TradeTheNews.com Weekly Market Update: French Election and Solid Earnings Restore Reflation Trade
Fri, 28 Apr 2017 16:08 PM EST
The week opened with a bang as markets breathed a sigh of relief that the polls accurately predicted Emmanuel Macron’s win in the first round of the French election, sparking a global scramble for risk assets. Global indices surged Monday and into Tuesday, Treasury yields moved up, and gold prices backed down from the $1,300 level. The VIX careened back down to briefly touch the lowest level since 2007 as traders unwound hedging trades from last week. The NASDAQ crossed above 6K for the first time ever, as the technology sector took center stage during earnings season, while other indices got back within striking distance of their all-time highs. For the week, the DJIA gained 1.9%, the S&P added 1.5%, and the Nasdaq rose 2.3%.
By Wednesday, focus shifted back to Washington DC, as speculation of a revived healthcare agreement picked up and the Trump administration unveiled an outline for its massive tax cut plans. But the winds coming from Washington were not entirely helpful to sentiment when the Trump administration repeatedly struck an aggressive posture on foreign trade, including setting tariffs on Canadian timber, initiating a trade investigation of the aluminum market, and a threat to withdraw from NAFTA. Equity trading leveled off into week's end, and Treasury yields made little headway to the upside.
In corporate news this week, tech names seemed to be the big winner on earnings boosted by the cloud. Amazon, Microsoft, and Alphabet all said that their cloud computing divisions were growing faster than their larger, mainline businesses, with Amazon notably making most of its profits from its AWS unit. Twitter reported a reassuring beat on its top and bottom line, as its user numbers spiked surprisingly, and the social media giant noted it’s seeing less abuse reported across the service. General Motors posted its highest profits since emerging from bankruptcy in 2009, thanks partly to an increase in North American sales, while Ford saw a 35% drop in profit due to the effects of recalls and rising material prices, and it warned about pricing falling for new and used cars. Caterpillar reported surprisingly strong results and raised guidance, but did caution that geopolitical and market uncertainty along with volatility in commodity prices continue to present risks for the rest of the year.
SUNDAY 4/23
BCR: BD to acquire Bard for $317.00/shr in cash and stock in a $24B deal
MONDAY 4/24
(DE) GERMANY APR IFO BUSINESS CLIMATE: 112.9 V 112.4E (highest since summer 2011); CURRENT ASSESSMENT: 121.1 V 119.2E
(UK) APR CBI INDUSTRIAL TRENDS TOTAL ORDERS: 4 V 6E
AA Reports Q1 $0.63 v $0.55e, R$2.7B v $2.97Be; Raises 17 demand outlook
(CA) US President Trump warns may put import tax on Canada dairy products - financial press
Hynix Semiconductor Reports Q1 Net KRW1.9T v KRW1.8Te; Op KRW2.5T v KRW2.4Te; Rev KRW6.3T v KRW6.0Te
TUESDAY 4/25
NOVN.CH Reports Q1 $1.13 v $1.10e, Core Op profit $3.01B v $3.26B y/y, R$11.54B v $11.6Be
SAP.DE Reports Q1 Non-IFRS Net €887M v €886Me, non-IFRS Op profit €1.20B v €1.23Be, Rev €5.29B v €5.18Be
(FR) FRANCE APR BUSINESS CONFIDENCE: 104 V 104E; MANUFACTURING CONFIDENCE: 108 V 105E
LMT Reports Q1 $2.61 v $2.76e, R$11.1B v $11.3Be
CAT Reports Q1 $1.28 v $0.62e, R$9.8B v $9.36Be
FCX Reports Q1 $0.15 adj v $0.17e, R$3.34B v $3.52Be
(US) Apr Philadelphia Fed Non-Manufacturing General Regional Business Conditions: 30.1 v 35.4 prior
(US) APR RICHMOND FED MANUFACTURING INDEX: 20 V 16E
(US) MAR NEW HOME SALES: 621K V 584KE
(US) APR CONSUMER CONFIDENCE: 120.3 V 122.5E
(US) Goldman Sachs chief economist Hatzius: not expecting US to reach 3% GDP growth in 2017 or 2018
TXN Reports Q1 $0.97 v $0.83e, R$3.40B v $3.30Be
(US) Trump administration drops support for border adjustment tax (BAT) on imports - NYT
BHP.AU Reports Q3 iron ore production 54.0Mt v 57.0Mte; Updates on US shale asset sale
(AU) AUSTRALIA Q1 CONSUMER PRICES (CPI) Q/Q: 0.5% V 0.6%E; Y/Y: 2.1% (highest since Q2 of 2014) V 2.2%E; TRIMMED MEAN Q/Q: 0.5% V 0.5%E ; Y/Y: 1.9% (5-quarter high) V 1.8%E
WEDNESDAY 4/26
SAN.ES Reports Q1 Net €1.87B v €1.73Be, Rev €12.0B v €11.1B q/q
CSGN.CH Reports Q1 Net CHF596M v CHF336.1Me, Pretax profit CHF889M v CHF648Me, Rev CHF5.5B v CHF5.39Be; Announces CHF4B rights offering, to retain full ownership of Swiss Bank
(FR) FRANCE APR CONSUMER CONFIDENCE: 100 V 100E
STAN.UK Reports Q1 Adj Pretax profit $1.05B v $850Me, Op Income $3.61B v $3.64Be
TWTR Reports Q1 $0.11 v $0.02e, R$548M v $512Me; DAU +14% y/y, +11% q/q
(TR) TURKEY CENTRAL BANK (CBRT) LEAVES BENCHMARK REPURCHASE RATE UNCHANGED AT 8.00%; AS EXPECTED
(US) Freedom Caucus says group is now in support of House Obamacare replacement bill following modifications - press
(US) Association of American Railroads weekly rail traffic report for week ending April 22nd: 515.1K carloads and intermodal units, +4.7% y/y (15th straight week of gains)
(US) White House econ adviser Cohn: look forward to working with House and Senate on tax proposal in weeks ahead; in agreement on the core principles
(US) White House: President Trump agrees to not terminate NAFTA at this time after conversations with Mexico's Nieto and Canada's Trudeau
(JP) BOJ LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10% AND 10-YEAR JGB YIELD TARGET AT AROUND 0.0%; AS EXPECTED
THURSDAY 4/27
AIR.FR Reports Q1 Adj EBIT €240M v €326Me, Rev €13.0B v €12.2B y/y
BAS.DE Reports Q1 EPS €1.97 v €1.81e, EBIT (before items) €2.46B v €2.38Be, Rev €16.9B v €15.7Be
ROG.CH Reports Q1 Rev CHF12.9B v CHF12.7Be
NOK1V.FI Reports Q1 adj Net €203M v €164Me, adj Op €341M v €329.5Me, Rev €5.39B v €5.28e
DBK.DE Reports Q1 Net €575M v €475Me, Pretax €878M v €579M y/y, Rev €7.34B v €8.07B y/y
BAYN.DE Reports Q1 Net profit €2.08B (adj) v €1.51M y/y, EBITDA adj €3.89B v €3.67Be, Rev €13.2B v €12.7Be; CFO Johannes Dietch to leave company effective end of May, 2018
ORA.FR Reports Q1 EBITDA €2.60B v €2.55B y/y, Rev €10.1B v €9.99B y/y
(DE) GERMANY APR GFK CONSUMER CONFIDENCE: 10.2 V 9.9E (matches highest level since Oct 2001)
RMS.FR Reports Q1 Rev €1.35B v €1.32Be
AZN.UK Reports Q1 Core EPS $0.99 v $0.82e, Rev $5.41B v $5.41Be
LLOY.UK Reports Q1 PBT £1.30B v £654M y/y, Underlying profit £2.08B v £1.96Be, Total Income £4.41B v £4.38B y/y
(DE) GERMANY APR CPI SAXONY M/M: -0.1% V +0.2% PRIOR; Y/Y: 2.1% V 1.8% PRIOR
(SE) SWEDEN CENTRAL BANK (RIKSBANK) LEAVES REPO RATE UNCHANGED AT -0.50%; AS EXPECTED
(SE) SWEDEN CENTRAL BANK (RIKSBANK) AMENDS QE BOND BUYING SCHEME; extends QE by SEK15B during H2 of 2017
(EU) EURO ZONE APR BUSINESS CLIMATE INDICATOR: 1.09 V 0.82E; CONSUMER CONFIDENCE (FINAL): -3.6 V -3.6E
(IT) ITALY DEBT AGENCY (TESORO) SELLS TOTAL €5.25B VS. €4.25-5.25B INDICATED RANGE IN 5-YEAR AND 10-YEAR BTP BONDS
POT Reports Q1 $0.18 v $0.10e, R$1.11B v $928Me
DOW Reports Q1 $1.04 v $0.99e, R$13.2B v $12.4Be
F Reports Q1 $0.39 v $0.34e, R$39.1B v $34.7Be
(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED
UPS Reports Q1 $1.32 v $1.30e, R$15.3B v $15.2Be
(DE) GERMANY APR PRELIMINARY CPI M/M: 0.0% V -0.1%E; Y/Y: 2.0% V 1.9%E
(US) MAR PRELIMINARY DURABLE GOODS ORDERS: 0.7% V 1.3%E; DURABLES EX-TRANSPORTATION:-0.2 % V +0.4%E
(EU) ECB chief Draghi: Reiterates forward guidance that rates to stay low or lower for an extended period beyond the end of QE until ECB sees a sustain pick up in inflation - Prepared remarks
(EU) ECB chief Draghi: Things are going better but did not discuss any exit strategy at today's meeting- Q&A
(US) Atlanta Fed cuts Q1 GDP to 0.2% from 0.5% on 4/18
AMZN Reports Q1 $1.48 v $1.03e, R$35.7B v $35.4Be
GOOGL Reports Q1 $7.73 v $7.48e, R$24.8B (includes $4.6B TAC) v $19.7Be
INTC Reports Q1 $0.66 v $0.65e, R$14.8B v $14.8Be; approves $10B increase to buyback program (5.7% of market cap)
MSFT Reports Q3 $0.73 v $0.69e, R$22.1B v $23.6Be
BIDU Reports Q1 $1.00 v $0.85e, R$2.45B v $2.32Be; CFO to step down, effective on appointment of successor
(JP) JAPAN MAR JOBLESS RATE: 2.8% V 2.9%E (matches lowest rate since Jun 1994)
(US) President Trump: North Korea is my biggest worry; Would love to resolve situation diplomatically, but it's "very difficult" - press interview
FRIDAY 4/28
UBSN.CH Reports Q1 Net CHF1.27B v CHF953Me, Adj Pretax profit CHF1.93B v CHF1.37B y/y, Adj Op Rev CHF7.53B v CHF7.06B y/y
(FR) FRANCE Q1 ADVANCE GDP Q/Q: 0.3% V 0.4%E; Y/Y: 0.8% V 0.9%E
SAN.FR Reports Q1 Business EPS €1.42 v €1.26e, Business Op €2.44B v €2.12B y/y, Rev €8.65B v €8.38Be
(UK) APR NATIONWIDE HOUSE PRICES M/M: -0.4% V +0.1%E; Y/Y: 2.6% V 3.3%E
RBS.UK Reports Q1 Net profit £259M v loss £968M y/y, adj Op £1.37B v £931M y/y, Rev £3.21B v £3.06B y/y
BARC.UK Reports Q1 Net £190M* v £433M y/y, adj Pretax £1.68B v £793M y/y, Core Net Rev £5.82B v £5.04B y/y
(FR) FRANCE APR PRELIMINARY CPI M/M: 0.1% V 0.1%E; Y/Y: 1.2% V 1.2%E
(EU) EURO ZONE MAR M3 MONEY SUPPLY Y/Y: 5.3% V 4.7%E
(UK) Q1 ADVANCE GDP Q/Q: 0.3% V 0.4%E; Y/Y: 2.1% V 2.2%E
(EU) EURO ZONE APR ADVANCE CPI ESTIMATE Y/Y: 1.9% V 1.8%E (returns to ECB target); CPI CORE Y/Y: 1.2% V 1.0%E (highest level since mid-2013)
GM Reports Q1 $1.70 v $1.45e, R$41.2B v $40.3Be
(US) Q1 EMPLOYMENT COST INDEX (ECI): 0.8% V 0.6%E
(US) Q1 ADVANCE GDP ANNUALIZED Q/Q: 0.7% V 1.0%E; PERSONAL CONSUMPTION: 0.3% V 0.9%E
(US) Q1 Advance GDP Price Index: 2.3% v 2.0%e; Core PCE Q/Q: 2.0% v 2.0%e
(US) APR CHICAGO PURCHASING MANAGER: 58.3 V 56.2E
(US) APR FINAL MICHIGAN CONFIDENCE: 97.0 V 98.0E
(US) New York Fed Nowcast: maintains Q1 GDP forecast at 2.7%, unchanged from 4/21; raises Q2 GDP forecast to 2.3% from 2.1% from 4/21
Friday, April 28, 2017
Saturday, April 22, 2017
Barrons weekend summary
Barrons weekend summary: Positive on top US banks, JNJ, MGM, SRPT, SRG, ORLY; Cautious on ARNC, HOG, INFY
Cover story: MORN has exerted an outsize influence on the mutual fund industry for 30 years, but under new chief executive Kunal Kapoor it will continue to undergo a transition with a move beyond data and research as passive investing grows more dominant.
Tech Trader: Tiernan Ray talks about the growing trend among tech companies of delivering products in beta form, so that “the future is not delivered anymore so much as teased,” as with GOOGL’s Google Glass or FB’s recent announcement about augmented reality.
Trader: The results of the French election could have a major effect on markets this week, says MS strategist Michael Wilson; Positive on JNJ: Company’s “revenue miss could be a buying opportunity now that its shares look more reasonably priced”; Positive on MGM: When the gaming giant reports earnings Thursday it won’t likely miss, and a drop in share price presents an opportunity for investors.
Features:
1) Positive on BAC, C, GS, JPM, MS, WFC: Six major banks trade at a discount to the S&P 500 after a selloff sparked by economic and political concerns, but their profit outlook is improving and the shares look like buys;
2) Positive on SRPT: Shares should appeal to investors because there’s a good chance company’s Duchenne muscular dystrophy drug, Exondys 51, will ramp up this year, making Sarepta an acquisition target;
3) Positive on SRG: The REIT spun off from SHLD is signing on new tenants who pay substantially more than shuttered Sears stores, and it offers the opportunity for significant long-term growth;
4) Positive on ORLY: Shares are down on an earnings miss and concerns about a move into auto parts by AMZN, but the company should be able to get past its problems, and cheap shares are a good long-term bet.
Profile: David Brown of Hawk Ridge Fund monitors companies carefully for catalysts, such as a change in regulation or a division with unseen promise (long: AAN, EHTH, RACE, FOGO, Opera Software; short: CVGW).
Interview: Paul Hickey and Justin Walters of Bespoke talk about their ten years in business and what they think about the bull market (picks: SOM, TRVG, ZTS; pans: BURL, P).
Follow-Up: Cautious on ARNC: The ouster of chief Klaus Kleinfeld and an upcoming proxy fight make shares of sister company AA a better bet for now; Cautious HOG: Iconic motorcycle maker faces declining ridership and an aging consumer base, making shares a risky bet despite their recent uptick.
European Trader: France’s presidential election is the most important European vote in years, more critical than the Brexit referendum, and it could dictate the future of the EU and the euro.
Asian Trader: Cautious on INFY, Tata Consultancy Services: Donald Trump’s executive order on H-1B work visas is more bad news for struggling Indian infotech outsourcers.
Emerging Markets: “Fixed-income investment in emerging markets has traditionally been dominated by sovereign Eurobonds, but yield-hungry investors are widening their horizons to corporate debt, with good results.”
Commodities: Gold has regained strength after a drop, reflecting concerns about the U.S. economy and worries about the European elections.
Streetwise: “An April survey of global money managers by Bank of America Merrill Lynch showed 83% of respondents consider U.S. stocks overvalued, the highest on record.”
Friday, April 21, 2017
Risk-On Returns as Leaders Jawbone Reform Efforts
TradeTheNews.com Weekly Market Update: Risk-On Returns as Leaders Jawbone Reform Efforts
Fri, 21 Apr 2017 16:04 PM EST
Trading resumed this week with investors looking to add back some of the risk taken out of their portfolios ahead of the long Easter break. A lack of escalation surrounding the Korean Peninsula and renewed hopes of forthcoming Congressional reform legislation spurred some early buying in equities and helped put a floor in bond yields. The IMF modestly raised its global growth outlook for 2017 to 3.5% as G20 finance ministers and central bankers met in Washington and produced mostly upbeat commentary about diminishing risks. The surprise move by UK PM May to call snap elections and the impending French election kept sentiment muted. Cable moved up roughly 2.5% and held most of those gains after the election announcement. For the week the DJIA rose 0.5%, the S&P gained 0.9%, and the Nasdaq added 1.8%.
US economic readings retreated from the recent higher levels and largely came up short of expectations. Overseas data, with the exception of the UK, revealed some relative strength which helped pressure the US Dollar Index to the its lowest levels in nearly a month. US Treasury yields hovered near their lowest levels since November and gold prices made a run at $1,300 early on before consolidating. On Friday, WTI crude slipped back below the $50 mark to levels not seen since March on what traders largely attributed to technical selling pressures. Regardless, US rig counts and total NA production continued to rise, overshadowing reports that OPEC is likely headed towards a six month extension of coordinated production cuts.
In corporate news this week, earnings season commenced with some big financial names. Goldman disappointed investors with a first quarter sales and earnings miss, sending the stock on its biggest one-day post-earnings selloff since going public in 1999. Morgan Stanley delivered a rebuke to its rival’s quarter, reporting a Q1 beat on both top and bottom lines, helped by a boost in bond trading revenue following the Fed's interest rate hike. Bank of America reported solid results, but they, along with several regional banks, exhibited slower loan growth in the quarter. American Express led the Dow higher on Thursday after its earnings beat indicated it might be finding ways to overcome last year’s Costco portfolio loss. In tech names, Netflix beat on earnings but missed on revenues, as streaming net new additions came in below management’s own guidance. IBM revenues came in below expectations, but its CFO said that was mostly due to increasing forex headwinds, and the hardware giant affirmed its full year outlook. On Friday Honeywell and Visa put up outstanding quarters yet again leading to new 52-week highs while GE meandered lower after missing quarterly cash flow projections.
SUNDAY 4/16
(TR) Turkey passes referendum on changing the constitution to replace its parliamentary system with the executive presidency with 51.5% v 48.7%; opposition to challenge result
(CN) CHINA Q1 GDP Y/Y: 6.9% V 6.8%E (fastest growth since the third quarter of 2015)
(CN) CHINA MAR RETAIL SALES Y/Y: 10.9% (3-month high) V 9.7%E; YTD Y/Y: 10.0% V 9.6%E
(CN) CHINA MAR INDUSTRIAL PRODUCTION Y/Y: 7.6% (highest since Dec 2014) V 6.3%E; YTD 6.8% V 6.3%E
(CN) CHINA MAR FIXED ASSETS EX RURAL YTD Y/Y: 9.2% (10-month high) V 8.8%E
MONDAY 4/17
US Federal Communications Commission (FCC) reportedly considering lifting a ban on telecoms companies engaging in merger talks - financial press
(US) APR EMPIRE MANUFACTURING: 5.2 V 15.0E
(US) APR NAHB HOUSING MARKET INDEX: 68 V 70E
(US) FEB TOTAL NET TIC FLOWS: $19.3B V $121.2B PRIOR; NET LONG-TERM TIC FLOWS: $53.4B V $5.9B PRIOR
NFLX Reports Q1 $0.40 v $0.38e, R$2.64B v $2.64Be
UAL Reports Q1 $0.41 (adj) v $0.37e, R$8.42B v $8.36Be
(CN) CHINA MAR PROPERTY PRICES M/M: RISE IN 62 OUT OF 70 CITIES VS 56 PRIOR; Y/Y: RISE IN 68 OUT OF 70 CITIES V 67 PRIOR
(JP) Japan nominates Goshi Kataoka and Hitoshi Suzuki to BOJ board; will replace BOJ dissenters Sato and Kiuchi
TUESDAY 4/18
(UK) PM MAY STATEMENT: CALLS FOR GENERAL ELECTION JUNE 8TH (as speculated); needs a stronger mandate to negotiate Brexit with EU
BAC Reports Q1 $0.41 v $0.35e, R$22.2B v $21.5Be
GS Reports Q1 $5.15 v $5.38e, R$8.03B v $8.37Be; Increases dividend 15% to $0.75/shr (implied yield 1.3%); authorizes additional $50M share buyback (0.6% of market cap)
*IMF UPDATES WORLD ECONOMIC OUTLOOK (WEO): Raises 2017 global growth forecast from 3.4% to 3.5%
*(US) MAR HOUSING STARTS: 1.22M V 1.25ME; BUILDING PERMITS: 1.26M V 1.25ME
(US) MAR INDUSTRIAL PRODUCTION M/M: 0.5% V 0.4%E; CAPACITY UTILIZATION: 76.1% V 76.1%E
(US) Atlanta Fed maintains Q1 GDP at 0.5%, unchanged from 4/14
IBM Reports Q1 $2.38 v $2.34e, R$18.2B v $18.5Be
WEDNESDAY 4/19
(HK) Macau reports Easter Weekend visitors 427K, +5.6% y/y
ASML.NL Reports Q1 Net €452M v €403Me, Rev €1.94B v €1.82Be
BRBY.UK Reports H2 Rev £1.61B v £1.61Be; SSS +3% v +3.8%e
HEIA.NL Reports Q1 Net €293M v €265M y/y
(EU) EURO ZONE MAR CPI M/M: 0.8% V 0.8%E; Y/Y (FINAL READING): 1.5% V 1.5%E; CPI CORE Y/Y(FINAL READING): 0.7% V 0.7%E
(US) Association of American Railroads weekly rail traffic report for week ending April 15th: 519.3K carloads and intermodal units, +3.9% y/y (14th straight week of gains)
CP Reports Q1 C$2.50 adj v C$2.50 y/y, rev C$1.6B v C$1.59B y/y
CSX Reports Q1 $0.51 v $0.43e, R$2.87B v $2.73Be
RIO.AU Reports Q1 global iron ore production 66.2Mt, -2% y/y, -10% q/q; Shipments 80.8Mt, +11% y/y
THURSDAY 4/20
NESN.CH Reports Q1 Rev CHF21.0B v CHF21.3Be
SU.FR Reports Q1 Rev €5.84B v €5.84Be, organic sales 3.1% y/y
UNA.NL Reports Q1 Rev €13.3B v €13.2Be; raises dividend 12% to €0.3585/shr
BMW.DE Reports prelim Q1 PBT €3.0B v €2.37B y/y, EBIT €2.65B v €2.46B y/y, Rev €23.4B v €20.9B y/y
*(ID) INDONESIA CENTRAL BANK (BI) LEAVES 7-DAY REVERSE REPO RATE UNCHANGED AT 4.75%; AS EXPECTED (6th straight pause in current easing cycle)
(US) APR PHILADELPHIA FED BUSINESS OUTLOOK: 22.0 V 25.5E (lowest since Dec)
(US) MAR LEADING INDEX: 0.4% V 0.2%E
BN.FR Reports Q1 Rev €5.46B v €5.31B y/y; raises FY outlook
KND Reportedly considering sale of nursing division, but also getting M&A interest for the whole company - M&A blog
V Reports Q2 $0.86 v $0.79e, R$4.48B v $4.30Be; announces $5B buyback (2% of market cap)
(JP) JAPAN APR PRELIMINARY PMI MANUFACTURING: 52.8 V 52.4 PRIOR (8th month of expansion)
FRIDAY 4/21
(FR) FRANCE APR PRELIMINARY MANUFACTURING PMI: 55.1 V 53.1E (7th month of expansion and and highest since Apr 2011)
*(DE) GERMANY APR PRELIMINARY MANUFACTURING PMI: 58.2 V 58.0E (29th month of expansion)
(EU) EURO ZONE APR PRELIMINARY MANUFACTURING PMI: 56.8 V 56.0E (46th month of expansion and highest since Apr 2011)
(UK) MAR RETAIL SALES (EX AUTO FUEL) M/M: -1.5% V -0.5%E; Y/Y: 2.6% V 3.8%E
GE Reports Q1 $0.21 v $0.17e, R$27.7B v $26.4Be
SLB Reports Q1 $0.25 v $0.25e, R$6.89B v $7.01Be
(US) APR PRELIMINARY MARKIT MANUFACTURING PMI: 52.8 V 53.8E
(US) MAR EXISTING HOME SALES: 5.71M V 5.60ME
Fri, 21 Apr 2017 16:04 PM EST
Trading resumed this week with investors looking to add back some of the risk taken out of their portfolios ahead of the long Easter break. A lack of escalation surrounding the Korean Peninsula and renewed hopes of forthcoming Congressional reform legislation spurred some early buying in equities and helped put a floor in bond yields. The IMF modestly raised its global growth outlook for 2017 to 3.5% as G20 finance ministers and central bankers met in Washington and produced mostly upbeat commentary about diminishing risks. The surprise move by UK PM May to call snap elections and the impending French election kept sentiment muted. Cable moved up roughly 2.5% and held most of those gains after the election announcement. For the week the DJIA rose 0.5%, the S&P gained 0.9%, and the Nasdaq added 1.8%.
US economic readings retreated from the recent higher levels and largely came up short of expectations. Overseas data, with the exception of the UK, revealed some relative strength which helped pressure the US Dollar Index to the its lowest levels in nearly a month. US Treasury yields hovered near their lowest levels since November and gold prices made a run at $1,300 early on before consolidating. On Friday, WTI crude slipped back below the $50 mark to levels not seen since March on what traders largely attributed to technical selling pressures. Regardless, US rig counts and total NA production continued to rise, overshadowing reports that OPEC is likely headed towards a six month extension of coordinated production cuts.
In corporate news this week, earnings season commenced with some big financial names. Goldman disappointed investors with a first quarter sales and earnings miss, sending the stock on its biggest one-day post-earnings selloff since going public in 1999. Morgan Stanley delivered a rebuke to its rival’s quarter, reporting a Q1 beat on both top and bottom lines, helped by a boost in bond trading revenue following the Fed's interest rate hike. Bank of America reported solid results, but they, along with several regional banks, exhibited slower loan growth in the quarter. American Express led the Dow higher on Thursday after its earnings beat indicated it might be finding ways to overcome last year’s Costco portfolio loss. In tech names, Netflix beat on earnings but missed on revenues, as streaming net new additions came in below management’s own guidance. IBM revenues came in below expectations, but its CFO said that was mostly due to increasing forex headwinds, and the hardware giant affirmed its full year outlook. On Friday Honeywell and Visa put up outstanding quarters yet again leading to new 52-week highs while GE meandered lower after missing quarterly cash flow projections.
SUNDAY 4/16
(TR) Turkey passes referendum on changing the constitution to replace its parliamentary system with the executive presidency with 51.5% v 48.7%; opposition to challenge result
(CN) CHINA Q1 GDP Y/Y: 6.9% V 6.8%E (fastest growth since the third quarter of 2015)
(CN) CHINA MAR RETAIL SALES Y/Y: 10.9% (3-month high) V 9.7%E; YTD Y/Y: 10.0% V 9.6%E
(CN) CHINA MAR INDUSTRIAL PRODUCTION Y/Y: 7.6% (highest since Dec 2014) V 6.3%E; YTD 6.8% V 6.3%E
(CN) CHINA MAR FIXED ASSETS EX RURAL YTD Y/Y: 9.2% (10-month high) V 8.8%E
MONDAY 4/17
US Federal Communications Commission (FCC) reportedly considering lifting a ban on telecoms companies engaging in merger talks - financial press
(US) APR EMPIRE MANUFACTURING: 5.2 V 15.0E
(US) APR NAHB HOUSING MARKET INDEX: 68 V 70E
(US) FEB TOTAL NET TIC FLOWS: $19.3B V $121.2B PRIOR; NET LONG-TERM TIC FLOWS: $53.4B V $5.9B PRIOR
NFLX Reports Q1 $0.40 v $0.38e, R$2.64B v $2.64Be
UAL Reports Q1 $0.41 (adj) v $0.37e, R$8.42B v $8.36Be
(CN) CHINA MAR PROPERTY PRICES M/M: RISE IN 62 OUT OF 70 CITIES VS 56 PRIOR; Y/Y: RISE IN 68 OUT OF 70 CITIES V 67 PRIOR
(JP) Japan nominates Goshi Kataoka and Hitoshi Suzuki to BOJ board; will replace BOJ dissenters Sato and Kiuchi
TUESDAY 4/18
(UK) PM MAY STATEMENT: CALLS FOR GENERAL ELECTION JUNE 8TH (as speculated); needs a stronger mandate to negotiate Brexit with EU
BAC Reports Q1 $0.41 v $0.35e, R$22.2B v $21.5Be
GS Reports Q1 $5.15 v $5.38e, R$8.03B v $8.37Be; Increases dividend 15% to $0.75/shr (implied yield 1.3%); authorizes additional $50M share buyback (0.6% of market cap)
*IMF UPDATES WORLD ECONOMIC OUTLOOK (WEO): Raises 2017 global growth forecast from 3.4% to 3.5%
*(US) MAR HOUSING STARTS: 1.22M V 1.25ME; BUILDING PERMITS: 1.26M V 1.25ME
(US) MAR INDUSTRIAL PRODUCTION M/M: 0.5% V 0.4%E; CAPACITY UTILIZATION: 76.1% V 76.1%E
(US) Atlanta Fed maintains Q1 GDP at 0.5%, unchanged from 4/14
IBM Reports Q1 $2.38 v $2.34e, R$18.2B v $18.5Be
WEDNESDAY 4/19
(HK) Macau reports Easter Weekend visitors 427K, +5.6% y/y
ASML.NL Reports Q1 Net €452M v €403Me, Rev €1.94B v €1.82Be
BRBY.UK Reports H2 Rev £1.61B v £1.61Be; SSS +3% v +3.8%e
HEIA.NL Reports Q1 Net €293M v €265M y/y
(EU) EURO ZONE MAR CPI M/M: 0.8% V 0.8%E; Y/Y (FINAL READING): 1.5% V 1.5%E; CPI CORE Y/Y(FINAL READING): 0.7% V 0.7%E
(US) Association of American Railroads weekly rail traffic report for week ending April 15th: 519.3K carloads and intermodal units, +3.9% y/y (14th straight week of gains)
CP Reports Q1 C$2.50 adj v C$2.50 y/y, rev C$1.6B v C$1.59B y/y
CSX Reports Q1 $0.51 v $0.43e, R$2.87B v $2.73Be
RIO.AU Reports Q1 global iron ore production 66.2Mt, -2% y/y, -10% q/q; Shipments 80.8Mt, +11% y/y
THURSDAY 4/20
NESN.CH Reports Q1 Rev CHF21.0B v CHF21.3Be
SU.FR Reports Q1 Rev €5.84B v €5.84Be, organic sales 3.1% y/y
UNA.NL Reports Q1 Rev €13.3B v €13.2Be; raises dividend 12% to €0.3585/shr
BMW.DE Reports prelim Q1 PBT €3.0B v €2.37B y/y, EBIT €2.65B v €2.46B y/y, Rev €23.4B v €20.9B y/y
*(ID) INDONESIA CENTRAL BANK (BI) LEAVES 7-DAY REVERSE REPO RATE UNCHANGED AT 4.75%; AS EXPECTED (6th straight pause in current easing cycle)
(US) APR PHILADELPHIA FED BUSINESS OUTLOOK: 22.0 V 25.5E (lowest since Dec)
(US) MAR LEADING INDEX: 0.4% V 0.2%E
BN.FR Reports Q1 Rev €5.46B v €5.31B y/y; raises FY outlook
KND Reportedly considering sale of nursing division, but also getting M&A interest for the whole company - M&A blog
V Reports Q2 $0.86 v $0.79e, R$4.48B v $4.30Be; announces $5B buyback (2% of market cap)
(JP) JAPAN APR PRELIMINARY PMI MANUFACTURING: 52.8 V 52.4 PRIOR (8th month of expansion)
FRIDAY 4/21
(FR) FRANCE APR PRELIMINARY MANUFACTURING PMI: 55.1 V 53.1E (7th month of expansion and and highest since Apr 2011)
*(DE) GERMANY APR PRELIMINARY MANUFACTURING PMI: 58.2 V 58.0E (29th month of expansion)
(EU) EURO ZONE APR PRELIMINARY MANUFACTURING PMI: 56.8 V 56.0E (46th month of expansion and highest since Apr 2011)
(UK) MAR RETAIL SALES (EX AUTO FUEL) M/M: -1.5% V -0.5%E; Y/Y: 2.6% V 3.8%E
GE Reports Q1 $0.21 v $0.17e, R$27.7B v $26.4Be
SLB Reports Q1 $0.25 v $0.25e, R$6.89B v $7.01Be
(US) APR PRELIMINARY MARKIT MANUFACTURING PMI: 52.8 V 53.8E
(US) MAR EXISTING HOME SALES: 5.71M V 5.60ME
Saturday, April 15, 2017
Barrons weekend summary
Barrons weekend summary: Cover story features REGN, VRTX; positive on HBI, WAB
Cover story: Drug-price increases are likely to ease because of market-based forces and government policy tweaks; Investors should focus on companies that are increasing revenue through new drugs and growing customer bases, such as REGN and VRTX, and not on serial price hikers such as ABBV, AMGN, and BIIB.
Features:
1) Positive on HBI: Demand for undergarments remains strong, and as retail inventories stabilize and Hanes sees cost savings from debt reduction and acquisitions, shares could rise 25%;
2) Positive on WAB: Company has completed about 50 acquisitions during the past decade, creating a diverse and less volatile business; shares could rise 20% in a year.
Tech Trader: Some people on Wall Street think AAPL should buy DIS to create a tech and media powerhouse, but it's a terrible idea, says columnist Tiernan Ray, since the companies are pursuing vastly different missions.
Trader: "The rally impetus from the so-called Trump trade seems depleted," and investors are worried the president will be unable to implement his economic policies; Positive in F: The stock's recent weakness reflects several concerns, but the automaker is sitting on a strong balance sheet, shares look cheap, and the company has a secure high dividend; Cautious on DAL: Carrier, considered the best-managed among top American rivals, could see its shares move higher if it can demonstrate earnings consistency and growth.
Advisor Rankings: Top 100: Barron's list of the top 100 financial advisors is topped by Andy Chase, Gregory Vaughan, Lyon Polk, and Brian Pfeifler of Morgan Stanley Private Wealth Management and Mark Curtis of Graystone Consulting; Barron's list of the top consultants to institutional investors is led by Graystone, UBS International Consulting Group, and Sheridan Road Financial.
Small Caps: Positive in Linamar (LNR.CA): Canadian company is well-positioned in a slowing auto market, and its engine and transmission components are poised to grow well above the market clip.
Profile: Rob Lanphier and Karl Brewer of the William Blair
Small-Mid Cap fund look for companies with a market value of $500M to $10B in sectors with double-digit weightings in the Russell 2500 Growth Index (top 10 holdings: CPRT, CSGP, LGND, SIX, TSCO, JCOM, MMS, BWXT, VEEV, BAH).
Interview: Michael Hartner, investment strategist at Merrill Lynch, discusses the "Icarus trade"-the idea that stocks will return to normal after years of monetary policy.
Follow-Up:
1) Positive in WFM: Shares could rise if grocer heeds advice from activist hedge fund Jana Partners to improve operations, shake up the board, and consider a sale;
2) Cautious on P: Internet radio station is struggling to remake its streaming business, but the brand has value and the worst could be over for shares.
European Trader: Investors want to know what strategies Akzo Nobel will employ to deliver more value as it faces increasing pressure to accept an acquisition bid from PPG.
Asian Trader: China's next business and commercial hub, the city of Xiong'an in Hebei province, could attract up to $350B in investment in the coming years, says Morgan Stanley.
Emerging Markets: "Long term, South Africa has little to cheer about," with president Jacob Zuma the target of corruption probes and his party moving toward more populist polices that will foster economic stagnation.
Commodities: Strong demand for cotton from abroad led to higher prices last year, but higher plantings this year should put downward pressure on them.
Streetwise: The autopilot approach of passive investing may be fine for young people, but retirees who need to navigate turbulent markets may prefer a skilled advisor.
Thursday, April 13, 2017
Risk Assets Fall Out of Favor During Holiday Shortened Week
TradeTheNews.com Weekly Market Update: Risk Assets Fall Out of Favor During Holiday Shortened Week
Thu, 13 Apr 2017 16:03 PM EST
Investors' risk appetite faded this week. Traders didn't necessarily attribute the change in sentiment to one headline; re-positioning ahead of Q2 earnings season and the French election, enhanced geopolitical concerns surrounding North Korea and Syria, combined with waning confidence in Washington DC's ability to deliver on promised economic reforms remained underlying themes. Volumes were noticeably muted, with the Easter calendar providing a bit of a lull in terms of both trader participation and likely catalysts. Against that backdrop the VIX jumped more than 20% touching levels not seen since the US election. For the week the Dow finished down 1%, the S&P lost 1.1%, and the NASDAQ slipped 1.2%.
Treasuries rallied throughout the week, and stocks fell out of favor. Today the US 10-year note yield fell to its lowest level this year at 2.21% before closing slightly higher. Medium term notes and long bonds auctioned over the week also saw average yields decline significantly from previous tenders. Gold and the Yen were also in high demand as alternative havens to fixed income. Gold moved up to levels not seen since November rising 2.6% over the week. The Yen surged to highest level against the US dollar since the November election after President Trump commented he was concerned about the Greenback getting too strong globally.
In corporate news for this shortened week, AT&T announced Monday it would acquire Straight Path for $95.63/share in a $1.6B all-stock deal. The telecom giant is aiming to strengthen its 5G service potential, as Straight Path is one of the largest holders of 28 GHz and 39 GHz millimeter wave spectrum, bands which have received FCC approval to carry 5G. AT&T and other telecoms, acquired additional spectrum for their 5G build out via a $20B FCC-run auction on Thursday. T-mobile spent just under $8B to capture about 45% of the low band spectrum being sold off by broadcasters. Swift Transportation acquired Knight Transportation in an all-stock transaction that will create the industry's largest full truckload company, with a combined EV of $6B. The deal would be the largest in the trucking sector since the $3B Con-way/XPO merger in 2015. Tesla may soon be supplying those truckers with autonomous semi-trucks, announcing that it will unveil its version of the big rig in September. Tesla also hit a financial milestone this week, surpassing General Motors in market cap to become the most valuable U.S. automaker. Late in the week, steel stocks were pressured after the US Commerce Department imposed preliminary duties on South Korean steel that were lower than had been anticipated.
SUNDAY APRIL 9TH
04/09 (HK) Macau’s biggest junket operator Suncity reports 1st half of March was +40% y/y
MONDAY APRIL 10th
(FR) BANK OF FRANCE MAR BUSINESS SENTIMENT: 103 V 104E
(EU) EURO ZONE APR SENTIX INVESTOR CONFIDENCE: 23.9 V 21.0E
Gartner: Cuts 2017 global IT spending forecast +1.4% y/y (prior 2.7%)
STRP To be acquired by AT&T for $95.63/shr in $1.6B all-stock deal
(US) Mar Labor Market Conditions Index Change: 0.4 v 1.0e
(US) Fed Chair Yellen: US economy now is pretty healthy - comments in Michigan
TUESDAY APRIL 11TH
(UK) MAR CPI M/M: 0.4% V 0.3%E; Y/Y: 2.3% V 2.3%E; CPI CORE Y/Y: 1.8% V 1.9%E
(DE) GERMANY APR ZEW CURRENT SITUATION SURVEY: 80.1 V 77.5E; EXPECTATIONS SURVEY: 19.5 V 14.8E
(SA) Saudi Arabia said to push for extension of OPEC production cuts - press
(CN) CHINA MAR CPI M/M: -0.3% (2nd straight decline) v -0.2% PRIOR; Y/Y: 0.9% V 1.0%E
(CN) CHINA MAR PPI Y/Y: 7.6% V 7.5%E; 7th consecutive increase
(KR) US Commerce Dept found South Korean steel producers have been dumping tubular steel, imposes preliminary duties of 2.76% to 24.9%
WEDNESDAY APRIL 12TH
TSCO.UK Reports FY16/17 adj PBT £729M v £335M y/y, adj Op £1.28B v £1.26Be, Rev (Inc Fuel) £55.9B v £55.7Be
(UK) FEB AVERAGE WEEKLY EARNINGS 3M/Y: 2.3% V 2.2%E; WEEKLY EARNINGS (EX BONUS) 3M/Y: 2.2% V 2.1%E
(UK) FEB ILO UNEMPLOYMENT RATE 3M/3M: 4.7% V 4.7%E
(UK) MAR JOBLESS CLAIMS CHANGE: +25.5K V -6.1K PRIOR; CLAIMANT COUNT RATE: 2.2% V 2.1% PRIOR
OPEC MONTHLY REPORT: OPEC oil production at 31.928M bpd, -153K bpd m/m
DAL Reports Q1 $0.77 v $0.73e, R$9.15B v $9.16Be
(US) MAR IMPORT PRICE INDEX M/M: -0.2% V -0.2%E; Y/Y: 4.2% V 4.0%E
(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 0.50%; AS EXPECTED
(US) Association of American Railroads weekly rail traffic report for week ending April 8th: 513.0K carloads and intermodal units, +7.1% y/y (13th straight week of gains)
(US) Pres Trump: US dollar is getting too strong; Will not label China a currency manipulator - press interview
THURSDAY APRIL 13th
CA.FR Reports Q1 Rev €21.3B v €21.3Be
JP Morgan Reports Q1 $1.65 v $1.51e, R$25.6B (managed) v $24.6Be; core loans +9% y/y, +1% q/q
Citigroup Reports Q1 $1.35 v $1.24e, R$18.1B v $17.8Be
(US) MAR PPI FINAL DEMAND M/M: -0.1% V 0.0%E; Y/Y: 2.3% V 2.4%E
(US) APR PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 98 V 96.5E
(US) Forces in Afghanistan struck ISIS tunnels with "the mother of all bombs", largest conventional bomb ever used by the US military – press
(US) FCC announces preliminary results of $19.8B spectrum auction; largest winners include T-Mobile, Dish, Comcast, U.S. Cellular
TSLA Elon Musk tweets: "Tesla Semi truck unveil set for September."
Thu, 13 Apr 2017 16:03 PM EST
Investors' risk appetite faded this week. Traders didn't necessarily attribute the change in sentiment to one headline; re-positioning ahead of Q2 earnings season and the French election, enhanced geopolitical concerns surrounding North Korea and Syria, combined with waning confidence in Washington DC's ability to deliver on promised economic reforms remained underlying themes. Volumes were noticeably muted, with the Easter calendar providing a bit of a lull in terms of both trader participation and likely catalysts. Against that backdrop the VIX jumped more than 20% touching levels not seen since the US election. For the week the Dow finished down 1%, the S&P lost 1.1%, and the NASDAQ slipped 1.2%.
Treasuries rallied throughout the week, and stocks fell out of favor. Today the US 10-year note yield fell to its lowest level this year at 2.21% before closing slightly higher. Medium term notes and long bonds auctioned over the week also saw average yields decline significantly from previous tenders. Gold and the Yen were also in high demand as alternative havens to fixed income. Gold moved up to levels not seen since November rising 2.6% over the week. The Yen surged to highest level against the US dollar since the November election after President Trump commented he was concerned about the Greenback getting too strong globally.
In corporate news for this shortened week, AT&T announced Monday it would acquire Straight Path for $95.63/share in a $1.6B all-stock deal. The telecom giant is aiming to strengthen its 5G service potential, as Straight Path is one of the largest holders of 28 GHz and 39 GHz millimeter wave spectrum, bands which have received FCC approval to carry 5G. AT&T and other telecoms, acquired additional spectrum for their 5G build out via a $20B FCC-run auction on Thursday. T-mobile spent just under $8B to capture about 45% of the low band spectrum being sold off by broadcasters. Swift Transportation acquired Knight Transportation in an all-stock transaction that will create the industry's largest full truckload company, with a combined EV of $6B. The deal would be the largest in the trucking sector since the $3B Con-way/XPO merger in 2015. Tesla may soon be supplying those truckers with autonomous semi-trucks, announcing that it will unveil its version of the big rig in September. Tesla also hit a financial milestone this week, surpassing General Motors in market cap to become the most valuable U.S. automaker. Late in the week, steel stocks were pressured after the US Commerce Department imposed preliminary duties on South Korean steel that were lower than had been anticipated.
SUNDAY APRIL 9TH
04/09 (HK) Macau’s biggest junket operator Suncity reports 1st half of March was +40% y/y
MONDAY APRIL 10th
(FR) BANK OF FRANCE MAR BUSINESS SENTIMENT: 103 V 104E
(EU) EURO ZONE APR SENTIX INVESTOR CONFIDENCE: 23.9 V 21.0E
Gartner: Cuts 2017 global IT spending forecast +1.4% y/y (prior 2.7%)
STRP To be acquired by AT&T for $95.63/shr in $1.6B all-stock deal
(US) Mar Labor Market Conditions Index Change: 0.4 v 1.0e
(US) Fed Chair Yellen: US economy now is pretty healthy - comments in Michigan
TUESDAY APRIL 11TH
(UK) MAR CPI M/M: 0.4% V 0.3%E; Y/Y: 2.3% V 2.3%E; CPI CORE Y/Y: 1.8% V 1.9%E
(DE) GERMANY APR ZEW CURRENT SITUATION SURVEY: 80.1 V 77.5E; EXPECTATIONS SURVEY: 19.5 V 14.8E
(SA) Saudi Arabia said to push for extension of OPEC production cuts - press
(CN) CHINA MAR CPI M/M: -0.3% (2nd straight decline) v -0.2% PRIOR; Y/Y: 0.9% V 1.0%E
(CN) CHINA MAR PPI Y/Y: 7.6% V 7.5%E; 7th consecutive increase
(KR) US Commerce Dept found South Korean steel producers have been dumping tubular steel, imposes preliminary duties of 2.76% to 24.9%
WEDNESDAY APRIL 12TH
TSCO.UK Reports FY16/17 adj PBT £729M v £335M y/y, adj Op £1.28B v £1.26Be, Rev (Inc Fuel) £55.9B v £55.7Be
(UK) FEB AVERAGE WEEKLY EARNINGS 3M/Y: 2.3% V 2.2%E; WEEKLY EARNINGS (EX BONUS) 3M/Y: 2.2% V 2.1%E
(UK) FEB ILO UNEMPLOYMENT RATE 3M/3M: 4.7% V 4.7%E
(UK) MAR JOBLESS CLAIMS CHANGE: +25.5K V -6.1K PRIOR; CLAIMANT COUNT RATE: 2.2% V 2.1% PRIOR
OPEC MONTHLY REPORT: OPEC oil production at 31.928M bpd, -153K bpd m/m
DAL Reports Q1 $0.77 v $0.73e, R$9.15B v $9.16Be
(US) MAR IMPORT PRICE INDEX M/M: -0.2% V -0.2%E; Y/Y: 4.2% V 4.0%E
(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 0.50%; AS EXPECTED
(US) Association of American Railroads weekly rail traffic report for week ending April 8th: 513.0K carloads and intermodal units, +7.1% y/y (13th straight week of gains)
(US) Pres Trump: US dollar is getting too strong; Will not label China a currency manipulator - press interview
THURSDAY APRIL 13th
CA.FR Reports Q1 Rev €21.3B v €21.3Be
JP Morgan Reports Q1 $1.65 v $1.51e, R$25.6B (managed) v $24.6Be; core loans +9% y/y, +1% q/q
Citigroup Reports Q1 $1.35 v $1.24e, R$18.1B v $17.8Be
(US) MAR PPI FINAL DEMAND M/M: -0.1% V 0.0%E; Y/Y: 2.3% V 2.4%E
(US) APR PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 98 V 96.5E
(US) Forces in Afghanistan struck ISIS tunnels with "the mother of all bombs", largest conventional bomb ever used by the US military – press
(US) FCC announces preliminary results of $19.8B spectrum auction; largest winners include T-Mobile, Dish, Comcast, U.S. Cellular
TSLA Elon Musk tweets: "Tesla Semi truck unveil set for September."
Saturday, April 8, 2017
Barrons weekend summary
Barrons weekend summary: Positive on STX and select energy names; cautious on GKOS
Cover story: Roger Ferguson, chief executive of TIAA-CREF, has taken a number of steps to reinvent the company, including hiring Vijay Advani to run the asset-management side, which has been rebranded as Nuveen, and consolidating a variety of businesses.
Features:
1) Positive on LNGG, Ultra Petroleum, SD, HK, MPO, GDPP: After emerging from bankruptcy, these energy companies reduced debt levels, have stronger balance sheets than many rivals, and are attracting interest from value-oriented investors;
2) Cautious on GKOS: Medical device maker has had a strong run, but faces increased competition from NCS and AGN; shares carry a high valuation, and a minor setback could send them down 30%;
3) The outlook for gold is stronger, with overproduction no longer an issue despite growing demand, especially in Asia; any whiff of stagflation could send the precious metal higher (Positive on GLD, GDX, GDXJ, ABX).
Tech Trader: Positive on STX: Chief Steve Luczo says investors misunderstand the company, one of three that make hard drives, and that it should be judged not by how many units its ships, but by the power and efficiency of each drive and their underlying technology.
Trader: Not all investors are confident about the market's resilience, and it may be necessary to tamp down confidence in an economic acceleration in the near term; Maxim analyst Stephen Anderson says the availability of cheap debt and strong cash-flow generation at restaurants make chains such as DNKN good acquisition targets; "Bank stocks have suffered with the death of the Trump trade. But that doesn't mean it's time to bail on the group."
Small Caps: Positive on JLL: Worries about the commercial real estate market have weighed on shares, but the stock already reflects pessimism and is trading at a substantial discount-shares could rise 40%.
Mutual Fund Quarterly:
1) Hersh Cohen of ClearBridge shares his top dividend picks, including MRK, SLB, IP, and PSX;
2) A look at how to use smart beta strategies to build stronger bond indexes, a problematic area for investors;
3) "Behavioral-finance fund managers capitalize on the errors investors routinely make," and some do it quite well, though not always at a low cost;
4) During the first quarter, growth mutual funds beat top value funds amid a strong stock rally based on hopes of economic growth, while foreign funds had the best performance.
Follow-Up: Positive on CELG: Trading at 17 times earnings, drug company is the rare case in its sector with rapid revenue growth, and shares could see a 12% gain, says Carter Gould of UBS; Cautious on AFSI: "The quality of the New York-based insurer's reserve practices remains questionable."
European Trader: Positive on Bayer, Novo Nordisk: U.S. investors can benefit from a valuation gap between the American and European markets that has created a price advantage for investors in the pharma giants.
Asian Trader: Investors need to be more vigilant about China's big bank stocks, which have seen a rally despite having near-nonexistent earnings growth and shrinking net-interest margins.
Emerging Markets: The Turkish market is likely to rally regardless of the outcome of a vote on 18 proposed constitutional amendments, because the result will put an end to uncertainty.
Commodities: Outages at three of the world's largest copper mines have erased what was expected to be a surplus, prompting analysts to forecast higher prices.
Streetwise: "Trillions from global central banks have already lifted stocks and bonds to giddy heights, but haven't animated the economy to quite the same extent."
Friday, April 7, 2017
Markets Directionless Amid Conflicting Data and Geopolitical Maneuvers
TradeTheNews.com Weekly Market Update: Markets Directionless Amid Conflicting Data and Geopolitical Maneuvers
Fri, 07 Apr 2017 16:09 PM EST
Equities remained within a fairly narrow range throughout most of the week as markets focused on events in Syria, as well as President Trump's highly anticipated meeting with China President Xi and congressional attempts to enact some part of the White House agenda. US stock markets traded mostly sideways, and for the week the DJIA was about flat, the S&P500 slipped 0.3%, and the Nasdaq fell 0.6%.
Stronger than expected ADP employment data pushed the Dow back up near 20,900 on Wednesday, but stocks to close down on the day after Speaker Ryan admitted that Republican factions were not yet “on the same page” on tax reform, and the FOMC minutes showed the Fed aiming to start shrinking its balance sheet in late 2017. The forecast for NFP had been raised to 180k after strong ADP data, so Friday's 98K top-line reading was surprising, sending 10-year notes to a low of 2.27%. That reaction was wiped out as New York Fed President Dudley reinforced the idea that the Fed may pause its rate hike schedule at the outset of the balance sheet runoff. 10-year yields rose again to close the day at 2.37% as the reflation trade remained intact.
The ECB faced continued pressure from German officials, most notably the Bundesbank. ECB President Draghi made comments dismissing the need to reduce the size of its QE program, despite many calling for it. Germany in particular is seeing rising inflation, while for other EU countries CPI remains subdued. There is likely to be more pressure as the Fed continues to hike rates. India hiked its key Reverse Repo rate this week in an attempt to defend the economy from rising inflation and maintain the spread to US dollar assets.
In corporate news, Tesla started the week off by posting Q1 deliveries above analyst estimates, which boosted investor confidence in 50K deliveries for the first half and bolstered the automaker’s effort as it starts production of the Model 3. Hospital stocks were volatile most of the week, as GOP members of Congress held meetings to potentially revive its Obamacare repeal endeavor, but the exercise was largely fruitless and the repeal bill remains in congressional purgatory as legislators start a two week recess. On the M&A front, a report indicated Staples is in early stage talks for a potential sale to private equity, in a deal that could be worth $7B. Bakery chain Panera Bread was acquired by investor JAB Holding -- owner of Krispy Kreme, Keurig, and various coffee retailers -- for $315/share in cash, in a deal valued at $7.5B. The $43B Syngenta-ChemChina merger received FTC approval, though some divestitures of US assets would be required.
SUNDAY APR 2
TSLA Reports Q1 deliveries just over 25.0K (~13.5K Model S; ~11.6K Model X), +69% y/y; Production 25.4K (deliveries and production fresh record highs)
(HK) Macau Mar Gaming Rev MOP21.23B v MOP22.99B prior; y/y: 18.1% v +11%e
MONDAY APR 3
(DE) GERMANY MAR FINAL MANUFACTURING PMI: 58.3 V 58.3E (confirms its 28th month of expansion and highest since Apr 2011)
(UK) MAR PMI MANUFACTURING: 54.2 V 55.0E (8th month of expansion)
(EU) EURO ZONE FEB UNEMPLOYMENT RATE: 9.5% V 9.5%E (lowest level since 2009)
(US) MAR ISM MANUFACTURING: 57.2 V 57.2E; PRICES PAID: 70.5 V 66.0E (prices paid highest since May 2011)
(US) Atlanta Fed raises Q1 GDP to 1.2% from 0.9% on 3/31
(ZA) S&P cuts South Africa sovereign credit rating to junk status, cuts one notch to BB+ from BBB-; outlook Negative
(US) Senate Democrats now have 41 votes against cloture, sufficient to filibuster nomination of Neil Gorsuch to the Supreme Court - press
(AU) AUSTRALIA FEB TRADE BALANCE (A$): +3.6B V +1.9BE (4TH CONSECUTIVE SURPLUS)
TUESDAY APR 4
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50% (AS EXPECTED)
SPLS Reportedly in early stage talks with private equity over potential sale of the company; could be valued at $7B - press
(US) FEB FINAL DURABLE GOODS ORDERS: 1.8% V 1.7%E; DURABLES EX-TRANSPORTATION : 0.5% V 0.4% PRELIM
(US) Atlanta Fed maintains Q1 GDP at 1.2%, unchanged from 4/3
(US) Richmond Fed President Lacker to resign effective today over improper disclosure of confidential FOMC information, earlier than planned - press
SYT FTC approves $43B merger with ChemChina; to require divestiture of US asset as a condition for merger approval
PNRA JAB Holding reportedly in advanced talks to acquire Panera - press
WEDNESDAY APR 5
PNRA Confirms to be acquired by investor JAB for $315/shr in cash valued at $7.5B; Q1 SSS +5.3%
(PL) POLAND CENTRAL BANK (NBP) LEAVES BASE RATE UNCHANGED AT 1.50%; AS EXPECTED
(US) MAR ADP EMPLOYMENT CHANGE: +263K V +185KE
(US) MAR FINAL MARKIT SERVICES PMI: 52.8 V 53.1E (lowest since Sept)
(US) GOP leaders and conservative factions reportedly likely to take break on healthcare talks - Axios
(US) House Speaker Ryan: House, Senate and White House are not yet on the same page regarding tax reform
(US) FOMC MINUTES FROM MARCH 15 MEETING: MOST PARTICIPANTS SEE CHANGE TO BALANCE SHEET POLICY LATER THIS YEAR
(US) Association of American Railroads weekly rail traffic report for week ending April 1st: 527.7K carloads and intermodal units, +7.2% y/y (12th straight week of gains)
BBBY Reports Q4 $1.84 v $1.77e, R$3.53B v $3.50Be; Raises dividend 20% to $0.15/shr (indicated yield 1.6%)
2202.HK Reports Mar contracted sales CNY63.6B v CNY33.6B y/y
(HK) HONG KONG MAR COMPOSITE PMI: 49.9 V 49.6 PRIOR; 3rd straight contraction
(CN) CHINA MAR CAIXIN PMI SERVICES: 52.2 V 52.6 PRIOR (6-month low and 3rd straight sequential decline)
THURSDAY APR 6
(IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 6.25%; AS EXPECTED; narrow rate corridor
(CZ) CZECH CENTRAL BANK (CNB) REMOVES FX FLOOR (allows the currency to float to stronger levels) - Extraordinary monetary policy meeting
(US) INITIAL JOBLESS CLAIMS: 234K V 250KE; CONTINUING CLAIMS: 2.03M V 2.03ME
(US) Senate Republicans pass "nuclear option" rule change that will allow for approval of Gorsuch Supreme Court nomination on a majority vote basis (as expected)
(CN) US Sec of State Tillerson: Has no doubt Syria is responsible for chemical attack this week; the chemical weapons attack requires a serious response
(PE) PERU CENTRAL BANK (BRCP) LEAVES REFERENCE RATE UNCHANGED AT 4.25%; AS EXPECTED
005930.KR Reports prelim Q1 Op profit KRW9.9T v KRW9.2Te, Rev KRW50T v KRW49.5Te
(SY) US LAUNCHED CRUISE MISSILES AGAINST AIRFIELD TARGETS IN SYRIA
FRIDAY APR 7
(CN) CHINA MAR FOREIGN RESERVES: $3.009T V $3.011TE (2nd straight month of increase)
(UK) FEB INDUSTRIAL PRODUCTION M/M: -0.7% V +0.2%E; Y/Y: 2.8% V 3.7%E
(GR) Eurogroup Chief Dijsselbloem: making significant progress on Greece; have an agreement on main Greek policy elements
(US) MAR UNEMPLOYMENT RATE: 4.5% V 4.7%E (lowest since April 2007)
(CA) CANADA MAR NET CHANGE IN EMPLOYMENT: +19.4K V +5.7KE; UNEMPLOYMENT RATE: 6.7% V 6.7%E
(US) MAR AVERAGE HOURLY EARNINGS M/M: 0.2% V 0.2%E; Y/Y: 2.7% V 2.7%E; AVERAGE WEEKLY HOURS: 34.3 V 34.4E
(US) MAR CHANGE IN NONFARM PAYROLLS: +98K V +180KE (lowest since May 2016)
Fri, 07 Apr 2017 16:09 PM EST
Equities remained within a fairly narrow range throughout most of the week as markets focused on events in Syria, as well as President Trump's highly anticipated meeting with China President Xi and congressional attempts to enact some part of the White House agenda. US stock markets traded mostly sideways, and for the week the DJIA was about flat, the S&P500 slipped 0.3%, and the Nasdaq fell 0.6%.
Stronger than expected ADP employment data pushed the Dow back up near 20,900 on Wednesday, but stocks to close down on the day after Speaker Ryan admitted that Republican factions were not yet “on the same page” on tax reform, and the FOMC minutes showed the Fed aiming to start shrinking its balance sheet in late 2017. The forecast for NFP had been raised to 180k after strong ADP data, so Friday's 98K top-line reading was surprising, sending 10-year notes to a low of 2.27%. That reaction was wiped out as New York Fed President Dudley reinforced the idea that the Fed may pause its rate hike schedule at the outset of the balance sheet runoff. 10-year yields rose again to close the day at 2.37% as the reflation trade remained intact.
The ECB faced continued pressure from German officials, most notably the Bundesbank. ECB President Draghi made comments dismissing the need to reduce the size of its QE program, despite many calling for it. Germany in particular is seeing rising inflation, while for other EU countries CPI remains subdued. There is likely to be more pressure as the Fed continues to hike rates. India hiked its key Reverse Repo rate this week in an attempt to defend the economy from rising inflation and maintain the spread to US dollar assets.
In corporate news, Tesla started the week off by posting Q1 deliveries above analyst estimates, which boosted investor confidence in 50K deliveries for the first half and bolstered the automaker’s effort as it starts production of the Model 3. Hospital stocks were volatile most of the week, as GOP members of Congress held meetings to potentially revive its Obamacare repeal endeavor, but the exercise was largely fruitless and the repeal bill remains in congressional purgatory as legislators start a two week recess. On the M&A front, a report indicated Staples is in early stage talks for a potential sale to private equity, in a deal that could be worth $7B. Bakery chain Panera Bread was acquired by investor JAB Holding -- owner of Krispy Kreme, Keurig, and various coffee retailers -- for $315/share in cash, in a deal valued at $7.5B. The $43B Syngenta-ChemChina merger received FTC approval, though some divestitures of US assets would be required.
SUNDAY APR 2
TSLA Reports Q1 deliveries just over 25.0K (~13.5K Model S; ~11.6K Model X), +69% y/y; Production 25.4K (deliveries and production fresh record highs)
(HK) Macau Mar Gaming Rev MOP21.23B v MOP22.99B prior; y/y: 18.1% v +11%e
MONDAY APR 3
(DE) GERMANY MAR FINAL MANUFACTURING PMI: 58.3 V 58.3E (confirms its 28th month of expansion and highest since Apr 2011)
(UK) MAR PMI MANUFACTURING: 54.2 V 55.0E (8th month of expansion)
(EU) EURO ZONE FEB UNEMPLOYMENT RATE: 9.5% V 9.5%E (lowest level since 2009)
(US) MAR ISM MANUFACTURING: 57.2 V 57.2E; PRICES PAID: 70.5 V 66.0E (prices paid highest since May 2011)
(US) Atlanta Fed raises Q1 GDP to 1.2% from 0.9% on 3/31
(ZA) S&P cuts South Africa sovereign credit rating to junk status, cuts one notch to BB+ from BBB-; outlook Negative
(US) Senate Democrats now have 41 votes against cloture, sufficient to filibuster nomination of Neil Gorsuch to the Supreme Court - press
(AU) AUSTRALIA FEB TRADE BALANCE (A$): +3.6B V +1.9BE (4TH CONSECUTIVE SURPLUS)
TUESDAY APR 4
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50% (AS EXPECTED)
SPLS Reportedly in early stage talks with private equity over potential sale of the company; could be valued at $7B - press
(US) FEB FINAL DURABLE GOODS ORDERS: 1.8% V 1.7%E; DURABLES EX-TRANSPORTATION : 0.5% V 0.4% PRELIM
(US) Atlanta Fed maintains Q1 GDP at 1.2%, unchanged from 4/3
(US) Richmond Fed President Lacker to resign effective today over improper disclosure of confidential FOMC information, earlier than planned - press
SYT FTC approves $43B merger with ChemChina; to require divestiture of US asset as a condition for merger approval
PNRA JAB Holding reportedly in advanced talks to acquire Panera - press
WEDNESDAY APR 5
PNRA Confirms to be acquired by investor JAB for $315/shr in cash valued at $7.5B; Q1 SSS +5.3%
(PL) POLAND CENTRAL BANK (NBP) LEAVES BASE RATE UNCHANGED AT 1.50%; AS EXPECTED
(US) MAR ADP EMPLOYMENT CHANGE: +263K V +185KE
(US) MAR FINAL MARKIT SERVICES PMI: 52.8 V 53.1E (lowest since Sept)
(US) GOP leaders and conservative factions reportedly likely to take break on healthcare talks - Axios
(US) House Speaker Ryan: House, Senate and White House are not yet on the same page regarding tax reform
(US) FOMC MINUTES FROM MARCH 15 MEETING: MOST PARTICIPANTS SEE CHANGE TO BALANCE SHEET POLICY LATER THIS YEAR
(US) Association of American Railroads weekly rail traffic report for week ending April 1st: 527.7K carloads and intermodal units, +7.2% y/y (12th straight week of gains)
BBBY Reports Q4 $1.84 v $1.77e, R$3.53B v $3.50Be; Raises dividend 20% to $0.15/shr (indicated yield 1.6%)
2202.HK Reports Mar contracted sales CNY63.6B v CNY33.6B y/y
(HK) HONG KONG MAR COMPOSITE PMI: 49.9 V 49.6 PRIOR; 3rd straight contraction
(CN) CHINA MAR CAIXIN PMI SERVICES: 52.2 V 52.6 PRIOR (6-month low and 3rd straight sequential decline)
THURSDAY APR 6
(IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 6.25%; AS EXPECTED; narrow rate corridor
(CZ) CZECH CENTRAL BANK (CNB) REMOVES FX FLOOR (allows the currency to float to stronger levels) - Extraordinary monetary policy meeting
(US) INITIAL JOBLESS CLAIMS: 234K V 250KE; CONTINUING CLAIMS: 2.03M V 2.03ME
(US) Senate Republicans pass "nuclear option" rule change that will allow for approval of Gorsuch Supreme Court nomination on a majority vote basis (as expected)
(CN) US Sec of State Tillerson: Has no doubt Syria is responsible for chemical attack this week; the chemical weapons attack requires a serious response
(PE) PERU CENTRAL BANK (BRCP) LEAVES REFERENCE RATE UNCHANGED AT 4.25%; AS EXPECTED
005930.KR Reports prelim Q1 Op profit KRW9.9T v KRW9.2Te, Rev KRW50T v KRW49.5Te
(SY) US LAUNCHED CRUISE MISSILES AGAINST AIRFIELD TARGETS IN SYRIA
FRIDAY APR 7
(CN) CHINA MAR FOREIGN RESERVES: $3.009T V $3.011TE (2nd straight month of increase)
(UK) FEB INDUSTRIAL PRODUCTION M/M: -0.7% V +0.2%E; Y/Y: 2.8% V 3.7%E
(GR) Eurogroup Chief Dijsselbloem: making significant progress on Greece; have an agreement on main Greek policy elements
(US) MAR UNEMPLOYMENT RATE: 4.5% V 4.7%E (lowest since April 2007)
(CA) CANADA MAR NET CHANGE IN EMPLOYMENT: +19.4K V +5.7KE; UNEMPLOYMENT RATE: 6.7% V 6.7%E
(US) MAR AVERAGE HOURLY EARNINGS M/M: 0.2% V 0.2%E; Y/Y: 2.7% V 2.7%E; AVERAGE WEEKLY HOURS: 34.3 V 34.4E
(US) MAR CHANGE IN NONFARM PAYROLLS: +98K V +180KE (lowest since May 2016)
Friday, March 31, 2017
Brexit Begins, Washington Resets
TradeTheNews.com Weekly Market Update: Brexit Begins, Washington Resets
Fri, 31 Mar 2017 16:08 PM EST
Equities returned to their bull trend this week on positive economic data and talk of tax reform from the Trump administration. Markets shook off concerns about the Trump legislative agenda after the failed effort at healthcare reform, as the prospects of moving on to economic policy implementation starting with tax cuts re-galvanized investors' interest in stocks. For the week, the Dow gained 0.3%, the S&P added 0.8% and the Nasdaq rose 1.4%.
Talk from various Fed officials of three rate hikes for 2017 and maintaining a prudent pace kept the reflation trade muted. The economy is seen as being on track, warranting another couple of hikes this year. However, the bond market had been looking for evidence there might be a total of four. 10-Year Treasuries maintained their yield within a tight range throughout the week; most price action kept yield between a month low of 2.37% and 2.41%. WTI crude bounced from last week's low at $47, to close the week above $50 a barrel, as EIA reported an unexpected drop in supply and traders' judged OPEC cuts in a different light.
The UK Prime Minister May sent a letter to the EU council formally initiating the Brexit process by triggering Article 50 of the EU constitution. The text of the letter was conciliatory, but also advised that it was in both parties' interest to reach an agreement. It also warned that security would be undermined if a deal was not reached and called for simultaneous negotiations of Brexit terms along with a future trade deal. The EU answered that trade negotiations can only happen once Brexit terms are at a well advanced point, and EU officials reiterated calls for a £50B divorce bill. The British government has not made any official comments so far as to the size of the divorce bill request. Less than two days after invoking Article 50, the UK reported Q4 final GDP at 1.9%, its worst annual growth pace in nearly four years and potentially a bad omen as the Brexit begins.
In corporate news, with earnings season past us, hospital names led the week off buoyed by the scuttling of the Republican healthcare plan. Greenlight's Einhorn pushed GM to boost its share value by splitting common stock into two separate classes, but management rejected the plan on grounds it could harm the carmaker’s investment-grade rating. On the M&A front, the EU formally blocked Deutsche Boerse’s plan to acquire London Stock Exchange, citing competition concerns. Semiconductor company Maxlinear acquired Exar Group for $13.00/shr in cash in a $700M transaction, seeking to build scale and boost growth. Cenovus agreed to acquire ConocoPhillips' 50% interest in the FCCL Partnership for $17.7B in cash and shares, as Conoco aims to accelerate its debt reduction plan. And FMC announced it would buy parts of Dupont's Crop protection business, and Dupont would acquire FMC Health and Nutrition, as part of a strategy to win EU approval for the Dow-Dupont merger.
SUNDAY 3/26
386.HK Reports Q4 Net CNY46.4B v CNY32.3B y/y; Op CNY77.2B v CNY56.8B y/y; Rev CNY1.93T v CNY2.02T y/y
2202.HK Reports FY16 Net CNY21.0B v CNY18.1B y/y, Rev CNY228.9B v CNY184.3B y/y
MONDAY 3/27
(EU) EURO ZONE FEB M3 MONEY SUPPLY Y/Y: 4.7% V 4.9%E
(DE) GERMANY MAR IFO BUSINESS CLIMATE: 112.3 V 111.1E (highest since July 2011); CURRENT ASSESSMENT: 119.3 V 118.3E
TUESDAY 3/28
3328.HK Reports FY16 Net CNY67.2B v CNY65.4Be, NII CNY134.9B v CNY144.2B y/y
(US) MAR RICHMOND FED MANUFACTURING INDEX: 22 V 15E
- Volume of new orders 26 v 24 prior
(US) MAR CONSUMER CONFIDENCE: 125.6 V 114.0E (highest since Dec 2000)
WEDNESDAY 3/29
(FR) FRANCE MAR CONSUMER CONFIDENCE: 100 V 100E
(TH)THAILAND CENTRAL BANK (BOT) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.50%; AS EXPECTED
494.HK Reports FY16 Net $223M v $283.5Me, Op profit $412M v $512M y/y, Rev $16.8B v $17.6Be
(UK) UK FORMALLY BEGINS BREXIT PROCESS WITH TRANSFER OF SIGNED ARTICLE 50 LETTER TO EU'S PRESIDENT TUSK
(UK) PM May presents content of Article 50 letter: Confirm beginning of Brexit process; no turning back from this historic moment to shape the future
(EU) ECB said to be wary of making any fresh-policy shift in its communication at its April meeting - financial press
(US) Fed’s Evans (dove, voter): there has been good progress towards Fed goals; supports one or two more rate hikes this year
(US) Fed's Rosengren (moderate, non-voter): Fed should raise rates four times in 2017; raises should only be delayed if data disappoints - remarks in Boston
(US) Association of American Railroads weekly rail traffic report for week ending March 25th: 526.4K carloads and intermodal units, +12% y/y (11th straight week of gains)
THURSDAY 3/30
(DE) GERMANY MAR CPI SAXONY M/M: 0.2% V 0.5% PRIOR; Y/Y: 1.8% V 2.4% PRIOR
1398.HK Reports FY16 Net CNY278.2B v CNY275.3Be, Net interest income CNY471.8B v CNY508B y/y
(EU) EURO ZONE MAR BUSINESS CLIMATE INDICATOR: 0.82 V 0.87E; CONSUMER CONFIDENCE (FINAL): -5.0 V -5.0E
(CZ) CZECH CENTRAL BANK (CNB) LEAVES REPURCHASE RATE UNCHANGED AT 0.05%; AS EXPECTED
(DE) GERMANY MAR PRELIMINARY CPI M/M: 0.2% V 0.4%E; Y/Y: 1.6% V 1.8%E
(US) INITIAL JOBLESS CLAIMS: 258K V 247KE; CONTINUING CLAIMS: 2.05M V 2.03ME
(US) Q4 FINAL GDP PRICE INDEX: 2.1% V 2.0%E; CORE PCE Q/Q: 1.3% V 1.2%E
(US) Q4 FINAL GDP ANNUALIZED Q/Q: 2.1% V 2.0%E; PERSONAL CONSUMPTION: 3.5% V 3.0%E
(ZA) SOUTH AFRICA CENTRAL BANK (SARB) LEAVES INTEREST RATES UNCHANGED AT 7.00%; AS EXPECTED
(US) Trump administration draft letter seeks changes to NAFTA, but not scrapping deal altogether - Washington Post
(EU) ECB's Knot (Netherlands): rate hike in early 2018 is closer to my own expectations - Dutch press interview
(UK) Scotland First Min Sturgeon sends letter (section 30) to UK govt formally requesting 2nd Scottish independence referendum - financial press
(MX) MEXICO CENTRAL BANK (BANXICO) RAISES OVERNIGHT RATE BY 25BPS TO 6.50%; AS EXPECTED
(ZA) South Africa President Zuma reportedly to make major cabinet reshuffle; Fin Min Gordhan will be affected by overhaul - press
(US) Fed's Dudley (dove, FOMC voter): Rate rises are needed to keep expansion on track; economic risks may be tilting toward the upside - comments in Florida
(JP) JAPAN FEB JOBLESS RATE: 2.8% V 3.0%E; lowest since June 1994
(CN) CHINA MAR MANUFACTURING PMI (GOVT OFFICIAL): 51.8 (highest since Apr 2012) V 51.7E; NON-MANUFACTURING PMI: 55.1 (highest since May 2014) V 54.2 PRIOR
FRIDAY 3/31
(EU) EU Brexit negotiation guidelines said to ban bilateral talks between UK and EU member States - financial press
(EU) EU President Tusk formally present Brexit negotiation guidelines: Will visit London with talks with PM May ahead of the Apr 29th summit; reiterates that UK must fulfill its financial obligation to EU
(UK) Q4 FINAL GDP Q/Q: 0.7% V 0.7%E; Y/Y: 1.9% V 2.0%E (lowest annual pace since Q1 2013)
3988.HK Reports FY16 Net CNY164.6B v CNY167.1Be, Op Rev CNY485.7B v CNY473.9B y/y
(EU) EURO ZONE MAR ADVANCE CPI ESTIMATE Y/Y: 1.5% V 1.8%E; CPI CORE Y/Y: 0.7% V 0.8%E
(US) FEB PERSONAL INCOME: 0.4% V 0.4%E; PERSONAL SPENDING: 0.1% V 0.2%E
(US) FEB PCE DEFLATOR M/M: 0.1% V 0.1%E; Y/Y: 2.1% V 2.1%E
(US) FEB PCE CORE M/M: 0.2% V 0.2%E; Y/Y: 1.8% V 1.7%E
(US) MAR CHICAGO PURCHASING MANAGER: 57.7 V 56.9E
(US) MAR FINAL MICHIGAN CONFIDENCE: 96.9 V 97.6E
(US) Atlanta Fed cuts Q1 GDP to 0.9% from 1.0% on 3/24
(US) New York Fed Nowcast: cuts Q1 GDP forecast to 2.9% from 3.0% on 3/24; cuts Q2 GDP forecast to 2.6% from 2.7%
Fri, 31 Mar 2017 16:08 PM EST
Equities returned to their bull trend this week on positive economic data and talk of tax reform from the Trump administration. Markets shook off concerns about the Trump legislative agenda after the failed effort at healthcare reform, as the prospects of moving on to economic policy implementation starting with tax cuts re-galvanized investors' interest in stocks. For the week, the Dow gained 0.3%, the S&P added 0.8% and the Nasdaq rose 1.4%.
Talk from various Fed officials of three rate hikes for 2017 and maintaining a prudent pace kept the reflation trade muted. The economy is seen as being on track, warranting another couple of hikes this year. However, the bond market had been looking for evidence there might be a total of four. 10-Year Treasuries maintained their yield within a tight range throughout the week; most price action kept yield between a month low of 2.37% and 2.41%. WTI crude bounced from last week's low at $47, to close the week above $50 a barrel, as EIA reported an unexpected drop in supply and traders' judged OPEC cuts in a different light.
The UK Prime Minister May sent a letter to the EU council formally initiating the Brexit process by triggering Article 50 of the EU constitution. The text of the letter was conciliatory, but also advised that it was in both parties' interest to reach an agreement. It also warned that security would be undermined if a deal was not reached and called for simultaneous negotiations of Brexit terms along with a future trade deal. The EU answered that trade negotiations can only happen once Brexit terms are at a well advanced point, and EU officials reiterated calls for a £50B divorce bill. The British government has not made any official comments so far as to the size of the divorce bill request. Less than two days after invoking Article 50, the UK reported Q4 final GDP at 1.9%, its worst annual growth pace in nearly four years and potentially a bad omen as the Brexit begins.
In corporate news, with earnings season past us, hospital names led the week off buoyed by the scuttling of the Republican healthcare plan. Greenlight's Einhorn pushed GM to boost its share value by splitting common stock into two separate classes, but management rejected the plan on grounds it could harm the carmaker’s investment-grade rating. On the M&A front, the EU formally blocked Deutsche Boerse’s plan to acquire London Stock Exchange, citing competition concerns. Semiconductor company Maxlinear acquired Exar Group for $13.00/shr in cash in a $700M transaction, seeking to build scale and boost growth. Cenovus agreed to acquire ConocoPhillips' 50% interest in the FCCL Partnership for $17.7B in cash and shares, as Conoco aims to accelerate its debt reduction plan. And FMC announced it would buy parts of Dupont's Crop protection business, and Dupont would acquire FMC Health and Nutrition, as part of a strategy to win EU approval for the Dow-Dupont merger.
SUNDAY 3/26
386.HK Reports Q4 Net CNY46.4B v CNY32.3B y/y; Op CNY77.2B v CNY56.8B y/y; Rev CNY1.93T v CNY2.02T y/y
2202.HK Reports FY16 Net CNY21.0B v CNY18.1B y/y, Rev CNY228.9B v CNY184.3B y/y
MONDAY 3/27
(EU) EURO ZONE FEB M3 MONEY SUPPLY Y/Y: 4.7% V 4.9%E
(DE) GERMANY MAR IFO BUSINESS CLIMATE: 112.3 V 111.1E (highest since July 2011); CURRENT ASSESSMENT: 119.3 V 118.3E
TUESDAY 3/28
3328.HK Reports FY16 Net CNY67.2B v CNY65.4Be, NII CNY134.9B v CNY144.2B y/y
(US) MAR RICHMOND FED MANUFACTURING INDEX: 22 V 15E
- Volume of new orders 26 v 24 prior
(US) MAR CONSUMER CONFIDENCE: 125.6 V 114.0E (highest since Dec 2000)
WEDNESDAY 3/29
(FR) FRANCE MAR CONSUMER CONFIDENCE: 100 V 100E
(TH)THAILAND CENTRAL BANK (BOT) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.50%; AS EXPECTED
494.HK Reports FY16 Net $223M v $283.5Me, Op profit $412M v $512M y/y, Rev $16.8B v $17.6Be
(UK) UK FORMALLY BEGINS BREXIT PROCESS WITH TRANSFER OF SIGNED ARTICLE 50 LETTER TO EU'S PRESIDENT TUSK
(UK) PM May presents content of Article 50 letter: Confirm beginning of Brexit process; no turning back from this historic moment to shape the future
(EU) ECB said to be wary of making any fresh-policy shift in its communication at its April meeting - financial press
(US) Fed’s Evans (dove, voter): there has been good progress towards Fed goals; supports one or two more rate hikes this year
(US) Fed's Rosengren (moderate, non-voter): Fed should raise rates four times in 2017; raises should only be delayed if data disappoints - remarks in Boston
(US) Association of American Railroads weekly rail traffic report for week ending March 25th: 526.4K carloads and intermodal units, +12% y/y (11th straight week of gains)
THURSDAY 3/30
(DE) GERMANY MAR CPI SAXONY M/M: 0.2% V 0.5% PRIOR; Y/Y: 1.8% V 2.4% PRIOR
1398.HK Reports FY16 Net CNY278.2B v CNY275.3Be, Net interest income CNY471.8B v CNY508B y/y
(EU) EURO ZONE MAR BUSINESS CLIMATE INDICATOR: 0.82 V 0.87E; CONSUMER CONFIDENCE (FINAL): -5.0 V -5.0E
(CZ) CZECH CENTRAL BANK (CNB) LEAVES REPURCHASE RATE UNCHANGED AT 0.05%; AS EXPECTED
(DE) GERMANY MAR PRELIMINARY CPI M/M: 0.2% V 0.4%E; Y/Y: 1.6% V 1.8%E
(US) INITIAL JOBLESS CLAIMS: 258K V 247KE; CONTINUING CLAIMS: 2.05M V 2.03ME
(US) Q4 FINAL GDP PRICE INDEX: 2.1% V 2.0%E; CORE PCE Q/Q: 1.3% V 1.2%E
(US) Q4 FINAL GDP ANNUALIZED Q/Q: 2.1% V 2.0%E; PERSONAL CONSUMPTION: 3.5% V 3.0%E
(ZA) SOUTH AFRICA CENTRAL BANK (SARB) LEAVES INTEREST RATES UNCHANGED AT 7.00%; AS EXPECTED
(US) Trump administration draft letter seeks changes to NAFTA, but not scrapping deal altogether - Washington Post
(EU) ECB's Knot (Netherlands): rate hike in early 2018 is closer to my own expectations - Dutch press interview
(UK) Scotland First Min Sturgeon sends letter (section 30) to UK govt formally requesting 2nd Scottish independence referendum - financial press
(MX) MEXICO CENTRAL BANK (BANXICO) RAISES OVERNIGHT RATE BY 25BPS TO 6.50%; AS EXPECTED
(ZA) South Africa President Zuma reportedly to make major cabinet reshuffle; Fin Min Gordhan will be affected by overhaul - press
(US) Fed's Dudley (dove, FOMC voter): Rate rises are needed to keep expansion on track; economic risks may be tilting toward the upside - comments in Florida
(JP) JAPAN FEB JOBLESS RATE: 2.8% V 3.0%E; lowest since June 1994
(CN) CHINA MAR MANUFACTURING PMI (GOVT OFFICIAL): 51.8 (highest since Apr 2012) V 51.7E; NON-MANUFACTURING PMI: 55.1 (highest since May 2014) V 54.2 PRIOR
FRIDAY 3/31
(EU) EU Brexit negotiation guidelines said to ban bilateral talks between UK and EU member States - financial press
(EU) EU President Tusk formally present Brexit negotiation guidelines: Will visit London with talks with PM May ahead of the Apr 29th summit; reiterates that UK must fulfill its financial obligation to EU
(UK) Q4 FINAL GDP Q/Q: 0.7% V 0.7%E; Y/Y: 1.9% V 2.0%E (lowest annual pace since Q1 2013)
3988.HK Reports FY16 Net CNY164.6B v CNY167.1Be, Op Rev CNY485.7B v CNY473.9B y/y
(EU) EURO ZONE MAR ADVANCE CPI ESTIMATE Y/Y: 1.5% V 1.8%E; CPI CORE Y/Y: 0.7% V 0.8%E
(US) FEB PERSONAL INCOME: 0.4% V 0.4%E; PERSONAL SPENDING: 0.1% V 0.2%E
(US) FEB PCE DEFLATOR M/M: 0.1% V 0.1%E; Y/Y: 2.1% V 2.1%E
(US) FEB PCE CORE M/M: 0.2% V 0.2%E; Y/Y: 1.8% V 1.7%E
(US) MAR CHICAGO PURCHASING MANAGER: 57.7 V 56.9E
(US) MAR FINAL MICHIGAN CONFIDENCE: 96.9 V 97.6E
(US) Atlanta Fed cuts Q1 GDP to 0.9% from 1.0% on 3/24
(US) New York Fed Nowcast: cuts Q1 GDP forecast to 2.9% from 3.0% on 3/24; cuts Q2 GDP forecast to 2.6% from 2.7%
Saturday, March 25, 2017
Barrons weekend update
Barrons weekend update: Positive on VIA, SIVB; cautious on SEDG
Cover story: Barron's list of the World's Best CEOs includes newcomers Mary Barra of GM, Satya Nadella of MSFT, and Stephen Hensley of UNH.
Features:
1) Positive on VIA: The media company's shares are up since Bob Bakish became CEO, and his plan to reorganize programming, revive reality TV, and create more content for MTV could give shares a 40% upside;
2) Cautious on SEDG: Shares of company that makes residential and commercial solar-power systems have taken a hit along with those of other firms in the sector, but shares are underpriced and could rally if sales targets are hit this year;
3) Positive on SIVB: Lender to venture capitalists and start-up founders expects strong earnings growth in the years ahead, and shares could move 25% or more higher.
Tech Trader: Tiernan Ray says the good times for MU aren't likely to last, since DRAM and flash memory chips "haven't become any less of a commodity since the stock bottomed out roughly a year ago."
Trader: Jason Trennert of Strategas Research Partners says that of nine factors that precede a market top, only one-slowing upward earnings revisions-is of concern; Robert Sluymer of Fundstrat Global Advisors says the number of energy stocks making new relative lows is no longer growing; Mall REITs have historically outperformed other real estate investments when rates are rising, a trend that should continue this year.
Interview: Mariko Gordon of small-cap specialist Daruma Capital looks for a positive rate of change in a company's fundamentals and for risks and rewards that aren't reflected in the valuation (picks: ABM, FCB, OMCL, NPO).
Profile: Jim Dondero of Highland Capital Management makes bets on alternative investments by focusing strongly on debt deals, turnarounds, and trends (top holdings: VSTE, CLO, TWTR, TRGP, LRN, PAGP, EPD, TerreStar, Argentina sovereign debt).
Follow-Up: Positive on YHOO: Company's shares trade at a discount to its likely asset value; assuming no change in its BABA stake, investors could realize a 20% return during the next year; Cautious on GME: Shares could rally if the company gains time for its transition to selling a wider range of merchandise, and strong sales on new products from Nintendo and MSFT.
European Trader: Positive on TOT: French oil major "could again find favor with investors after emerging from the recent oil-price collapse in better shape than many rivals."
Asian Trader: Positive on BABA, Tencent: With fintech set to be a major trend in China, tech giants have the potential to generate an estimated $65B in sales by 2020 from the technology, and add 60% to their current valuations.
Emerging Markets: Poland, Korea, and Mexico are the best-performing emerging-market countries so far this year, while Greece, Russia, and Qatar/UAE have performed the worst.
Commodities: Lumber prices are set to rise because of a small trade war under way between the U.S. and Canada related to the price Canadian foresters charge to cut down a tree.
Streetwise: "With the dollar's rise stalling and Americans balking at potential border adjustments that make imports pricier, investors looking to walk back their Trump trades could find NKE an increasingly comfortable fit."
Friday, March 24, 2017
‘Trump Bump’ Wobbles as Healthcare Bill Dies
TradeTheNews.com Weekly Market Update: ‘Trump Bump’ Wobbles as Healthcare Bill Dies
Fri, 24 Mar 2017 16:09 PM EST
The week saw a reversal in sentiment as investors grew concerned about the ability of the White House to push through the healthcare reform bill in the House and began to sell risk. Tuesday, the Dow lost more than 1%, its biggest one-day loss since last September. Stocks sold off on Friday morning as it appeared the Republicans didn’t have the votes to pass the bill, raising concerns about the Trump administration’s effectiveness in moving forward on the rest of its legislative agenda, including tax reform and infrastructure spending plans. Just before the close on Friday, the GOP pulled the healthcare bill, and stocks saw a relief rally led by the hospitals and healthcare sector. For the week, the S&P500 lost 1.4%, the DJIA dropped 1.5%, and the Nasdaq slipped 1.2%.
China's central bank intervened in the open market to add liquidity, as various financial institutions failed to meet payments. The Bank also tightened rules on borrowing and using corporate bonds as collateral, requiring a AAA rating on bonds as of April 7th. China may be starting to see the effects of financial stress typically associated with extremely high levels of credit-to-GDP ratios. However, the Shanghai Composite closed up on the week by 0.9%, bucking the global trend.
UK PM May set March 29th as the date to trigger the start of the Brexit negotiation process. Article 50 of the EU Treaty states that a member wishing to leave has two years from the date it officially triggers the process. Fears of a ‘hard Brexit’ have driven the Pound to recent lows, while the FTSE has reached new all-time highs. With the Brexit looming, however, the FTSE lost 1.2% over the week in sympathy with the US stock market, joining the sell-off of global stock indices as the Trump trade faded.
In corporate news, Nike shares fell following a mixed quarterly report and disappointing Q3 worldwide futures orders guidance. The sports retailer’s revenues disappointed the Street, despite a beat on earnings, which analysts mostly attributed to tighter expense management and shortening the production process length, amid increasing competition domestically from Under Armour and Adidas. Ford stock also slumped after guiding Q1 earnings below consensus, noting higher costs and unfavorable exchange rates, amid increasing sector worry about fast-falling used car prices. Micron closed out the week on a positive note, posting a big beat on earnings, as well as guiding much higher revenue and profit next quarter, citing strong demand and limited industry supply combined with a successful cost reduction plan.
SUNDAY 3/19
(CN) CHINA FEB PROPERTY PRICES M/M: RISE IN 56 OUT OF 70 CITIES VS 45 PRIOR; Y/Y: RISE IN 67 OUT OF 70 CITIES V 66 PRIOR
(CN) China property sector said to be more sensitive to rising interest rates - Chinese press
MONDAY 3/20
DBK.DE Guides FY17 Income to remain 'in comparison' y/y, Rev 'broadly flat' y/y; Plans to reorganise business into three divisions; Plans to recommend at least the minimum dividend - annual report
(US) FBI Director Comey: confirms that FBI is investigating Russian govt efforts to interfere in election, including potential links between Trump campaign and Russia - testimony to House Intel Committee
(UK) Report by PA Consulting Group found that a hard Brexit could increase the cost of making a car in the UK by £2,400
TUESDAY 3/21
BMW.DE Guides FY17 EBIT, Rev and Sales volume to see 'slight rise' y/y
*(UK) FEB CPI M/M: 0.7% V 0.5%E; Y/Y: 2.3% V 2.1%E; CPI CORE Y/Y: 2.0% V 1.7%E; inflation above BOE target for 1st time since Dec 2013
(UK) MAR CBI INDUSTRIAL TRENDS TOTAL ORDERS: 8 V 5E
(US) Mar Philadelphia Fed Non-Manufacturing General Business Conditions: 35.4 v 29.3 prior
NKE Reports Q3 $0.68 v $0.52e, R$8.43B v $8.45Be
- Gross margin 44.5% v 45.9% y/y
FDX Reports Q3 $2.35 v $2.63e, R$15.0B v $15.0Be
WEDNESDAY 3/22
RMS.FR Reports FY16 Net €1.1B v €1.1Be, Op profit €1.70B v €827M y/y; confirms mid-term Rev targets
700.HK Reports Q4 Net CNY10.5B v CNY11.0Be, Op CNY13.9B v CNY10.9B y/y; Rev CNY43.9B v CNY44.2Be
(US) FEB EXISTING HOME SALES: 5.48M V 5.55ME
(UK) Shots reportedly fired outside of UK Parliament building - press
(US) Association of American Railroads weekly rail traffic report for week ending March 18th: 495.3K carloads and intermodal units, +2.4% y/y (10th straight week of gains)
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED
THURSDAY 3/23
(DE) GERMANY APR GFK CONSUMER CONFIDENCE: 9.8 V 10.0E
(PH) PHILIPPINES CENTRAL BANK (BSP) LEAVES OVERNIGHT BORROWING RATE UNCHANGED AT 3.00%; AS EXPECTED
(GR) ECB raises emergency liquidity assistance (ELA) cap for Greece banks from €46.2B to €46.6B (1st hike since Jun 2015)
(EU) ECB PUBLISHES ECONOMIC BULLETIN: Reiterates March monetary policy stance
(TW) TAIWAN CENTRAL BANK (CBC) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.375%; AS EXPECTED
(UK) FEB RETAIL SALES (EX-AUTO FUEL) M/M: 1.3% V 0.3%E; Y/Y: 4.1% V 3.2%E V
(EU) ECB ALLOTS €233.5B IN FINAL TLTRO-2 OPERATION VS. €110BE (last auction of an unconventional tool)
*(US) INITIAL JOBLESS CLAIMS: 258K V 240KE; CONTINUING CLAIMS: 2.00M V 2.04ME
F Guides Q1 $0.30-0.35 v $0.45e - filing ahead of analyst event
(US) FEB NEW HOME SALES: 592K V 564KE
MU Reports Q2 $0.90 v $0.81e, R$4.65B v $4.65Be - filing
(JP) JAPAN MAR PRELIMINARY PMI MANUFACTURING: 52.6 V 53.3 PRIOR (7th month of expansion)
FRIDAY 3/24
CSGN.CH Revises Q4 Net loss CHF2.62B* v CHF2.35B prior reported following CHF272M charge after NCUA settlement on toxic mortgage securities - annual report
(FR) FRANCE MAR PRELIMINARY MANUFACTURING PMI: 53.4 V 52.4E (6th month of expansion)
(DE) GERMANY MAR PRELIMINARY MANUFACTURING PMI: 58.3 V 56.5E (28th month of expansion and highest since Apr 2011)
(EU) EURO ZONE MAR PRELIMINARY MANUFACTURING PMI: 56.2 V 55.3E (45th month of expansion and highest since Apr 2011)
(RU) RUSSIA CENTRAL BANK (CBR) CUTS 7-DAY AUCTION RATE BY 25BPS TO 9.75%; NOT EXPECTED
(US) FEB PRELIMINARY DURABLE GOODS ORDERS: 1.7% V 1.3%E; DURABLES EX-TRANSPORTATION: 0.4% V 0.6%E
(US) MAR PRELIMINARY MARKIT MANUFACTURING PMI: 53.4 V 54.8E (lowest since Oct)
(US) Atlanta Fed raises Q1 GDP to 1.0% from 0.9% on 3/16
(US) Labor Dept corrects jobless claims for March 18th week to 261K from 258K prior release
(US) New York Fed Nowcast: raises Q1 GDP forecast to 3.0% from 2.8% on 3/17; raises Q2 GDP forecast to 2.7% from 2.5%
(US) GOP congressional aide: GOP leaders are not confident they have votes to pass AHCA bill; now planning what to do next if healthcare bill fails - press
(US) US President Trump says the GOP has just pulled the healthcare bill - press
Fri, 24 Mar 2017 16:09 PM EST
The week saw a reversal in sentiment as investors grew concerned about the ability of the White House to push through the healthcare reform bill in the House and began to sell risk. Tuesday, the Dow lost more than 1%, its biggest one-day loss since last September. Stocks sold off on Friday morning as it appeared the Republicans didn’t have the votes to pass the bill, raising concerns about the Trump administration’s effectiveness in moving forward on the rest of its legislative agenda, including tax reform and infrastructure spending plans. Just before the close on Friday, the GOP pulled the healthcare bill, and stocks saw a relief rally led by the hospitals and healthcare sector. For the week, the S&P500 lost 1.4%, the DJIA dropped 1.5%, and the Nasdaq slipped 1.2%.
China's central bank intervened in the open market to add liquidity, as various financial institutions failed to meet payments. The Bank also tightened rules on borrowing and using corporate bonds as collateral, requiring a AAA rating on bonds as of April 7th. China may be starting to see the effects of financial stress typically associated with extremely high levels of credit-to-GDP ratios. However, the Shanghai Composite closed up on the week by 0.9%, bucking the global trend.
UK PM May set March 29th as the date to trigger the start of the Brexit negotiation process. Article 50 of the EU Treaty states that a member wishing to leave has two years from the date it officially triggers the process. Fears of a ‘hard Brexit’ have driven the Pound to recent lows, while the FTSE has reached new all-time highs. With the Brexit looming, however, the FTSE lost 1.2% over the week in sympathy with the US stock market, joining the sell-off of global stock indices as the Trump trade faded.
In corporate news, Nike shares fell following a mixed quarterly report and disappointing Q3 worldwide futures orders guidance. The sports retailer’s revenues disappointed the Street, despite a beat on earnings, which analysts mostly attributed to tighter expense management and shortening the production process length, amid increasing competition domestically from Under Armour and Adidas. Ford stock also slumped after guiding Q1 earnings below consensus, noting higher costs and unfavorable exchange rates, amid increasing sector worry about fast-falling used car prices. Micron closed out the week on a positive note, posting a big beat on earnings, as well as guiding much higher revenue and profit next quarter, citing strong demand and limited industry supply combined with a successful cost reduction plan.
SUNDAY 3/19
(CN) CHINA FEB PROPERTY PRICES M/M: RISE IN 56 OUT OF 70 CITIES VS 45 PRIOR; Y/Y: RISE IN 67 OUT OF 70 CITIES V 66 PRIOR
(CN) China property sector said to be more sensitive to rising interest rates - Chinese press
MONDAY 3/20
DBK.DE Guides FY17 Income to remain 'in comparison' y/y, Rev 'broadly flat' y/y; Plans to reorganise business into three divisions; Plans to recommend at least the minimum dividend - annual report
(US) FBI Director Comey: confirms that FBI is investigating Russian govt efforts to interfere in election, including potential links between Trump campaign and Russia - testimony to House Intel Committee
(UK) Report by PA Consulting Group found that a hard Brexit could increase the cost of making a car in the UK by £2,400
TUESDAY 3/21
BMW.DE Guides FY17 EBIT, Rev and Sales volume to see 'slight rise' y/y
*(UK) FEB CPI M/M: 0.7% V 0.5%E; Y/Y: 2.3% V 2.1%E; CPI CORE Y/Y: 2.0% V 1.7%E; inflation above BOE target for 1st time since Dec 2013
(UK) MAR CBI INDUSTRIAL TRENDS TOTAL ORDERS: 8 V 5E
(US) Mar Philadelphia Fed Non-Manufacturing General Business Conditions: 35.4 v 29.3 prior
NKE Reports Q3 $0.68 v $0.52e, R$8.43B v $8.45Be
- Gross margin 44.5% v 45.9% y/y
FDX Reports Q3 $2.35 v $2.63e, R$15.0B v $15.0Be
WEDNESDAY 3/22
RMS.FR Reports FY16 Net €1.1B v €1.1Be, Op profit €1.70B v €827M y/y; confirms mid-term Rev targets
700.HK Reports Q4 Net CNY10.5B v CNY11.0Be, Op CNY13.9B v CNY10.9B y/y; Rev CNY43.9B v CNY44.2Be
(US) FEB EXISTING HOME SALES: 5.48M V 5.55ME
(UK) Shots reportedly fired outside of UK Parliament building - press
(US) Association of American Railroads weekly rail traffic report for week ending March 18th: 495.3K carloads and intermodal units, +2.4% y/y (10th straight week of gains)
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED
THURSDAY 3/23
(DE) GERMANY APR GFK CONSUMER CONFIDENCE: 9.8 V 10.0E
(PH) PHILIPPINES CENTRAL BANK (BSP) LEAVES OVERNIGHT BORROWING RATE UNCHANGED AT 3.00%; AS EXPECTED
(GR) ECB raises emergency liquidity assistance (ELA) cap for Greece banks from €46.2B to €46.6B (1st hike since Jun 2015)
(EU) ECB PUBLISHES ECONOMIC BULLETIN: Reiterates March monetary policy stance
(TW) TAIWAN CENTRAL BANK (CBC) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.375%; AS EXPECTED
(UK) FEB RETAIL SALES (EX-AUTO FUEL) M/M: 1.3% V 0.3%E; Y/Y: 4.1% V 3.2%E V
(EU) ECB ALLOTS €233.5B IN FINAL TLTRO-2 OPERATION VS. €110BE (last auction of an unconventional tool)
*(US) INITIAL JOBLESS CLAIMS: 258K V 240KE; CONTINUING CLAIMS: 2.00M V 2.04ME
F Guides Q1 $0.30-0.35 v $0.45e - filing ahead of analyst event
(US) FEB NEW HOME SALES: 592K V 564KE
MU Reports Q2 $0.90 v $0.81e, R$4.65B v $4.65Be - filing
(JP) JAPAN MAR PRELIMINARY PMI MANUFACTURING: 52.6 V 53.3 PRIOR (7th month of expansion)
FRIDAY 3/24
CSGN.CH Revises Q4 Net loss CHF2.62B* v CHF2.35B prior reported following CHF272M charge after NCUA settlement on toxic mortgage securities - annual report
(FR) FRANCE MAR PRELIMINARY MANUFACTURING PMI: 53.4 V 52.4E (6th month of expansion)
(DE) GERMANY MAR PRELIMINARY MANUFACTURING PMI: 58.3 V 56.5E (28th month of expansion and highest since Apr 2011)
(EU) EURO ZONE MAR PRELIMINARY MANUFACTURING PMI: 56.2 V 55.3E (45th month of expansion and highest since Apr 2011)
(RU) RUSSIA CENTRAL BANK (CBR) CUTS 7-DAY AUCTION RATE BY 25BPS TO 9.75%; NOT EXPECTED
(US) FEB PRELIMINARY DURABLE GOODS ORDERS: 1.7% V 1.3%E; DURABLES EX-TRANSPORTATION: 0.4% V 0.6%E
(US) MAR PRELIMINARY MARKIT MANUFACTURING PMI: 53.4 V 54.8E (lowest since Oct)
(US) Atlanta Fed raises Q1 GDP to 1.0% from 0.9% on 3/16
(US) Labor Dept corrects jobless claims for March 18th week to 261K from 258K prior release
(US) New York Fed Nowcast: raises Q1 GDP forecast to 3.0% from 2.8% on 3/17; raises Q2 GDP forecast to 2.7% from 2.5%
(US) GOP congressional aide: GOP leaders are not confident they have votes to pass AHCA bill; now planning what to do next if healthcare bill fails - press
(US) US President Trump says the GOP has just pulled the healthcare bill - press
Saturday, March 18, 2017
Barron's weekend summary
Barron's weekend summary: Positive on DIS and water sector; cautious on GRUB
Cover story: Donald Trump's border adjustment tax is a bad idea, and is "so complicated that even its advocates can't agree on how its disruptive effects on the U.S. economy will play out"; Barron's says there are better ways to boost the economy.
Features:
1) Cautious on GRUB: Online food-ordering service has seen strong revenue and profit growth since 2013, but new rivals with deeper pocks could grab market share and dent earnings;
2) Positive on PHO, CGW, TTEK, XYL: There isn't a single dominant company to bet on in the
3) Positive on DIS: Company's film and parks divisions are doing well, and an upcoming ESPN service viewers will be able to access outside of cable packages should boost earnings growth next year.
Tech Trader: Positive on INTC, ORCL, IBM: Companies may be doing better than many investors expected, but little has changed in their strategy and operations, and they don't truly grasp the leaps technology is making.
Trader: The fact that tech stocks such as FB and PCLN are back in fashion is a sign investors have begun to doubt the economic growth spurt expected under the Trump administration; Cautious on FDX, NSC: Transportation companies are lagging, but investors have no reason to worry yet, says Doug Ramsey of Leuthold Group; Cautious on GOOS: Shares of trendy clothing company seem richly priced, and while it may have a strong year, its stock discounts many years of success, but not much risk.
Interview: Ellen Stanek, chief investment officer of Baird Advisors, "focuses on adding basis points of yield and return through old-fashioned credit analysis."
Profile: David Marcus, manager of the Evermore Global Value fund, focuses primarily on Europe and looks for value and change (top 10 holdings: Scorpio Bulkers, ENZ, Ainmt, Ambac Financial Group, Codere, Aurelius Equity Opportunities, NN Group, Bollore, Hapag-Lloyd, Telecom Italia).
Small Caps: Positive on WBT: Shares have gained 40% since Wellbilt was spun off from MTW, and could see more gains when investors better understand its business.
Best Online Brokers: Barron's list of the best online brokers for 2017 is topped by Fidelity, IBKR, AMTD, OptionsHouse, and SCHW.
Follow-Up : Positive on AAPL: Investors should hold shares until at least the end of summer, when buzz for the tenth anniversary iPhone will heat up and shares could see a 10% boost.
European Trader: The results of the recent Dutch elections have eased fears of a European Union breakup, but uncertainty about rising populism and upcoming elections in France and Germany could affect market s .
Asian Trader: The surprise majority win of Indian prime minister Narendra Modi's Bharatiya Janata party in Uttar Pradesh should send the country's stocks higher.
Emerging Markets: "Emerging-market skeptics may need to rethink their positions. While higher U.S. rates historically have been bad for emerging markets, this rate cycle looks different."
Commodities: A closer look at the natural-gas market indicates it may not be in as much trouble as it appears to be; investors should look past winter and prepare to make a summer play.
Streetwise: Investors have a number of issues to worry about, including the potential for a slower-than-expected economic recovery, an economic slowdown in China, and a Fed move to raise rates faster than the market anticipates.
Friday, March 17, 2017
Global Central Banks Mull Tighter Policy as Fed Hikes Again
TradeTheNews.com Weekly Market Update: Global Central Banks Mull Tighter Policy as Fed Hikes Again
Fri, 17 Mar 2017 16:17 PM EST
While German Chancellor Merkel and President Trump met at the White House to discuss their differences, the stock market continued to post gains on Friday, and closed up on the week. Major indices had faltered when the week began, as investors keep looking for promised fiscal policy implementation to buy at higher prices. While most economic data this week was strong and better than expected, that alone was not enough to send equities to new highs. For the week the DJIA gained 0.1%, the S&P rose 0.2%, and the Nasdaq added 0.7%.
Wednesday's FOMC meeting statement sent stock markets rallying again as the Fed framed a 25 basis point hike as a vote of confidence in the economy and reiterated it would raise rates gradually. The committee noted inflation is near the 2% target, but that it may also be willing to let inflation exceed that level for a while. Signals from Chair Yellen that interest rate normalization wouldn't happen faster than the economy could handle reassured buyers, as the market took on more risk, sending all major indices higher for the day. Those perceived reassurances on the speed of hikes didn't help bond prices, however, as fixed-income products sold off after the statement, reversing their rise from the beginning of the week.
Various central banks held monetary policy meetings on Thursday, and all three banks kept rates on hold. Japan, Switzerland and the UK kept their monetary policy unchanged, with no surprises from the first two central banks. Analysts, however, debated how long major developed economies such as Switzerland, Japan or the EU could keep current accommodating rates. ECB official Nowotny said that monetary policy in the EU is not like the US and that interest rates could rise before the end of the QE program (though no decision on this policy has been made yet). The BOE policy meeting kept the Asset Purchase Target in place with a unanimous vote, but on the question of rates Forbes dissented in favor of a rate hike. With the Brexit about to be triggered, higher rates for the UK are still seen as on hold, but that may change soon if economic data stays strong.
In corporate news this week, Intel announced it would acquire Mobileye for $15.3B in cash, as the chipmaker makes a move into the computer vision and machine learning space for autonomous vehicles, a sector it sees as a $70B market opportunity by 2030. Valeant shares were hit Monday on news Bill Ackman’s Pershing Square was liquidating its stake, with Ackman noting that he didn't realize how bad the Valeant situation was until he joined the board. Airline names ended the week slightly lower after some soft Q1 commentary from Southwest and a snowstorm which ravaged the Northeast led to over 1,500 flight cancellations. Amgen dragged down the biotech sector on Friday when study results showed its Repatha cholesterol treatment reduced heart attack risk, but perhaps not by enough to justify the price tag of the drug.
MONDAY 3/13
(UK) Scottish First Min Sturgeon (SNP): Confirms will seek authority for another independence referendum between autumn 2018 and spring 2019 period to give Scotland the opportunity to follow the UK out of the EU - speech from Edinburgh
(US) CBO scores American Health Care Act (AHCA): 14M more people would be uninsured in 2018 and 24M more by 2026
(CN) CHINA JAN-FEB FIXED ASSETS EX RURAL YTD Y/Y: 8.9% V 8.3%E (8-month high)
(CN) CHINA JAN-FEB INDUSTRIAL PRODUCTION Y/Y: 6.3% V 6.2%E (6-month high)
(CN) CHINA JAN-FEB RETAIL SALES Y/Y: 9.5% V 10.6%E (multi-year low)
MBLY Confirms to be acquired by Intel for $63.54/shr in cash valued at $15.3B; To be accretive to Intel EPS immediately
03/13 VRX Pershing Square sold its entire 27.2M share stake at $11.00/shr and Ackman to leave the board - CNBC
TUESDAY 3/14
(DE) GERMANY MAR ZEW CURRENT SITUATION SURVEY: 77.3 V 78.0E; EXPECTATIONS SURVEY: 12.8 V 13.0E
OPEC Monthly Report: raises 2017 global oil demand growth from 1.19M bpd to 1.26M bpd; boosts non OPEC supply growth forecast
(US) FEB PPI FINAL DEMAND M/M: 0.3% V 0.1%E; Y/Y: 2.2% V 1.9%E
WEDNESDAY 4/15
BAS.DE Raises prices globally for antioxidants & light stabilizers by 10% (majority of products); effective today
(CN) China Feb YTD Fiscal Balance at CNY660B (surplus)
(UK) JAN ILO UNEMPLOYMENT RATE 3M/3M: 4.7% V 4.8%E
(UK) FEB JOBLESS CLAIMS CHANGE: -11.3K V -41.2K PRIOR; CLAIMANT COUNT RATE: 2.1% V 2.2% PRIOR
(UK) JAN AVERAGE WEEKLY EARNINGS 3M/Y: 2.2% V 2.4%E; WEEKLY EARNINGS (EX BONUS) 3M/Y: 2.3% V 2.5%E
(US) FEB ADVANCE RETAIL SALES M/M: 0.1% V 0.1%E; RETAIL SALES EX AUTO M/M: 0.2% V 0.1%E
(US) MAR EMPIRE MANUFACTURING: 16.4 V 15.0E
(US) FEB CPI M/M: 0.1% V 0.0%E; CPI EX FOOD AND ENERGY M/M: 0.2% V 0.2%E; CPI INDEX NSA: 243.603 V 243.416E
(US) MAR NAHB HOUSING MARKET INDEX: 71 V 65E (highest since June 2005)
(US) Atlanta Fed cuts Q1 GDP forecast to 0.9% from 1.2% on 3/8
(US) Association of American Railroads weekly rail traffic report for week ending March 11th: 510.6K carloads and intermodal units, +4.4% y/y (ninth straight week of gains)
(US) FOMC RAISES FED FUNDS TARGET RANGE 25BPS TO 0.75-1.00% (AS EXPECTED); EXPECTS ECONOMIC CONDITIONS WILL EVOLVE IN WAY THAT WARRANTS GRADUAL INCREASES
(US) FOMC UPDATED ECONOMIC FORECAST FOR MARCH MEETING (DEC)
(US) Fed Chair Yellen: rate decision was based on economy's continued progress toward reaching our two mandates - post rate decision conf
(US) President Trump: will do something about rising CAFE standards for autos; US auto industry has been hurt, but won't be hurting for long - press
(US) Fed Chair Yellen: Fed wants confidence in economy before starting to shrink balance sheet; the term "well under way" is more qualitative than quantitative - Q&A
(US) JAN TOTAL NET TIC FLOWS: +$110.4B V -$42.8B PRIOR; NET LONG-TERM TIC FLOWS: +$6.3B V -$12.9B PRIOR
ORCL Reports Q3 $0.69 v $0.62e, R$9.21B v $9.24Be; Raises dividend 27% to $0.19/shr (implied yield 1.8%)
(NL) Netherlands election results (1st exit poll): PM Rutte's VVD party wins the most seats with 31 out of 150 in the lower house; Wilders' PVV wins 19 seats - Ipsos
(AU) AUSTRALIA FEB EMPLOYMENT CHANGE: -6.4K (first decline in 5 months) V +16.0KE; UNEMPLOYMENT RATE: 5.9% (13-month high) V 5.7%E
(CN) PBOC to inject combined CNY80B v CNY60B prior in 7-day,14-day, and 28-day reverse repos; raises all offer yields by 10bps
(CN) PBoC conducts total of CNY303B in 6-month and 1-yr Medium-term Lending Facility (MLF) operations; again raises rates by another 10bps
(JP) BOJ LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED; Maintains 10-yr JGB yield target around 0%; Cuts assessment of Housing sector
THURSDAY 3/16
(CH) SWISS NATIONAL BANK (SNB) LEAVES SIGHT DEPOSIT INTEREST RATE UNCHANGED AT -0.75%; AS EXPECTED
(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.50%; AS EXPECTED
(EU) EURO ZONE FEB CPI M/M: 0.4% V 0.4%E; Y/Y (FINAL READING): 2.0% V 2.0%E; CPI CORE Y/Y (FINAL READING): 0.9% V 0.9%E
(ID) INDONESIA CENTRAL BANK (BI) LEAVES 7-DAY REVERSE REPURCHASE RATE UNCHANGED AT 4.75%; AS EXPECTED
(TR) TURKEY CENTRAL BANK (CBRT) LEAVES BENCHMARK REPURCHASE RATE UNCHANGED AT 8.00%; AS EXPECTED
(UK) BANK OF ENGLAND (BOE) LEAVES INTEREST RATES UNCHANGED AT 0.25%; AS EXPECTED
(UK) BOE MAR MINUTES: VOTED 8-1 TO LEAVES INTEREST RATES UNCHANGED AT 0.50% (Forbes dissented, called for 25bps hike)
(US) FEB HOUSING STARTS: 1.29M V 1.26ME; BUILDING PERMITS: 1.21M V 1.27ME
(US) INITIAL JOBLESS CLAIMS: 241K V 240KE; CONTINUING CLAIMS: 2.03M V 2.05ME
(US) MAR PHILADELPHIA FED BUSINESS OUTLOOK: 32.8 V 30.0E
(EU) ECB's Nowotny (Austria): ECB strategy for tightening policy will be different from the US Fed; ECB could raise rates before QE ends - Handelsblatt interview
(CL) CHILE CENTRAL BANK (BCCH) CUTS OVERNIGHT RATE TARGET BY 25BPS TO 3.00%; AS EXPECTED
FRIDAY
TIF Reports Q4 $1.45 (adj) v $1.37e, R$1.23B v $1.22Be
(US) FEB INDUSTRIAL PRODUCTION M/M: 0.0% V 0.2%E; CAPACITY UTILIZATION: 75.4% V 75.5%E
(US) Fed's Kashkari (dove, dissenting voter): Fed should only resume rate hikes after it publishes a plan to reduce balance sheet and sees the market reaction to it
(US) FEB LEADING INDEX: 0.6% V 0.5%E (highest level in over a decade)
(US) MAR PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 97.6 V 97.0E
(US) New York Fed Nowcast: cuts Q1 GDP forecast to 2.8% from 3.2% on 3/10; cuts Q2 GDP forecast to 2.5% from 3.0%
(US) Weekly Baker Hughes US Rig Count: 789 v 768 w/w (+2.7%) (9th straight weekly rise)
Fri, 17 Mar 2017 16:17 PM EST
While German Chancellor Merkel and President Trump met at the White House to discuss their differences, the stock market continued to post gains on Friday, and closed up on the week. Major indices had faltered when the week began, as investors keep looking for promised fiscal policy implementation to buy at higher prices. While most economic data this week was strong and better than expected, that alone was not enough to send equities to new highs. For the week the DJIA gained 0.1%, the S&P rose 0.2%, and the Nasdaq added 0.7%.
Wednesday's FOMC meeting statement sent stock markets rallying again as the Fed framed a 25 basis point hike as a vote of confidence in the economy and reiterated it would raise rates gradually. The committee noted inflation is near the 2% target, but that it may also be willing to let inflation exceed that level for a while. Signals from Chair Yellen that interest rate normalization wouldn't happen faster than the economy could handle reassured buyers, as the market took on more risk, sending all major indices higher for the day. Those perceived reassurances on the speed of hikes didn't help bond prices, however, as fixed-income products sold off after the statement, reversing their rise from the beginning of the week.
Various central banks held monetary policy meetings on Thursday, and all three banks kept rates on hold. Japan, Switzerland and the UK kept their monetary policy unchanged, with no surprises from the first two central banks. Analysts, however, debated how long major developed economies such as Switzerland, Japan or the EU could keep current accommodating rates. ECB official Nowotny said that monetary policy in the EU is not like the US and that interest rates could rise before the end of the QE program (though no decision on this policy has been made yet). The BOE policy meeting kept the Asset Purchase Target in place with a unanimous vote, but on the question of rates Forbes dissented in favor of a rate hike. With the Brexit about to be triggered, higher rates for the UK are still seen as on hold, but that may change soon if economic data stays strong.
In corporate news this week, Intel announced it would acquire Mobileye for $15.3B in cash, as the chipmaker makes a move into the computer vision and machine learning space for autonomous vehicles, a sector it sees as a $70B market opportunity by 2030. Valeant shares were hit Monday on news Bill Ackman’s Pershing Square was liquidating its stake, with Ackman noting that he didn't realize how bad the Valeant situation was until he joined the board. Airline names ended the week slightly lower after some soft Q1 commentary from Southwest and a snowstorm which ravaged the Northeast led to over 1,500 flight cancellations. Amgen dragged down the biotech sector on Friday when study results showed its Repatha cholesterol treatment reduced heart attack risk, but perhaps not by enough to justify the price tag of the drug.
MONDAY 3/13
(UK) Scottish First Min Sturgeon (SNP): Confirms will seek authority for another independence referendum between autumn 2018 and spring 2019 period to give Scotland the opportunity to follow the UK out of the EU - speech from Edinburgh
(US) CBO scores American Health Care Act (AHCA): 14M more people would be uninsured in 2018 and 24M more by 2026
(CN) CHINA JAN-FEB FIXED ASSETS EX RURAL YTD Y/Y: 8.9% V 8.3%E (8-month high)
(CN) CHINA JAN-FEB INDUSTRIAL PRODUCTION Y/Y: 6.3% V 6.2%E (6-month high)
(CN) CHINA JAN-FEB RETAIL SALES Y/Y: 9.5% V 10.6%E (multi-year low)
MBLY Confirms to be acquired by Intel for $63.54/shr in cash valued at $15.3B; To be accretive to Intel EPS immediately
03/13 VRX Pershing Square sold its entire 27.2M share stake at $11.00/shr and Ackman to leave the board - CNBC
TUESDAY 3/14
(DE) GERMANY MAR ZEW CURRENT SITUATION SURVEY: 77.3 V 78.0E; EXPECTATIONS SURVEY: 12.8 V 13.0E
OPEC Monthly Report: raises 2017 global oil demand growth from 1.19M bpd to 1.26M bpd; boosts non OPEC supply growth forecast
(US) FEB PPI FINAL DEMAND M/M: 0.3% V 0.1%E; Y/Y: 2.2% V 1.9%E
WEDNESDAY 4/15
BAS.DE Raises prices globally for antioxidants & light stabilizers by 10% (majority of products); effective today
(CN) China Feb YTD Fiscal Balance at CNY660B (surplus)
(UK) JAN ILO UNEMPLOYMENT RATE 3M/3M: 4.7% V 4.8%E
(UK) FEB JOBLESS CLAIMS CHANGE: -11.3K V -41.2K PRIOR; CLAIMANT COUNT RATE: 2.1% V 2.2% PRIOR
(UK) JAN AVERAGE WEEKLY EARNINGS 3M/Y: 2.2% V 2.4%E; WEEKLY EARNINGS (EX BONUS) 3M/Y: 2.3% V 2.5%E
(US) FEB ADVANCE RETAIL SALES M/M: 0.1% V 0.1%E; RETAIL SALES EX AUTO M/M: 0.2% V 0.1%E
(US) MAR EMPIRE MANUFACTURING: 16.4 V 15.0E
(US) FEB CPI M/M: 0.1% V 0.0%E; CPI EX FOOD AND ENERGY M/M: 0.2% V 0.2%E; CPI INDEX NSA: 243.603 V 243.416E
(US) MAR NAHB HOUSING MARKET INDEX: 71 V 65E (highest since June 2005)
(US) Atlanta Fed cuts Q1 GDP forecast to 0.9% from 1.2% on 3/8
(US) Association of American Railroads weekly rail traffic report for week ending March 11th: 510.6K carloads and intermodal units, +4.4% y/y (ninth straight week of gains)
(US) FOMC RAISES FED FUNDS TARGET RANGE 25BPS TO 0.75-1.00% (AS EXPECTED); EXPECTS ECONOMIC CONDITIONS WILL EVOLVE IN WAY THAT WARRANTS GRADUAL INCREASES
(US) FOMC UPDATED ECONOMIC FORECAST FOR MARCH MEETING (DEC)
(US) Fed Chair Yellen: rate decision was based on economy's continued progress toward reaching our two mandates - post rate decision conf
(US) President Trump: will do something about rising CAFE standards for autos; US auto industry has been hurt, but won't be hurting for long - press
(US) Fed Chair Yellen: Fed wants confidence in economy before starting to shrink balance sheet; the term "well under way" is more qualitative than quantitative - Q&A
(US) JAN TOTAL NET TIC FLOWS: +$110.4B V -$42.8B PRIOR; NET LONG-TERM TIC FLOWS: +$6.3B V -$12.9B PRIOR
ORCL Reports Q3 $0.69 v $0.62e, R$9.21B v $9.24Be; Raises dividend 27% to $0.19/shr (implied yield 1.8%)
(NL) Netherlands election results (1st exit poll): PM Rutte's VVD party wins the most seats with 31 out of 150 in the lower house; Wilders' PVV wins 19 seats - Ipsos
(AU) AUSTRALIA FEB EMPLOYMENT CHANGE: -6.4K (first decline in 5 months) V +16.0KE; UNEMPLOYMENT RATE: 5.9% (13-month high) V 5.7%E
(CN) PBOC to inject combined CNY80B v CNY60B prior in 7-day,14-day, and 28-day reverse repos; raises all offer yields by 10bps
(CN) PBoC conducts total of CNY303B in 6-month and 1-yr Medium-term Lending Facility (MLF) operations; again raises rates by another 10bps
(JP) BOJ LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED; Maintains 10-yr JGB yield target around 0%; Cuts assessment of Housing sector
THURSDAY 3/16
(CH) SWISS NATIONAL BANK (SNB) LEAVES SIGHT DEPOSIT INTEREST RATE UNCHANGED AT -0.75%; AS EXPECTED
(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.50%; AS EXPECTED
(EU) EURO ZONE FEB CPI M/M: 0.4% V 0.4%E; Y/Y (FINAL READING): 2.0% V 2.0%E; CPI CORE Y/Y (FINAL READING): 0.9% V 0.9%E
(ID) INDONESIA CENTRAL BANK (BI) LEAVES 7-DAY REVERSE REPURCHASE RATE UNCHANGED AT 4.75%; AS EXPECTED
(TR) TURKEY CENTRAL BANK (CBRT) LEAVES BENCHMARK REPURCHASE RATE UNCHANGED AT 8.00%; AS EXPECTED
(UK) BANK OF ENGLAND (BOE) LEAVES INTEREST RATES UNCHANGED AT 0.25%; AS EXPECTED
(UK) BOE MAR MINUTES: VOTED 8-1 TO LEAVES INTEREST RATES UNCHANGED AT 0.50% (Forbes dissented, called for 25bps hike)
(US) FEB HOUSING STARTS: 1.29M V 1.26ME; BUILDING PERMITS: 1.21M V 1.27ME
(US) INITIAL JOBLESS CLAIMS: 241K V 240KE; CONTINUING CLAIMS: 2.03M V 2.05ME
(US) MAR PHILADELPHIA FED BUSINESS OUTLOOK: 32.8 V 30.0E
(EU) ECB's Nowotny (Austria): ECB strategy for tightening policy will be different from the US Fed; ECB could raise rates before QE ends - Handelsblatt interview
(CL) CHILE CENTRAL BANK (BCCH) CUTS OVERNIGHT RATE TARGET BY 25BPS TO 3.00%; AS EXPECTED
FRIDAY
TIF Reports Q4 $1.45 (adj) v $1.37e, R$1.23B v $1.22Be
(US) FEB INDUSTRIAL PRODUCTION M/M: 0.0% V 0.2%E; CAPACITY UTILIZATION: 75.4% V 75.5%E
(US) Fed's Kashkari (dove, dissenting voter): Fed should only resume rate hikes after it publishes a plan to reduce balance sheet and sees the market reaction to it
(US) FEB LEADING INDEX: 0.6% V 0.5%E (highest level in over a decade)
(US) MAR PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 97.6 V 97.0E
(US) New York Fed Nowcast: cuts Q1 GDP forecast to 2.8% from 3.2% on 3/10; cuts Q2 GDP forecast to 2.5% from 3.0%
(US) Weekly Baker Hughes US Rig Count: 789 v 768 w/w (+2.7%) (9th straight weekly rise)
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