 0.3% V 0.2%E; Y/Y: 2.9% V 2.7%E; CPI CORE Y/Y: 2.6% V 2.3%E
(DE) GERMANY JUN ZEW CURRENT SITUATION SURVEY: 88.0 V 85.0E; EXPECTATION SURVEY: 18.6 V 21.7E
(US) MAY PPI FINAL DEMAND M/M: 0.0% V 0.0%E; Y/Y: 2.4% V 2.3%E
(CN) China Finance Ministry (MOF) announced plan to issue CNY2.0B in USD-denominated bonds (China’s first USD-denominated bond sale since 2004) – financial press (Update)
*(CN) CHINA MAY RETAIL SALES Y/Y: 10.7% V 10.7%E; YTD Y/Y: 10.3% V 10.3%E
(CN) CHINA MAY INDUSTRIAL PRODUCTION Y/Y: 6.5% V 6.4%E; YTD Y/Y: 6.7% V 6.6%E
(CN) CHINA MAY FIXED ASSETS EX RURAL YTD Y/Y: 8.6% (4-month low) V 8.8%E
WEDNESDAY JUNE 14
(UK) APR AVERAGE WEEKLY EARNINGS 3M/Y: 2.1% V 2.4%E; WEEKLY EARNINGS (EX BONUS) 3M/Y: 1.7% V 2.0%E (5th straight slowing of data to it lowest pace in two years)
*(UK) MAY JOBLESS CLAIMS CHANGE: +7.3K V +22.0K PRIOR; CLAIMANT COUNT RATE: 2.3% V 2.3%PRIOR
*(UK) APR ILO UNEMPLOYMENT RATE 3M/3M: 4.6% V 4.6%E
(IS) ICELAND CENTRAL BANK (SEDABANKI) CUTS 7-DAY TERM DEPOSIT RATE BY 25BPS TO 4.50%
(US) Reports of shooting at GOP congressional baseball practice in VA; suspect believed to be in custody
(US) MAY ADVANCE RETAIL SALES M/M: -0.3% V 0.0%E; RETAIL SALES EX AUTO M/M: -0.3% V 0.1%E
(US) MAY CPI M/M: -0.1% V 0.0%E (2nd negative reading in last 3 months); CPI EX FOOD AND ENERGY M/M: 0.1% V 0.2%E; CPI INDEX NSA: 251.329 V 251.580E
(US) Atlanta Fed raises Q2 GDP to 3.2% from 3.0% on 6/9
(US) FOMC RAISES FED FUNDS TARGET RANGE 25BPS TO 1.00-1.25%(AS EXPECTED); CUT TO REINVESTMENT STARTING THIS YEAR IS SEEN EXPANDING ON QUARTERLY BASIS UNTIL IT REACHES $30M FOR TREASURIES AND $20B PER MONTH IN MORTAGAGE-BACKED SECURITIES
(US) Fed Chair Yellen: economic growth appears to have rebounded after first quarter slowdown - post rate decision conf
US Dollar firms as Yellen highlights "one off" catagories that have pressured recent core inflation readings; Notes weakness in cellular phone contracts and some prescription drugs
(US) Association of American Railroads weekly rail traffic report for week ending June 10th: 545.3K carloads and intermodal units, +6.2% y/y (22nd straight week of gains)
(AU) AUSTRALIA MAY EMPLOYMENT CHANGE: +42.0K (3rd straight increase) V +10.0KE; UNEMPLOYMENT RATE: 5.5% (4-year low) V 5.7%E
THURSDAY JUNE 15
*(CH) SWISS NATIONAL BANK (SNB) LEAVES DEPOSIT INTEREST RATE UNCHANGED AT -0.75%; AS EXPECTED
*(UK) MAY RETAIL SALES (EX AUTO FUEL) M/M: -1.6% V -1.0%E; Y/Y: 0.6% V 1.9%E
*(ID) INDONESIA CENTRAL BANK (BI) LEAVES REVERSE REPO RATE UNCHANGED AT 4.75% (as expected)
(UK) BANK OF ENGLAND BANK (BOE) LEAVES INTEREST RATES UNCHANGED AT 0.25%; AS EXPECTED
(UK) BOE MINUTES: VOTED 5 TO 3 TO LEAVE INTEREST RATES UNCHANGED
*(TR) TURKEY CENTRAL BANK (CBRT) LEAVES BENCHMARK REPURCHASE RATE UNCHANGED AT 8.00%; AS EXPECTED
(RU) Russia President Putin: No reason for US to tighten sanctions; not considering US an enemy - Annual question and answer session
*(US) JUN EMPIRE MANUFACTURING: 19.8 V 5.0E
(US) MAY IMPORT PRICE INDEX M/M: -0.3% V -0.1%E; Y/Y: 2.1% V 2.9%
(US) JUN PHILADELPHIA FED BUSINESS OUTLOOK: 27.6 V 24.9E
(US) MAY INDUSTRIAL PRODUCTION M/M: 0.0% V 0.2%E; CAPACITY UTILIZATION: 76.6% V 76.8%E
(US) JUN NAHB HOUSING MARKET INDEX: 67 V 70E
BlackHat security conference in July 22-27 to demonstrate significant compromises in major systems
(US) White House reportedly preparing an executive order on drug pricing; to hold meetings with budget and health officials
(CN) Chinese banks said to have taken steps to limit Anbang exposure - press
(GR) Eurogroup's Dijsselbloem: we have achievements on all elements on Greece; agreed on €8.5B loan to Greece
(US) APR TOTAL NET TIC FLOWS: $65.8B V $9.3B PRIOR; LONG-TERM TIC FLOWS: $1.8B V $59.8B PRIOR
BAH Discloses civil and criminal investigation by Dept of Justice into cost accounting practices - filing
(CN) PBOC to inject combined CNY290B v CNY150B prior in 7-day, 14-day and 28-day reverse repos
(JP) BOJ LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED; maintains its Economic Assessment
FRIDAY 6/16
TSCO.UK Reports Q1 UK LFL (ex VAT, ex-fuel) 2.3% v 1.9%e
- Group sales (ex VAT, ex-fuel, cc):1.0% v 1.6%e
(EU) EURO ZONE MAY CPI M/M: -0.1% V -0.1%E; Y/Y: 1.4% V 1.4%E; CPI CORE Y/Y: 0.9% V 0.9%E
(RU) RUSSIA CENTRAL BANK (CBR) CUTS KEY 1-WEEK AUCTION RATE BY 25BPS TO 9.00%; AS EXPECTED
FCAU CEO: Q2 in line with expectations, Affirms FY17 outlook; Does not expect Diesel issues in the US to impact 2018 targets
(US) MAY HOUSING STARTS: 1.09M V 1.22ME (lowest since Sept); BUILDING PERMITS: 1.17M V 1.25ME (lowest since Aug)
WFM Amazon to acquire Whole Foods Market for $42/shr in cash in $13.7B deal
*(US) JUN PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 94.5 V 97.0E
(US) Deputy AG Rosenstein reportedly indicates he may need to recuse himself from Russia investigation - ABC News
Fri, 16 Jun 2017 16:04 PM EST
Global stock markets drifted higher during the first few trading sessions this week, shaking off fallout from the UK elections and lingering volatility in high-profile NASDAQ stocks. Even a horrific shooting at a congressional baseball practice on Wednesday did little to sway sentiment. US Treasury markets continued to march to their own beat, and yields touched the lowest levels since November after May CPI data was softer than expected. The soft data did little to sway the Fed though, who later that day raised rates and outlined a plan to begin shrinking its balance sheet sometime later this year. In her press conference Chair Yellen stressed she still held a high degree of confidence inflation readings would turn back higher towards the Fed target which will enable the continued normalization of policy. Rates bottomed and the Greenback firmed, a move that was aided by better than expected manufacturing data. The Bank of England leaned more hawkish than expected, disclosing two more dissenters joined the ranks of MPC members pushing for a cutback in stimulus when they met on Thursday.
Crude markets remained under pressure as faith in global oil markets coming into balance this year appears to be waning. Both the monthly OPEC and IEA reports forecast increased supply, accompanied with stable demand. Brent prices briefly dropped below the May low, while WTI stopped just above it. With that, the energy complex served as anchor for the S&P for much of the week. Banks and financials moved up into the Fed meeting. On Friday, equity markets were roiled by Amazon's surprise purchase of Whole Foods, putting pressure of a host of sectors tied to the supermarket space. For the week the DJIA gained 0.5%, the S&P500 added less than 0.1%, and the Nasdaq lost 0.9%.
In corporate news, GE started off the week with the announcement that longtime CEO Jeff Immelt would be stepping down to be succeeded by current healthcare division president John Flannery. Flannery is best known for overseeing a turnaround at GE’s $18B healthcare unit. Nike shares slipped Thursday after announcing a company reorganization and 2% workforce reduction. Booz Allen Hamilton shares plunged following their disclosure of a DOJ civil and criminal probe into cost accounting practices. Kroger dropped on a disappointing cut to FY guidance and a weak earnings report, with executives citing commodity cost deflation and intense price pressures in the quarter. And Amazon finished off the week with the bombshell $13.7B deal to acquire Whole Foods for $42/share in cash, signaling in a grand way the e-commerce behemoth’s entrance into the $300B grocery market and sending ripples throughout an array of sectors.
MONDAY JUNE 12
(FR) BANK OF FRANCE MAY BUSINESS SENTIMENT: 105 V 105E
GE Names John Flannery (55) Chairman and CEO; effective Aug 1st; Affirms FY17 forecast
(IN) INDIA MAY CPI Y/Y: 2.2% V 2.4%E (record low reading)
(CA) BOC's Wilkins: Bank of Canada to assess whether reduced stimulus is needed
(CN) China Ministry of Industry and Information Technology(MIIT) releases latest draft on New energy vehicle (NEV) credit policy/quota for comment
TUESDAY JUNE 13
(UK) MAY CPI M/M: 0.3% V 0.2%E; Y/Y: 2.9% V 2.7%E; CPI CORE Y/Y: 2.6% V 2.3%E
(DE) GERMANY JUN ZEW CURRENT SITUATION SURVEY: 88.0 V 85.0E; EXPECTATION SURVEY: 18.6 V 21.7E
(US) MAY PPI FINAL DEMAND M/M: 0.0% V 0.0%E; Y/Y: 2.4% V 2.3%E
(CN) China Finance Ministry (MOF) announced plan to issue CNY2.0B in USD-denominated bonds (China’s first USD-denominated bond sale since 2004) – financial press (Update)
*(CN) CHINA MAY RETAIL SALES Y/Y: 10.7% V 10.7%E; YTD Y/Y: 10.3% V 10.3%E
(CN) CHINA MAY INDUSTRIAL PRODUCTION Y/Y: 6.5% V 6.4%E; YTD Y/Y: 6.7% V 6.6%E
(CN) CHINA MAY FIXED ASSETS EX RURAL YTD Y/Y: 8.6% (4-month low) V 8.8%E
WEDNESDAY JUNE 14
(UK) APR AVERAGE WEEKLY EARNINGS 3M/Y: 2.1% V 2.4%E; WEEKLY EARNINGS (EX BONUS) 3M/Y: 1.7% V 2.0%E (5th straight slowing of data to it lowest pace in two years)
*(UK) MAY JOBLESS CLAIMS CHANGE: +7.3K V +22.0K PRIOR; CLAIMANT COUNT RATE: 2.3% V 2.3%PRIOR
*(UK) APR ILO UNEMPLOYMENT RATE 3M/3M: 4.6% V 4.6%E
(IS) ICELAND CENTRAL BANK (SEDABANKI) CUTS 7-DAY TERM DEPOSIT RATE BY 25BPS TO 4.50%
(US) Reports of shooting at GOP congressional baseball practice in VA; suspect believed to be in custody
(US) MAY ADVANCE RETAIL SALES M/M: -0.3% V 0.0%E; RETAIL SALES EX AUTO M/M: -0.3% V 0.1%E
(US) MAY CPI M/M: -0.1% V 0.0%E (2nd negative reading in last 3 months); CPI EX FOOD AND ENERGY M/M: 0.1% V 0.2%E; CPI INDEX NSA: 251.329 V 251.580E
(US) Atlanta Fed raises Q2 GDP to 3.2% from 3.0% on 6/9
(US) FOMC RAISES FED FUNDS TARGET RANGE 25BPS TO 1.00-1.25%(AS EXPECTED); CUT TO REINVESTMENT STARTING THIS YEAR IS SEEN EXPANDING ON QUARTERLY BASIS UNTIL IT REACHES $30M FOR TREASURIES AND $20B PER MONTH IN MORTAGAGE-BACKED SECURITIES
(US) Fed Chair Yellen: economic growth appears to have rebounded after first quarter slowdown - post rate decision conf
US Dollar firms as Yellen highlights "one off" catagories that have pressured recent core inflation readings; Notes weakness in cellular phone contracts and some prescription drugs
(US) Association of American Railroads weekly rail traffic report for week ending June 10th: 545.3K carloads and intermodal units, +6.2% y/y (22nd straight week of gains)
(AU) AUSTRALIA MAY EMPLOYMENT CHANGE: +42.0K (3rd straight increase) V +10.0KE; UNEMPLOYMENT RATE: 5.5% (4-year low) V 5.7%E
THURSDAY JUNE 15
*(CH) SWISS NATIONAL BANK (SNB) LEAVES DEPOSIT INTEREST RATE UNCHANGED AT -0.75%; AS EXPECTED
*(UK) MAY RETAIL SALES (EX AUTO FUEL) M/M: -1.6% V -1.0%E; Y/Y: 0.6% V 1.9%E
*(ID) INDONESIA CENTRAL BANK (BI) LEAVES REVERSE REPO RATE UNCHANGED AT 4.75% (as expected)
(UK) BANK OF ENGLAND BANK (BOE) LEAVES INTEREST RATES UNCHANGED AT 0.25%; AS EXPECTED
(UK) BOE MINUTES: VOTED 5 TO 3 TO LEAVE INTEREST RATES UNCHANGED
*(TR) TURKEY CENTRAL BANK (CBRT) LEAVES BENCHMARK REPURCHASE RATE UNCHANGED AT 8.00%; AS EXPECTED
(RU) Russia President Putin: No reason for US to tighten sanctions; not considering US an enemy - Annual question and answer session
*(US) JUN EMPIRE MANUFACTURING: 19.8 V 5.0E
(US) MAY IMPORT PRICE INDEX M/M: -0.3% V -0.1%E; Y/Y: 2.1% V 2.9%
(US) JUN PHILADELPHIA FED BUSINESS OUTLOOK: 27.6 V 24.9E
(US) MAY INDUSTRIAL PRODUCTION M/M: 0.0% V 0.2%E; CAPACITY UTILIZATION: 76.6% V 76.8%E
(US) JUN NAHB HOUSING MARKET INDEX: 67 V 70E
BlackHat security conference in July 22-27 to demonstrate significant compromises in major systems
(US) White House reportedly preparing an executive order on drug pricing; to hold meetings with budget and health officials
(CN) Chinese banks said to have taken steps to limit Anbang exposure - press
(GR) Eurogroup's Dijsselbloem: we have achievements on all elements on Greece; agreed on €8.5B loan to Greece
(US) APR TOTAL NET TIC FLOWS: $65.8B V $9.3B PRIOR; LONG-TERM TIC FLOWS: $1.8B V $59.8B PRIOR
BAH Discloses civil and criminal investigation by Dept of Justice into cost accounting practices - filing
(CN) PBOC to inject combined CNY290B v CNY150B prior in 7-day, 14-day and 28-day reverse repos
(JP) BOJ LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED; maintains its Economic Assessment
FRIDAY 6/16
TSCO.UK Reports Q1 UK LFL (ex VAT, ex-fuel) 2.3% v 1.9%e
- Group sales (ex VAT, ex-fuel, cc):1.0% v 1.6%e
(EU) EURO ZONE MAY CPI M/M: -0.1% V -0.1%E; Y/Y: 1.4% V 1.4%E; CPI CORE Y/Y: 0.9% V 0.9%E
(RU) RUSSIA CENTRAL BANK (CBR) CUTS KEY 1-WEEK AUCTION RATE BY 25BPS TO 9.00%; AS EXPECTED
FCAU CEO: Q2 in line with expectations, Affirms FY17 outlook; Does not expect Diesel issues in the US to impact 2018 targets
(US) MAY HOUSING STARTS: 1.09M V 1.22ME (lowest since Sept); BUILDING PERMITS: 1.17M V 1.25ME (lowest since Aug)
WFM Amazon to acquire Whole Foods Market for $42/shr in cash in $13.7B deal
*(US) JUN PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 94.5 V 97.0E
(US) Deputy AG Rosenstein reportedly indicates he may need to recuse himself from Russia investigation - ABC News
Sunday, June 11, 2017
Barrons weekend summary
Barrons weekend summary: positive on LRCX, DBD, select energy sector names, select banks \Cover story: Mid-year picks from panelists on the Barron's 2017 Roundtable: William Priest (COHR, CYBR, DIS, JCI); Jeffrey Gundlach (PPT, EEM); Meryl Witmer (DLTR, Howden Joinery Group); Scott Black (TSEM, ICHR); Oscar Schafer (COMM, Cellnex Telecom); Abby Joseph Cohen (Schneider Electric, Clariant, Omron, ARMK); Mario Gabelli (VVV, COT, MICC, CNHI, Liberty Braves Group, RHP, MWA).
Features:
1) Positive on CNQ, CVX, EOG, NBL: The struggling energy sector could be near a bottom after a drop in U.S. crude-oil inventories sent prices to a new low for the year, and the stocks should see nice gains;
2) Positive on CMA, SIVB, ZION: The three banks, which have large variable-rate commercial loan portfolios and non-interest-bearing checking accounts, should continue to benefit from short-term rate hikes;
3) Positive on LRCX: Company is benefiting from the spread of NAND hard drives and the growth in popularity of smart devices such as refrigerators and watches; shares could gain 20% during the coming year;
4) Positive on DBD: Though Wall Street believes online and mobile payment systems will render cash obsolete, Diebold continues to make cutting-edge ATMs and is a contrarian opportunity for investors.
Tech Trader: Cautious on AAPL: Tech giant’s recently unveiled HomePod “shows up Apple’s shortcomings in cloud computing and the related fields of machine learning and artificial intelligence,” and isn’t likely to supplant AMZN’s Alexa or GOOGL’s Assistant.
Trader: “If Fed chief Janet Yellen can pull off a hike and convince markets that the U.S. economy is still growing steadily, Friday’s tech wreck could be just a hiccup on the way to higher stock markets”; The tools in the activist investor playbook are getting old, with most activists simply focusing on getting companies to buy back shares and pay dividends; If KR is forced to cut guidance again, it could lead to another industry price war in which margins are sacrificed for sales growth.
Profile: Peter Kwiatkowski of the Touchstone Flexible Income fund looks for stable income in a global portfolio with a low correlation to traditional stocks and bonds (top 10 preferred holdings: GE, RBS, LYG, Australia and New Zealand Banking Group, JPM, Societe Generale, ING, USB, VIA, Catlin Insurance).
Follow-Up: Positive on REGN: Shares may look expensive relative to near-term earnings forecasts, but the company has more long-term potential for hits than its peers; Cautious on EXAS: Tests of the company’s colorectal cancer medication seem positive, but profits are years away and much of the optimism is already priced into the stock.
European Trader: For investors, the outcome of the recent British elections was the worst possible, “potentially plunging the U.K. into a period of political uncertainty that could weaken the economy.”
Asian Trader: Positive on Inventec, Primax Electronics, Sunny Optical Technology, Largan Precision: AAPL’s home-speaker device is likely to boost several companies in the Asian tech sector.
Emerging Markets: Positive on BAP: Shares of the Peruvian bank are up, and should continue to benefit from economic growth under Peru’s market-friendly president, Pedro Pablo Kuczynski.
Commodities: “Palladium prices surged to multiyear highs last week, but more pessimism in the auto industry and a pile-in by speculators suggest the rally is getting exhausted.”
Streetwise: Fundstrat’s Thomas Lee sees opportunity in unloved sectors, and he likes MKTX, SCHW, WAL, TMUS, FANG, LNG.
Friday, June 9, 2017
Political Turmoil Hits FX; Big Tech Sells Off on Friday
TradeTheNews.com Weekly
Market Update: Political Turmoil Hits FX; Big Tech Sells Off on Friday
Fri, 09 Jun 2017 16:12 PM EST
US stock markets digested a host of headline risk late in the week, with the Dow remaining at lofty levels while the Nasdaq sold off into Friday afternoon. Geopolitics largely ruled the roost, with terrorist attacks in London and Tehran, a Saudi rift with Qatar, former FBI Director Comey's testimony, and a surprise result in the UK election all registering on traders' radar screens. The ECB boosted its economic growth outlook for the Eurozone midweek, but kept interest rates on hold, though Mario Draghi said the ECB would continue its bond-buying program and will remain in the market for 'a long time.' The EUR/USD fell below 1.1200 on Thursday to hit its lowest point in June, and later that evening the pound weakened sharply when it became clear the UK election would result in a hung parliament. Crude was down ~3% on the week, hurt by US inventory builds, despite diplomatic turmoil between the Gulf states. Treasury yields lifted marginally and gold pared back its recent gains as safe haven assets came under pressure.Stocks were mostly higher, but large cap tech sold off on heavy volume on Friday, with profit-taking apparently triggered by a short seller note on Nvidia. The late drop in stocks lifted the VIX volatility index off of a two-decade low.For the week, the DJIA gained 0.3%, while the S&P slipped 0.3% and the Nasdaq lost 1.6%.
On the political front, Mexico came to agreement with the US government to cut its exports of refined sugar, a deal that bodes well for upcoming NAFTA renegotiation talks later in the summer. The House of Representatives passed a repeal of Dodd-Frank financial regulation on a party-line vote, though the replacement bill will likely have trouble in its current form in the Senate as it would be subject to filibuster rules. There was also some chatter this week that a GOP Obamacare replacement health care bill was making progress behind the scenes in the Senate, but no timeline was announced.
In corporate news, Macy's shares dipped on Tuesday along with other department store retailers after its CFO talked down margins at its analyst day. Nordstrom popped higher Thursday on word the Nordstrom family is considering taking the retailer private. Airlines climbed on continued softness in oil and Delta comments that it's on track to expand margins over the balance of the year. And NVIDIA led the Nasdaq lower on Friday after Citron's Andrew Left reiterated his cautious comments and said over-optimism has led people to discount the tech manufacturer's competition.
SUNDAY JUNE 4
World Bank maintains both 2017 and 2018 global GDP growth forecast; Warns on emerging market growth
*(HK) HONG KONG MAY COMPOSITE PMI: 50.5 V 51.1 PRIOR (2nd straight expansion)
(CN) CHINA MAY CAIXIN PMI SERVICES: 52.8 V 51.5 PRIOR (4 month high)
MONDAY JUNE 5
(FR) FRANCE MAY FINAL SERVICES PMI: 57.2 V 58.0E (confirms 11th month of expansion)
Evergrande reports May contracted sales CNY38.2B v CNY21.7B y/y
(US) Q1 FINAL NONFARM PRODUCTIVITY: 0.0% V -0.2%E; LABOR COST: 2.2% V 2.4%E
(US) MAY FINAL MARKIT SERVICES PMI: 53.6 V 54.0 PRELIM
(US) APR FINAL DURABLE GOODS ORDERS: -0.8% V -0.5%E; DURABLES EX TRANSPORTATION: -0.5% V -0.4% PRELIM
TUESDAY JUNE 6
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50% (AS EXPECTED)
*(EU) EURO ZONE JUN SENTIX INVESTOR CONFIDENCE: 28.4 V 27.4E (highest reading since July 2007)
FAST Reports May Net Sales $383.5M, +14.9% y/y
August gold future approachs April high of $1300
(US) APR JOLTS JOB OPENINGS: 6.044M V 5.75ME (record high, first time above 6M)
*(US) S&P AFFIRMS UNITED STATES OF AMERICA SOVEREIGN RATING AT AA+; OUTLOOK STABLE
(AU) AUSTRALIA Q1 GDP Q/Q: 0.3% V 0.3%E; Y/Y: 1.7% V 1.6%E (ties longest expansion on record but at slowest annual pace since 2009)
WEDNESDAY JUNE 7
(IR) Shooting reported inside Iran Parliament and reports of hostages taken - Twitter sources
(UK) MAY HALIFAX HOUSE PRICE M/M: +0.4% V -0.2%E; 3M/Y: 3.3% V 3.0%E
(CH) CHINA MAY FOREIGN RESERVES: $3.054T V $3.046TE (4th straight increase and longest streak since Jun 2014)
(EU) OECD Economic Outlook; Raises 2017 Global GDP forecasts from 3.3% to 3.5% (highest since 2011)
(IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 6.25%; AS EXPECTED
(IR) Iran Revolutionary Guards spokesperson: Saudi Arabia was behind terrorist attacks in Tehran today - press
(US) Association of American Railroads weekly rail traffic report for week ending June 3rd: 500.2K carloads and intermodal units, +9.8% y/y (21st straight week of gains)
(QA) Pres Trump reportedly told Qatari leaders in a phone call that he is ready to find a solution to Gulf crisis - Qatar press
(US) Senate Intel Committee posts former FBI Dir Comey's opening statement for tomorrow's Senate testimony
(US) Freedom Caucus' Meadows (R-NC): if Dems to vote for clean debt limit, let's vote now
(JP) JAPAN Q1 FINAL GDP Q/Q: 0.3% V 0.6%E; ANNUALIZED GDP: 1.0% (3-quarter low) V 2.4%E
(AU) AUSTRALIA APR TRADE BALANCE (A$): +0.56B V +2.00BE (6th consecutive surplus, smallest surplus in 6 months)
(CN) CHINA MAY TRADE BALANCE (CNY): 281.6B V 324.1BE
(CN) China Passenger Car Association (PCA): May vehicle sales 1.78M units, +1.2% y/y; YTD sales 9.05M units, -0.9% y/y
(CN) CHINA MAY TRADE BALANCE: $40.8B V $47.8BE
THURSDAY JUNE 8
(EU) EURO ZONE Q1 FINAL GDP Q/Q: 0.6% V 0.5%E; Y/Y: 1.9% V 1.7%E (highest annual pace since 2015)
(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED
(EU) ECB STATEMENT AMENDS ITS FORWARD GUIDANCE: Removes "lower" on interest rate outlook
(EU) ECB's Draghi: Sees interest rates at present level well past end of QE; to preserve favorable conditions needed
UBI.IT Priced €400M rights offering share offering at 26% discount
(EU) ECB's Draghi: Council did not vote on language change; did not hear any dissent - Q&A
(EU) ECB's Draghi: Could still cut interest rates if necessary should the situation worsen - ECB press conf Q&A
(MX) MEXICO MAY CPI M/M: -0.1% V -0.1%E; Y/Y: 6.2% V 6.2%E; CORE CPI M/M: 0.3% V 0.3%E
(US) Former FBI Dir Comey: the shifting explanations of firing confused and concerned him; Trump had repeatedly said he was doing a good job - testimony to Congress
(US) Fed reports Q1 Financial Accounts: Household Change in Net Worth: $2.347T v $2.043T prior
(JP) BOJ's Kuroda: Japan is no longer experiencing deflation; long way to go until Japan price stability target is achieved - comments in UK
(US) Pres Trump's attorney: Comey hearing established that Trump was not being investigated for colluding or attempting to obstruct FBI investigation
(US) House passes Dodd-Frank financial law replacement bill - press
(UK) UK exit poll shows Prime Min May's Conservative Party set to win 314 seats; may fall short of majority and could be a hung parliament - NOP/Ipsos MORI poll
(PE) PERU CENTRAL BANK (BRCP) LEAVES REFERENCE RATE UNCHANGED AT 4.00%
(CN) CHINA MAY CPI M/M: -0.1% V 0.1% PRIOR; Y/Y: 1.5% (4-month high) V 1.5%E
(CN) CHINA MAY PPI Y/Y: 5.5% V 5.6%E; 5-month low
FRIDAY 6/9
(FR) FRANCE APR INDUSTRIAL PRODUCTION M/M: -0.5% V +0.2%E; Y/Y: 0.6% V 1.2%E
(UK) APR INDUSTRIAL PRODUCTION M/M: 0.2% V 0.7%E; Y/Y: -0.8% V -0.3%E
(UK) PM May: I will now form a government; Brexit talks to start in 10 days as expected
(CA) CANADA MAY NET CHANGE IN EMPLOYMENT: +54.5K V +15.0KE; UNEMPLOYMENT RATE: 6.6% V 6.6%E
(US) New York Fed Nowcast: raises Q2 GDP forecast to 2.3% from 2.2% on 6/2; maintains Q3 GDP forecast at 1.8%, unchanged from 6/2
NVDA Citron makes cautious comments again; sets $130 price target
Fri, 09 Jun 2017 16:12 PM EST
US stock markets digested a host of headline risk late in the week, with the Dow remaining at lofty levels while the Nasdaq sold off into Friday afternoon. Geopolitics largely ruled the roost, with terrorist attacks in London and Tehran, a Saudi rift with Qatar, former FBI Director Comey's testimony, and a surprise result in the UK election all registering on traders' radar screens. The ECB boosted its economic growth outlook for the Eurozone midweek, but kept interest rates on hold, though Mario Draghi said the ECB would continue its bond-buying program and will remain in the market for 'a long time.' The EUR/USD fell below 1.1200 on Thursday to hit its lowest point in June, and later that evening the pound weakened sharply when it became clear the UK election would result in a hung parliament. Crude was down ~3% on the week, hurt by US inventory builds, despite diplomatic turmoil between the Gulf states. Treasury yields lifted marginally and gold pared back its recent gains as safe haven assets came under pressure.Stocks were mostly higher, but large cap tech sold off on heavy volume on Friday, with profit-taking apparently triggered by a short seller note on Nvidia. The late drop in stocks lifted the VIX volatility index off of a two-decade low.For the week, the DJIA gained 0.3%, while the S&P slipped 0.3% and the Nasdaq lost 1.6%.
On the political front, Mexico came to agreement with the US government to cut its exports of refined sugar, a deal that bodes well for upcoming NAFTA renegotiation talks later in the summer. The House of Representatives passed a repeal of Dodd-Frank financial regulation on a party-line vote, though the replacement bill will likely have trouble in its current form in the Senate as it would be subject to filibuster rules. There was also some chatter this week that a GOP Obamacare replacement health care bill was making progress behind the scenes in the Senate, but no timeline was announced.
In corporate news, Macy's shares dipped on Tuesday along with other department store retailers after its CFO talked down margins at its analyst day. Nordstrom popped higher Thursday on word the Nordstrom family is considering taking the retailer private. Airlines climbed on continued softness in oil and Delta comments that it's on track to expand margins over the balance of the year. And NVIDIA led the Nasdaq lower on Friday after Citron's Andrew Left reiterated his cautious comments and said over-optimism has led people to discount the tech manufacturer's competition.
SUNDAY JUNE 4
World Bank maintains both 2017 and 2018 global GDP growth forecast; Warns on emerging market growth
*(HK) HONG KONG MAY COMPOSITE PMI: 50.5 V 51.1 PRIOR (2nd straight expansion)
(CN) CHINA MAY CAIXIN PMI SERVICES: 52.8 V 51.5 PRIOR (4 month high)
MONDAY JUNE 5
(FR) FRANCE MAY FINAL SERVICES PMI: 57.2 V 58.0E (confirms 11th month of expansion)
Evergrande reports May contracted sales CNY38.2B v CNY21.7B y/y
(US) Q1 FINAL NONFARM PRODUCTIVITY: 0.0% V -0.2%E; LABOR COST: 2.2% V 2.4%E
(US) MAY FINAL MARKIT SERVICES PMI: 53.6 V 54.0 PRELIM
(US) APR FINAL DURABLE GOODS ORDERS: -0.8% V -0.5%E; DURABLES EX TRANSPORTATION: -0.5% V -0.4% PRELIM
TUESDAY JUNE 6
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50% (AS EXPECTED)
*(EU) EURO ZONE JUN SENTIX INVESTOR CONFIDENCE: 28.4 V 27.4E (highest reading since July 2007)
FAST Reports May Net Sales $383.5M, +14.9% y/y
August gold future approachs April high of $1300
(US) APR JOLTS JOB OPENINGS: 6.044M V 5.75ME (record high, first time above 6M)
*(US) S&P AFFIRMS UNITED STATES OF AMERICA SOVEREIGN RATING AT AA+; OUTLOOK STABLE
(AU) AUSTRALIA Q1 GDP Q/Q: 0.3% V 0.3%E; Y/Y: 1.7% V 1.6%E (ties longest expansion on record but at slowest annual pace since 2009)
WEDNESDAY JUNE 7
(IR) Shooting reported inside Iran Parliament and reports of hostages taken - Twitter sources
(UK) MAY HALIFAX HOUSE PRICE M/M: +0.4% V -0.2%E; 3M/Y: 3.3% V 3.0%E
(CH) CHINA MAY FOREIGN RESERVES: $3.054T V $3.046TE (4th straight increase and longest streak since Jun 2014)
(EU) OECD Economic Outlook; Raises 2017 Global GDP forecasts from 3.3% to 3.5% (highest since 2011)
(IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 6.25%; AS EXPECTED
(IR) Iran Revolutionary Guards spokesperson: Saudi Arabia was behind terrorist attacks in Tehran today - press
(US) Association of American Railroads weekly rail traffic report for week ending June 3rd: 500.2K carloads and intermodal units, +9.8% y/y (21st straight week of gains)
(QA) Pres Trump reportedly told Qatari leaders in a phone call that he is ready to find a solution to Gulf crisis - Qatar press
(US) Senate Intel Committee posts former FBI Dir Comey's opening statement for tomorrow's Senate testimony
(US) Freedom Caucus' Meadows (R-NC): if Dems to vote for clean debt limit, let's vote now
(JP) JAPAN Q1 FINAL GDP Q/Q: 0.3% V 0.6%E; ANNUALIZED GDP: 1.0% (3-quarter low) V 2.4%E
(AU) AUSTRALIA APR TRADE BALANCE (A$): +0.56B V +2.00BE (6th consecutive surplus, smallest surplus in 6 months)
(CN) CHINA MAY TRADE BALANCE (CNY): 281.6B V 324.1BE
(CN) China Passenger Car Association (PCA): May vehicle sales 1.78M units, +1.2% y/y; YTD sales 9.05M units, -0.9% y/y
(CN) CHINA MAY TRADE BALANCE: $40.8B V $47.8BE
THURSDAY JUNE 8
(EU) EURO ZONE Q1 FINAL GDP Q/Q: 0.6% V 0.5%E; Y/Y: 1.9% V 1.7%E (highest annual pace since 2015)
(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED
(EU) ECB STATEMENT AMENDS ITS FORWARD GUIDANCE: Removes "lower" on interest rate outlook
(EU) ECB's Draghi: Sees interest rates at present level well past end of QE; to preserve favorable conditions needed
UBI.IT Priced €400M rights offering share offering at 26% discount
(EU) ECB's Draghi: Council did not vote on language change; did not hear any dissent - Q&A
(EU) ECB's Draghi: Could still cut interest rates if necessary should the situation worsen - ECB press conf Q&A
(MX) MEXICO MAY CPI M/M: -0.1% V -0.1%E; Y/Y: 6.2% V 6.2%E; CORE CPI M/M: 0.3% V 0.3%E
(US) Former FBI Dir Comey: the shifting explanations of firing confused and concerned him; Trump had repeatedly said he was doing a good job - testimony to Congress
(US) Fed reports Q1 Financial Accounts: Household Change in Net Worth: $2.347T v $2.043T prior
(JP) BOJ's Kuroda: Japan is no longer experiencing deflation; long way to go until Japan price stability target is achieved - comments in UK
(US) Pres Trump's attorney: Comey hearing established that Trump was not being investigated for colluding or attempting to obstruct FBI investigation
(US) House passes Dodd-Frank financial law replacement bill - press
(UK) UK exit poll shows Prime Min May's Conservative Party set to win 314 seats; may fall short of majority and could be a hung parliament - NOP/Ipsos MORI poll
(PE) PERU CENTRAL BANK (BRCP) LEAVES REFERENCE RATE UNCHANGED AT 4.00%
(CN) CHINA MAY CPI M/M: -0.1% V 0.1% PRIOR; Y/Y: 1.5% (4-month high) V 1.5%E
(CN) CHINA MAY PPI Y/Y: 5.5% V 5.6%E; 5-month low
FRIDAY 6/9
(FR) FRANCE APR INDUSTRIAL PRODUCTION M/M: -0.5% V +0.2%E; Y/Y: 0.6% V 1.2%E
(UK) APR INDUSTRIAL PRODUCTION M/M: 0.2% V 0.7%E; Y/Y: -0.8% V -0.3%E
(UK) PM May: I will now form a government; Brexit talks to start in 10 days as expected
(CA) CANADA MAY NET CHANGE IN EMPLOYMENT: +54.5K V +15.0KE; UNEMPLOYMENT RATE: 6.6% V 6.6%E
(US) New York Fed Nowcast: raises Q2 GDP forecast to 2.3% from 2.2% on 6/2; maintains Q3 GDP forecast at 1.8%, unchanged from 6/2
NVDA Citron makes cautious comments again; sets $130 price target
Sunday, June 4, 2017
Barrons weekend summary
Barrons weekend summary: positive on TWX, ACN
Cover story: Consumers should be spending amid low unemployment and a strong stock market, but a massive credit expansion may have taken them as far as they can go; Uncertainty about tax cuts and regulatory reform also come into play in the current climate.
Features:
1) Starting on June 9, firms must comply with the new fiduciary rule, as well as provisions concerning conflicts of interest and impartial conduct;
2) Positive on Atlantia, BAC, BDX, CME, JNJ, Royal Dutch Shell: These six companies could thrive in an inflationary environment because of their pricing power and/or interest-rate sensitivity;
3) Positive on GOOGL, AAPL, AMZN, Berkshire Hathaway, MSFT: Companies top Barron’s 2017 ranking of America’s most respected companies based on a poll of money managers; JNJ, No. 1 on the list last year, fell to No. 7 this year;
4) Positive on TWX: Media giant’s shares could return 20% this year, buoyed by the success of movies such as “Wonder Woman” and divisions such as HBO and Turner;
5) Positive on ACN: Doubts about the technology consultant’s prospects have grown recently, but investors may be misreading the changing nature of its global opportunities.
Tech Trader: Positive on NVDA, AMD, INTC, CEVA, CDNS: Companies stand to benefit from growing demand for artificial intelligence, though some experts say the hype about AI is overblown; It’s “a very general term for a still-evolving collection of technologies, and no one knows exactly where it’s going,” says Tiernan Ray.
Trader: The market’s rally is quiet broad, says Doug Ramsey of Leuthold Group, despite concerns too many recent gains have come from giants such as AAPL and AMZN; There’s no doubt that economic data are worrisome, says Barron’s, “but we’d be far more concerned if economically sensitive stocks were underperforming overseas”; Positive on ESV, DO, RIG: Offshore drillers have taken a hit lately, but it’s time for investors to get back into the sector, which has probably hit bottom.
Interview: Jason Trennert and Daniel Clifton of Strategas Research, which predicted Donald Trump’s election victory, talk about market opportunities for the second half of 2017.
Profile: Jonas Krumplys, co-manager of the Ivy Emerging Markets Equity fund, which holds 50 to 80 stocks and averaged an annual return of 5.3% during the past three years (top five holdings: Samsung Electronics, Tencent Holdings, BABA, Sberbank of Russia, TSM). Advisor Rankings: Barron’s list of the top 100 women advisors is topped by Karen McDonald and Colleen O’Callaghan of Morgan Stanley Private Wealth Management, Kimberly Orth of Ameriprise Financial, Valerie Newell of RiverPoint Capital Management, and Stephanie Stiefel of Neuberger Berman.
Follow-Up: Cautious on ESRX: Company’s lawsuit against Kaleo Pharma and the potential loss of a contract with ANTM continue to concern investors, keeping the share price down; Positive on GT: “The tire maker has an opportunity to transform itself into an asset-light supplier for future autonomous fleets.”
European Trader: Positive on International Consolidated Airlines Group: British Airways is struggling to contain the fallout from a computer outage, which raised questions about its strategy, but a range of positives at the parent company make it a good time to buy shares.
Asian Trader: Cautious on China Evergrande: A recent rally has been painful for shorts, but they could have the last laugh because of the company’s bloated balance sheet and high valuation.
Emerging Markets: For India to continue growing, the World Bank recommends it add more regular, salaried jobs for women and provide more incentives for female entrepreneurs.
Commodities: Natural gas faces more threats as fracking into shale and other new technologies have unleashed a record amount of gas onto the market, and a slowdown is likely to endure.
Streetwise: “Banks may have had a mediocre trading quarter, but other trends are favorable, including widening net interest margins, loan growth, and regulatory relief.”
Friday, June 2, 2017
Stocks Rise, Bond Yields Flatten Amid Lukewarm Data and Central Banks’ Eyeing Normalization
TradeTheNews.com Weekly
Market Update: Stocks Rise, Bond Yields Flatten Amid Lukewarm Data and Central
Banks’ Eyeing Normalization
Fri, 02 Jun 2017 16:12 PM EST
Global stock markets pushed out to new highs this week despite continued buying in government bond markets. By Friday the FTSE 100, DAX, S&P 500, Dow and NASDAQ Composite all reached new all-time highs. Economic figures continued to point at better relative growth outside the US, but overall solid footing for Central Banks and their policy prescriptions. The narrative that Fed would continue to raise rates like in June was unswayed while more focus was given to the upcoming ECB meeting and the cover the next round of staff projections may give to officials seeking to start reshaping expectations. By the end of the week, President Trump’s decision to pull out of the Paris climate accord, a continued retreat in crude oil prices, and a lower than forecasted May nonfarm payroll figure did little to derail global stock markets.
Recent sellers in the Greenback and buyers of US Treasuries were rewarded by the May jobs report on Friday. The Dollar Index dipped back below 97 and gold rallied 1% to a fresh one-month high. The Euro touched a fresh 7-month high, while the 10-year US Treasury yield fell to a new 2017 low below the 200-day moving average. The 2-10 spread narrowed by ~4 bps to the flattest levels since before the US election in November. The VIX finished the week back below 10. For the week, the DJIA gained 0.6%, the S&P added 0.9%, and the Nasdaq rose 1.5%.
In corporate news, financial executives tempered Q2 banking expectations at an investor conference this week. Wells Fargo CEO Sloan said Q2 loan growth has not been as robust as everyone would have hoped, while BofA’s Moynihan noted Q2 earnings would be squeezed by a 10-12% drop in trading revenues, and JPMorgan CFO Lake added she doesn’t see a reason for down trends to change in June. Shares in Lululemon surged after reporting a beat on profit and revenue, boosted by positive trends that materialized late in Q1 and are seen as continuing into Q2. On the M&A front, First Data agreed to acquire credit card payment processor CardConnect for $15/share in a $750M all-cash deal, which will add $26B worth of payments a year to First Data’s books. And media outlets indicated ConAgra had made an approach to acquire Pinnacle Foods, but CNBC’s Faber poured cold water on the report, pointing to sources that say merger talks have ended and are unlikely to be restarted.
SUNDAY 5/28
(EU) Official G7 communique from meeting May 26-27 in Taormina, Italy
MONDAY 5/29
(EU) EURO ZONE APR M3 MONEY SUPPLY Y/Y: 4.9% V 5.2%E
(JP) JAPAN APR JOBLESS RATE: 2.8% V 2.8%E (matches lowest rate since Jun 1994)
TUESDAY 5/30
(FR) FRANCE Q1 PRELIMINARY GDP Q/Q: 0.4% V 0.3%E; Y/Y: 1.0% V 0.8%E
(DE) GERMANY MAY CPI SAXONY M/M: -0.1% V -0.1% PRIOR; Y/Y: 1.6% V 2.1% PRIOR
(ES) SPAIN MAY PRELIMINARY CPI M/M: -0.1% V 0.0%E; Y/Y: 1.9% V 2.1%E
(EU) EURO ZONE MAY BUSINESS CLIMATE INDICATOR: 0.90 V 1.11E; CONSUMER CONFIDENCE (FINAL): -3.3 V -3.3E
(IT) ITALY DEBT AGENCY (TESORO) SELLS TOTAL €5.75B VS. 4.75-5.75B INDICATED RANGE IN 5-YEAR AND 10-YEAR BTP BONDS
(DE) GERMANY MAY PRELIMINARY CPI M/M: -0.2% V -0.1%E; Y/Y: 1.5% V 1.6%E
(US) APR PCE DEFLATOR M/M: 0.2% V 0.2%E; Y/Y: 1.7% V 1.7%E
(US) APR PCE CORE M/M: 0.2% V 0.1%E ; Y/Y: 1.5% V 1.5%E
(US) APR PERSONAL INCOME: 0.4% V 0.4%E ; PERSONAL SPENDING: 0.4% V 0.4%E
(US) MAY CONSUMER CONFIDENCE: 117.9 V 119.5E
(US) Atlanta Fed raises Q2 GDP to 3.8% from 3.7% on 5/26
(EU) European Commission paper proposes packaging different countries' debt into new sovereign bond-backed securities - FT
(CN) CHINA MAY MANUFACTURING PMI (GOVT OFFICIAL): 51.2 (matches 7-month low; 10th month of expansion) V 51.0E; NON-MANUFACTURING PMI: 54.5 V 54.0 PRIOR
(HK) Macau Apr Hotel Occupancy Rate: 86.1% v 82.7% prior
WEDNESDAY 5/31
(FR) FRANCE MAY PRELIMINARY CPI M/M: 0.1% V 0.1%E; Y/Y: 0.8% V 0.9%E
(DE) GERMANY MAY UNEMPLOYMENT CHANGE: -9K V -15KE; UNEMPLOYMENT RATE: 5.7% V 5.7%E
(EU) EURO ZONE MAY CPI ESTIMATE Y/Y: 1.4% V 1.5%E (2nd month remaining below ECB target); CPI CORE Y/Y: 0.9% V 1.0%E
(EU) EURO ZONE APR UNEMPLOYMENT RATE: 9.3% V 9.4%E (lowest since 2009)
JPM CFO: seeing resonably active capital markets activity in Q2 - DB conf comments
(US) May Chicago Purchasing Manager corrected to 59.4 from erroneously reported 55.2 (v 57.0e)
(US) Association of American Railroads weekly rail traffic report for week ending May 27th: 548.1K carloads and intermodal units, +6.7% y/y (20th straight week of gains)
(US) Weekly API Oil Inventories: Crude: -8.7M v -1.5M prior (biggest draw since Sept 2016)
(BR) BRAZIL CENTRAL BANK (BCB) CUTS SELIC TARGET RATE BY 100BPS TO 10.25%; AS EXPECTED
(CN) PBOC SETS YUAN MID POINT AT 6.8090 V 6.8633 PRIOR; Biggest margin of increase since Jan 6th; Strongest Yuan fix since Nov 10th
(CN) CHINA MAY CAIXIN PMI MANUFACTURING: 49.6 V 50.1E (1st contraction in 11 months)
THURSDAY 6/1
(HK) Macau May Gaming Rev MOP22.7B v MOP20.2B prior; +23.7% y/y v 16.2%e
(DE) GERMANY MAY FINAL MANUFACTURING PMI: 59.5 V 59.4E (confirms 30th month of expansion and highest since Apr 2011)
(UK) MAY MANUFACTURING PMI: 56.7 V 56.5E (10th month of expansion)
(US) MAY ADP EMPLOYMENT CHANGE: +253K V +180KE
WFC CEO: overall, credit is "very strong"; auto loan market started getting out of sorts about a year ago, was the right decision to pull back from auto market - Bernstein conf comments
GM Reports May US sales -1% y/y, to 237.3K units v 254.1Ke
(US) MAY FINAL MARKIT MANUFACTURING PMI: 52.7 V 52.5E (lowest since Sept)
(US) MAY ISM MANUFACTURING: 54.9 V 54.8E; PRICES PAID: 60.5 V 67.0E
(US) Atlanta Fed raises Q2 GDP to 4.0% from 3.8% on 5/30
FRIDAY 6/2
(US) MAY UNEMPLOYMENT RATE: 4.3% V 4.4%E (lowest since May 2001)
(US) MAY CHANGE IN NONFARM PAYROLLS: +138K V +182KE
(US) MAY AVERAGE HOURLY EARNINGS M/M: 0.2% V 0.2%E; Y/Y: 2.5% V 2.6%E; AVERAGE WEEKLY HOURS: 34.4 V 34.4E
(US) APR TRADE BALANCE: -$47.6B V -$46.1BE
EUR at 7-month highs following disappointing US payroll data; tested 1.1270 level
Fri, 02 Jun 2017 16:12 PM EST
Global stock markets pushed out to new highs this week despite continued buying in government bond markets. By Friday the FTSE 100, DAX, S&P 500, Dow and NASDAQ Composite all reached new all-time highs. Economic figures continued to point at better relative growth outside the US, but overall solid footing for Central Banks and their policy prescriptions. The narrative that Fed would continue to raise rates like in June was unswayed while more focus was given to the upcoming ECB meeting and the cover the next round of staff projections may give to officials seeking to start reshaping expectations. By the end of the week, President Trump’s decision to pull out of the Paris climate accord, a continued retreat in crude oil prices, and a lower than forecasted May nonfarm payroll figure did little to derail global stock markets.
Recent sellers in the Greenback and buyers of US Treasuries were rewarded by the May jobs report on Friday. The Dollar Index dipped back below 97 and gold rallied 1% to a fresh one-month high. The Euro touched a fresh 7-month high, while the 10-year US Treasury yield fell to a new 2017 low below the 200-day moving average. The 2-10 spread narrowed by ~4 bps to the flattest levels since before the US election in November. The VIX finished the week back below 10. For the week, the DJIA gained 0.6%, the S&P added 0.9%, and the Nasdaq rose 1.5%.
In corporate news, financial executives tempered Q2 banking expectations at an investor conference this week. Wells Fargo CEO Sloan said Q2 loan growth has not been as robust as everyone would have hoped, while BofA’s Moynihan noted Q2 earnings would be squeezed by a 10-12% drop in trading revenues, and JPMorgan CFO Lake added she doesn’t see a reason for down trends to change in June. Shares in Lululemon surged after reporting a beat on profit and revenue, boosted by positive trends that materialized late in Q1 and are seen as continuing into Q2. On the M&A front, First Data agreed to acquire credit card payment processor CardConnect for $15/share in a $750M all-cash deal, which will add $26B worth of payments a year to First Data’s books. And media outlets indicated ConAgra had made an approach to acquire Pinnacle Foods, but CNBC’s Faber poured cold water on the report, pointing to sources that say merger talks have ended and are unlikely to be restarted.
SUNDAY 5/28
(EU) Official G7 communique from meeting May 26-27 in Taormina, Italy
MONDAY 5/29
(EU) EURO ZONE APR M3 MONEY SUPPLY Y/Y: 4.9% V 5.2%E
(JP) JAPAN APR JOBLESS RATE: 2.8% V 2.8%E (matches lowest rate since Jun 1994)
TUESDAY 5/30
(FR) FRANCE Q1 PRELIMINARY GDP Q/Q: 0.4% V 0.3%E; Y/Y: 1.0% V 0.8%E
(DE) GERMANY MAY CPI SAXONY M/M: -0.1% V -0.1% PRIOR; Y/Y: 1.6% V 2.1% PRIOR
(ES) SPAIN MAY PRELIMINARY CPI M/M: -0.1% V 0.0%E; Y/Y: 1.9% V 2.1%E
(EU) EURO ZONE MAY BUSINESS CLIMATE INDICATOR: 0.90 V 1.11E; CONSUMER CONFIDENCE (FINAL): -3.3 V -3.3E
(IT) ITALY DEBT AGENCY (TESORO) SELLS TOTAL €5.75B VS. 4.75-5.75B INDICATED RANGE IN 5-YEAR AND 10-YEAR BTP BONDS
(DE) GERMANY MAY PRELIMINARY CPI M/M: -0.2% V -0.1%E; Y/Y: 1.5% V 1.6%E
(US) APR PCE DEFLATOR M/M: 0.2% V 0.2%E; Y/Y: 1.7% V 1.7%E
(US) APR PCE CORE M/M: 0.2% V 0.1%E ; Y/Y: 1.5% V 1.5%E
(US) APR PERSONAL INCOME: 0.4% V 0.4%E ; PERSONAL SPENDING: 0.4% V 0.4%E
(US) MAY CONSUMER CONFIDENCE: 117.9 V 119.5E
(US) Atlanta Fed raises Q2 GDP to 3.8% from 3.7% on 5/26
(EU) European Commission paper proposes packaging different countries' debt into new sovereign bond-backed securities - FT
(CN) CHINA MAY MANUFACTURING PMI (GOVT OFFICIAL): 51.2 (matches 7-month low; 10th month of expansion) V 51.0E; NON-MANUFACTURING PMI: 54.5 V 54.0 PRIOR
(HK) Macau Apr Hotel Occupancy Rate: 86.1% v 82.7% prior
WEDNESDAY 5/31
(FR) FRANCE MAY PRELIMINARY CPI M/M: 0.1% V 0.1%E; Y/Y: 0.8% V 0.9%E
(DE) GERMANY MAY UNEMPLOYMENT CHANGE: -9K V -15KE; UNEMPLOYMENT RATE: 5.7% V 5.7%E
(EU) EURO ZONE MAY CPI ESTIMATE Y/Y: 1.4% V 1.5%E (2nd month remaining below ECB target); CPI CORE Y/Y: 0.9% V 1.0%E
(EU) EURO ZONE APR UNEMPLOYMENT RATE: 9.3% V 9.4%E (lowest since 2009)
JPM CFO: seeing resonably active capital markets activity in Q2 - DB conf comments
(US) May Chicago Purchasing Manager corrected to 59.4 from erroneously reported 55.2 (v 57.0e)
(US) Association of American Railroads weekly rail traffic report for week ending May 27th: 548.1K carloads and intermodal units, +6.7% y/y (20th straight week of gains)
(US) Weekly API Oil Inventories: Crude: -8.7M v -1.5M prior (biggest draw since Sept 2016)
(BR) BRAZIL CENTRAL BANK (BCB) CUTS SELIC TARGET RATE BY 100BPS TO 10.25%; AS EXPECTED
(CN) PBOC SETS YUAN MID POINT AT 6.8090 V 6.8633 PRIOR; Biggest margin of increase since Jan 6th; Strongest Yuan fix since Nov 10th
(CN) CHINA MAY CAIXIN PMI MANUFACTURING: 49.6 V 50.1E (1st contraction in 11 months)
THURSDAY 6/1
(HK) Macau May Gaming Rev MOP22.7B v MOP20.2B prior; +23.7% y/y v 16.2%e
(DE) GERMANY MAY FINAL MANUFACTURING PMI: 59.5 V 59.4E (confirms 30th month of expansion and highest since Apr 2011)
(UK) MAY MANUFACTURING PMI: 56.7 V 56.5E (10th month of expansion)
(US) MAY ADP EMPLOYMENT CHANGE: +253K V +180KE
WFC CEO: overall, credit is "very strong"; auto loan market started getting out of sorts about a year ago, was the right decision to pull back from auto market - Bernstein conf comments
GM Reports May US sales -1% y/y, to 237.3K units v 254.1Ke
(US) MAY FINAL MARKIT MANUFACTURING PMI: 52.7 V 52.5E (lowest since Sept)
(US) MAY ISM MANUFACTURING: 54.9 V 54.8E; PRICES PAID: 60.5 V 67.0E
(US) Atlanta Fed raises Q2 GDP to 4.0% from 3.8% on 5/30
FRIDAY 6/2
(US) MAY UNEMPLOYMENT RATE: 4.3% V 4.4%E (lowest since May 2001)
(US) MAY CHANGE IN NONFARM PAYROLLS: +138K V +182KE
(US) MAY AVERAGE HOURLY EARNINGS M/M: 0.2% V 0.2%E; Y/Y: 2.5% V 2.6%E; AVERAGE WEEKLY HOURS: 34.4 V 34.4E
(US) APR TRADE BALANCE: -$47.6B V -$46.1BE
EUR at 7-month highs following disappointing US payroll data; tested 1.1270 level
Sunday, May 28, 2017
Risk-On Returns, Unfazed by Manchester Attack or Ho-Hum OPEC Meeting
TradeTheNews.com Weekly Market Update: Risk-On Returns, Unfazed by Manchester Attack or Ho-Hum OPEC Meeting
Fri, 26 May 2017 16:04 PM EST
Markets began the week putting last Wednesday’s brief bout of risk aversion and elevated volatility further back in the rear view mirror. Even another heinous terrorist attack in Europe did little to upset trading. US stock indices marched onward to fresh all-time highs as technical/momentum-buying emerged as seasonality and thin volumes once again played a significant role heading towards the long holiday weekend. The Dollar continued to serve as a tailwind for stocks as well. Wednesday’s FOMC minutes were seen to have a somewhat dovish tilt keeping the Dollar index from rebounding significantly from last week’s six month low. The VIX dropped back below 10 and US Treasury markets barely budged despite the new highs for equites. Oil prices moved up ahead of the OPEC meeting on Thursday, but WTI slid back below $50/bbl when ministers failed to offer up anything in the form of a surprise. The energy complex suffered with many stocks dropping to the lows of the year, but that too had little effect on overall trade or sentiment. For the week the S&P500 added 1.4%, DJIA gained 1.3%, and the Nasdaq rose 2.1%.
There were a few notable earnings reports this week. Shares of luxury goods retailer Tiffany & Co. dropped over 8% as Q1 revenues missed expectations, with management blaming continued marcoeconomic challenges, geopolitical uncertainty, and a strong USD. Video game producer Take-Two Interactive saw its share up 10% this week on the back of blow out earnings. GM took a hit after a class action lawsuit was filed accusing the automaker of employing VW-like emissions test defeat devices in some diesel trucks.On the M&A front, shares of Bunge were sharply higher on reports that Glencore had made an informal approach about a potential merger or partnership.
SUNDAY 5/21
(IR) Iran President Hassan Rouhani wins second term with 57% of the vote (update)
(CN) China regulators order new round of housing curbs in Hunan - Chinese press
MONDAY 5/22
05/22 (UK) Explosion heard near Manchester Arena, large police response seen
05/22 (CN) China Baoding city in the northern Hebei province will suspend sales of 3rd homes to local residents
*(JP) JAPAN MAY PRELIMINARY PMI MANUFACTURING: 52.0 V 52.7 PRIOR (9th consecutive expansion but at a 6-month low)
(US) President Trump's budget said to seek $3.6T in US spending cuts over 10 years; Seeks to sell half of US strategic petroleum reserve (SPR) to raise $16.5B
CLN.CH Confirms all stock merger of equals with Huntsman; Combined enterprise value of ~$20B
TUESDAY 5/23
*(DE) GERMANY Q1 FINAL GDP Q/Q: 0.6% V 0.6%E; Y/Y: % V 1.7%E; GDP NSA Y/Y: % V 2.9%E
*(FR) FRANCE MAY BUSINESS CONFIDENCE: 105 V 105E; MANUFACTURING CONFIDENCE: 109 V 108E
*(FR) FRANCE MAY PRELIMINARY MANUFACTURING PMI: 54.0 V 55.2E (8th month of expansion)
(DE) GERMANY MAY PRELIMINARY MANUFACTURING PMI: 59.4 V 58.0E (30th month of expansion and highest since Apr 2011)
(EU) EURO ZONE MAY PRELIMINARY MANUFACTURING PMI: 57.0 V 56.5E (46th straight month of growth and highest since April 2011)
(DE) GERMANY MAY IFO BUSINESS CLIMATE: 114.6 V 113.1E; CURRENT ASSESSMENT: 123.2 V 121.0E (highest level since 2011)
*(US) MAY PRELIMINARY MARKIT MANUFACTURING PMI: 52.5 V 53.0E
*(US) MAY RICHMOND FED MANUFACTURING INDEX: +1 V 15E (lowest since Sep 2016)
(US) APR NEW HOME SALES: 569K V 610KE
(US) Weekly API Oil Inventories: Crude: -1.5M v +0.9M prior
(CN) MOODY'S CUTS CHINA SOVEREIGN RATING TO A1 FROM AA3 (one notch); revises outlook from negative to stable (first Moody's cut since 1989)
WEDS 5/24
(DE) GERMANY APR JUN GFK CONSUMER CONFIDENCE: 10.4 V 10.2E (highest since 2001)
*(TH) THAILAND CENTRAL BANK (BOT) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.50%; AS EXPECTED
TIF Reports Q1 $0.74 v $0.70e, R$900M v $916Me
OPEC Committee statement: recommends 9 month cut extension (as expected)
(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 0.50%; AS EXPECTED
*(US) APR EXISTING HOME SALES: 5.57M V 5.65ME
(US) Senate Maj Leader McConnell: currently lacks votes to approve a Senate healthcare bill, but it remains a top priority - press interview
(US) FOMC MINUTES FROM MAY 3 MEETING: MOST PARTICIPANTS VIEWED MARCH SOFT INFLATION AS TRANSITORY; STAFF PRESENTED PHASED IN BALANCE SHEET RUN OFF PLAN
(US) Association of American Railroads weekly rail traffic report for week ending May 20th: 534.9K carloads and intermodal units, +5.5% y/y (19th straight week of gains) (update)
*(KR) BANK OF KOREA (BOK) LEAVES REPO RATE UNCHANGED AT 1.25%; AS EXPECTED (11th consecutive hold)
THURS 5/25
992.HK Reports Q4 Net $107M v $98Me, Op $74M v $248M y/y; R$9.6B v $9.7Be
(UK) Q1 PRELIMINARY GDP Q/Q: 0.2% V 0.3%E; Y/Y: 2.0% V 2.1%E
BBY Reports Q1 $0.60 v $0.40e, R$8.53B v $8.26Be
(ZA) SOUTH AFRICA CENTRAL BANK (SARB) LEAVES INTEREST RATES UNCHANGED 7.00%; AS EXPECTED
GM Lawsuit accuses GM of employing VW-like emissions test defeat devices in some diesel trucks - press
FRI 5/26
*(US) Q1 PRELIMINARY GDP ANNUALIZED Q/Q: 1.2% V 0.9%E; PERSONAL CONSUMPTION: 0.6% V 0.4%E
*(US) APR PRELIMINARY DURABLE GOODS ORDERS: -0.7% V -1.5%E; DURABLES EX TRANSPORTATION: -0.4% V 0.4%E
*(US) Q1 PRELIMINARY GDP PRICE INDEX: 2.2% V 2.3%E; CORE PCE Q/Q: 2.1% V 2.0%E
Fri, 26 May 2017 16:04 PM EST
Markets began the week putting last Wednesday’s brief bout of risk aversion and elevated volatility further back in the rear view mirror. Even another heinous terrorist attack in Europe did little to upset trading. US stock indices marched onward to fresh all-time highs as technical/momentum-buying emerged as seasonality and thin volumes once again played a significant role heading towards the long holiday weekend. The Dollar continued to serve as a tailwind for stocks as well. Wednesday’s FOMC minutes were seen to have a somewhat dovish tilt keeping the Dollar index from rebounding significantly from last week’s six month low. The VIX dropped back below 10 and US Treasury markets barely budged despite the new highs for equites. Oil prices moved up ahead of the OPEC meeting on Thursday, but WTI slid back below $50/bbl when ministers failed to offer up anything in the form of a surprise. The energy complex suffered with many stocks dropping to the lows of the year, but that too had little effect on overall trade or sentiment. For the week the S&P500 added 1.4%, DJIA gained 1.3%, and the Nasdaq rose 2.1%.
There were a few notable earnings reports this week. Shares of luxury goods retailer Tiffany & Co. dropped over 8% as Q1 revenues missed expectations, with management blaming continued marcoeconomic challenges, geopolitical uncertainty, and a strong USD. Video game producer Take-Two Interactive saw its share up 10% this week on the back of blow out earnings. GM took a hit after a class action lawsuit was filed accusing the automaker of employing VW-like emissions test defeat devices in some diesel trucks.On the M&A front, shares of Bunge were sharply higher on reports that Glencore had made an informal approach about a potential merger or partnership.
SUNDAY 5/21
(IR) Iran President Hassan Rouhani wins second term with 57% of the vote (update)
(CN) China regulators order new round of housing curbs in Hunan - Chinese press
MONDAY 5/22
05/22 (UK) Explosion heard near Manchester Arena, large police response seen
05/22 (CN) China Baoding city in the northern Hebei province will suspend sales of 3rd homes to local residents
*(JP) JAPAN MAY PRELIMINARY PMI MANUFACTURING: 52.0 V 52.7 PRIOR (9th consecutive expansion but at a 6-month low)
(US) President Trump's budget said to seek $3.6T in US spending cuts over 10 years; Seeks to sell half of US strategic petroleum reserve (SPR) to raise $16.5B
CLN.CH Confirms all stock merger of equals with Huntsman; Combined enterprise value of ~$20B
TUESDAY 5/23
*(DE) GERMANY Q1 FINAL GDP Q/Q: 0.6% V 0.6%E; Y/Y: % V 1.7%E; GDP NSA Y/Y: % V 2.9%E
*(FR) FRANCE MAY BUSINESS CONFIDENCE: 105 V 105E; MANUFACTURING CONFIDENCE: 109 V 108E
*(FR) FRANCE MAY PRELIMINARY MANUFACTURING PMI: 54.0 V 55.2E (8th month of expansion)
(DE) GERMANY MAY PRELIMINARY MANUFACTURING PMI: 59.4 V 58.0E (30th month of expansion and highest since Apr 2011)
(EU) EURO ZONE MAY PRELIMINARY MANUFACTURING PMI: 57.0 V 56.5E (46th straight month of growth and highest since April 2011)
(DE) GERMANY MAY IFO BUSINESS CLIMATE: 114.6 V 113.1E; CURRENT ASSESSMENT: 123.2 V 121.0E (highest level since 2011)
*(US) MAY PRELIMINARY MARKIT MANUFACTURING PMI: 52.5 V 53.0E
*(US) MAY RICHMOND FED MANUFACTURING INDEX: +1 V 15E (lowest since Sep 2016)
(US) APR NEW HOME SALES: 569K V 610KE
(US) Weekly API Oil Inventories: Crude: -1.5M v +0.9M prior
(CN) MOODY'S CUTS CHINA SOVEREIGN RATING TO A1 FROM AA3 (one notch); revises outlook from negative to stable (first Moody's cut since 1989)
WEDS 5/24
(DE) GERMANY APR JUN GFK CONSUMER CONFIDENCE: 10.4 V 10.2E (highest since 2001)
*(TH) THAILAND CENTRAL BANK (BOT) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.50%; AS EXPECTED
TIF Reports Q1 $0.74 v $0.70e, R$900M v $916Me
OPEC Committee statement: recommends 9 month cut extension (as expected)
(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 0.50%; AS EXPECTED
*(US) APR EXISTING HOME SALES: 5.57M V 5.65ME
(US) Senate Maj Leader McConnell: currently lacks votes to approve a Senate healthcare bill, but it remains a top priority - press interview
(US) FOMC MINUTES FROM MAY 3 MEETING: MOST PARTICIPANTS VIEWED MARCH SOFT INFLATION AS TRANSITORY; STAFF PRESENTED PHASED IN BALANCE SHEET RUN OFF PLAN
(US) Association of American Railroads weekly rail traffic report for week ending May 20th: 534.9K carloads and intermodal units, +5.5% y/y (19th straight week of gains) (update)
*(KR) BANK OF KOREA (BOK) LEAVES REPO RATE UNCHANGED AT 1.25%; AS EXPECTED (11th consecutive hold)
THURS 5/25
992.HK Reports Q4 Net $107M v $98Me, Op $74M v $248M y/y; R$9.6B v $9.7Be
(UK) Q1 PRELIMINARY GDP Q/Q: 0.2% V 0.3%E; Y/Y: 2.0% V 2.1%E
BBY Reports Q1 $0.60 v $0.40e, R$8.53B v $8.26Be
(ZA) SOUTH AFRICA CENTRAL BANK (SARB) LEAVES INTEREST RATES UNCHANGED 7.00%; AS EXPECTED
GM Lawsuit accuses GM of employing VW-like emissions test defeat devices in some diesel trucks - press
FRI 5/26
*(US) Q1 PRELIMINARY GDP ANNUALIZED Q/Q: 1.2% V 0.9%E; PERSONAL CONSUMPTION: 0.6% V 0.4%E
*(US) APR PRELIMINARY DURABLE GOODS ORDERS: -0.7% V -1.5%E; DURABLES EX TRANSPORTATION: -0.4% V 0.4%E
*(US) Q1 PRELIMINARY GDP PRICE INDEX: 2.2% V 2.3%E; CORE PCE Q/Q: 2.1% V 2.0%E
Saturday, May 20, 2017
Barrons weekend summary
Barrons weekend summary: positive cover story on select retailers; positive on Berkshire
Cover story: As AMZN continues to shake up the retail sector, forcing traditional players to adapt or close, “nine retail plays could thrive in a marketplace growing more competitive by the hour” (Positive on COST, WMT, LOW, BID, GGP, PRTY, BBY, HD, JWN).
Features:
1) The 2017 Barron’s 500, measuring operating performance based on cash flow and revenue growth, is topped by ABC, ABBV, MAR, SLF, and NVR;
2) Positive on Berkshire Hathaway: Company’s results are driven more by wholly owned businesses such as Burlington Northern and Berkshire Energy than its big equity portfolio.
Tech Trader: Cautious on PI, MRAM: Small chip companies offer genuine innovations and real breakthroughs that could put them at the forefront of new trends, though a bet on their stocks comes with some risk.
Trader: Leuthold Group chief investment officer Doug Ramsey said market breadth is too strong to suggest a top, while Marketfield Asset Management isn’t letting the threat of impeachment proceedings against Donald Trump change its outlook; At the recent SALT Conference, “the one thing everyone could agree on was that the turmoil that had engulfed the president is bad for the U.S.”; At the SALT conference, many investors agreed that master limited partnerships are investable again. Profile: Sumanta Biswas and Bernard Horn, managers of the Pear Tree Polaris Foreign Value Small Cap fund, say this is an era of great opportunity for investors in foreign stocks (top 10 holdings: Dragerwerk, WorleyParsons, PrimaMeat Packers, Arcadis, Crest Nicholson Holdings, DFDS, freenet, BBA Aviation, Loomis, Taiwan Union Technology).
Interview: Dana Telsey, chief executive of the Telsey Advisory Group, says retailers are still good investments, though the sector is going through changes in how and what people buy.
Follow-Up:
1) Jeremy Siegel of the Wharton School says that if Donald Trump is impeached, the Dow could rise by 1,000 points, or 5%, even before vice president Mike Pence takes the helm;
2) Positive on FDC: Shares still trade at attractive below-market levels, and investors should hold onto them;
3) Cautious on Badger Daylighting: A number of questions about the company’s business remain, and investors should avoid shares until they understand what’s going wrong.
European Trader: Positive on VOD: British mobile phone operator seems to be improving its performance after struggling with competition and regulatory pressures.
Asian Trader: “As the U.S. becomes ever more entangled in investigations of its recent presidential election mess, China is quietly easing itself to the forefront of the world stage.”
Emerging Markets: The MSCI index will next month likely confirm that Argentina will rise from a frontier to an emerging market in 2018, attracting new funds and investors.
Commodities: Oil prices are rising ahead of a May OPEC meeting at which the group will revisit last year’s decision to reduce production in order to boost prices.
Streetwise: With 51% of active managers beating their benchmarks this year, up from 31% in 2016, bullish strategists are struggling to persuade investors to keep buying stocks a little longer.
Friday, May 19, 2017
Markets Acknowledge Embroiled Trump Administration Before Quickly Moving On
TradeTheNews.com Weekly Market Update: Markets Acknowledge Embroiled Trump Administration Before Quickly Moving On
Fri, 19 May 2017 16:14 PM EST
In most cases stock indices opened the week at or near recent all-time highs. A continuing run of decelerating US economic data and the steady beat of headlines coming out of Washington DC were largely offset by a move higher in oil prices. Crude was finding support in solidifying market expectations that OPEC would extend supply cuts through next spring when they meet next week. Volatility remained remarkably low, and stocks remained bid globally, helped in part by a speech from China’s President Xi that illustrated the importance his government intends to put on finding new drivers for growth in the wake of softer April economic data.
By mid-week the tone dramatically shifted. Headwinds from Washington freshened on a report former FBI Dir Comey had drafted a memo chronicling a meeting with President Trump where he was asked to drop the investigation into former National Sec Adviser Flynn. Within 24 hours, former FBI Dir Mueller was appointed special counsel to oversee the Russia investigation, while the President repeatedly denied the reports, calling the whole thing a ‘witch hunt.’ Markets finally buckled as investors became increasingly concerned the political fallout could ultimately be fatal for the Republican’s pro-growth agenda. The flight from risk assets sent the VIX +27%, ultimately filling the gap made into the French election. Gold prices rose along with global Treasury bonds, sending yields lower. The US 10-year yield fell just short of the April low of 2.18%. The Dollar index gave back all the post-US election/Trump reflation gains.
The move into safe have assets was short lived. Equity markets rebounded Thursday in the wake of better US economic readings and technically driven momentum buying after the significant reversal. Markets largely shrugged off the latest political crisis in Brazil, which brought a spat of elevated volatility to Brazilian assets and word the Trump administration was pushing ahead with the NAFTA renegotiation. Oil prices pressed higher on speculation OPEC was contemplating a scenario of deepening supply cuts, not just extending. WTI crude finished the week above the $50 mark, while the Dollar Index closed near $97 for the first time since before the Nov election. Dollar bulls were dismayed by notably.dovish commentary from the Fed's Bullard. The US 10-year yield rebounded back towards 2.25%, but the curve remained compressed. For the week the Dow, S&P and NASDAQ nearly did a round trip, all falling ~0.5%.
As earnings news this week slowed to a trickle, a few big names reported strong results. Home Depot bucked the trend of poor retailer reports by notching a solid beat on top and bottom line, as the home improvement giant remains buoyed by a stronger housing market and a boost in big-ticket transactions. Semis were up modestly in Friday trading after Applied Materials issued strong results and guidance as its chipmaker customers ramp up to bring more advanced production equipment online. Deere rebounded by beating expectations across the board and raising its outlook, with notable strength from international farm equipment sales and home construction equipment.
SUN 5/14
(CN) CHINA APR INDUSTRIAL PRODUCTION Y/Y: 6.5% V 7.0%E; YTD Y/Y 6.7% V 6.9%E
(CN) CHINA APR RETAIL SALES Y/Y: 10.7% V 10.8%E; YTD Y/Y: 10.2% V 10.2%E
(CN) CHINA APR FIXED ASSETS EX RURAL YTD Y/Y: 8.9% V 9.1%E
(SA) Saudi Oil Min Al-Falih: Russia and Saudi Arabia in favor of extending OPEC deal for 9-months to March 2018; decision to be made May 25th - financial press
MON 5/15
(US) MAY EMPIRE MANUFACTURING: -1.0 V +7.3E
(US) MAY NAHB HOUSING MARKET INDEX: 70 V 68E (second-highest reading since financial downturn)
(US) MAR TOTAL NET TIC FLOWS: -$0.7B V $13.2B PRIOR; LONG-TERM TIC FLOWS: $59.8B V $53.1B PRIOR
27.HK CEO Lui: Encouraged by recent improvements in VIP; will need a few mouths to see if recovery is sustainable
TUES 5/16
VOD.UK Reports FY16/17 Adj EBIT €3.97B v €3.70B y/y, adj EBITDA €14.1B v €14.2B y/y, Rev €47.6B v €49.8B y/y
*(UK) APR CPI M/M: 0.5% V 0.4%E; Y/Y: 2.7% V 2.6%E; CPI CORE Y/Y: 2.4% V 2.3%E
*(EU) EURO ZONE Q1 PRELIMINARY GDP Q/Q: 0.5% V 0.5%E; Y/Y: 1.7% V 1.7%E
*(DE) GERMANY MAY ZEW CURRENT SITUATION SURVEY: 83.9 V 82.0E; EXPECTATION SURVEY: 20.6 V 22.0E
HD Reports Q1 $ 1.67 v $1.62e, R$23.9B v $23.7Be
(US) APR HOUSING STARTS: 1.17M V 1.26ME; BUILDING PERMITS: 1.23M V 1.27ME
TATA.IN Reports Q4 (INR) Group loss 7.2B v profit 9.88Be, Rev 354.6B v 316.2Be
(US) APR INDUSTRIAL PRODUCTION M/M: 1.0% V 0.4%E; CAPACITY UTILIZATION: 76.7% V 76.3%E (largest total industrial production gain since Feb 2014)
(US) Atlanta Fed raises Q2 GDP to 4.1% from 3.6% on 5/12
(US) Weekly API Oil Inventories: Crude: +0.9M v -5.8M prior; first build in 3 weeks
(US) President Trump reportedly asked former FBI Director Comey to shut down investigation into National Sec Adviser Flynn, according to memo Comey wrote following a meeting with Trump - NY Times
(US) US House Chair of Oversight Committee Chaffetz (R): Has subpoena pen ready for Comey memo, oversight committee is going to get the memo
WEDS 5/17
(HK) Macau Gaming Regulator: No plans to set up online gaming; no plan to adj gaming tax
(UK) MAR AVERAGE WEEKLY EARNINGS 3M/Y/Y: 2.4% V 2.4%E; WEEKLY EARNINGS (EX BONUS) 3M/Y/Y: 2.1% V 2.1%E
*(UK) APR JOBLESS CLAIMS CHANGE: +19.4K V +33.5K PRIOR; CLAIMANT COUNT RATE: 2.3% V 2.2% PRIOR
(UK) MAR ILO UNEMPLOYMENT RATE 3M/3M: 4.6% V 4.7%E (lowest since 1975)
700.HK Reports Q1 (CNY) Net 14.5B v 13.0Be; Rev 49.6B v 46.4Be
(EU) EURO ZONE APR CPI M/M: 0.4% V 0.4%E; Y/Y (FINAL READING): 1.9% V 1.9%E; CPI CORE Y/Y(FINAL READING): 1.2% V 1.2%E
(DE) GERMANY SELLS €812M VS. €1.0B INDICATED IN 2.5% JULY 2044 BUNDS; AVG YIELD: 1.24% V 0.87% PRIOR; BID-TO-COVER: 2.3X V 1.2X PRIOR
*(PL) POLAND CENTRAL BANK (NBP) LEAVES BASE RATE UNCHANGED AT 1.50%; AS EXPECTED
TGT Reports Q1 $1.21 v $0.89e, R$16.0B v $15.6Be
F Confirms plan to cut 10% of Salaried workforce in North America and Asia as part of cost reduction program
(IR) Trump administration confirms will renew Iran sanctions waiver, as expected, related to nuclear agreement - press
(IE) Ireland PM Kenny confirms plan to resign; effective Thursday, May 18th; successor to be appointed June 2nd - Irish press
(US) Association of American Railroads weekly rail traffic report for week ending May 13th: 527.0K carloads and intermodal units, +5.7% y/y (18th straight week of gains)
CSCO Reports Q3 $0.60 v $0.58e, R$11.9B v $11.9Be; to cut 1.1K jobs (about 1.5% of total)
(US) Justice Dept names former FBI Director Mueller as special counsel to take over Russia probe - press
*(JP) JAPAN Q1 PRELIMINARY GDP Q/Q: 0.5% V 0.5%E; ANNUALIZED GDP: 2.2% V 1.7%E; 5th consecutive quarter of growth for the first time in 11 years
(CN) China developers expect their offshore dollar bond issuance to dramatically slow in the near term in an effort for govt to cool the sector - financial press
(HK) DICJ director Martins Chan: Macau gaming licenses will be not be renewed but open for bidding again when they expire; no plans for online gaming platforms
*(AU) AUSTRALIA APR EMPLOYMENT CHANGE: +37.4K (2nd straight increase; best 2-month rise since late 2015) V +5.0KE; UNEMPLOYMENT RATE: 5.7% (3-month low) V 5.9%E
*(CN) CHINA APR PROPERTY PRICES M/M: RISE IN 58 OUT OF 70 CITIES VS 62 PRIOR; Y/Y: RISE IN 69 OUT OF 70 CITIES V 68 PRIOR
(US) Democratic strategists said to begin poll-testing public opinions of impeaching Pres Trump - US press
THURS 5/18
BRBY.UK Reports FY16 Adj Pretax £462.4M v £457.1Me, Op Profit £458.7M v £417.8M y/y, Rev £2.77B v £2.77Be
*(ID) INDONESIA CENTRAL BANK (BI) LEAVES REVERSE REPO RATE UNCHANGED AT 4.75% (as expected)
(UK) APR RETAIL SALES (EX-AUTO/FUEL) M/M: 2.0% V 1.0%E; Y/Y: 4.5% V 2.6%E
(BR) Brazil govt allies said to seek resignation of President Temer - financial press
(US) Commerce Sec Ross: Do not see any reason for policy delay; calls special investigations a sideshow - CNBC
(EU) ECB ACCOUNT OF MONETARY POLICY MEETING (APR MINUTES): Broad agreement that monetary policy stance was appropriate; risk outlook has improved
(US) MAY PHILADELPHIA FED BUSINESS OUTLOOK: 38.8 V 18.5E
(US) APR LEADING INDEX: 0.3% V 0.4%E
(MX) US Trade Rep Lighthizer: confirms began 90-day consultation period to renegotiate NAFTA
(MX) MEXICO CENTRAL BANK (BANXICO) RAISES OVERNIGHT RATE BY 25BPS TO 6.75%; NOT EXPECTED
(BR) Brazil President Temer: I have nothing to hide; I will not resign; will prove innocence before Brazil's Supreme Court - comments in Brasilia
AMAT Reports Q2 $0.79 v $0.76e, R$3.55 v $3.54Be
CRM Reports Q1 $0.28 v $0.26e, R$2.39B v $2.35Be
*(CL) CHILE CENTRAL BANK (BCCH) CUTS OVERNIGHT RATE TARGET BY 25BPS TO 2.50%; NOT EXPECTED
FRIDAY 5/19
(UK) MAY CBI INDUSTRIAL TRENDS TOTAL ORDERS: 9 V 4E
DE Reports Q2 $2.49 v $1.70e, Net Equipment Rev $7.26B* v $7.24Be
(CN) China reportedly will lift at 2-year suspension of foreign funds raising money in China to invest overseas as early as June - financial press
(US) New York Fed Nowcast: raises Q2 GDP forecast to 2.3% from 1.9% from 5/12
(US) GOP healthcare bill CBO score scheduled for release on Weds afternoon (5/24) - press
Fri, 19 May 2017 16:14 PM EST
In most cases stock indices opened the week at or near recent all-time highs. A continuing run of decelerating US economic data and the steady beat of headlines coming out of Washington DC were largely offset by a move higher in oil prices. Crude was finding support in solidifying market expectations that OPEC would extend supply cuts through next spring when they meet next week. Volatility remained remarkably low, and stocks remained bid globally, helped in part by a speech from China’s President Xi that illustrated the importance his government intends to put on finding new drivers for growth in the wake of softer April economic data.
By mid-week the tone dramatically shifted. Headwinds from Washington freshened on a report former FBI Dir Comey had drafted a memo chronicling a meeting with President Trump where he was asked to drop the investigation into former National Sec Adviser Flynn. Within 24 hours, former FBI Dir Mueller was appointed special counsel to oversee the Russia investigation, while the President repeatedly denied the reports, calling the whole thing a ‘witch hunt.’ Markets finally buckled as investors became increasingly concerned the political fallout could ultimately be fatal for the Republican’s pro-growth agenda. The flight from risk assets sent the VIX +27%, ultimately filling the gap made into the French election. Gold prices rose along with global Treasury bonds, sending yields lower. The US 10-year yield fell just short of the April low of 2.18%. The Dollar index gave back all the post-US election/Trump reflation gains.
The move into safe have assets was short lived. Equity markets rebounded Thursday in the wake of better US economic readings and technically driven momentum buying after the significant reversal. Markets largely shrugged off the latest political crisis in Brazil, which brought a spat of elevated volatility to Brazilian assets and word the Trump administration was pushing ahead with the NAFTA renegotiation. Oil prices pressed higher on speculation OPEC was contemplating a scenario of deepening supply cuts, not just extending. WTI crude finished the week above the $50 mark, while the Dollar Index closed near $97 for the first time since before the Nov election. Dollar bulls were dismayed by notably.dovish commentary from the Fed's Bullard. The US 10-year yield rebounded back towards 2.25%, but the curve remained compressed. For the week the Dow, S&P and NASDAQ nearly did a round trip, all falling ~0.5%.
As earnings news this week slowed to a trickle, a few big names reported strong results. Home Depot bucked the trend of poor retailer reports by notching a solid beat on top and bottom line, as the home improvement giant remains buoyed by a stronger housing market and a boost in big-ticket transactions. Semis were up modestly in Friday trading after Applied Materials issued strong results and guidance as its chipmaker customers ramp up to bring more advanced production equipment online. Deere rebounded by beating expectations across the board and raising its outlook, with notable strength from international farm equipment sales and home construction equipment.
SUN 5/14
(CN) CHINA APR INDUSTRIAL PRODUCTION Y/Y: 6.5% V 7.0%E; YTD Y/Y 6.7% V 6.9%E
(CN) CHINA APR RETAIL SALES Y/Y: 10.7% V 10.8%E; YTD Y/Y: 10.2% V 10.2%E
(CN) CHINA APR FIXED ASSETS EX RURAL YTD Y/Y: 8.9% V 9.1%E
(SA) Saudi Oil Min Al-Falih: Russia and Saudi Arabia in favor of extending OPEC deal for 9-months to March 2018; decision to be made May 25th - financial press
MON 5/15
(US) MAY EMPIRE MANUFACTURING: -1.0 V +7.3E
(US) MAY NAHB HOUSING MARKET INDEX: 70 V 68E (second-highest reading since financial downturn)
(US) MAR TOTAL NET TIC FLOWS: -$0.7B V $13.2B PRIOR; LONG-TERM TIC FLOWS: $59.8B V $53.1B PRIOR
27.HK CEO Lui: Encouraged by recent improvements in VIP; will need a few mouths to see if recovery is sustainable
TUES 5/16
VOD.UK Reports FY16/17 Adj EBIT €3.97B v €3.70B y/y, adj EBITDA €14.1B v €14.2B y/y, Rev €47.6B v €49.8B y/y
*(UK) APR CPI M/M: 0.5% V 0.4%E; Y/Y: 2.7% V 2.6%E; CPI CORE Y/Y: 2.4% V 2.3%E
*(EU) EURO ZONE Q1 PRELIMINARY GDP Q/Q: 0.5% V 0.5%E; Y/Y: 1.7% V 1.7%E
*(DE) GERMANY MAY ZEW CURRENT SITUATION SURVEY: 83.9 V 82.0E; EXPECTATION SURVEY: 20.6 V 22.0E
HD Reports Q1 $ 1.67 v $1.62e, R$23.9B v $23.7Be
(US) APR HOUSING STARTS: 1.17M V 1.26ME; BUILDING PERMITS: 1.23M V 1.27ME
TATA.IN Reports Q4 (INR) Group loss 7.2B v profit 9.88Be, Rev 354.6B v 316.2Be
(US) APR INDUSTRIAL PRODUCTION M/M: 1.0% V 0.4%E; CAPACITY UTILIZATION: 76.7% V 76.3%E (largest total industrial production gain since Feb 2014)
(US) Atlanta Fed raises Q2 GDP to 4.1% from 3.6% on 5/12
(US) Weekly API Oil Inventories: Crude: +0.9M v -5.8M prior; first build in 3 weeks
(US) President Trump reportedly asked former FBI Director Comey to shut down investigation into National Sec Adviser Flynn, according to memo Comey wrote following a meeting with Trump - NY Times
(US) US House Chair of Oversight Committee Chaffetz (R): Has subpoena pen ready for Comey memo, oversight committee is going to get the memo
WEDS 5/17
(HK) Macau Gaming Regulator: No plans to set up online gaming; no plan to adj gaming tax
(UK) MAR AVERAGE WEEKLY EARNINGS 3M/Y/Y: 2.4% V 2.4%E; WEEKLY EARNINGS (EX BONUS) 3M/Y/Y: 2.1% V 2.1%E
*(UK) APR JOBLESS CLAIMS CHANGE: +19.4K V +33.5K PRIOR; CLAIMANT COUNT RATE: 2.3% V 2.2% PRIOR
(UK) MAR ILO UNEMPLOYMENT RATE 3M/3M: 4.6% V 4.7%E (lowest since 1975)
700.HK Reports Q1 (CNY) Net 14.5B v 13.0Be; Rev 49.6B v 46.4Be
(EU) EURO ZONE APR CPI M/M: 0.4% V 0.4%E; Y/Y (FINAL READING): 1.9% V 1.9%E; CPI CORE Y/Y(FINAL READING): 1.2% V 1.2%E
(DE) GERMANY SELLS €812M VS. €1.0B INDICATED IN 2.5% JULY 2044 BUNDS; AVG YIELD: 1.24% V 0.87% PRIOR; BID-TO-COVER: 2.3X V 1.2X PRIOR
*(PL) POLAND CENTRAL BANK (NBP) LEAVES BASE RATE UNCHANGED AT 1.50%; AS EXPECTED
TGT Reports Q1 $1.21 v $0.89e, R$16.0B v $15.6Be
F Confirms plan to cut 10% of Salaried workforce in North America and Asia as part of cost reduction program
(IR) Trump administration confirms will renew Iran sanctions waiver, as expected, related to nuclear agreement - press
(IE) Ireland PM Kenny confirms plan to resign; effective Thursday, May 18th; successor to be appointed June 2nd - Irish press
(US) Association of American Railroads weekly rail traffic report for week ending May 13th: 527.0K carloads and intermodal units, +5.7% y/y (18th straight week of gains)
CSCO Reports Q3 $0.60 v $0.58e, R$11.9B v $11.9Be; to cut 1.1K jobs (about 1.5% of total)
(US) Justice Dept names former FBI Director Mueller as special counsel to take over Russia probe - press
*(JP) JAPAN Q1 PRELIMINARY GDP Q/Q: 0.5% V 0.5%E; ANNUALIZED GDP: 2.2% V 1.7%E; 5th consecutive quarter of growth for the first time in 11 years
(CN) China developers expect their offshore dollar bond issuance to dramatically slow in the near term in an effort for govt to cool the sector - financial press
(HK) DICJ director Martins Chan: Macau gaming licenses will be not be renewed but open for bidding again when they expire; no plans for online gaming platforms
*(AU) AUSTRALIA APR EMPLOYMENT CHANGE: +37.4K (2nd straight increase; best 2-month rise since late 2015) V +5.0KE; UNEMPLOYMENT RATE: 5.7% (3-month low) V 5.9%E
*(CN) CHINA APR PROPERTY PRICES M/M: RISE IN 58 OUT OF 70 CITIES VS 62 PRIOR; Y/Y: RISE IN 69 OUT OF 70 CITIES V 68 PRIOR
(US) Democratic strategists said to begin poll-testing public opinions of impeaching Pres Trump - US press
THURS 5/18
BRBY.UK Reports FY16 Adj Pretax £462.4M v £457.1Me, Op Profit £458.7M v £417.8M y/y, Rev £2.77B v £2.77Be
*(ID) INDONESIA CENTRAL BANK (BI) LEAVES REVERSE REPO RATE UNCHANGED AT 4.75% (as expected)
(UK) APR RETAIL SALES (EX-AUTO/FUEL) M/M: 2.0% V 1.0%E; Y/Y: 4.5% V 2.6%E
(BR) Brazil govt allies said to seek resignation of President Temer - financial press
(US) Commerce Sec Ross: Do not see any reason for policy delay; calls special investigations a sideshow - CNBC
(EU) ECB ACCOUNT OF MONETARY POLICY MEETING (APR MINUTES): Broad agreement that monetary policy stance was appropriate; risk outlook has improved
(US) MAY PHILADELPHIA FED BUSINESS OUTLOOK: 38.8 V 18.5E
(US) APR LEADING INDEX: 0.3% V 0.4%E
(MX) US Trade Rep Lighthizer: confirms began 90-day consultation period to renegotiate NAFTA
(MX) MEXICO CENTRAL BANK (BANXICO) RAISES OVERNIGHT RATE BY 25BPS TO 6.75%; NOT EXPECTED
(BR) Brazil President Temer: I have nothing to hide; I will not resign; will prove innocence before Brazil's Supreme Court - comments in Brasilia
AMAT Reports Q2 $0.79 v $0.76e, R$3.55 v $3.54Be
CRM Reports Q1 $0.28 v $0.26e, R$2.39B v $2.35Be
*(CL) CHILE CENTRAL BANK (BCCH) CUTS OVERNIGHT RATE TARGET BY 25BPS TO 2.50%; NOT EXPECTED
FRIDAY 5/19
(UK) MAY CBI INDUSTRIAL TRENDS TOTAL ORDERS: 9 V 4E
DE Reports Q2 $2.49 v $1.70e, Net Equipment Rev $7.26B* v $7.24Be
(CN) China reportedly will lift at 2-year suspension of foreign funds raising money in China to invest overseas as early as June - financial press
(US) New York Fed Nowcast: raises Q2 GDP forecast to 2.3% from 1.9% from 5/12
(US) GOP healthcare bill CBO score scheduled for release on Weds afternoon (5/24) - press
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