Earnings Season Opens, Key Central Banks Talk Normalization and the Equity Rally Rolls on

TradeTheNews.com : Earnings Season Opens, Key Central Banks Talk Normalization and the Equity Rally Rolls on
Fri, 13 Oct 2017 16:05 PM EST

The party for US stock indices extended with the Transports leading the way higher throughout much of the week. Airline stocks climbed after managements’ indicated the industry weathered the September storms better than originally thought. The September FOMC minutes along with a deluge of commentary affirmed the Fed remained firmly on a charted course towards a December rate hike, but Friday’s softer than expected CPI figures supported the notion normalization will remain agonizingly slow. Global growth shined and officials from around the globe touted the synchronized pick up, while the Chinese import figures on Friday suggested potential acceleration. President Trump followed through with another of his election pledges when he essentially began the process of withdrawing from the 2015 Iranian nuclear deal. WIT crude prices climbed more than 3% on the week finishing back above the 200-day moving average. The Greenback largely stabilized before drifting lower late in the week along with Treasury yields following the disappointing inflation readings. For the week the S&P added 0.2%, the Dow gained 0.4% and the NASDAQ rose 0.2%.

In corporate news this week, JPMorgan and Citi kicked off earnings season by reporting a top-line beat, but shares traded down as some analysts saw weakness in loan volume growth and potential warnings signs in credit card charge offs. Wells Fargo also drifted lower after posting a miss on revenue and noting higher legal costs. Micron’s announced sale of $1.2B in new shares was received positively, bringing in so many buyers that shares priced at $41 instead of $40. Honeywell announced it would spin-off its homes product portfolio and global distribution unit into two separately publicly traded companies, but will retain its aerospace unit.

SUNDAY 10/8
*(CN) CHINA SEPT CAIXIN SERVICES PMI: 50.6 V 52.7 PRIOR (21-month low)

MONDAY 10/9
*(FR) BANK OF FRANCE SEPT BUSINESS SENTIMENT: 104 V 105E
*(CN) CHINA SEPT FOREIGN RESERVES: $3.1085T v $3.100Te (8th straight increase)
*(EU) EURO ZONE OCT SENTIX INVESTOR CONFIDENCE: 29.7 V 28.5E (highest reading since 2007)
HON Reportedly readying to spin off non-core assets into two new entities - press
OPEC Sec Gen Barkindo: Sees 2017 global oil demand growth at 1.45M bpd, sees 2018 demand growth at 1.4M bpd

TUESDAY 10/10
LG Electronics reports prelim Q3 (KRW) Op 516.1B v 283.2B y/y, Rev 15.2T v 13.2T y/y
(FR) FRANCE AUG INDUSTRIAL PRODUCTION M/M: -0.3% V +0.4%E; Y/Y: 2.4% V 1.5%E
(UK) AUG INDUSTRIAL PRODUCTION M/M: 0.2% V 0.2%E; Y/Y: 1.6% V 0.9%E
(DE) German IG Metall union recommends 6.0% pay increase for metal and electrical industry
WMT Affirms FY18 $4.30-4.40 v $4.38e (prior $4.30-4.40); Launches new $20B share repurchase program (8.3% of market cap) - investor day slides
IMF UPDATES WORLD ECONOMIC OUTLOOK (WEO): Raises 2017 global growth forecast from 3.5% to 3.6%; Raises 2018 global growth forecast from 3.6% to 3.7%
(ES) Spain pro-independence Popular Unity Candidacy party (CUP) has reportedly rejected the text of Catalan President Puigdemont speech - Spanish press
(ES) Catalan President Puigdemont: asks for mandate to declare Catalonia an independent state; proposes to suspend referendum results for several weeks in order to hold talks
(MX) US reportedly to seek stricter NAFTA rules of origin requiring 85% of content to come from the three NAFTA countries - CNBC
(AU) Australia sells A$3.5B (record amount) v A$3.5B indicated in Nov 2022 bonds, bid to cover 3.68x, avg yield 2.4167%

WEDS 10/11
DAL Reports Q3 $1.57 v $1.54e, Rev $11.1B v $11.0Be
(UK) PM May: if there is no Brexit deal, we will have to make arrangements with other EU states on citizen rights - comments in Parliament
(US) Pres Trump tweets: "Fake @NBCNews made up a story that I wanted a "tenfold" increase in our U.S. nuclear arsenal. Pure fiction, made up to demean. NBC = CNN!"
(US) AUG JOLTS JOB OPENINGS: 6.082M V 6.125ME
TMUS Sprint acquisition of T-Mobile reportedly to likely meet opposition from DOJ antitrust regulators - press
*(US) FOMC MINUTES FROM SEPT 19-20 MEETING: MANY FED POLICYMAKERS FELT ANOTHER RATE INCREASE WAS LIKELY WARRANTED THIS YEAR
(US) Association of American Railroads weekly rail traffic report for week ending Oct 7th: 554.8K carloads and intermodal units, +6.3% y/y (update)
(US) US President Trump: Looking at ~10% repatriation tax rate (vs current 35% corporate tax rate)
MU Prices upsized $1.2B (prior $1.0B) offering of 29.3M shares at $41.00/shr

THURS 10/12
(EU) EU Chief Negotiator Barnier: Have NOT made great steps in negotiations but recent round was constructive- 5th round of Brexit negotiation press conference
JPM Reports Q3 $1.76 v $1.67e, Rev $26.3B (Managed Rev) v $25.7Be
GM Reportedly cutting back on production on Detroit Hamtrack assembly plant for 6 weeks due to slower demand - press
C Reports Q3 $1.42 v $1.30e, Rev $18.2B v $17.7Be
(IN) INDIA SEPT CPI Y/Y: 3.3% V 3.5%E
(US) SEPT PPI FINAL DEMAND M/M: 0.4% V 0.4%E; Y/Y: 2.6% V 2.6%E
(US) US negotiators reportedly made proposal in talks to sunset NAFTA after five years - press
Samsung Reports prelim Q3 (KRW) Op profit 14.5T* (record) v 14.3Te, Rev 62.0T v 62.0Te
(SG) SINGAPORE Q3 ADVANCE GDP Q/Q: 6.3% V 3.7%E; Y/Y: 4.6% V 3.8%E
(SG) SINGAPORE CENTRAL BANK (MAS) SEMI-ANNUAL POLICY DECISION: KEEPS ZERO APPRECIATION PATH FOR SGD CURRENCY, maintains width and center of currency band
Samsung CEO*/Co-vice Chairman Kwon Oh-hyun to step down
(US) President Trump said to plan to end subsidy payments to insurers related to sale of Obamacare insurance coverage – US press
(CN) PBOC offers CNY498B 1-year Medium-term Lending Facility (MLF) OPERATION AT 3.2% V 3.2% PRIOR
*(CN) CHINA SEPT TRADE BALANCE (CNY) 193.0B V 266.1BE
*(CN) CHINA SEPT TRADE BALANCE: $28.5B V $38.0BE

FRIDAY 10/13
BAC Reports Q3 $0.48 v $0.46e, Rev $21.9B* v $22.0Be
(US) SEPT CPI M/M: 0.5% V 0.6%E; CPI EX FOOD AND ENERGY M/M: 0.1% V 0.2%E; CPI NSA: 246.819 V 246.911E
(US) SEPT ADVANCE RETAIL SALES M/M: 1.6% V 1.7%E; RETAIL SALES EX AUTO M/M: 1.0% V 0.9%E
(US) OCT PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 101.1 V 95.0E
(US) Atlanta Fed raises Q3 GDP to 2.7% from 2.5% on 10/6
(US) Pres Trump: We cannot and will not make this Iran nuclear deal certification (as expected)
(US) Weekly Baker Hughes US Rig Count: 928 v 936 w/w (-0.9%)

Barrons weekend summary

Barrons weekend summary: Positive features on WMT, RH, CTSH, MTCH; Cautious on CHL 

Cover story: Barron’s list of the top-performing sustainable funds, of which 37% beat the S&P 500 during the past year, is topped by CGM Focus, Vanguard Capital Opportunity, MassMutal Select Equity Opportunities, Putnam Multi-Cap Core, and Pioneer Core Equity. 

Features: 

1) Positive on WMT: The company’s acquisition of Jet.com has boosted its e-commerce efforts and brought fresh thinking and innovators such as Jet founder Marc Lore, now Wal-Mart’s e-commerce chief; 

2) Cautious on RH: The upscale furniture company’s shares are fully priced, but if it fails to keep growing amid competition from ETH, WSM’s West Elm, W, Houzz.com, and AMZN, the shares could lose a third of their value; 

3) Cautious on CHL: Chinese telecom has the industry’s best balance sheet, with $60B of net cash, but while that’s a source of strength and a draw for investors, some worry Beijing may divert the money to other state-owned enterprises; 

4) Positive on CTSH: Cognizant is increasingly moving into digital consulting and making other changes at the urging of activist investor Elliott Management; shares could rise another 15% as earnings growth reaccelerates; 

5) Positive on MTCH: Online dating company’s shares are up because of the success of a new paid feature, Tinder Gold, which has made Tinder among the highest-grossing apps in the AAPL App Store. 

Tech Trader: Positive on ATVI, EA, TTWO: Gaming companies have seen an increase in recurring spending from users, providing revenue streams for older games or new titles that don’t meet sales expectations—and the money flows straight to the bottom line. 

Trader: Wellington Shields technical analyst Frank Gretz says bull markets generally see a “blowoff” move from at least one sector before they end, and recommends watching the FANGs and financials; COST continues to face challenges in a changing retail sector, and nobody knows how its new grocery deliver services will affect in-store traffic; One of the biggest conundrums of the recovery is why wages aren’t rising faster if the U.S. economy is at full employment. 

Mutual Fund Quarterly: “More mutual funds that use social and environmental criteria are outperforming the market, and moving the style into the mainstream”; Interview with investor Jeremy Grantham, whose involvement in environmental causes is closely tied to his thinking on risk and opportunity in investing; Bond funds such as PAXHX, TSBRX, CONAX, CULAX, and GRNB may be better than stocks for investors looking to leverage ESG criteria in their portfolios; Funds that combine ESG and smart beta approaches will start to gain steam as more become available in the market; ESG funds are starting to use their size to change corporate behavior; All major fund categories except one had positive returns in the third quarter, with international stock funds outperforming U.S. counterparts; A list of the best and worst performers in the third quarter. 

Follow-Up: Positive on GM: Story says the automaker “is well-placed to make self-driving, shared, battery-powered cars of the future”; investors should hang onto shares, which have more upside and a 3.4% dividend yield. 

European Trader: Investors may want to be careful with Spanish stocks, because Catalonia—which accounts for 19% of Spain’s GDP—could succeed in its independence effort. 

Asian Trader: The Indian stock market remains one Asia’s best performers this year, but some investors think it has moved too far, too fast—though this is probably not a long-term concern. 

Emerging Market: The U.S. is in the late stages of a bull market and investors should seek out emerging market funds with handpicked stocks, says Ruchir Sharma of Morgan Stanley Investment Management. 

Commodities: For the first time in 16 years, palladium has made the biggest gains in the commodity sector, but platinum should bypass it in price by the end of the year. 

Streetwise: With the prospect of significant new federal gun legislation low, gun stocks appear to be more trading vehicles than long-term investments, and some—including RGR and AOBC—appear overpriced.

Hurricane Distorted Jobs Data Cap Turbulent Week

TradeTheNews.com Weekly Market Update: Hurricane Distorted Jobs Data Cap Turbulent Week
Fri, 06 Oct 2017 16:03 PM EST

Equity markets ran up yet again this week to fresh highs before Friday’s September employment report induced some minimal profit taking. Outside of Friday's jobs numbers the economic data remained unambiguously strong; headlined by the highest ISM non-manufacturing composite since 2005. The September jobs report did suggest wage inflation may be taking hold as unemployment rates continue to dwindle. The figures came on the heels of a plethora of Fed speak which seemed to indicate Fed officials were gaining confidence in their ability pull the trigger and raise rates in December. Rates moved up and Treasury curves steepened while the US Dollar regained some upside momentum. The Pound came under pressure as Brexit concerns, and in particular, the fate of PM May weighed on traders psyche. Spanish stocks weighed on Europe as uncertainty surrounding Catalonia resulted IBEX weakness and a modest widening of peripheral yield spreads. WTI crude futures stumbled, dipping back below $50 and under the 50-day moving average even as another tropical storm, Nate, approached the Gulf of Mexico. Copper prices broke back above the 50-day moving average to the highest levels in more than a month, helped by a dearth of headlines out of China as markets were closed for Golden Week. In Washington DC, Republicans continued to press the case for tax cuts while speculation swirled surrounding the fate of Sec of State Tillerson. Democrats called for renewed gun regulation in the wake of Las Vegas suffering the worst mass shooting in US history. The VIX drifted lower yet again nearing the 9.00 mark midweek and overall stock volumes remained notably soft. For the week the DJIA gained 1.6%, the S&P500 was up 1.2%, and the Nasdaq added 1.5%.

In corporate news this week, September auto sales topped expectations, helped by hurricane replacement purchasing and consumer demand for trucks. Tesla reported its all-time best quarter for its Models S and X deliveries, but Model 3 production numbers disappointed due to bottlenecks, though the company maintains there are no fundamental issues with the supply chain. Costco reported a Q4 beat on top and bottom line, but Wall Street was concerned about gross margins and membership numbers. Kellogg announced it would acquire the maker of RXBAR protein bars for $600M in a move to appeal to more organic-oriented consumers. Netflix raised prices on its two most popular plans in the US, changing the standard package to $10.99/mo and the premium service to $13.99/mo.

SUN 10/1
(HK) Macau Sept Gaming Rev MOP21.4B, +16.1% y/y v 14.5%e
(ES) Catalonia Referendum Update: On Sunday, police entered various polling stations to try to seize materials related to the voting; While some Catalans were blocked from voting, others were able to cast ballots – financial press
(KR) Sec State Tillerson has been encouraged to not talk with North Korea by President Trump
(CN) PBOC Q3 meeting of monetary policy committee: To cut reserve requirement ratio (RRR) for some banks that meet certain requirements for lending to small business and agricultural sector, effective in 2018 (1st cut since Feb 2016); affirms prudent and neutral monetary policy
(JP) JAPAN Q3 TANKAN LARGE MANUFACTURING INDEX: 22 V 18E (highest since Sept 2007); MANUFACTURERS OUTLOOK: 19 V 16E; ALL-INDUSTRY CAPEX: 7.7% V 8.4%E

MON 10/2
MGM Police look into reports of a shooter at Mandalay Bay; shots fired at Country Music concerts, multiple casualties - press
(EU) EURO ZONE AUG UNEMPLOYMENT RATE: 9.1%V 9.0%E
(US) SEPT ISM MANUFACTURING: 60.8 V 58.1E; PRICES PAID: 71.5 V 63E (highest headline reading since June 2004, prices highest since May 2011)
(US) Atlanta Fed raises Q3 GDP to 2.7% from 2.3% on 9/29
GOOGL Waymo division reportedly readying commercial ride-sharing service using autonomous vehicles with no safety drivers as soon as this fall - The Information
TSLA Reports Q3 deliveries 26.2K vehicles, +17.7% q/q, +4.5% y/y (all time best quarter for Model S and X deliveries); says no fundamental issues with the Model 3 production or supply chain
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED (14th consecutive hold in current easing cycle)

TUES 10/3
(HK) Macau Golden Week visitors from China on Oct 2nd +8.6% y/y
*(IN) INDIA SEPT MANUFACTURING PMI: 51.2 V 51.2 PRIOR (2nd month of expansion)
LEN Reports Q3 $1.06 v $1.01e, Rev $3.26B v $3.22Be
Warren Buffett: realizing losses in some positions by holding off on stock sales in anticipation of potential tax code changes - cnbc
GM Reports Sept US vehicle sales +11.9% y/y, at 279.4K units v 268.3Ke (best Sept U.S. retail performance since 2007)
(US) House Transportation Committee Chair Shuster (R-PA): Trump may release infrastructure plan next week
(ES) Spain King Felipe VI: Spanish democracy is in a serious moment; referendum plans by Catalan leaders were illegal
(US) House GOP tax plan reportedly likely to include fourth tax bracket on high earners; not likely to exceed 39.6% - CNBC
Ford Affirms FY17 outlook; provides strategic update to investors; sees 100% of new US vehicles build with connectivity by FY19; cutting internal combustion engine capex by a third
(ES) Catalan govt President Puigdemont confirms planning to declare independence within days - press
UBER.IPO Board said to approve $1.0-1.25B investment from Softbank (implied valuation $69B) and corporate governance reforms; said to set 2019 deadline for IPO - US financial press
MYL U.S. FDA approves first generic for Copaxone 40 mg/mL 3-times-a-week; may be eligible for 180 days of generic drug exclusivity
(US) US President Trump: Puerto Rico's debt will have to be 'wiped out' - US media interview
(HK) Hong Kong Sept Home Sales (HK$) 45.3B v 56.0B y/y

WEDS 10/4
TSCO.UK Reports H1 adj PBT £504 v £352M y/y, Op £759M v £703Me, Rev (ex Fuel) £25.2B v £24.4B y/y
(UK) SEPT SERVICES PMI: 53.6 V 53.2E (14th month of expansion)
*(IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 6.00%; AS EXPECTED
(PL) POLAND CENTRAL BANK (NBP) LEAVES BASE RATE UNCHANGED AT 1.50%; AS EXPECTED
(US) SEPT ADP EMPLOYMENT CHANGE: +135K V +135KE
(US) White House Budget Dir Mulvaney: Pres Trump's comments about 'wiping out' Puerto Rico debt shouldn't be taken word for word; we aren't going to bail out Puerto Rico - TV interview
(US) SEP FINAL MARKIT SERVICES PMI: 55.3 V 55.1E
(US) SEP ISM NON-MANUFACTURING COMPOSITE: 59.8 V 55.5E (highest since Aug 2005)
(US) Association of American Railroads weekly rail traffic report for week ending Sep 30th: 559.6K carloads and intermodal units, +1.9% y/y
(UK) Reportedly some UK members of parliament are prepared to call for PM May to resign; could be out of office before end of year - UK press

THURS 10/5
(CH) SWISS SEPT CPI M/M: 0.2% V 0.2%E; Y/Y: 0.7% V 0.6%E
(US) AUG TRADE BALANCE: -$42.4B V -$42.7BE
(ES) Catalan leaders reportedly are slowing push for independence due to divisions within leadership - press
(US) AUG FINAL DURABLE GOODS ORDERS: 2.0% V 1.7%E; DURABLES EX TRANSPORTATION: 0.5% V 0.2%E
(US) Senate confirms Randal Quarles for Federal Reserve Board in 65-32 vote, as expected - press
(US) Atlanta Fed raises Q3 GDP to 2.8% from 2.7% on 10/2
(US) National Rifle Association: expresses some support for additional gun regulations; gun bump stocks should be subject to regulation
(US) President Trump to announce he will decertify Iran nuclear agreement and let Congress deal with the issue; would keep door open to modifying the agreement - Wash Post
COST Reports Q4 $2.08 v $2.02e, Rev $42.3B v $41.7Be; E-commerce surging

FRI 10/6
(DE) GERMANY AUG FACTORY ORDERS M/M: 3.6% V 0.7%E; Y/Y: 7.8% V 4.7%E
(US) SEPT AVERAGE HOURLY EARNINGS M/M: 0.5% V 0.3%E; Y/Y: 2.9% V 2.5%E; AVERAGE WEEKLY HOURS: 34.4 V 34.4E
(US) SEPT CHANGE IN NONFARM PAYROLLS: -33K V +80KE (1st negative reading since Oct 2010)
(CA) CANADA SEPT NET CHANGE IN EMPLOYMENT: +10K V +12.0KE; UNEMPLOYMENT RATE: 6.2% V 6.2%E
(US) SEPT UNEMPLOYMENT RATE: 4.2% V 4.4%E (lowest since May 2001)
(NK) Russian official suggests North Korea may be preparing another long range missile test - Russian press
(US) Atlanta Fed cuts Q3 GDP to 2.5% from 2.8% on 10/5

Markets Sanguine Amid Prospects of Tax Reform and Monetary Policy Normalization

TradeTheNews.com Weekly Market Update: Markets Sanguine Amid Prospects of Tax Reform and Monetary Policy Normalization
Fri, 29 Sep 2017 16:03 PM EST

US stocks finished the week at fresh all-time highs, though volumes remained uninspiring and volatility stayed at historically low levels. Breadth expanded with the Transports, Russell 2000 and the NASDAQ joining the S&P at new highs. The Dow held back some, which may have been partially due to quarter-end profit taking and rotation out of large caps. Small caps and banks, in particular, benefited by an aggressive push by President Trump and congressional republicans to get a tax reform package approved by the end of this year. The growing hopes for fiscal stimulus reignited support for the reflation trade resulting in a move higher in rates and notable bounce in the Greenback. Treasury yields backed up and curves steepened. Central bank speak was pervasive with officials on both sides of the Atlantic indicating a continued willingness to push ahead with the admittedly gradual pace of normalization. Markets appeared to be heartened on Friday, when it became clear that President Trump will make a decision on an appointment to the Fed chairman post in the next few weeks. The data was mixed with certain inflation readings and housing figures missing expectations once again, while manufacturing continued to exhibit strength highlighted by the Richmond and Chicago PMIs. WTI crude prices reached the highest level since mid-May, which may have had some influence on the US weekly oil rig count rising for the first time since mid-August. For the week the DJIA gained 0.2%, the S&P500 added 0.7%, and Nasdaq was up 1.1%.

In corporate news this week, Nike posted a big Q1 beat on its bottom line, noting strong sales growth in its international divisions, but the apparel giant saw waning revenue in North America. Target announced it would boost its minimum hourly wage for employees to $11/hour this year, with an aim to reach $15/hour by 2020. Equifax’s CEO stepped down amid ongoing blowback from its massive data hack. The Saudi Finance Minister reportedly informed bond investors that the Aramco IPO will go forward in 2018 as planned, despite rumors of a delay to 2019. Bombardier shares were hit after the US announced it would slap hefty tariffs on its jets, and the move also registered complaints from the Canadian and UK governments.

SUN 9/24
(DE) Germany exit polls suggest Merkel's party finishes 1st in German election; anti-migrant party to enter parliament; AFD Party to enter parliament for first time - tweet by financial press
(NZ) New Zealand Election Results: Ruling National Party 46.6%; Labour 35.5%; neither party wins enough seats to have a majority in parliament, will have to use nationalist New Zealand First Party to form a coalition

MON 9/25
(DE) GERMANY SEPT IFO BUSINESS CLIMATE: 115.2 V 116.0E; CURRENT ASSESSMENT: 123.6 V 124.7E
TGT Affirms Q3 $0.75-0.95 v $0.85e, FY17 $4.34-4.54 v $4.50e; Raises min wage base 10% to $11/hour (last $10/hr OCT16)
ARAMCO.IPO Saudi Fin Min reportedly has told bond investors that Aramco IPO will go forward in 2018 as planned - press
(US) SEPT DALLAS FED MANUFACTURING ACTIVITY: 21.3 V 11.5E
(KR) North Korea Foreign Min: Pres Trump's comments over the weekend amount to declaration of war - comments in NY

TUES 9/26
(FR) FRANCE SEPT BUSINESS CONFIDENCE: 109 V 110E; MANUFACTURING CONFIDENCE: 110 V 111E
EFX Chairman and CEO Richard Smith retires; Paulino do Rego Barros appointed interim CEO; company to initiate CEO search
(US) SEPT RICHMOND FED MANUFACTURING INDEX: 19 V 13E
(US) AUG NEW HOME SALES: 560K V 585KE
(US) CONSUMER CONFIDENCE: 119.8 V 120.0E
(KR) North Korea interlocutors reportedly have approached Republican Party analysts on how to deal with Pres Trump - Wash Post
(US) Fed Chair Yellen: it would be imprudent to leave rates on hold until inflation reaches 2%; there are considerable odds inflation won't stabilize at 2% for next few years - comments in Cleveland
(US) Sen Roberts (R-KS): It would appear there will be no vote on the Graham-Cassidy healthcare bill
MU Reports Q4 $2.02 v $1.84e, Rev $6.14B v $5.97Be
NKE Reports Q1 $0.57 v $0.48e, Rev $9.1B v $9.06Be

WEDS 9/27
(TH) THAILAND CENTRAL BANK (BOT) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.50% (AS EXPECTED)
(EU) EURO ZONE AUG M3 MONEY SUPPLY Y/Y: 5.0% V 4.6%E
(CZ) CZECH CENTRAL BANK (CNB) LEAVES REPURCHASE RATE UNCHANGED AT 0.25%; AS EXPECTED
(US) AUG PRELIMINARY DURABLE GOODS ORDERS: +1.7% V +1.0%E; DURABLES EX TRANSPORTATION: 0.2% V 0.2%E
(US) AUG PENDING HOME SALES M/M: -2.6% V -0.5%E; Y/Y: -3.1% V -0.5%E
(US) Atlanta Fed cuts Q3 GDP to 2.1% from 2.2% on 9/19
(US) Association of American Railroads weekly rail traffic report for week ending Sep 23rd: 548.2K carloads and intermodal units, +1.6% y/y
(US) Pres Trump: middle class would be biggest winners under GOP tax plan; no reason tax reform can't be bipartisan effort - prepared remarks on tax reform
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED
(CN) Tianhong's Yu'e Bao money market fund said to adjust portfolio for new liquidity rules - Chinese Press

THURS 9/28
(DE) GERMANY OCT GFK CONSUMER CONFIDENCE: 10.8 V 11.0E
(DE) GERMANY SEPT CPI SAXONY M/M: 0.2% V 0.2% PRIOR; Y/Y: 2.0% V 1.9% PRIOR
(DE) Germany Sept CPI Brandenburg M/M: 0.2% v 0.1% prior; Y/Y: 1.6% v 1.8% prior
(DE) Germany Sept CPI Bavaria M/M: 0.2% v 0.2% prior; Y/Y: 1.8% v 1.8% prior
(DE) Germany Sept CPI Hesse M/M: 0.3% v 0.0% prior; Y/Y: 2.1% v 1.8% prior
(DE) GERMANY SEPT CPI NORTH RHINE WESTPHALIA M/M: 0.1% V 0.1% PRIOR; Y/Y: 1.9% V 1.9% PRIOR
(EU) EURO ZONE SEPT BUSINESS CLIMATE INDICATOR: 1.34 V 1.12E; FINAL CONSUMER CONFIDENCE: -1.2 V -1.2E
(DE) GERMANY SEPT CPI BADEN WUERTTEMBERG M/M: 0.3% V 0.1% PRIOR; Y/Y: 1.9% V 1.9% PRIOR
(DE) GERMANY SEPT PRELIMINARY CPI M/M: 0.1% V 0.1%E; Y/Y: 1.8% V 1.8%E
(US) Q2 FINAL GDP ANNUALIZED (3RD READING) Q/Q: 3.1% V 3.0%E; PERSONAL CONSUMPTION: 3.3% V 3.3%E
(US) Q2 FINAL GDP PRICE INDEX: 1.0% V 1.0%E; CORE PCE Q/Q: 0.9% V 0.9%E
(MX) MEXICO CENTRAL BANK (BANXICO) LEAVES OVERNIGHT RATE UNCHANGED AT 7.00%; AS EXPECTED

FRI 9/29
(FR) FRANCE SEPT PRELIMINARY CPI M/M: -0.1% V -0.2%E; Y/Y: 1.0% V 1.0%E
(DE) GERMANY SEPT UNEMPLOYMENT CHANGE: -23K V -5KE; UNEMPLOYMENT RATE: 5.6% (record low) V 5.7%E
(UK) Q2 FINAL GDP Q/Q: 0.3% V 0.3%E; Y/Y: 1.5% V 1.7%E
(EU) EURO ZONE SEPT ADVANCE CPI ESTIMATE Y/Y: 1.5% V 1.6%E; CPI CORE Y/Y: 1.1% V 1.2%E
(US) AUG PCE CORE M/M: 0.1% V 0.2%E; Y/Y: 1.3% V 1.4%E
(US) AUG PCE DEFLATOR M/M: 0.2% V 0.3%E; Y/Y: 1.4% V 1.5%E
(US) AUG PERSONAL INCOME: 0.2% V 0.2%E; PERSONAL SPENDING: 0.1% V 0.1%E
(US) Nevada reports Aug casino gaming Rev $989.5M, +14.9% y/y; Las Vegas strip rev $545.5M, +21.4% y/y
(US) SEPT CHICAGO PURCHASING MANAGER: 65.2 V 58.7E (highest since June)
(US) SEPT FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 95.1 V 95.3E
(US) Pres Trump: will make Fed Chair decision in next 2 to 3 weeks

Barrons weekend summary

Barrons weekend summary: Cover positive on gene therapy sector; Positive feature on ORCL; cautious on SIX 

Cover story: “After decades of research and development, gene therapy is rapidly emerging as one of the most exciting areas in biotechnology—and generating new hope for patients with certain rare and often deadly inherited diseases” (Positive on ONCE, AVXS, RGNX, BOLD, VYGR). 

Features: 

1) Cautious on SIX: Shares have climbed sixfold since the company exited bankruptcy in 2010, but hitting long-range growth targets may be difficult, and competition could dent its growth potential; 

2) Positive on ORCL: Tech major’s numbers indicate that its move to the cloud is on track, and that its legacy business is stabilizing after two years of declines. 

Tech Trader: As the artificial intelligence trend continues to gain steam, investors such as SoftBank Group’s Masayoshi Son will keep funding companies with ties to the sector, of which the chip industry is at the epicenter; Among the companies benefiting from the AI boom are XLNX, SNPS, CDNS, LSCC. 

Trader: Analysts expect to see some sort of economic pullback, perhaps sparked by North Korea, but few predict that financial conditions will deteriorate; If the government allows U.S. companies to repatriate cash at a low tax rate, those with the most cash relative to their market caps will get the biggest boost; A look at defensive stocks investors can look to for protection during a correction, suggested by Michael Belkin of the Belkin Report (long: CVX, CSOP SZSE ChiNext ETF, VXX, NEM, PAAS, XLRE, XLU, VZ; short: GOOG, SCHW, CTXS, ERIC, NVDA). 

Interview: Christopher Ailman of CalSTRS can’t settle for low growth but must also protect principal; he sees opportunities in Europe, problems in the investment industry, and says the U.S. market is priced for perfection. 

Profile: Matt Brill and Michael Hyman, co-managers of the Invesco Corporate Bond fund, are optimistic because U.S. economic growth is running at or above expectations, and strong corporate earnings make for creditworthy companies. Penta: A look at the turnaround of New England-based Narragansett Beer; Profile of little-known Swiss watch maker Romain Gauthier; HMC’s $200K Acura NSX supercar doesn’t have the “raw appeal” of cars from RACE; Aircraft prices are depressed, making it the perfect time to buy a used corporate jet; Women clients are reshaping private banks; America’s Top 40 wealth management firms, topped by Bank of America Global Wealth & Investment Management, grew by 19% last year; A year from now, a glut of new and old condos in Miami should present a buying opportunity; Profile of Martha Henderson, “the most powerful banker in Hollywood”; A look at tax bonuses available for people who rent out second homes. 

Follow-Up: “Any optimism that Puerto Rico’s massive debt would get renegotiated in a timely fashion has been dashed by the impact of two monster storms that struck the island this month”; SharkNinja continues to gain ground on IRBT in the robotic vacuum space. 

European Trader: Investors often conflate European companies, which may derive a sizable share of income from outside the region, with European countries and their slowing economic growth. 

Asian Trader: Pakistan recently regained emerging market status after being a frontier market, a move that prompted many investors to sell—creating opportunities for those who see potential in the country’s stocks. 

Emerging Markets: Poland, China, and Korea are the best-performing emerging markets year-to-date, while Pakistan, Qatar, and Russia are the worst, according to data from MSCI. 

Commodities: “Coal’s price performance this year has outpaced that of archrival natural gas, and it’s on track to reclaim the top spot in electrical generation before long.” 

Streetwise: The fundamentals for aerospace are good, says Rajeev Lalwani of MS, and manufacturers have the “upper hand” because they can dictate which suppliers to work with.

UN Meetings Ramp Korea Tensions; Fed Confirms Balance Sheet Run Off Plan

TradeTheNews.com Weekly Market Update: UN Meetings Ramp Korea Tensions; Fed Confirms Balance Sheet Run Off Plan
Fri, 22 Sep 2017 16:04 PM EST

Stock markets continued to press up against fresh all-time highs headlined by the S&P500 gaining a foothold above 2500 early this week, pushing the VIX volatility index back below 10. A weaker US dollar persisted, likely aiding US equity valuations. On Wednesday, the Fed confirmed that quantitative tightening is firmly on track to start in October, with rates to continue rising gradually despite still being perplexed about what has kept the pressure on inflation readings. Short rates moved up following the FOMC statement but long rates held relatively stable. By Thursday the spread between the US 5-year and 30-year treasury yield narrowed to levels not seen since 2007. The Greenback saw a brief bout of buying before sellers sent the Dollar index back towards 2.5 year lows. Cable continued to test post-Brexit highs into PM May’s highly anticipated Brexit speech on Friday. Robust European PMI numbers underscored the building momentum in many European economies and helped hold the Euro up near the 1.20 mark despite the perceived hawkishness by the FOMC. The Dow broke a 9-day winning streak on Thursday and shares trickled lower on Friday after new sanctions announced at the UN general assembly prompted North Korean to threaten an above ground nuclear test. For the week, the DJIA gained 0.4%, the S&P added 0.1%, and the Nasdaq fell 0.3%.

The week’s corporate news was bookended by two significant transactions. Monday Northrup Grumman confirmed an all-cash deal to acquire Orbital ATK at a $9.2B valuation including debt. Investors voiced support sending NOC shares up 6% on the week. After the close of trading in Japan on Friday, Calgon Carbon Corp announced an agreement to be acquired at a 60% premium by Japan’s Kuraray. FedEx reported results on Wednesday that were short of expectations and lowered the full year outlook. Nevertheless shares moved up helped by an announcement intend to raise shipping rates by ~5% on Jan 1st. Apple shares traded off 4% this week as a glitch emerged in its new untethered Apple Watch and analysts predicted iPhone 8 sales may be lackluster as consumers wait for the iPhone X release in November. The healthcare sector, HMOs and hospitals in particular, experienced bouts out selling over several sessions when it started to look like momentum was building for the Republican’s last digit effort to repeal Obamacare. But on Friday Sen. McCain (R-AZ) indicated he will once again be break with his party, likely killing the bill’s path forward. The headlines induced a reversal in some of the healthcare names.

MON 9/18
*(EU) EURO ZONE AUG FINAL CPI Y/Y: 1.5% V 1.5%E; CPI CORE Y/Y: 1.2% V 1.2%E
*(US) SEPT NAHB HOUSING MARKET INDEX: 64 V 67E
*(US) JULY TOTAL NET TIC FLOWS: -$7.3B V +$5.9B PRIOR; NET LONG-TERM TIC FLOWS: $1.3B V $34.4B PRIOR

TUES 9/19
(IR) Iraq Oil Min Al-Luaibi: Current oil production cuts are going fine; prices and global markets are improving
*(DE) GERMANY SEPT ZEW CURRENT SITUATION SURVEY: 87.9 V 86.2BE; EXPECTATION SURVEY: 17.0 V 12.0E
*(HU) HUNGARY CENTRAL BANK (NBH) LEAVES BASE RATE UNCHANGED AT 0.90%; AS EXPECTED
(HU) Hungary Central Bank (NBH) cuts Deposit Rate further into negative territory by 10bps
*(US) AUG HOUSING STARTS: 1.180M V 1.174ME; BUILDING PERMITS: 1.30M V 1.22ME
*(US) AUG IMPORT PRICE INDEX M/M: 0.6% V 0.4%E; Y/Y: 2.1% V 2.2%E
(US) Trump admin reportedly plans to ease rules on overseas sales of guns, including assault rifles – press
FDX Reports Q1 $2.51 v $3.17e, Rev $15.3B v $15.4Be
BBBY Reports Q2 $0.78 (ex-items) v $0.95e, Rev $2.90B v $3.01Be; Cuts FY17 EPS ~$3.00 v $4.02e

WED 9/20
TKA.DE Agree to European Steel 50/50 JV with Tata Steel, sees synergies of €400-600M
DGE.UK Trading Update: Affirms FY16-19 of mid-single digit top line growth and 175bps of organic operating margin improvement; expect our organic operating margin expansion will be weighted towards H2
*(UK) AUG RETAIL SALES (EX AUTO/FUEL) M/M: 1.0% V 0.1%E; Y/Y: 2.8% V 1.4%E
(UK) BOE Agents Summary: Impact of Sterling drop on goods inflation may have peaked
(EU) OECD Economic Outlook; Maintains 2017 Global GDP forecasts at 3.5% Raises 2018 Global GDP forecasts from 3.6% to 3.7%
*(US) AUG EXISTING HOME SALES: 5.35M V 5.45ME
AAPL Rosenblatt analyst: preorders for iPhone 8 are much lower than they were for iPhone 6 and 7
*(US) FOMC HOLDS TARGET RATE RANGE AT 1.00-1.25%, AS EXPECTED; confirms start of balance sheet reduction in Oct; hurricanes could temporarily boost inflation (as expected)
*(US) FOMC UPDATED ECONOMIC FORECAST FOR SEPT MEETING: Cuts Median forecast for Long Run rate to 2.75%
(US) 2-year Treasury yield rises above 1.43% for the first time since late 2008 post FOMC statement
(US) Fed Chair Yellen: hurricanes may have a substantial impact on Sept payrolls data - FOMC press conf
*(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED

THRS 9/21
CCC To be acquired by Japan's Kuraray for $21.50/shr cash valued at $1.11B (63% prem)
*(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.50% (AS EXPECTED)
*(PH) PHILIPPINES CENTRAL BANK (BSP) LEAVES OVERNIGHT BORROWING RATE UNCHANGED AT 3.00% (AS EXPECTED)
(CN) S&P cuts China to A+ from AA-; Outlook stable; Rating now inline w/Fitch & Moody's
*(TW) TAIWAN CENTRAL BANK (CBC) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.375%; AS EXPECTED
*(US) SEPT PHILADELPHIA FED BUSINESS OUTLOOK: 23.8 V 17.1E
*(ZA) SOUTH AFRICA CENTRAL BANK (SARB) KEEPS INTEREST RATE ON HOLD AT 6.75% (NOT EXPECTED)
*(US) AUGUST LEADING INDEX: 0.4% V 0.3%E
*(EU) EURO ZONE SEPT ADVANCE CONSUMER CONFIDENCE: -1.2 V -1.5E
(US) Fed reports Q2 Financial Accounts: Household Change in Net Worth: $1.698T v $2.327T prior
(KR) President Trump: confirms expanded sanctions surrounding North Korea
(KR) North Korea countermeasure may mean H-bomb test in Pacific - South Korean Press

FRI 9/22
*(FR) FRANCE Q2 FINAL GDP Q/Q: 0.5% V 0.5%E; Y/Y 1.8% V 1.7%E
*(FR) FRANCE SEPT PRELIMINARY MANUFACTURING PMI: 56.0 V 55.5E (11TH MONTH OF EXPANSION)
*(DE) GERMANY SEPT PRELIMINARY MANUFACTURING PMI: 60.6 V 59.0E (34TH MONTH OF EXPANSION)
*(EU) EURO ZONE SEPT PRELIMINARY MANUFACTURING PMI: 58.2 V 57.2E (50TH MONTH OF EXPANSION)
*(UK) SEPT CBI INDUSTRIAL TRENDS TOTAL ORDERS: 7 V 13E
(US) Weekly Baker Hughes US Rig Count: 935 v 936 w/w (-0.1%)

Barrons weekend summary

Barrons weekend summary: Positive feature on CFR 

Cover story: “Research suggests the combination of better-than-predicted earnings and revenue, followed by a quick, positive price reaction, tends to predict market-beating performance for months to come”; CAT and ADI are among companies with such potential upside. 

Feature: Positive on CFR: Texas-based bank looks like a bargain for patient investors, with strength based on good loan underwriting and a conservative approach to allocating capital. 

Tech Trader: Story profiles special purpose acquisition company Social Capital Hedosophia, which “could conceivably execute a promising acquisition, drive up the share price, and walk away with a profit,” but no company is guaranteed to succeed just because it has gone public through an IPO or a SPAC, says Tiernan Ray. 

Trader: “Traders are increasingly confident that another rate hike is coming this year, with the market pricing in a 47% chance”; GS, rarely seen as an underdog, may be one now, but because the decline is due to its own missteps it should be able to fix its problems; Cautious on FDX: Few analysts expect the delivery giant’s earnings report to be good—instead, the question among many is just how bad it will be. 

Interview: Sarah Ketterer, founder of Causeway Capital Management and manager of the Causeway International Value fund, looks for cheap, financially sound, and contrarian plays that can weather a downturn (picks: PDCE, ECA, CHL, Akso Nobel, Volkswagen). 

Profile: Fabio Paolini of the AMG Managers Pictet International fund looks for companies that can grow cash flow and deploy it wisely (top 10 holdings: BUD, GSK, Japan Tobacco, BBVA, Inmarsat, Nestle, Vinci, CK Hutchison Holdings, SoftBank Group, Orpea).

Advisor Rankings: Barron’s list of the top independent financial advisors is led by Spuds Powell of Kayne Anderson Rudnick Investment Management, Robert Clarfeld of Clarfeld Financial Advisors, and Greg Miller of Wellesley Asset Management; Barron’s list of the top 30 RIA Firms is led by Creative Management, Mariner Holdings, and Edelman Financial Services; Story says large players dominate the RIA industry, but small firms can still carve out a successful niche. 

European Trader: German chancellor Angela Merkel appears likely to win a fourth term, which could provide investing opportunities even if her electoral win isn’t a major market mover. 

Asian Trader: Indonesia has been the best performing market in Asia after the region’s financial crisis in the late 1990s, though its benchmark Jakarta Composite Index lags India’s and China’s—a situation that could change. 

Emerging Markets: Although inflation in Argentina has been hard for free-market reform president Mauricio Macri’s administration to tame, there are signs of progress. 

Commodities: If lumber benefits from the recovery efforts under way following a string of recent storms, prices could reach a level they haven’t seen in a decade. 

Streetwise: “Thanks to immense changes in the equity markets over the years, public investors, such as individuals, face diminishing odds of buying stakes in companies early in their growth cycles,” and there may never again be another AMZN for investors.

Markets Blow Off Real and Geopolitical Storms, Still Eying Tax Reform

TradeTheNews.com com Weekly Market Update: Markets Blow Off Real and Geopolitical Storms, Still Eying Tax Reform
Fri, 15 Sep 2017 16:12 PM EST

US stock markets forged ahead to fresh all-time highs this week as investors maintained a healthy risk appetite despite a host of ongoing risks. Massive Florida power outages following landfall from Hurricane Irma, fallout from the unprecedented Equifax credit breach, more provocative actions from the North Korean regime, and another terrorist attack in London did little to impede sentiment. Washington taking further baby steps towards tax reform likely offset some of those risks. The President's perceived willingness to reach across the aisle on key issues like immigration spurred hopes for a tax deal, while Republicans pledged to release a detailed reform package by the end of the month. For the week, the the DJIA gained 2.2%, the S&P500 rose 1.6%, and the Nasdaq added 1.4%.



Treasury yields moved up alongside three disappointing auctions and a host of corporate supply announcements. Bond sellers appeared to be rewarded by a hotter than expected US August CPI print, but despite a 15+ basis point move in UST, yields remained at depressed levels. The Bank of England met and indicated the recent data may force them to begin withdrawing accommodation faster than the market currently anticipates despite the uncertainty surrounding Brexit talks that are moving along at a glacial pace. Cable traded to the highest levels since the days after last summer’s Brexit vote, while the Dollar index tried to bottom along with the upswing in rates. Copper prices retreated some 7% from recent highs, helped by softer than expected Chinese industrial production data.



The major corporate news this week came from Apple’s product event, where the tech giant introduced its next-gen Apple Watch 3 with cellular capability and confirmed the release of its premium iPhone X (‘ten’) product with improved graphics and face ID technology. Oracle reported a Q1 beat on earnings and cloud revenue, but shares fell after the company guided Q2 numbers below consensus. Nordstrom shares popped this week on reports that the founding family was moving closer to a going private deal. Steel producer Nucor guided its Q3 earnings below Street estimates, noting import pressures have not allowed pricing to keep pace with increasing raw material costs.



MON 9/11

(FR) BANK OF FRANCE AUG BUSINESS SENTIMENT: 104 V 106E

*(KR) UN SECURITY COUNCIL VOTES IN FAVOR OF INCREASING SANCTIONS AGAINST NORTH KOREA; Sanctions now impact more than 90% of all reported exports

(UK) Parliament votes against opposition labor party attempt to block EU withdrawal bill; passes first parliamentary hurdle

TUES 9/12

(UK) AUG CPI M/M: 0.6% V 0.5%E; Y/Y: 2.9% V 2.8%E; CPI CORE Y/Y: 2.7% V 2.5%E (annual pace matches highest level since Jun 2013)

(IN) INDIA AUG CPI Y/Y: 3.4% V 3.2%E

(US) JULY JOLTS JOB OPENINGS: 6.17M V 6.00ME (record high)

JWN Nordstrom family reportedly nearing deal with PE firm to take company private - CNBC

AAPL Introduces next gen Apple Watch 3 (available Sept 22): confirms it includes built in cellular (untethered from iPhone); can receive calls on the same number as your phone; Introduces iPhone 8 and 8 Plus (Prices start at $699 and $799, shipping Sept 22) - iPhone 8 event

WEDS 9/13

(UK) JULY AVERAGE WEEKLY EARNINGS 3M/Y: 2.1% V 2.3%E; WEEKLY EARNINGS EX BONUS 3M/Y: 2.1% V 2.2%E

(UK) AUG JOBLESS CLAIMS CHANGE: -2.8K V -2.9K PRIOR; CLAIMANT COUNT RATE: 2.3% V 2.3% PRIOR

(UK) JULY ILO UNEMPLOYMENT RATE: 4.3% V 4.4%E (lowest level since 1975)

(US) AUG PPI FINAL DEMAND M/M: 0.2% V 0.3%E; Y/Y: 2.4% V 2.5%E

(US) Association of American Railroads weekly rail traffic report for week ending Sep 9th: 486.5K carloads and intermodal units, +0.8% y/y

ARAMCO.IPO May delay IPO to 2019 - financial press

THURS 9/14

RMS.FR Reports H1 Net €605M v €603Me, Op profit €931.3M v €919Me, Rev €2.71B v €2.44B y/y

(CH) SWISS NATIONAL BANK (SNB) LEAVES SIGHT DEPOSIT RATE UNCHANGED AT -0.75%; AS EXPECTED

(UK) BOE LEAVES INTEREST RATES UNCHANGED AT 0.25%; AS EXPECTED

(UK) BOE SEPT MINUTES: MPC VOTED 7-2 TO LEAVE INTEREST RATES UNCHANGED AT 0.25%

(TR) TURKEY CENTRAL BANK (CBRT) LEAVES BENCHMARK REPURCHASE RATE UNCHANGED AT 8.00%; AS EXPECTED

VZ CEO: We have moved on from looking at cable companies; Big content deal coming by end of Sep - Goldman conf

(US) AUG CPI M/M: 0.4% V 0.3%E; CPI EX FOOD AND ENERGY M/M: 0.2% V 0.2%E; CPI NSA: 245.519 V 245.350E

(UK) Bank of England's (BOE) Carney: May need to adjust BOE interest rate in the coming months (in-line with Sept policy statement)

ORCL Reports Q1 $0.62 v $0.61e, Rev $9.21B v $9.02Be

*(CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 2.50%; AS EXPECTED

(KR) North Korea fires a missile from Pyongyang towards the east, missile passes over Japan - South Korea press

(KR) UN Security Council to meet at 3 pm EDT on Friday, Sept 15thregarding the most recent North Korea missile test

FRI 9/15

*(CN) CHINA AUG NEW YUAN LOANS (CNY): 1.09T V 950.0BE

*(CN) CHINA AUG AGGREGATE FINANCING (CNY): 1.48T V 1.280TE

(UK) BOE’s Vlieghe (dove): May need to adjust BOE interest rate in the coming months (in-line with MPC majority) - comments from London

(RU) RUSSIA CENTRAL BANK (CBR) CUTS 1-WEEK AUCTION RATE BY 50BPS TO 8.50%; AS EXPECTED

*(US) AUG ADVANCE RETAIL SALES M/M: -0.2% V +0.1%E; RETAIL SALES EX AUTO M/M: 0.2% V 0.5%E

*(US) SEPT EMPIRE MANUFACTURING: 24.4 V 18.0E

(US) AUG INDUSTRIAL PRODUCTION M/M: -0.9% V +0.1%E; CAPACITY UTILIZATION: 76.1% V 76.7%E

NUE Guides Q3 $0.75-0.80 v $1.06e

(US) SEPT PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 95.3 V 95.0E

(US) New York Fed Nowcast: cuts Q3 GDP forecast to 1.3% from 2.1% on 9/8; cuts Q4 GDP forecast at 1.8% from 2.6% on 9/8

(US) Atlanta Fed cuts Q3 GDP to 2.2% from 3.0% on 9/6

(UK) Prime Min May: raising national threat level to 'critical' from 'severe'; category indicates a further attack may be imminent

September-October 2017 Маркет Outlook

TradeTheNews.com TTN September-October 2017 Outlook: Hurricane Watch
Thu, 14 Sep 2017 14:42 PM EST

The 2017 Atlantic Hurricane Season has already been one of the most active and destructive in years, and the rare occurrence of three simultaneous hurricanes seems an apt metaphor for the geopolitical, monetary, and fiscal storm fronts churning around the fringes of the global economy. Like their real world counterparts, these metaphoric storms could make landfall with serious consequences to the economy, but they are inherently unpredictable and could also blow harmlessly out to sea or in some cases even provide a healthy tailwind.

As global economies are starting to reach a stage of sustainable economic recovery, geopolitical disturbances have flared up, most notably the tempest brewing over North Korea. Amid these tensions and a sudden flurry of natural disasters striking North America, central bankers are putting their fingers in the wind, left to guess whether they can continue to remove accommodation or if they need to take a pause. Meanwhile, fiscal authorities remain bogged down in political disputes, most visibly over tax and spending policies in the US and in the Brexit negotiations between the UK and EU.

Inherit the Wind

In the final accounting, hurricanes Harvey and Irma will have dealt tens of billions of dollars in damage to homes and businesses, and have already caused significant disruption to the regional economy. Some economists have estimated that by itself Harvey will hit Q3 GDP by about three-tenths of a percentage point. Irma may double that temporary economic dampener. The silver lining, if any, is that the GDP hit is expected to be more of a deferral as the rebuilding effort on the Gulf coast should provide a small boost to Q1 GDP next year.

The storms that have battered Texas and Florida are overshadowing the usual hot air swirling out of Washington, D.C. For the time being, the focus is on relief efforts across the south, which has quieted party politics in Washington, and provided President Trump an opportunity to show leadership in a non-partisan moment when the country is drawn together to address on the aftermath of the hurricanes.

In the eyes of some of his fellow Republicans, Trump may have carried this spirit too far when he snubbed his own party’s advice and embraced a Democratic proposal for a three month extension of the debt ceiling and government funding as part of a package to provide disaster relief. It’s not clear if this rapprochement with the Democrats is signaling a new governing style from Trump, but it could theoretically allow him to reposition himself as a neutral arbiter of ideas in a still dysfunctional Washington. After months of the President goading his own party to action with little success, Republicans can no longer assume that Trump will stick to their talking points on the legislative agenda. Yet it’s also unlikely that the President will stay on friendly terms with Democrats for long, given his bluster and mercurial loyalties.

In any event, the three month deal gave the minority party some leverage heading into legislative negotiations this fall. With the GOP off balance, Democrats could find themselves with more influence in the tax reform debate. Democrats might get on board with tax simplification, but there are strong interest groups standing guard over various deductions, so it may be a tough battle to strip down itemization even if the Republican plan includes a doubling of the standard deduction, as reported. Since the debt ceiling deal, Speaker Paul Ryan has conceded that a 22.5% tax rate for corporations is a “realistic” goal (as opposed to the Freedom Caucus proposal of taking the corporate rates from 35% down to 16%, and the President’s opening bid of 15%). Ryan asserts that Congress has made good progress on fleshing out the thumbnail proposal the White House produced earlier this year, and that their plan will be unveiled in late September with the hope of passing legislation before year end. The stock market continues to anticipate that some major reform legislation will get through Congress this year, and equities could resume their surge higher if such a bill passes, especially if it is the much-sought tax reform package.

On another front, the Trump Administration is hoping to fulfill its promises on revitalizing trade. Commerce Secretary Ross has set the goal of renegotiating NAFTA by year end, and there have been a few meetings already with high level Mexican and Canadian delegations. Mexican finance minister Meade recently proclaimed that the trade talks are progressing as expected, and Canadian PM Trudeau has said he wants to use this opportunity to make progress on labor and climate issues. It should become clear in the next couple of months if the three-party talks are indeed making any headway. If not, expect President Trump to renew threats of withdrawing from NAFTA altogether, which could exert fresh headwinds on North American currency pairs.

Across the Atlantic, an even more complex and contentious negotiation is under a dark cloud. The Brexit clock is ticking: under the Article 50 provision of the EU charter, there are now less than 20 months to sort out the UK’s divorce from the European Union. To date, negotiators have had three rounds of talks but have not made any tangible progress. Following the third round in late August, the EU’s chief negotiator Barnier stated that they had not made enough progress on the early issues including the Irish border to move on to free trade discussions in October.

In an effort to maintain pressure on EU negotiators, UK Prime Minister May has kept up the public refrain that no Brexit deal is better than a bad deal. The next round of talks has reportedly been pushed back a week to accommodate a speech that PM May is planning to make on the issue on September 22 from Florence. The PM’s office has been vague about the details of the address, and is calling it an “update” on the Brexit negotiations that will “underline the government’s wish for a deep and special partnership with the European Union once the UK leaves the EU.” This could be the most important moment of May’s tenure as her words will act as a barometer for the negotiations. The speech will be closely watched for any sign of softening in Britain’s stance.

For their part, EU negotiators have taken a tough line, chiding their UK counterparts for producing incomplete position papers and threatening to delay the next stage of scheduled talks by two months to December. That decision will likely come at the conclusion of the fourth round of preliminary talks in late September, and such a delay would be a blow to the UK and its hopes of disentangling itself from the EU within the prescribed two year window. If a more constructive tone is not established in the next few months it could reignite speculation about a ‘Hard Brexit’ scenario, which could roil markets, especially in the UK.

So far the UK has been spared the gale force economic headwinds that were predicted before the Brexit vote, but as talks have begun in earnest the economic realities of leaving the EU bloc may take hold. The UK reported final Q1 GDP growth of only 0.2% q/q, the slowest rate in a year, and the preliminary Q2 reading was only slightly better. The direst predictions for a nearly 10% drop in GDP through 2030 may not come to pass, but uncertainty could grow as the process drags on and cause UK consumers to moderate their spending in the months ahead.

Elsewhere in Europe, German national elections will be held on September 24, selecting the members of the Bundestag, Germany’s federal parliament. Chancellor Merkel appears to be on track to win reelection, as her center-right CDU party is consistently leading the Social Democrats (SPD) by double digits in the polls. The same polling suggests that Germans are content with their current government, a grand coalition of the CDU and SPD, which may lead to another term under that structure. The CDU could also seek a renewed alliance with the conservative Free Democratic Party (FDP), which acted as its junior coalition partner during Merkel’s 2009-2013 term. Barring another polling snafu (a la Brexit), Merkel’s fourth term as Chancellor appears to be secure, which should be a calming influence at the center of Europe after the wave of surprising voting outcomes last year.

Winds of War

More stability in Europe will be welcome given that security situation in Asia is deteriorating. North Korea’s repeated missile and bomb tests have put the Hermit Kingdom at the center of the geopolitical stage, and Pyongyang’s aggressive posture has even unnerved its traditional state ally in Beijing. It is notable that China has declined to veto recent UN Security Council sanctions against North Korea, though it remains to be seen if China will choose to enforce sanctions that could cripple the North’s economy.

President Trump has taken a tough rhetorical stance with North Korea, culminating in his unscripted “fire and fury” threat, which was subsequently supported by Defense Secretary Mattis in other very direct language. North Korea’s state press has responded with more frequent declarations about annihilating the US. So far, the markets have not concluded that a shooting war is imminent, but that could change at any time with the Trump administration apparently resolved that the status quo on the Korean peninsula is no longer tolerable.

The Trump administration has also had its sights set on Iran. The President has made it clear he thinks the nuclear agreement with Iran (JCPOA) was a “bad deal”, and has directed his cabinet to look for evidence it can use to revoke the accord. Congress requires the administration certify Iran’s compliance every 90 days, and the Trump White House has given that certification twice so far. During the July review, however, Secretary of State Tillerson said that his department will “evaluate whether suspension of sanctions related to Iran pursuant to the JCPOA is vital to the national security interests of the United States."

There is some speculation that the State Department may be prepared to declare a finding of non-compliance at the next review in mid-October. That would put the US at odds with the UN’s nuclear watchdog (the International Atomic Energy or IAEA) which is in charge of verifying that Iran is meeting its obligations to pursue only peaceful applications of nuclear energy. That may leave the White House on thin ice, likely having to assert that Iran is violating the ‘spirit’ of the accord with its ballistic missile tests and continued support of terrorist organizations, though those bad behaviors are not specifically barred by the agreement.

A confrontation with Iran could set off speculative activity in the energy market. Heightened tensions in the Persian Gulf could send oil prices higher even as the Gulf of Mexico’s refinery row is still recovering from Hurricane Harvey.

For the first time since Katrina devastated New Orleans in 2005, a hurricane has caused significant damage to the Gulf Coast and disrupted its key energy assets. Hurricane Harvey parked itself over Houston for half a week, causing serious property damage with record flooding. The Houston petro-chemical complex got through the storm with minimal damage, but about 15% of the nation’s refinery capacity has been taken off line, and it appears that it will take several weeks to normalize operations.

For the last two months, WTI crude prices have remained in a fairly tight range in the high $40’s. Crude prices have stabilized as OPEC and its non-cartel partners have maintained strong compliance with their production cutting deal, and as the rise in the US shale oil rig count has finally leveled off. The production accord was already extended by nine months to March of 2018, and now major producers are said to be pushing for another extension of at least three more months. That would provide more time for oil market imbalances to subside. Recently, OPEC Secretary General Barkindo noted progress on this front, observing that OECD commercial oil stocks stood at 195M bbl above the 5-year average in July, down from 340M bbl above average in January. Barkindo also forecast that higher oil demand in the second half of the year will contribute to additional declines in oil stocks.

Shelter from the Storm

As geopolitical forces swirl and fiscal policy reform moves at a glacial pace, global central banks are still providing significant shelter from the storm. A sea change is underway, however, as the Fed will soon announce a balance sheet reduction plan while the ECB has begun considerations on how to end its long-standing QE program.

Of the major central banks, the Fed has made the most progress toward normalizing policy after a decade of extreme accommodation, but the devastation caused by Harvey and Irma may be enough to give the Fed pause in considering its third rate hike this year. Prior to the storms materializing, the central bank appeared to be firmly on track to raise rates one last time in December, following an expected announcement about balance sheet reduction at the September 20 FOMC meeting. At this point, not even the category 5 winds of Irma could blow the balance sheet announcement off course, but if the storm damage meets some of the worst case estimates, the Fed may err on the side of caution and hold off on another rate hike.

The policy statement has made it clear that pace of tightening will be “gradual,” and Fed members have observed that the current neutral rate is much lower than historical levels, with some officials reckoning it to be well below 3.00%. In addition, inflation remains stubbornly low despite continued strong jobs growth. Fed members have no good explanation for the absence of any real signs of inflation pressure (notwithstanding the new $1,000 iPhone X), and merely describe the low unemployment, low inflation environment as “puzzling.” Given these points, the central bank will not rush to tighten rates through the last months of the Yellen era, unless incoming inflation data starts to blow the doors off of expectations.

Earlier this year, the Fed proved it can change expectations quickly and effectively if needs be. In the course of one week, Fed speakers unleashed a barrage of hawkish language that shifted fed funds futures from seeing little chance of a March rate move to a near certain expectation of a hike, all without creating a ripple in the markets. That experience should give the Fed confidence that the markets will pay heed if the Fed ramps up the dovish rhetoric after assessing hurricane damage or responding to geopolitical uncertainties.

The question of who will lead the Fed through this critical period becomes more momentous as more of the current board steps aside. The early resignation of Fed Vice Chair Fischer has opened up yet another seat on the Board of Governors, giving President Trump an unprecedented opportunity to put his stamp on the central bank. So far, however, the Trump has not made filling the Fed vacancies a priority, with only one nominee put forward so far (Randal Quarles who is set to get Senate approval this month). The latest reports say that White House staffers are vetting Fed governor candidates that include bankers and economists, but that President Trump is not deeply involved in the process.

Even with several board seats remaining open, most of the speculation has been around who the next Fed Chair will be. The leading candidate had been economic advisor Gary Cohn, but he is now on the outs after he publically criticized the President’s statements on Charlottesville. The former Goldman COO Cohn is a Wall Street darling and is seen as a stabilizing force in the White House economic policy, and for the time being he is said to be focused on putting together a viable tax reform plan. Reports say that at least a half-dozen candidates are being considered for the Fed Chair post.

The historic precedent of new Presidents reappointing Fed Chairs regardless of party for the sake of continuity does not seem to suit Trump’s style, but there has been some speculation about an outlying scenario in which Janet Yellen gets reappointed. Though Yellen has not commented on her tenure beyond saying that she intends to stay through the end of her term in February, even if Trump offered her a chance at a second term, this scenario seems unlikely after Vice Chair Fischer resigned and given the political pressure being exerted on Yellen to decline on the grounds that staying could be taken as an endorsement of Trump.

The European Central Bank is also preparing for the reversal of its historically easy monetary policy, now that the economic recovery in Europe has taken hold. Notably euro zone unemployment has reached an eight year low at 9.1%, even though inflation continues to lag the near 2% target. Amidst the improved data, the euro has strengthened nearly 15% this year, an FX move that some analysts equate to as much as 50 basis points of monetary policy tightening. The currency appreciation may also be in anticipation of an ECB announcement on the wind down of its quantitative easing program that has been operating since early 2015.

At this month’s ECB policy meeting, President Draghi expressed comfort with the expected October timing on a QE announcement, though he gave himself some wiggle room in the event of unexpected macroeconomic events that could cause a postponement. Market watchers will have to gauge events and data over the next month to determine whether they believe Draghi has the resolve to begin dismantling the QE program without further delay.

It’s still not entirely clear whether the ECB will provide a full accounting of the plan at the October 26 meeting or just give broad strokes that can be fleshed out by the mid-December meeting. The latest press reports say that the ECB governing council has been discussing four scenarios for QE including a possible 6-month or 9-month extension of the program (from the tentative December end date), as well as a reduction in the bond buying pace to €40B/month (from current level of €60B). Concurrent reports say that the 2018-2019 inflation forecast will be cut slightly, perhaps signaling no great rush to unwind accommodation.

The winds are shifting at other central banks as well. Though the Bank of Japan has maintained its soft pledge to increase Japan government bond (JGB) holdings at a pace of roughly ¥80T annually, in reality it has been slowing the pace of purchases all year. The BOJ has the flexibility to increase bond purchases – as it did in early July to respond to a spike in the 10-year JGB yields to 0.105% – but the overall trend remains downward. Meanwhile the Bank of England is making noises about rate policy again. Since its March meeting, the BOE has had at least one hawkish dissenter calling for a rate hike. Governor Carney punctuated the September meeting by stating that a rate adjustment may be needed in the coming months, so the BOE may now be on track to raise rates even before the Fed tightens again.

SEPTEMBER
1: US Payrolls & Unemployment; ISM Manufacturing PMI

4: UK Construction PMI; US Memorial Day holiday
5: UK Services PMI
6: US Trade Balance
7: ECB Policy Statement & Press Conf; Japan Final Q2 GDP; China Trade Balance (tentative)
8: UK Manufacturing Production; UK JOLTS Job Openings; China CPI & PPI

11:
12: UK CPI & PPI
13: UK Claimant Count & Unemployment; US PPI; China Industrial Production
14: UK Retail Sales; BOE Policy Statement; US CPI
15: US Retail Sales; US Industrial Production; Prelim University of Michigan Confidence

18: Euro Zone Final CPI
19: German ZEW Economic Sentiment; US Housing Starts & Building Permits
20: US Existing Home Sales; FOMC Policy Statement & Press Conf
21: BOJ Policy Statement & Press Conf; Philadelphia Fed Manufacturing Index
22: Various EU Flash Manufacturing and Services PMIs; PM May’s speech on Brexit from Florence
23: New Zealand elections

24: German federal election (Bundestag)
25: German Ifo Business Climate
26: US Consumer Confidence; US New Home Sales
27: US Durable Goods Orders
28: US Final Q2 GDP; China Caixin Manufacturing PMI
29: German Retail Sales; UK Current Account; UK Final Q2 GDP; Euro Zone Flash CPI; US Personal Spending; Chicago PMI; China Manufacturing & Non-Manufacturing PMIs

OCTOBER
1: Japan Tankan Manufacturing & Non-Manufacturing Indices
2: UK Manufacturing PMI; US ISM Manufacturing PMI
3: UK Construction PMI
4: US Services PMI; US ISM Non-Manufacturing PMI
5: ECB Minutes; US Trade Balance; US Factory Orders
6: US Payrolls & Unemployment

9:
10: UK Manufacturing Production; UK Goods Trade Balance; US JOLTS Jobs Openings
11: FOMC Minutes
12: US PPI; China Trade Balance (tentative)
13: US CPI; US Retail Sales; Prelim University of Michigan Sentiment



15: China CPI & PPI
16: US Empire State Manufacturing
17: UK CPI & PPI; German ZEW Economic Sentiment; US Industrial Production
18: UK Claimant Count & Unemployment; US Housing Starts & Building Permits; China Q3 GDP; China Industrial Production; China 19thNational Congress of the Communist Party of China opens
19: UK Retail Sales; Philadelphia Fed Manufacturing Index
20: US Existing Home Sales

23: Various EU Flash Manufacturing & Non-Manufacturing PMIs
24:
25: German Ifo Business Climate; UK Prelim Q3 GDP; US Durable Goods Orders; US New Home Sales
26: ECB Policy Decision & Press Conf
27: US Advance Q3 GDP (1st reading)

30: German Retail Sales; US Personal Spending; China Manufacturing & Non-Manufacturing PMIs; BOJ Policy Decision & Press Conf
31: Euro Zone Flash CPI Estimate; Euro Zone Prelim Q3 GDP; US Employment Cost Index; Chicago PMI; US Consumer Confidence; China Caixin Manufacturing PMI
NOVEMBER
1: UK Manufacturing PMI; US ISM Manufacturing PMI; FOMC Policy Decision
2: UK Construction PMI; BOE Policy Decision & Press Conf
3: UK Services PMI; US Payrolls & Unemployment; US ISM Non-Manufacturing PMI; US Factory Orders

Barrons weekend summary

Barrons weekend summary: cautious cover story on NKE; positive feature on AABA, CG; cautious on VIAB 

Cover story: Shares of NKE have dropped 16% since the end of 2015 and could fall by another 10% as the company loses traction with customers amid a changing e-commerce landscape and a rebound in the U.S. market by Adidas. 

Features: 

1) Positive on AABA: Shares of the former Yahoo!, whose 15% stake in BABA is valued at $65B, are a cheap way to play the Chinese e-commerce giant, and aren’t likely to suffer from liabilities related to data breaches at Yahoo; 

2) Positive on CG: A number of problems, including an ill-advised move into hedge funds, have left the private-equity giant’s shares looking cheap just as it launches a $100B fundraising effort that could boost fee-related earnings; 

3) Cautious on VIAB: Media giant is trying to reinvent itself, but the effort may not be enough to reverse a declining trend in which networks lose ground as consumers embrace new streaming paradigms; 

4) Story looks at six things people need to know about Social Security, which is far more complicated than it appears; 

5) Health savings accounts, “an oft-overlooked savings tool, can help with what will probably be the biggest cost in retirement—healthcare—and help people save on taxes now and later.” 

Tech Trader: Positive on AAPL: The next version of the Apple Watch could include a new technology called an embedded SIM that allows the device to access the Internet without being connected to a phone, leaving mobile phone providers out of the loop. 

Trader: The markets seem unfazed by global turmoil, and investors are looking forward to strong third quarter earnings, a case of good news being celebrated and bad news ignored; A market correction, were it to occur, would start with something small, such as a drop below the S&P 500’s 200-day moving average; Companies are increasingly snubbing activist investors, and some are greeting them with mockery—a major change in attitude from just a few years ago. 

Interview: Jonathan Atkin, an analyst at RBC Capital Markets in San Francisco, “is enthusiastic about the prospects for cell-tower and data-center industries,” but cautious on most cellular plays (picks: AMT, CCI, GDS, DLR, EQIX, ATUS, CHTR, TMUS). 

Profile: Jeffrey Sherman manages DoubleLine Capital’s DoubleLine Shiller Enhanced CAPE fund, which gains additional returns via an actively managed fixed-income portfolio that serves as collateral for a strategy that uses total-return swaps to access the S&P 500. 

European Trader: For investors who think the run-up in FANG stocks appears overdone, European companies such as ASML Holding and SAP might fit the bill, while investors should avoid Nokia and ERIC because of their close ties to the telecom industry. 

Asian Trader: “Long seen as a laggard in an economically dynamic region, the Philippines has staged a comeback. Its economy is one of the fastest growing in Asia.” 

Emerging Markets: Positive on Ping An Insurance, Bank of China, Huatai Securities, China Construction: Analysts say taking positions in large, conservative institutions with diverse businesses is a good way to deal with the changes facing China’s banking industry. 

Commodities: “As the recovery for the energy market in the Gulf of Mexico takes hold, post-Hurricane Harvey, Irma, and other storms promise to fuel volatility for oil and keep gasoline prices high in the weeks ahead.” 

Streetwise: The Fed faces a difficult task, says Morgan Stanley’s Ellen Zentner, because if it does nothing in the current environment of low unemployment and easing financial conditions, it runs the risk of having to raise rates quickly later on.

North Korea and Mother Nature Menace Market Sentiment

TradeTheNews.com Weekly Market Update: North Korea and Mother Nature Menace Market Sentiment
Fri, 08 Sep 2017 16:04 PM EST

Many investors returned from summer breaks to find a host of issues weighing upon the market. The holiday-shortened week began with traders aggressively paring back risk in light of the escalating tensions in North Korea surrounding its latest nuclear test. With the post-hurricane recovery in Texas still just getting underway, the potentially catastrophic hurricane Irma barreled towards Florida. Economists began to downgrade Q3 growth forecasts, believing near term business activity and productivity will surely be depressed by these two historic storms, though the Fed's Dudley noted that hurricane effects are transitory and likely to reverse by early 2018 as reconstruction gets underway.



Treasury markets surged, pushing yields to the lowest levels of the year, while the US Dollar slumped to the lowest levels since early 2015. Stock prices recovered from Monday’s lows on surprise word that President Trump cut a deal with the Democrats to keep the government open, fund hurricane recovery efforts, and raise the debt ceiling. The Euro moved to a new high above 1.2070 after the ECB left rates and QE unchanged on Thursday. ECB President Draghi did not alter expectations, indicating the central bank would likely unveil its plans on exiting the asset purchase program in October. The Chinese Yuan surged to the highs of the year, testing the 200-week moving average, sparking speculation officials in Beijing were stepping in and attempting to stabilize the currency at these levels. By Friday, investors' jitteriness was only exacerbated by disclosure of an enormous data breach at credit giant Equifax, and solidifying forecasts for a direct hit in South Florida with a path that will take Irma straight up the spine of the entire state. Gold prices drifted higher, ending the week at levels not seen since right after the November election. Oil prices recovered some of last week’s losses related to Harvey, while gasoline prices retreated. For the week, the DJIA lost 0.9%, the S&P500 dipped 0.6%, and the Nasdaq fell 1.2%.



In corporate news this week, insurance stocks, notably Aspen Insurance Holdings and Everest Re, were hit as the clean-up in Texas from Hurricane Harvey continued and Irma ravaged the Caribbean, threatening a weekend landing in south Florida. A swath of regulators and politicians announced plans to probe the causes of and reaction to Equifax’s massive data breach that may have affected up to 143 million American consumers. And United Technologies announced plans to acquire manufacturer Rockwell Collins for $140/share in a $30B cash and stock deal, one of the biggest mergers in aerospace industry history.



MONDAY 9/4

(UK) PM May set to approve a politically explosive Brexit bill of up to £50B after the Conservative Party conference in October - financial press

*(EU) EURO ZONE SEPT SENTIX INVESTOR CONFIDENCE: 28.2 V 27.0E



TUESDAY 9/5

*(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED

*(UK) AUG SERVICES PMI: 53.2 V 53.5E (13th month of expansion)



WEDNESDAY 9/6

(PL) POLAND CENTRAL BANK (NBP) LEAVES BASE RATE UNCHANGED AT 1.50%; AS EXPECTED

*(US) JULY TRADE BALANCE: -$43.7B V -$44.7BE

(US) AUG FINAL MARKIT SERVICES PMI: 56.0 V 56.9E

(US) Fed Vice Chair Fischer to step down on or around Oct 13th, cites personal reasons - letter to President Trump

(US) Democrats say President Trump and Congressional leaders have agreed to pass Harvey aid along with a short term debt limit and govt funding bill - press

(US) Reportedly Pres Trump is unlikely to nominate Gary Cohn as next Fed Chairman - financial press

(BR) BRAZIL CENTRAL BANK (BCB) CUTS SELIC TARGET RATE BY 100BPS TO 8.25%; AS EXPECTED

USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT: 6.5269 V 6.5311 PRIOR (9th consecutive stronger setting, longest run since 2011)

(AU) AUSTRALIA JULY TRADE BALANCE (A$): 460M V 1.0BE



THURSDAY 9/7

*(SE) SWEDEN CENTRAL BANK (RIKSBANK) LEAVES REPO RATE UNCHANGED AT -0.50%; maintains Repo Rate Path (as expected)

*(CN) CHINA AUG FOREIGN RESERVES: $3.0915 V $3.095TE (7th month of increase)

(EU) EURO ZONE Q2 FINAL GDP Q/Q: 0.6% V 0.6%E; Y/Y: 2.3% V 2.2%E&NBSP

FAST Reports Aug Net Rev $411.5M +12.8% y/y

(EU) ECB LEAVES MAIN 7-DAY REFINANCE RATE UNCHANGED AT 0.00%; AS EXPECTED

*(US) Q2 FINAL NONFARM PRODUCTIVITY: 1.5% V 1.3%E; UNIT LABOR COSTS: 0.2% V 0.3%E

(EU) ECB Chief Draghi: Reiterates that interest rates to remain present level well past end of QE; medium term outlook broadly for both growth and inflation

(EU) ECB Chief Draghi: Meeting did discuss growth, inflation and exchange rate - Q&A

AAPL New iPhone reportedly experienced some production problems earlier this summer; could affect supply chain and may delay shipping - press

EFX Announces cybersecurity incident involving consumer information; potentially impacts 143M US consumers; credit card numbers for 209K consumers were accessed

(JP) JAPAN Q2 FINAL GDP SA Q/Q: 0.6% V 0.7%E; ANNUALIZED: 2.5% V 2.9%E

(CN) CHINA AUG TRADE BALANCE (CNY): 286.5B V 335.7BE

(CN) CHINA AUG TRADE BALANCE: $42.0B V $48.5BE



FRIDAY 9/8

(FR) FRANCE JULY INDUSTRIAL PRODUCTION M/M: 0.5% V 0.5%E; Y/Y: 3.7% V 3.6%E

*(UK) JULY INDUSTRIAL PRODUCTION M/M: 0.2% V 0.2%E; Y/Y: 0.4% V 0.4%E

(CA) CANADA AUG NET CHANGE IN EMPLOYMENT: +22.2K V +15.0KE; UNEMPLOYMENT RATE: 6.2% V 6.3%E

(US) Fed's Dudley (dove, FOMC voter): hurricanes push down economic activity, but those effects are transitory; longer term effect is actually an economic positive on the rebuilding activity

(US) New York Fed Nowcast: cuts Q3 GDP forecast to 2.1% from 2.2% on 9/1; sees Q4 GDP forecast at 2.6%

TGT Lowering prices on thousands of items - corporate blog

(US) Atlanta Fed raises Q3 GDP to 3.0% from 2.9% on 9/6