TradeTheNews.com Weekly
Market Update: Stocks finish higher despite escalating trade spat
Fri, 06 Jul 2018 16:16 PM EST
Stocks lifted this week in holiday-abbreviated trade. Early on, worries around
potentially changing political winds in Europe resulted in risk-off trading
sentiment. Coming out of the July 4th break, rising tensions surrounding trade
and escalating tariffs were counterbalanced by another strong reading on the US
jobs market and high expectations heading into corporate earnings season. The
US Treasury yield curve continued to flatten into territory not seen since
2007, while copper prices plumbed to fresh 1-year lows. Banks remained a
notable laggard, unable to garner any momentum, while traditionally defensive
groups and the NASDAQ/tech remained in leadership roles. For the week the
S&P gained 1.5%, Dow rose 0.7% and the NASDAQ jumped 2.5%.
In corporate news this week, Tesla announced it hit its one-week production
goal of 5,000 Model 3 units in the last week of Q2, but analysts noted a miss
on overall Q2 deliveries and a decline in net Model 3 reservations, sending
shares lower. Casino names fell after Macau gaming numbers came in below
estimates for the second straight month. Facebook shares dropped Tues on news
of an expanded probe into the Cambridge Analytica-linked data breach, with the
FBI, SEC and FTC joining the DOJ in their investigation. Boeing and Embraer
confirmed a JV deal in which Boeing will acquire control of Embraer’s $4.8B
commercial jet division. Biogen surged after successful results from an
Alzheimer’s trial that showed its drug could slow the progression of the
disease in its milder, early stages.
SUN 7/1
(DE) Germany Interior Minister/CSU Chairman Seehofer said to have offered
resignation to colleagues in CSU Party over migrant issue; CSU Caucus chief
Dobrindt said to oppose Seehofer quitting - financial pres
(EU) EU makes written submission to US Commerce Dept warning that EU and others
will likely respond to tariffs on foreign autos, by targeting $300B in US goods
in retaliation - FT
(HK) Macau June Gaming Rev MOP22.5B, Y/Y: 12.5% v 18%e (2nd consecutive missed
estimate)
MON 7/2
TSLA Reports Q2 vehicle deliveries 40.7K (Model 3 18.4K, Model S 10.9K, Model X
11.4K)
(UK) JUN MANUFACTURING PMI: 54.4 V 54.0E
(DE) Chancellor Merkel and Interior Min Seehofer reach compromise over
migration - German press
(US) Atlanta Fed raises Q2 GDP forecast to 4.1% from 3.8% prior
(CN) China June exports to the US said to be +3.8% y/y according to customs v
27.6% y/y - Chinese press
TUES 7/3
(CN) China PBOC Gov Yi Gang: closely watching moves in fx market, reiterates to
keep yuan basically stable and at reasonable level; reiterates 'prudent,
neutral' monetary policy
(SE) SWEDEN CENTRAL BANK (RIKSBANK) LEAVES REPO RATE UNCHANGED AT -0.50%
WEDS 7/4
(UK) Post-Brexit document showed customs system 'could take up to five years -
financial press
(CN) China to implement tariffs on $34B worth of US goods from midnight July
6th, according to press report; Separately, a China MOF official said China
will not implement tariff measures ahead of the US
(UK) JUN SERVICES PMI: 55.1 V 54.0E (23rd month of expansion and a 9-month
high)
THURS 7/5
(US) JUN ADP EMPLOYMENT CHANGE: 177K V 190KE
(US) JUN ISM NON-MANUFACTURING COMPOSITE: 59.1 V 58.3E
(US) Conference Board June Total online job ads 4.5M v 4.7M m/m v 4.8M y/y; New
ads 1.9M v 1.9M m/m v 2.0M y/y
005930.KR Reports Q2 prelim (KRW) Op 14.8T v 14.9Te (vs 14.07T y/y), Rev 58.0T
v 59.7Te (vs. 61.0T y/y)
FRI 7/6
(CN) First round of US tariffs on China take effect
(CN) China Commerce Ministry (MOFCOM): Reiterates has to fight back, forced to
retaliate on tariffs; will continue evaluating impact of US tariffs
*(CN) CHINA STATE MEDIA: IMPORT TARIFFS HAVE TAKEN EFFECT ON US PRODUCTS
066570.KR Reports prelim Q2 (KRW) Op 771B v 821Be, Rev 15.02T v 15.5Te
(CN) China Foreign Ministry spokesperson Lu Kang: Retaliatory tariffs on US
goods are now in effect - press conf
DBK.DE Reportedly JP Morgan and ICBC considering taking a stake - press
(IT) Bank of Italy (BOI) June Balance-Sheet Aggregates: Target2 liabilities at
record high of €480.9B v €464.6B m/m
(CA) CANADA JUN NET CHANGE IN EMPLOYMENT: 31.8K V +20.0KE; UNEMPLOYMENT RATE:
6.0% V 5.8%E
*(US) JUN CHANGE IN NONFARM PAYROLLS: 213K V 195KE
Saturday, July 7, 2018
Barrons weekend summary
Barrons weekend summary: positive on LMT, MPC, INTC, KORS; cautious on home builders
Cover story: Proxy voting professionals and practitioners say the system needs to change, with the PG-Trian proxy fight the “latest failure in a system that is unresponsive to institutional and retail investors, and increasingly at risk of producing an erroneous result in a close vote.”
Features: 1) Positive on LMT, MPC, INTC, KORS: With the effects of Donald Trump’s trade wars uncertain, Barron’s found four companies whose earnings outlooks have climbed in recent months by more than their share price; 2) Cautious on TOL, DHI, LEN, PHM: Many investors see homebuilders as “early cycle” stocks that should be avoided toward the end of a long economic recovery, but bulls says the cycle will continue because the U.S. has underbuilt housing over the past decade; 3) Blockchain, the technology behind bitcoin, could be a solution to problems related to the use of middlemen in the proxy process, from solicitors to banks to tabulators, making tracking votes difficult; 4) Story looks at three proxy votes that went bad, including one that led TROW to erroneously vote for Michael Dell’s bid to take his company private, for which the firm had to compensate clients.
Tech Trader: Cloud computing is the greatest revolution in technology since the advent of the World Wide Web, but a backlash—called edge computing, led by old guard companies such as Dell, IBM, HPQ, HPE, NTAP, and CSCO, all imperiled by the cloud—is under way.
Trader: China’s ability to push back on U.S. tariffs may be limited, but the trade war could serve as a further impetus for Beijing to internationalize its currency, impacting the dollar’s role as the world’s reserve currency.
Barron’s Mutual Fund Quarterly: 1) A look at funds that have outperformed the market in a tough climate for bonds; money-market and short-term funds pose the least risk, while floating-rate, unconstrained, and high-yield muni bonds may be more volatile (+ VMFXX, THOPX, SEMRX, BSCK, EAFAX, FLOT, PUBAX, OSTRX, IOBAX, NHMAX); 2) With the winding down of a 35-year bull market in bonds and the potential for rising inflation, bond investors need to be stingy about management fees; 3) In an interview, Dan Wiener of Vanguard and Jim Lowell of Fidelity, who are a team at Adviser Investments, talk about their favorite fund managers, and say that healthcare is the best long-term opportunity right now; 4) Astonishingly high yields, often into the mid-teens, make collateralized loan obligations—which are typically institutional investments—worth another look.
Follow-Up: Positive on Embraer: Business jet prices are firming up, which could be good news for the company, but the best way to invest in it might be through BA, which now has a stake in Embraer’s narrow-body C-series.
European Trader: Cautious on Glencore: A selloff following a Justice Department subpoena could make it a good time to buy on the dip, but there’s a good case to made for holding off, especially if China demand weakens or other legal problems emerge.
Emerging Markets: “A number of Asia-based strategists believe Southeast Asian stocks are within 5-10% of their bottom and should be on the shopping list of long-term investors.”
Commodities: “Platinum, with its price at the lowest level in nearly a decade, might soon attract the interest of bargain hunters.”
Streetwise: Dell Technologies’ $21.7B cash and stock bid to buy out holders of DVMT, a Dell stock that tracks VMW, is likely to gain shareholder approval, though the tracking stock’s holders deserve a better deal.
Sunday, July 1, 2018
Barrons weekend summary
Barrons weekend summary: Cover story warns its time to prepare for the end of the bull market
Cover story: Time for the bull market that started in 2009 to come to an end by 2020. Factors include recent tax cuts (a stimulus that should last another year or so) and the Fed continuing to raise interest rates while reducing its $4T balance sheet. BMO chief investment strategist Brian Belski suggests traders focus on high quality stocks. (Picks: BLK, BIIB, COST, UTX) Goldman Sachs' chief U.S. equity strategist David Kostin recommends stocks with strong balance sheets. (picks: FB, ISRG, MNST, VZ)
Features: Positive on Sirius XM Holdings despite greater competition from the likes of Spotify and Apple. Liberty Media owns a controlling stake in Sirius and Barron's suggests investors can "ride the value" of that stake through a tracking stock. The tracking stock comes in three classes: Liberty Media Corp Series A (LSXMA), Series B SiriusXM (LSXMB) and Series C SiriusXM (LSXMK)
Feature 2: Non-financial companies debt is at a record 74% of GDP: Low Credit risk company picks: MA, EA, GGG, EQC, VZ Feature 3: The economy is running out of workers with continued economic growth in the United States. The author suggests "second-chancers," the population that was recently released from prison, could fill the void and extend economic expansion.
- Highlights: Trump and trade, going after Harley Davidson, immigration gridlock, Supreme Court's travel ban, GE exiting the Dow industrials, and Amazon's acquisition of PillPack
Tech Trader: Apple (AAPL), Qualcomm (QCOM), IBM (IBM) fell on Monday following news that the Trump would plan to target China's involvement in US tech. The Nasdaq ended up with its worst week since March finishing -2.4%; tech received some judicial relief when the high court ruled in favor of American express (AXP) giving it right to stop its partner merchants from offering discounts to consumers using cards from Visa (V) and MasterCard (MA).
Profile: Lisa Hess and Dan Sobol, the managing partners of SkyTop Capital Management talk about potential winners connected to the electric car and autonomous vehicles industry. (picks: AAG.DE, VC, CSTM, S.CA)
Interview: investors Kenneth Broad and Christopher Bonavico of Jackson Square SMID-Cap fund. The fund holds 30 stocks that remain in their portfolio for a long time with a third held for more than a decade. (picks: DNKN, LOGI, JCOM, RDFN, NYT) - Bernstein media analyst Todd Juenger recently conducted a 1,000-person survey to find out why Netflix (NFLX) has only 57M paying users. Survey results show Netflix has 141M users and 68% of whom pay for the service. Juenger also predicts the company will be at 87M subscriptions in 2030.
Trader: Expects durgstore names to recover after Amazon's announcement into prescription drug market. Sees Harley Davidson shares falling lower after 9% loss last week after announcing move of some production overseas and Trump's lashing out.
European Trader: Norway low level of political risk has helped stocks outperform other equities; the country's economic growth looks solid. Analysts see 2% GDP expansion both in 2018 and 2019.
Emerging Markets: Following Trukey's re-election of Erdogan the country's currency, the lira, is at its lowest value since 2012; real domestic interest rates are at 7% with yields at similar levels. Remains cautious on Turkey's future given re-election of Erdogan.
Commodities: Commodities' returns have not done as well as expected in H1 of 2018; trade news has dominated commodities which means the outlook is very uncertain.Follow Up: Remains cautious on GE sees credit rating in risk of being cut.
Saturday, June 30, 2018
Trump to lean on CFIUS; European inflation gets back to ECB target
TradeTheNews.com Weekly
Market Update: Trump to lean on CFIUS; European inflation gets back to ECB
target
Fri, 29 Jun 2018 16:08 PM EST
Markets chopped around this week as the quarter drew towards a close. Early on, risk-off flows picked up momentum on concerns that the US would crack down aggressively on Chinese investments in an attempt to curtail intellectual property theft. Trade tensions were soothed modestly when the President said he would use the CFIUS mechanism to protect US technology rather than introduce a new set of laws to go after transgressors, at least for now. Nevertheless, the Chinese Yuan repeatedly made new yearly lows against the Dollar after the PBOC announced an RRR cut on Sunday, leading some to speculate Chinese officials were OK with a weakening currency, illustrating devaluation remains part of their arsenal in any trade war.
By Friday, stocks were swinging back up, led by a rebound in Europe. European flash CPI topped the ECB target of 2% for the first time in more than a year, and EU leaders reached a modest agreement on immigration. US core PCE data also matched the Federal Reserve’s target for the first time since 2012. Treasury markets continued to flash warning signs, though, as flattening in the US yield curve continued to ever-precarious levels, keeping the pressure on banks until the CCAR results on Thursday night sparked a relief rally. High yield fixed income also slipped, pushing ETF barometers back towards key support levels for the year. The crude rally continued largely unabated to probe fresh highs going back to 2015, helped by reports that the US was leaning heavily on nations to comply with Iranian sanctions. The Greenback moved up for much of the week as emerging market currencies stayed volatile, and investors continued to place bets predicated on expected divergent central banks paths. For the week the S&P fell 1.3%, the Dow lost 1.3% and the NASDAQ dropped 2.4%.
In corporate news this week, the Nasdaq saw bouts of weakness amid some quarter end profit-taking in the FANG names as investors weighed potential upcoming trade and foreign investment hurdles. Harley Davidson was the target of Pres Trump’s ire after announcing plans to shift production of some motorcycles to the EU to avoid tariffs. Amazon made another foray into the drug sector with the acquisition of Pillpack, sending shares of drugstore names tumbling. Nike surged higher after topping expectations and raising its annual sales growth forecasts. ConAgra announced the acquisition of Pinnacle Foods in a $10.9B cash-and-stock deal, aiming to boost its foothold in the snack and frozen food markets.
SUNDAY 6/24
Bank for International Settlements Annual Economic Report: Banks may be disguising their borrowings in a way similar to that used by Lehman Brothers Holdings, with debt ratios falling within limits imposed by regulators just four times a year; warns on protectionist measures
(CN) China PBOC cuts Reserve Ratio Requirement (RRR) for some banks by 50bps, effective July 5th; (3rd targeted cut this year) as a result releasing CNY700B v CNY400Be in liquidity (as speculated)
MONDAY 6/25
*(DE) GERMANY JUN IFO BUSINESS CLIMATE: 101.8 V 101.8E; CURRENT ASSESSMENT: 105.1 V 105.6E; Expectations Survey: 98.6 v 98.0e
HOG Plans to shift production of motorcycles with EU destinations away from US to avoid tariffs, expects tariffs will result in an incremental cost of ~$2.2K per average motorcycle exported from the US to the EU - filing
(US) MAY NEW HOME SALES: 689K V 667KE
(US) JUN DALLAS FED MANUFACTURING ACTIVITY: 36.5 V 23.0E
(CN) China President Xi reportedly told various CEOs last week that Beijing plans to strike back against punitive American tariffs; says "In our culture we punch back" - press
(US) White House Trade Adviser Navarro: we have no plans to impose investment restrictions; today's market selloff is a large overreaction - CNBC interview
TUESDAY 6/26
LEN Reports Q2 $1.58 v $0.45e, Rev $5.46B v $5.23Be
GE Confirms Healthcare to become standalone company; to focus on Aviation, Power and Renewable Energy - Investor day
HOG (US) President Trump tweets "Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand. That was long before Tariffs were announced. Hence, they were just using Tariffs/Trade War as an excuse. Shows how unbalanced & unfair trade is, but we will fix it....
AXP To launch new Amazon cobrand card to enhance how small businesses buy
*(US) JUN RICHMOND FED MANUFACTURING INDEX: 20 V 15E
(US) Supreme Court upholds Trump travel ban by 5-4 vote - press
(CA) Canada govt reportedly readying steel quotas and tariffs on China and other countries - press
(US) S&P affirms United States sovereign rating at AA+: Outlook stable
WEDNESDAY 6/27
INTC New CPU release delay may reduce global notebook shipments - Digitimes
PF Confirms to be acquired by Conagra in a $10.9B cash and stock deal
(CZ) CZECH CENTRAL BANK (CNB) RAISES 2-WEEK REPURCHASE RATE BY 25BPS TO 1.00%; NOT EXPECTED
(US) Official: President Trump seeks to maintain investment environment open in the US, to use CFIUS to respond to China technology theft - closed door conference call (in-line with recent speculation)
(US) MAY PRELIMINARY DURABLE GOODS ORDERS: -0.6% V -1.0%E; DURABLES EX TRANSPORTATION: -0.3% V +0.5%E
(US) MAY PENDING HOME SALES M/M: -0.5% V +0.5%E; Y/Y: -2.8% V +0.4% PRIOR
(US) Atlanta Fed cuts Q2 GDP forecast to 4.5% from 4.7% prior
(US) Association of American Railroads weekly rail traffic report for week ending June 23rd: 557.3K, +3.7% y/y
(US) Justice Kennedy to retire from US Supreme Court - press
BBBY Reports Q1 $0.32 v $0.31e, Rev $2.75B v $2.75Be
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%, AS EXPECTED
THURSDAY 6/28
AMZN Announces new offering that helps entrepreneurs build their own companies delivering Amazon packages
(EU) EURO ZONE JUN BUSINESS CLIMATE INDICATOR: 1.39 V 1.40E; CONSUMER CONFIDENCE (FINAL): -0.5 V -0.5E
(DE) GERMANY JUN PRELIMINARY CPI M/M:0.1 % V 0.1%E; Y/Y: 2.1% V 2.1%E
*(DE) GERMANY JUN PRELIMINARY CPI M/M:0.1 % V 0.1%E; Y/Y: 2.1% V 2.1%E
(US) Q1 FINAL GDP PRICE INDEX: 2.2% V 1.9%E; CORE PCE Q/Q: 2.3% V 2.3% PRELIM
*(US) Q1 FINAL GDP ANNUALIZED Q/Q: 2.0% V 2.2%E; PERSONAL CONSUMPTION: 0.9% V 1.0%E
AMZN To buy PillPack, an online pharmacy that offers pre-sorted doses of medications and home delivery
(CN) China state planner issued special management measures list for foreign investment access, effective July 28th - press
(US) State Dept says it will work with countries who buy Iranian oil on case by case basis; may not reach zero imports - CNBC
(US) White House Chief of Staff Kelly reportedly expected to leave position this summer - press
NKE Reports Q4 $0.69 v $0.64e, Rev $9.79B v $9.39Be; authorizes new 4-year, $15B program to repurchase Class B shares (13% of market cap)
DBK.DE Fed objects to capital plan for Deutsche Bank US unit due to qualitative concerns
(US) FEDERAL RESERVE COMPREHENSIVE CAPITAL ANALYSIS AND REVIEW (CCAR): 34 OF 35 CAPITAL PLANS APPROVED
NKE CEO: Raises forecast for annual sales growth at high single digits (prior mid to high single digits) - earnings call comments
FRIDAY 6/29
Xiaomi Corp [1810.HK] IPO said to price at HK$17/share (low-end of range), raising ~$4.7B (implied valuation ~$48.0B) - financial press
(DE) GERMANY JUN UNEMPLOYMENT CHANGE: -15K V -8KE; UNEMPLOYMENT CLAIMS RATE: 5.2% V 5.2%E
(US) Nevada reports May casino gaming Rev $1.04B, +5.3% y/y; Las Vegas strip Rev $904.6M, +5.1% y/y
(US) JUN FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 98.2 V 99.0E (largely due to tariff concerns)
(US) Atlanta Fed cuts Q2 GDP forecast to 3.8% from 4.5% prior
AAPL Reportedly to rebuild its Maps product; to compile new maps from its own data - tech blog
Fri, 29 Jun 2018 16:08 PM EST
Markets chopped around this week as the quarter drew towards a close. Early on, risk-off flows picked up momentum on concerns that the US would crack down aggressively on Chinese investments in an attempt to curtail intellectual property theft. Trade tensions were soothed modestly when the President said he would use the CFIUS mechanism to protect US technology rather than introduce a new set of laws to go after transgressors, at least for now. Nevertheless, the Chinese Yuan repeatedly made new yearly lows against the Dollar after the PBOC announced an RRR cut on Sunday, leading some to speculate Chinese officials were OK with a weakening currency, illustrating devaluation remains part of their arsenal in any trade war.
By Friday, stocks were swinging back up, led by a rebound in Europe. European flash CPI topped the ECB target of 2% for the first time in more than a year, and EU leaders reached a modest agreement on immigration. US core PCE data also matched the Federal Reserve’s target for the first time since 2012. Treasury markets continued to flash warning signs, though, as flattening in the US yield curve continued to ever-precarious levels, keeping the pressure on banks until the CCAR results on Thursday night sparked a relief rally. High yield fixed income also slipped, pushing ETF barometers back towards key support levels for the year. The crude rally continued largely unabated to probe fresh highs going back to 2015, helped by reports that the US was leaning heavily on nations to comply with Iranian sanctions. The Greenback moved up for much of the week as emerging market currencies stayed volatile, and investors continued to place bets predicated on expected divergent central banks paths. For the week the S&P fell 1.3%, the Dow lost 1.3% and the NASDAQ dropped 2.4%.
In corporate news this week, the Nasdaq saw bouts of weakness amid some quarter end profit-taking in the FANG names as investors weighed potential upcoming trade and foreign investment hurdles. Harley Davidson was the target of Pres Trump’s ire after announcing plans to shift production of some motorcycles to the EU to avoid tariffs. Amazon made another foray into the drug sector with the acquisition of Pillpack, sending shares of drugstore names tumbling. Nike surged higher after topping expectations and raising its annual sales growth forecasts. ConAgra announced the acquisition of Pinnacle Foods in a $10.9B cash-and-stock deal, aiming to boost its foothold in the snack and frozen food markets.
SUNDAY 6/24
Bank for International Settlements Annual Economic Report: Banks may be disguising their borrowings in a way similar to that used by Lehman Brothers Holdings, with debt ratios falling within limits imposed by regulators just four times a year; warns on protectionist measures
(CN) China PBOC cuts Reserve Ratio Requirement (RRR) for some banks by 50bps, effective July 5th; (3rd targeted cut this year) as a result releasing CNY700B v CNY400Be in liquidity (as speculated)
MONDAY 6/25
*(DE) GERMANY JUN IFO BUSINESS CLIMATE: 101.8 V 101.8E; CURRENT ASSESSMENT: 105.1 V 105.6E; Expectations Survey: 98.6 v 98.0e
HOG Plans to shift production of motorcycles with EU destinations away from US to avoid tariffs, expects tariffs will result in an incremental cost of ~$2.2K per average motorcycle exported from the US to the EU - filing
(US) MAY NEW HOME SALES: 689K V 667KE
(US) JUN DALLAS FED MANUFACTURING ACTIVITY: 36.5 V 23.0E
(CN) China President Xi reportedly told various CEOs last week that Beijing plans to strike back against punitive American tariffs; says "In our culture we punch back" - press
(US) White House Trade Adviser Navarro: we have no plans to impose investment restrictions; today's market selloff is a large overreaction - CNBC interview
TUESDAY 6/26
LEN Reports Q2 $1.58 v $0.45e, Rev $5.46B v $5.23Be
GE Confirms Healthcare to become standalone company; to focus on Aviation, Power and Renewable Energy - Investor day
HOG (US) President Trump tweets "Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand. That was long before Tariffs were announced. Hence, they were just using Tariffs/Trade War as an excuse. Shows how unbalanced & unfair trade is, but we will fix it....
AXP To launch new Amazon cobrand card to enhance how small businesses buy
*(US) JUN RICHMOND FED MANUFACTURING INDEX: 20 V 15E
(US) Supreme Court upholds Trump travel ban by 5-4 vote - press
(CA) Canada govt reportedly readying steel quotas and tariffs on China and other countries - press
(US) S&P affirms United States sovereign rating at AA+: Outlook stable
WEDNESDAY 6/27
INTC New CPU release delay may reduce global notebook shipments - Digitimes
PF Confirms to be acquired by Conagra in a $10.9B cash and stock deal
(CZ) CZECH CENTRAL BANK (CNB) RAISES 2-WEEK REPURCHASE RATE BY 25BPS TO 1.00%; NOT EXPECTED
(US) Official: President Trump seeks to maintain investment environment open in the US, to use CFIUS to respond to China technology theft - closed door conference call (in-line with recent speculation)
(US) MAY PRELIMINARY DURABLE GOODS ORDERS: -0.6% V -1.0%E; DURABLES EX TRANSPORTATION: -0.3% V +0.5%E
(US) MAY PENDING HOME SALES M/M: -0.5% V +0.5%E; Y/Y: -2.8% V +0.4% PRIOR
(US) Atlanta Fed cuts Q2 GDP forecast to 4.5% from 4.7% prior
(US) Association of American Railroads weekly rail traffic report for week ending June 23rd: 557.3K, +3.7% y/y
(US) Justice Kennedy to retire from US Supreme Court - press
BBBY Reports Q1 $0.32 v $0.31e, Rev $2.75B v $2.75Be
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%, AS EXPECTED
THURSDAY 6/28
AMZN Announces new offering that helps entrepreneurs build their own companies delivering Amazon packages
(EU) EURO ZONE JUN BUSINESS CLIMATE INDICATOR: 1.39 V 1.40E; CONSUMER CONFIDENCE (FINAL): -0.5 V -0.5E
(DE) GERMANY JUN PRELIMINARY CPI M/M:0.1 % V 0.1%E; Y/Y: 2.1% V 2.1%E
*(DE) GERMANY JUN PRELIMINARY CPI M/M:0.1 % V 0.1%E; Y/Y: 2.1% V 2.1%E
(US) Q1 FINAL GDP PRICE INDEX: 2.2% V 1.9%E; CORE PCE Q/Q: 2.3% V 2.3% PRELIM
*(US) Q1 FINAL GDP ANNUALIZED Q/Q: 2.0% V 2.2%E; PERSONAL CONSUMPTION: 0.9% V 1.0%E
AMZN To buy PillPack, an online pharmacy that offers pre-sorted doses of medications and home delivery
(CN) China state planner issued special management measures list for foreign investment access, effective July 28th - press
(US) State Dept says it will work with countries who buy Iranian oil on case by case basis; may not reach zero imports - CNBC
(US) White House Chief of Staff Kelly reportedly expected to leave position this summer - press
NKE Reports Q4 $0.69 v $0.64e, Rev $9.79B v $9.39Be; authorizes new 4-year, $15B program to repurchase Class B shares (13% of market cap)
DBK.DE Fed objects to capital plan for Deutsche Bank US unit due to qualitative concerns
(US) FEDERAL RESERVE COMPREHENSIVE CAPITAL ANALYSIS AND REVIEW (CCAR): 34 OF 35 CAPITAL PLANS APPROVED
NKE CEO: Raises forecast for annual sales growth at high single digits (prior mid to high single digits) - earnings call comments
FRIDAY 6/29
Xiaomi Corp [1810.HK] IPO said to price at HK$17/share (low-end of range), raising ~$4.7B (implied valuation ~$48.0B) - financial press
(DE) GERMANY JUN UNEMPLOYMENT CHANGE: -15K V -8KE; UNEMPLOYMENT CLAIMS RATE: 5.2% V 5.2%E
(US) Nevada reports May casino gaming Rev $1.04B, +5.3% y/y; Las Vegas strip Rev $904.6M, +5.1% y/y
(US) JUN FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 98.2 V 99.0E (largely due to tariff concerns)
(US) Atlanta Fed cuts Q2 GDP forecast to 3.8% from 4.5% prior
AAPL Reportedly to rebuild its Maps product; to compile new maps from its own data - tech blog
Saturday, June 23, 2018
Barrons weekend summary
Barrons weekend summary: Cover story on BlackRock annual letter and sustainable investing
Cover story: Focuses on the quote from the BlackRock annual letter, “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.” Notes growing belief backed by research that investors and companies who take into account social and environmental governance generally outperform the market over the longer term and reduce short term risks.
Features:
1. Does sustainable investing (ESG) lead to lower returns? Cites 2 experts in the field one taking each side of the position.
2. Does an ESG roundtable with various CEOs and COIs who explore social and environmental governance
3. Trade wars: Investors should prepare. Stock market doesn't appear to have priced in the potential impact of a trade war. Positive mentions on: NextEra Energy (NEE), Xcel Energy (XEL), and American Electric Power (AEP), General Mills (GIS), Kroger (KR), Andeavor (ANDV), Valero (VLO)
4. Fed expected to approve big bank dividend increases and buyback plans this week. Expected to return avg of 100% of earnings to shareholders over next 12-months
5. Investing interviews David King who runs Columbia Flexible Capital Income Fund. Sees some opportunity in equities and convertible bonds. Positive on Six Flags Entertainment (SIX) and Microsoft (MSFT) Supports GE being kicked from Dow but should have been replaced by Facebook (FB)or another tech company, not Walgreens (WBA). Also thinks Berkshire Hathaway (BRK.B), AbbVie (ABBV), Abbott Laboratories (ABT), Nvidia (NVDA), and Salesforce.com (CRM) should all be considered for the Dow. Cautious On: MD, Mednax shares trade near the valuation at which competitor Envision (EVHC) agreed to be bought, and any buyer would inherit its disputes The amount of money flowing into sustainable mutual and exchange-traded funds every month has tripled since Donald Trump was elected Explores different styles of sustainable investing. Barron's names the 20 most influential people in ESG investing. Names Jeremy Grantham #7, comments on his ideas of the future. Panelists on Impact Investing Summit see big fund flows into ESG strategies, driven by millennials and women who will make up 75% of workforce by 2025.
The Trader: Notes that US may be winning the trade war, or at least has the upper hand as many of China's options would hurt them at home too much.
International trader: Positive on publicly traded venture-capital firm Draper Esprit (GROW.UK) as a play on early-stage, high-tech growth companies.
Commodities: Trade war between US and China has hurt corn and soybeans, but dont expect long term impact to priced
Streetwise: Notes raft of CEOs speaking out about separating child from their illegal parents, but notes that most will only speak out about political things that will impact their bottom line
Friday, June 22, 2018
Trade Tensions Simmer; OPEC Adjusts Coordinated Supply Agreement
TradeTheNews.com Weekly
Market Update: Trade Tensions Simmer; OPEC Adjusts Coordinated Supply Agreement
Fri, 22 Jun 2018 16:08 PM EST
Trade and tariffs continued to loom large over markets this week as the US administration held the line in ongoing negotiations with China and western allies alike. Nowhere was it more evident than the Dow Jones Industrial average which carried an eight session losing streak into Friday. The weakness in large cap industrial names and their potential exposure to an escalating trade spat was juxtaposed against new all-time highs in the NASDAQ and small cap Russel 2000. US treasury markets largely traded sideways but yield differentials in the belly of the curve held perilously close to inverting before rates lifted on Friday. US Jun manufacturing data softened and missed expectations lending to modest selling in the Greenback. Most notably the British Pound appreciated after the BOE indicated rates could rise again as soon as next month. Finally oil producers meet in Vienna, where OPEC leaders cajoled various members and reached an agreement that could potentially bring an additional ~600K bpd onto the market. The decision largely met market expectations but nevertheless WTI crude popped above the 50 moving average to a one month high.
In corporate news this week, Sarepta soared higher on positive DMD drug early trial results that analysts said “meaningfully beat even the highest of expectations.” Tesla ended lower after an odd week that included fires on its factory floor, speculated sabotage from a former technician, and the closing of some solar facilities. Starbucks shares cooled after cutting guidance and shuttering some underperforming stores. E-commerce names saw relatively muted reaction to a Supreme Court online sales tax ruling. Disney improved its bid to acquire Fox assets to $38/shr, up from its prior offer of $28/shr and ahead of Comcast’s $35/shr proposal. Perry Ellis agreed to be taken private for $27.50/shr, while Rent-A-Center accepted a raised acquisition offer from Vintage Capital at $15/shr.
MON 6/18
SQ New York Dept of Financial Services (DFS) has granted Square a virtual currency license
(UK) PM May defeated in House of Lords over plans to give lawmakers "meaningful vote" over final Brexit agreement - press (as expected)
Ministerial meeting of the 33 member Global Forum on Excess Steel Capacity scheduled for Wednesday in Paris has been cancelled due to trade tensions - Nikkei
AAPL Trump said to have told CEO Cook that iPhones will be excluded from China tariffs - NYT
(CN) China Commerce Ministry (MOFCOM): US threats on $200B tariffs list disobeys negotiation and consensus reached previously between the two countries: to take qualitative and quantitative measures if US publishes additional tariffs list
TUES 6/19
*(US) MAY HOUSING STARTS: 1.350M V 1.311ME; BUILDING PERMITS: 1.301M V 1.350ME
(US) Atlanta Fed cuts Q2 GDP forecast to 4.7% from 4.8% prior
ORCL Reports Q4 $0.99 v $0.94e, Rev $11.3B v $11.2Be
SBUX Guides Q3 SSS +1% y/y v +2.9%e; Raises Quarterly dividend 20% to $0.36 from $0.30 (indicated yield 2.51%)
FDX Reports Q4 $5.91 v $5.72e, Rev $17.3B v $17.2Be
WEDS 6/20
MU Reports Q3 $3.15 v $3.14e, Rev $7.80B v $7.70Be
(UK) UK govt wins vote in parliament, defeating Brexit 'meaningful vote' amendment (As expected after compromise made earlier)
(US) Association of American Railroads weekly rail traffic report for week ending June 16th: 558.1K, +4.1% y/y
(TH) THAILAND CENTRAL BANK (BOT) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.50%, AS EXPECTED
(US) Atlanta Fed cuts Q2 GDP forecast to 4.7% from 4.8% prior
ORCL Reports Q4 $0.99 v $0.94e, Rev $11.3B v $11.2Be
SBUX Guides Q3 SSS +1% y/y v +2.9%e; Raises Quarterly dividend 20% to $0.36 from $0.30 (indicated yield 2.51%)
FDX Reports Q4 $5.91 v $5.72e, Rev $17.3B v $17.2Be
THURS 6/21
(FR) FRANCE JUN BUSINESS CONFIDENCE: 106 V 106E; MANUFACTURING CONFIDENCE: 110 V 108E
*(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
*(UK) BANK OF ENGLAND (BOE) LEAVES INTEREST RATES UNCHANGED AT 0.50%; AS EXPECTED
(UK) BOE JUN MINUTES: VOTED 6-3 TO KEEP POLICY STEADY (McCafferty, Saunders again dissented calling for 25bps hike, chief economist Haldane joins ranks to hike)
(US) JUN PHILADELPHIA FED BUSINESS OUTLOOK: 19.9 V 29.0E (lowest since Nov 2016)
(US) Supreme Court rules that states can require collection of sales taxes on all online purchases, even if companies have no physical presence in a state
FED BANK STRESS TEST RESULTS: ALL 35 BANKS EXCEED MINIMUM CAPITAL REQUIREMENTS
OPEC+ committee supports 1M bpd production increase "on paper" - press
(JP) JAPAN MAY NATIONAL CPI Y/Y: 0.7% V 0.6%E; CPI EX FRESH FOOD (CORE): 0.7% V 0.7%E
FRI 6/22
(FR) FRANCE JUN PRELIMINARY MANUFACTURING PMI: 53.1V 54.0E (21st month of expansion)
(DE) GERMANY JUN PRELIMINARY MANUFACTURING PMI: 55.9 V 56.3E (42nd month of expansion and lowest since Dec 2016)
(EU) EURO ZONE JUN PRELIMINARY MANUFACTURING PMI: 55.0 V 55.0E (59th straight month of growth but lowest since Dec 2016)
(EU) ECB: banks to repay early €11B in TLTRO-2 loans - press
*(US) JUN PRELIMINARY MARKIT MANUFACTURING PMI: 54.6 V 56.1E (7-month low)
(US) Trump tweets: "Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!"
Fri, 22 Jun 2018 16:08 PM EST
Trade and tariffs continued to loom large over markets this week as the US administration held the line in ongoing negotiations with China and western allies alike. Nowhere was it more evident than the Dow Jones Industrial average which carried an eight session losing streak into Friday. The weakness in large cap industrial names and their potential exposure to an escalating trade spat was juxtaposed against new all-time highs in the NASDAQ and small cap Russel 2000. US treasury markets largely traded sideways but yield differentials in the belly of the curve held perilously close to inverting before rates lifted on Friday. US Jun manufacturing data softened and missed expectations lending to modest selling in the Greenback. Most notably the British Pound appreciated after the BOE indicated rates could rise again as soon as next month. Finally oil producers meet in Vienna, where OPEC leaders cajoled various members and reached an agreement that could potentially bring an additional ~600K bpd onto the market. The decision largely met market expectations but nevertheless WTI crude popped above the 50 moving average to a one month high.
In corporate news this week, Sarepta soared higher on positive DMD drug early trial results that analysts said “meaningfully beat even the highest of expectations.” Tesla ended lower after an odd week that included fires on its factory floor, speculated sabotage from a former technician, and the closing of some solar facilities. Starbucks shares cooled after cutting guidance and shuttering some underperforming stores. E-commerce names saw relatively muted reaction to a Supreme Court online sales tax ruling. Disney improved its bid to acquire Fox assets to $38/shr, up from its prior offer of $28/shr and ahead of Comcast’s $35/shr proposal. Perry Ellis agreed to be taken private for $27.50/shr, while Rent-A-Center accepted a raised acquisition offer from Vintage Capital at $15/shr.
MON 6/18
SQ New York Dept of Financial Services (DFS) has granted Square a virtual currency license
(UK) PM May defeated in House of Lords over plans to give lawmakers "meaningful vote" over final Brexit agreement - press (as expected)
Ministerial meeting of the 33 member Global Forum on Excess Steel Capacity scheduled for Wednesday in Paris has been cancelled due to trade tensions - Nikkei
AAPL Trump said to have told CEO Cook that iPhones will be excluded from China tariffs - NYT
(CN) China Commerce Ministry (MOFCOM): US threats on $200B tariffs list disobeys negotiation and consensus reached previously between the two countries: to take qualitative and quantitative measures if US publishes additional tariffs list
TUES 6/19
*(US) MAY HOUSING STARTS: 1.350M V 1.311ME; BUILDING PERMITS: 1.301M V 1.350ME
(US) Atlanta Fed cuts Q2 GDP forecast to 4.7% from 4.8% prior
ORCL Reports Q4 $0.99 v $0.94e, Rev $11.3B v $11.2Be
SBUX Guides Q3 SSS +1% y/y v +2.9%e; Raises Quarterly dividend 20% to $0.36 from $0.30 (indicated yield 2.51%)
FDX Reports Q4 $5.91 v $5.72e, Rev $17.3B v $17.2Be
WEDS 6/20
MU Reports Q3 $3.15 v $3.14e, Rev $7.80B v $7.70Be
(UK) UK govt wins vote in parliament, defeating Brexit 'meaningful vote' amendment (As expected after compromise made earlier)
(US) Association of American Railroads weekly rail traffic report for week ending June 16th: 558.1K, +4.1% y/y
(TH) THAILAND CENTRAL BANK (BOT) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT 1.50%, AS EXPECTED
(US) Atlanta Fed cuts Q2 GDP forecast to 4.7% from 4.8% prior
ORCL Reports Q4 $0.99 v $0.94e, Rev $11.3B v $11.2Be
SBUX Guides Q3 SSS +1% y/y v +2.9%e; Raises Quarterly dividend 20% to $0.36 from $0.30 (indicated yield 2.51%)
FDX Reports Q4 $5.91 v $5.72e, Rev $17.3B v $17.2Be
THURS 6/21
(FR) FRANCE JUN BUSINESS CONFIDENCE: 106 V 106E; MANUFACTURING CONFIDENCE: 110 V 108E
*(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
*(UK) BANK OF ENGLAND (BOE) LEAVES INTEREST RATES UNCHANGED AT 0.50%; AS EXPECTED
(UK) BOE JUN MINUTES: VOTED 6-3 TO KEEP POLICY STEADY (McCafferty, Saunders again dissented calling for 25bps hike, chief economist Haldane joins ranks to hike)
(US) JUN PHILADELPHIA FED BUSINESS OUTLOOK: 19.9 V 29.0E (lowest since Nov 2016)
(US) Supreme Court rules that states can require collection of sales taxes on all online purchases, even if companies have no physical presence in a state
FED BANK STRESS TEST RESULTS: ALL 35 BANKS EXCEED MINIMUM CAPITAL REQUIREMENTS
OPEC+ committee supports 1M bpd production increase "on paper" - press
(JP) JAPAN MAY NATIONAL CPI Y/Y: 0.7% V 0.6%E; CPI EX FRESH FOOD (CORE): 0.7% V 0.7%E
FRI 6/22
(FR) FRANCE JUN PRELIMINARY MANUFACTURING PMI: 53.1V 54.0E (21st month of expansion)
(DE) GERMANY JUN PRELIMINARY MANUFACTURING PMI: 55.9 V 56.3E (42nd month of expansion and lowest since Dec 2016)
(EU) EURO ZONE JUN PRELIMINARY MANUFACTURING PMI: 55.0 V 55.0E (59th straight month of growth but lowest since Dec 2016)
(EU) ECB: banks to repay early €11B in TLTRO-2 loans - press
*(US) JUN PRELIMINARY MARKIT MANUFACTURING PMI: 54.6 V 56.1E (7-month low)
(US) Trump tweets: "Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!"
Saturday, June 16, 2018
Barrons weekend summary
Barrons weekend summary: Cover story on Berkshire Hathaway succession planning; positive feature on AXL; concerns about a trade war
Cover story: After 35 years at the helm of Berkshire Hathaway, Warren Buffett needs to share the limelight with his likely successor and the company’s many managers—because the company’s future success depends in part on removing doubts about future leadership.
Features: 1) A global trade war seems likely, posing a major risk to the stock market, and though little of the threat is reflected in stock and bond prices, investors need to pay attention and take steps to avoid a worst-case scenario; 2) An increase in media mergers is being driven by desperate attempts to catch up to NFLX, which many media giants could have easily acquired a few years ago—before its current $170B market cap; 3) Positive on AXL: Concerns about the company—including high debt, reliance on GM, and exposure to a near-term slowdown in North American vehicle demand amid electric-car growth—appear overstated of misplaced.
Tech Trader: Cautious on FB: Despite recent problems related to privacy and data-sharing, and low approval ratings in some consumer polls, Wall Street continues to love the stock, and much of the world continues to treat the site as indispensable.
Trader: Jason Pride of Glenmede says investors should focus on what’s good (the economy and earnings) and not on what’s bad (tariffs and rate hikes); Debt markets are giving off mixed signals, with high-yield corporate debt rallying while safe bonds languish, and returns are being driven not by outside forces but by factors specific to each asset class; Cautious on ELY: Shares could have more upside, says JPM analyst Steven Zaccone, but Barron’s says traders should think carefully before buying shares.
Profile: James Hamel, managing director at Artisan Partners and head of the Artisan Global Opportunities fund, looks for companies with franchise characteristics and improving profitability (top 10 holdings: INFO, V, Shiseido, BAC, STT, NBL, APTV, PXD, Temenos, BSX).
Interview: Diana Strandberg and Charles Pohl, who oversee the Dodge & Cox Global Stock fund, recently undertook a rigorous scrub-down of the fund’s investing thesis on nearly every stock (picks: Itau Unibanco Holding, Naspers, SNY, DISH, GOOGL).
Follow-Up: Cautious on CRSP, EDIT, NTLA: It’s hard to say whether the market is over- or under-valuing companies that use the gene-editing technology, but for now there’s no reason to sell. European Trader: With Italy’s political situation in turmoil, investors may want to buy beaten-down European banking shares that will likely jump when the clouds over the sector evaporate.
Emerging Markets: Some investors are growing bullish about emerging markets fixed income, saying much of the gloom and doom this year has been driven by idiosyncratic stories that mask strong fundamentals.
Commodities: “OPEC can claim success in its roughly 18-month-old effort to curb production, easing a global glut of supply and raising oil prices.
Streetwise: A sudden change of chief executive won’t necessarily harm a stock, but “prudent investors should keep a sharp eye on what’s happening in the C-suite.” Cover story: After 35 years at the helm of Berkshire Hathaway, Warren Buffett needs to share the limelight with his likely successor and the company’s many managers—because the company’s future success depends in part on removing doubts about future leadership.
Trade Tensions Escalate; Central Bank Decisions Strengthen Greenback
TradeTheNews.com Weekly
Market Update: Trade Tensions Escalate; Central Bank Decisions Strengthen
Greenback
Fri, 15 Jun 2018 16:06 PM EST
A turbulent week was bookended by trade war concerns: a contentious G7 meeting last weekend ended with Canadian PM Trudeau promising to meet US tariffs with an equivalent response, and then on Friday the US administration slapped $50B in new tariffs on China. The Chinese government retaliated in kind and the US has reportedly identified another $100B in tariffs, threatening to set off tit-for-tat tariffs. Markets were more pleased that the nuclear summit in Singapore apparently went smoothly, with President Trump hailing his new strong personal relationship with North Korea’s Kim.
Central bank divergence became more pronounced as the Fed moved rates up another 25 basis points, while the ECB further delayed its first rate hike. The yield curve flattened further after the Fed move, as the policy statement dropped its forward guidance and as Chairman Powell spent a lot of time discussing the potential for inflation to spend some time above the 2% target. The euro tumbled on Thursday in the wake of the ECB announcement that rates would stay at zero at least until the summer of next year, which overshadowed a concurrent announcement that the QE program will be tapered in Q4. Meanwhile emerging markets remained troubled, emblemized by the Argentine peso hitting fresh record lows despite a $50B credit agreement signed with the IMF last week. Commodity price weakness accelerated through the end of the week, as crude tumbled 3% and copper fell more than 2% on Friday. For the week the DJIA dropped 0.9%, the S&P500 was flat, while the Nasdaq gained 1.3%.
In corporate news this week, the Time Warner-AT&T merger received long-sought-after approval from a federal judge, and the two completed their transaction on Friday after the DOJ said it would not seek a stay of the ruling. Seeing an all-clear signal from the court decision, Comcast made its anticipated proposal to acquire Twenty-First Century Fox assets in an all-cash $35/share deal, in a play to outbid Disney. Construction materials firm USG accepted a $7B bid from a German construction company after several months of talks involving shareholder Warren Buffett. Tesla announced 3K layoffs, about 9% of its workforce, largely directed at the company’s salaried employees and avoiding cuts to those in the production process.
SUN 6/10
(CH) SWITZERLAND VOLLGELD REFERENDUM RESULTS: VOTERS REJECT MOTION TO ABOLISH TRADITIONAL BANK LENDING AND ALLOW ONLY MONEY CREATED BY THE SNB (as expected)
TUES 6/12
(KR) Trump/Kim Document: US and North Korea commit to working towards complete denuclearization of the Korean peninsula
(UK) APR AVERAGE WEEKLY EARNINGS 3M/Y: 2.5% V 2.5%E; WEEKLY EARNINGS (EX BONUS) 3M/Y: 2.8% V 2.9%E
(UK) MAY JOBLESS CLAIMS CHANGE: -7.7K V +28.2K PRIOR; CLAIMANT COUNT RATE: 2.5% V 2.5% PRIOR
(UK) APR ILO UNEMPLOYMENT RATE: 4.2% V 4.2%E
(DE) GERMANY JUN ZEW CURRENT SITUATION: 80.6 V 85.0E; EXPECTATIONS SURVEY: -16.1 V -14.0E
(US) MAY CPI M/M: 0.2% V 0.2%E; CPI EX FOOD AND ENERGY M/M: 0.2% V 0.2%E; CPI NSA: 251.588 V 251.570E
TSLA Plans to cut 9% of total workforce as part of reorganization plan (cuts could amount to about 3,000 employees)
TWX *US JUDGE RULES AT&T/TWX MERGER CAN GO FORWARD; IMPOSES NO CONDITIONS ON THE MERGER - PRESS
WEDS 6/13
(UK) MAY CPI M/M: 0.4% V 0.4%E; Y/Y: 2.4% V 2.4%E; CPI CORE Y/Y: 2.1% v 2.1%E (matches the lowest annual pace in a year)
(US) MAY PPI FINAL DEMAND M/M: 0.5% V 0.3%E; Y/Y: 3.1% V 2.8%E
CAT Reports May dealer statistics: Total Machines +24% y/y
(US) Association of American Railroads weekly rail traffic report for week ending June 9th: 561.1K, +4.2% y/y
(US) FOMC UPDATED ECONOMIC FORECAST FOR JUNE MEETING (V. MAR): now forecasts 4 rate hikes in 2018
(US) US govt reportedly readying a specific list of goods from China that will be subject to tariffs on Friday - press
FOXA Comcast makes all-cash $35/shr proposal to acquire Twenty-First Century Fox after spinoff of "New Fox", values 21CF at $65B
THURS 6/14
(UK) MAY RETAIL SALES (EX AUTO/FUEL) M/M: 1.3% V 0.3%E; Y/Y: 4.4% V 2.5%E
(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%, AS EXPECTED
(EU) ECB REVISES QE BOND BUYING PROGRAM: QE to be reduced to €15B/month from Oct until Dec
Euro gives back initial taper gains as traders focus on ECB announcement that rates to be held steady until at least summer 2019
(EU) ECB's Draghi: Decision was unanimous; did not discuss when to raise interest rates - Q&A
(KR) US govt official: major military exercises on Korean peninsula have been 'suspended indefinitely' - press
(US) Atlanta Fed raises Q2 GDP forecast to 4.8% from 4.6% prior
(CN) White House said to put tariffs on a smaller list of 800 to 900 products from China tomorrow (trimmed from original list of 1,300 products) - CNBC
AT&T reaches deal with US govt on merger with Time Warner; DOJ will not seek a stay in merger; deal removes 6-day waiting period to close merger - press
(MX) Mexico govt said to consider possible tariffs on US corn and soybean imports if trade conflict escalates - press
FRI 6/15
TSCO.UK Reports Q1 UK LFL (ex VAT, ex-fuel) +2.1% v +1.9%e
US ANNOUNCES TARGET LIST OF CHINESE GOODS; to pursue more tariffs if China retaliates in imposing new tariffs or take punitive action against American companies
(CN) US said to be nearing completion of a 2nd tariff list comprising of $100B in Chinese goods, subject to same hearing conditions of approx 60 days - financial press
(US) JUN EMPIRE MANUFACTURING: 25.0 V 18.8E
(US) MAY INDUSTRIAL PRODUCTION M/M: -0.1% V +0.2%E; CAPACITY UTILIZATION: 77.9% V 78.1%E
(US) JUN PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 99.3 V 98.5E
(CN) China govt announces $50B in retaliatory tariffs on US goods, implementation to start on July 6th - press
Fri, 15 Jun 2018 16:06 PM EST
A turbulent week was bookended by trade war concerns: a contentious G7 meeting last weekend ended with Canadian PM Trudeau promising to meet US tariffs with an equivalent response, and then on Friday the US administration slapped $50B in new tariffs on China. The Chinese government retaliated in kind and the US has reportedly identified another $100B in tariffs, threatening to set off tit-for-tat tariffs. Markets were more pleased that the nuclear summit in Singapore apparently went smoothly, with President Trump hailing his new strong personal relationship with North Korea’s Kim.
Central bank divergence became more pronounced as the Fed moved rates up another 25 basis points, while the ECB further delayed its first rate hike. The yield curve flattened further after the Fed move, as the policy statement dropped its forward guidance and as Chairman Powell spent a lot of time discussing the potential for inflation to spend some time above the 2% target. The euro tumbled on Thursday in the wake of the ECB announcement that rates would stay at zero at least until the summer of next year, which overshadowed a concurrent announcement that the QE program will be tapered in Q4. Meanwhile emerging markets remained troubled, emblemized by the Argentine peso hitting fresh record lows despite a $50B credit agreement signed with the IMF last week. Commodity price weakness accelerated through the end of the week, as crude tumbled 3% and copper fell more than 2% on Friday. For the week the DJIA dropped 0.9%, the S&P500 was flat, while the Nasdaq gained 1.3%.
In corporate news this week, the Time Warner-AT&T merger received long-sought-after approval from a federal judge, and the two completed their transaction on Friday after the DOJ said it would not seek a stay of the ruling. Seeing an all-clear signal from the court decision, Comcast made its anticipated proposal to acquire Twenty-First Century Fox assets in an all-cash $35/share deal, in a play to outbid Disney. Construction materials firm USG accepted a $7B bid from a German construction company after several months of talks involving shareholder Warren Buffett. Tesla announced 3K layoffs, about 9% of its workforce, largely directed at the company’s salaried employees and avoiding cuts to those in the production process.
SUN 6/10
(CH) SWITZERLAND VOLLGELD REFERENDUM RESULTS: VOTERS REJECT MOTION TO ABOLISH TRADITIONAL BANK LENDING AND ALLOW ONLY MONEY CREATED BY THE SNB (as expected)
TUES 6/12
(KR) Trump/Kim Document: US and North Korea commit to working towards complete denuclearization of the Korean peninsula
(UK) APR AVERAGE WEEKLY EARNINGS 3M/Y: 2.5% V 2.5%E; WEEKLY EARNINGS (EX BONUS) 3M/Y: 2.8% V 2.9%E
(UK) MAY JOBLESS CLAIMS CHANGE: -7.7K V +28.2K PRIOR; CLAIMANT COUNT RATE: 2.5% V 2.5% PRIOR
(UK) APR ILO UNEMPLOYMENT RATE: 4.2% V 4.2%E
(DE) GERMANY JUN ZEW CURRENT SITUATION: 80.6 V 85.0E; EXPECTATIONS SURVEY: -16.1 V -14.0E
(US) MAY CPI M/M: 0.2% V 0.2%E; CPI EX FOOD AND ENERGY M/M: 0.2% V 0.2%E; CPI NSA: 251.588 V 251.570E
TSLA Plans to cut 9% of total workforce as part of reorganization plan (cuts could amount to about 3,000 employees)
TWX *US JUDGE RULES AT&T/TWX MERGER CAN GO FORWARD; IMPOSES NO CONDITIONS ON THE MERGER - PRESS
WEDS 6/13
(UK) MAY CPI M/M: 0.4% V 0.4%E; Y/Y: 2.4% V 2.4%E; CPI CORE Y/Y: 2.1% v 2.1%E (matches the lowest annual pace in a year)
(US) MAY PPI FINAL DEMAND M/M: 0.5% V 0.3%E; Y/Y: 3.1% V 2.8%E
CAT Reports May dealer statistics: Total Machines +24% y/y
(US) Association of American Railroads weekly rail traffic report for week ending June 9th: 561.1K, +4.2% y/y
(US) FOMC UPDATED ECONOMIC FORECAST FOR JUNE MEETING (V. MAR): now forecasts 4 rate hikes in 2018
(US) US govt reportedly readying a specific list of goods from China that will be subject to tariffs on Friday - press
FOXA Comcast makes all-cash $35/shr proposal to acquire Twenty-First Century Fox after spinoff of "New Fox", values 21CF at $65B
THURS 6/14
(UK) MAY RETAIL SALES (EX AUTO/FUEL) M/M: 1.3% V 0.3%E; Y/Y: 4.4% V 2.5%E
(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%, AS EXPECTED
(EU) ECB REVISES QE BOND BUYING PROGRAM: QE to be reduced to €15B/month from Oct until Dec
Euro gives back initial taper gains as traders focus on ECB announcement that rates to be held steady until at least summer 2019
(EU) ECB's Draghi: Decision was unanimous; did not discuss when to raise interest rates - Q&A
(KR) US govt official: major military exercises on Korean peninsula have been 'suspended indefinitely' - press
(US) Atlanta Fed raises Q2 GDP forecast to 4.8% from 4.6% prior
(CN) White House said to put tariffs on a smaller list of 800 to 900 products from China tomorrow (trimmed from original list of 1,300 products) - CNBC
AT&T reaches deal with US govt on merger with Time Warner; DOJ will not seek a stay in merger; deal removes 6-day waiting period to close merger - press
(MX) Mexico govt said to consider possible tariffs on US corn and soybean imports if trade conflict escalates - press
FRI 6/15
TSCO.UK Reports Q1 UK LFL (ex VAT, ex-fuel) +2.1% v +1.9%e
US ANNOUNCES TARGET LIST OF CHINESE GOODS; to pursue more tariffs if China retaliates in imposing new tariffs or take punitive action against American companies
(CN) US said to be nearing completion of a 2nd tariff list comprising of $100B in Chinese goods, subject to same hearing conditions of approx 60 days - financial press
(US) JUN EMPIRE MANUFACTURING: 25.0 V 18.8E
(US) MAY INDUSTRIAL PRODUCTION M/M: -0.1% V +0.2%E; CAPACITY UTILIZATION: 77.9% V 78.1%E
(US) JUN PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 99.3 V 98.5E
(CN) China govt announces $50B in retaliatory tariffs on US goods, implementation to start on July 6th - press
Saturday, June 9, 2018
Barrons weekend summary
Barrons weekend summary: positive features on LUV; cautious on Lowes
Cover story: High-power batteries, which are set to disrupt the car industry in the coming decades, are quickly multiplying across the U.S. power grid, which will allow consumers to save on energy, towns to cut pollution and add jobs, and utilities to enjoy lucrative growth.
Feature: 1) Positive on LUV: A recent midair accident, high fuel prices, and rivals’ expansion have pushed down the carrier’s shares, but with its strong business model and share buyback plans, the dip poses an opportunity for investors; 2) Hedge funds including BlueMountain Capital, Citadel, Apollo Global Management, Elliott Management, and Anchorage Capital Partners have been working together for months to fix credit-default-swap contracts; 3) Cautious on L: Conglomerate’s disclosure it may buy out the limited partners of BWP, which it controls, has prompted angry reactions from some minority investors who fear Loews will exercise its call right at an unfair price.
Tech Trader: “These days the difference between expensive and inexpensive tech stocks is misleading. Many companies are having a hard time holding onto any valuation premium, whether or not their shares are relatively cheap or relatively pricey.”
Trader: Michael Hartnett, chief investment strategist at BAC/Merrill Lynch, says it’s possible markets will see the return of “1998 risk,” in which the problems in emerging markets grow and eventually force investors in the U.S. to take defensive action; Positive on AABA: The company “remains a good proxy for investors seeking exposure to BABA” because of Altaba’s 15% stake in the e-commerce giant; In a new MIT working paper, researchers say that “managers seem tempted to overstate earnings as their companies gain attention and the rewards for lying increase.”
Interview: Jenny Van Leeuwen Harrington, portfolio manager and CEO of Gilman Hill Asset Management, says a company’s dividend should be sacrosanct, even in tough economic times (picks: SIX, LB, QCOM).
Profile: Magnus Larsson, lead manager of the AMG TimesSquare International Small Cap fund, says international small-mid-cap stocks are one of the few market sectors where active management can consistency add value. The Top 100 Women Financial Advisors: Barron’s annual list is topped by Karen McDonald of Morgan Stanley Wealth Management, Kimberlee Orth of Ameriprise Financial, and Valerie Newell of RiverPoint Capital Management.
Follow-Up: Cautious on SBUX: With chairman Howard Schultz stepping down, “the time might be right for an activist investor to push for change—and presumably push Starbucks shares higher,” a move that would have to focus on capital allocation.
European Trader: Uncertainty related to Trump administration auto tariffs has dented shares of German car makers, but they should quickly regain lost ground.
Emerging Markets: The real problem for the Chinese stock market isn’t U.S. tariffs, but the nearly 170% of GDP in debt piled up by Chinese corporations, five times the proportion for U.S. companies.
Commodities: “Copper has shown promise in recent weeks, and the long-term outlook is bright as global demand gradually strengthens, but realizing that potential may take time.”
Streetwise: A potential presidential run by departing SBUX chairman Howard Schultz would have to reckon with a crowded field, and some of his ideas don’t match up with core Democratic Party ideas.-
Friday, June 8, 2018
Investors risk appetite unfettered by G7 sparring or key events next week
TradeTheNews.com Weekly
Market Update: Investors risk appetite unfettered by G7 sparring or key events
next week
Fri, 08 Jun 2018 16:03 PM EST
US stock markets pushed higher this week, easily scaling a wall of worry heading into the G7 meeting this weekend. Both President Trump and his counterparts steadily escalated rhetoric heading into what are expected to be contentious trade talks between allies. Investors also had to contend with the run-up to the US/North Korea summit and Brexit negotiations that seem to be heading nowhere fast. US data, though, remained at robust levels, with manufacturing and services PMIs topping expectations, potentially giving the Trump Administration further ammunition to play hardball in trade negotiations. Major US indices broke out to the best levels since March in some cases, while the Russell 2000 and the NASDAQ continued to touch fresh all-time highs. For the week the DJIA gained 2.8%, the S&P500 rose 1.6%, and the Nasdaq added 1.2%.
US Treasury yields moved up, helped by the release of solid growth figures and receding pessimism around rising yields in Southern Europe. The US dollar continued to retreat modestly in what some viewed as positioning ahead of key central bank meetings next week. The Euro surpassed 1.18 briefly as many expect the ECB to announce an exit to QE next week. Emerging market currencies stayed in focus, with central banks in Turkey and Brazil taking aggressive actions to fight declining exchange rates. Copper prices edged higher for six straight sessions, helped by Chilean supply concerns and data that showed Chinese imports jumped to an 18-month high in May.
In corporate news this week, Microsoft announced a $7.5B acquisition of cloud source code repository GitHub, a move that signals a further warming by the software giant towards open source. AthenaHealth initiated a process to explore strategic alternatives and also announced its CEO would step down amid the company’s fight against a takeover offer from activist Elliott Management. Reports emerged that the EU is set to announce in July a fine against Google as part of its market dominance probe into Android’s mobile OS platform. Apple shares dropped after Nikkei reported that the tech giant has warned suppliers of 20% fewer component orders for iPhones debuting in the latter half of 2018. Twitter lifted on news that its stock would be added to the S&P 500 index, and the company subsequently announced a $1B convertible notes offering. Tesla CEO Musk affirmed at a shareholder meeting that the auto manufacturer would reach its Model 3 production target of five thousand units/week this month. Starbucks Chairman Schultz announced he was stepping down from his post, igniting speculation that the politically minded executive may initiate a presidential run in the near future.
SUN JUNE 3
(CN) 3rd round of trade talks between China and US end without a deal: China comments: two sides have made "concrete progress"; any move by the US to impose punitive tariffs would derail the negotiations
MON JUNE 4
(EU) EURO ZONE JUN SENTIX INVESTOR CONFIDENCE: 9.3 V 18.5E
BHP.AU Escondida mine workers reportedly have not ruled out strike action at start of wage talks - press
TUES JUNE 5
(UK) MAY SERVICES PMI: 54.0 V 53.0E (22nd month of expansion)
HDS Reports Q1 $0.70 v $0.63e, Rev $1.39B v $1.35Be; May daily net sales tracking ~ +19% y/y
*(US) MAY ISM NON-MANUFACTURING COMPOSITE: 58.6 V 57.6E
WED JUNE 6
*(IN) INDIA CENTRAL BANK (RBI) RAISES REPURCHASE RATE BY 25BPS TO 6.25%; NOT EXPECTED (1st rate hike since Jan 2014)
FAST Reports May Net Sales $431.4M, +12.5% y/y
*(US) Q1 FINAL NONFARM PRODUCTIVITY: 0.4% V 0.6%E; UNIT LABOR COSTS: 2.9% V 2.8%E
(US) APR TRADE BALANCE: -$46.2B V -$49.0BE
ATHN Initiates process to explore strategic alternatives; CEO Bush steps down, effective immediately; Jeff Immelt appointed executive chairman
(US) Association of American Railroads weekly rail traffic report for week ending June 2nd: 509.7K, +3.2% y/y
GOOGL EU reportedly set to release negative finding in its Google investigation - FT
(JP) Japan Investors Net Buying of Foreign Bonds: -¥1.67T v -¥700.2B prior week (largest net sales in over 1-year); Foreign Net Buying of Japan Stocks: -¥527.6B v -¥380.0B prior week
COST Reports May SSS (ex-gas) 8.0%; US SSS (ex-gas) 8.7% v 5.6%e
THURS JUNE 7
*(EU) EURO ZONE Q1 FINAL GDP Q/Q: 0.4% V 0.4%E; Y/Y: 2.5% V 2.5%E
(IE) UK Govt publishes backstop proposal (as anticipated): Expects future trade deal in place by Dec 2021; range of options on how time limit would be done on Irish backstop
*(US) INITIAL JOBLESS CLAIMS: 222K V 220KE; CONTINUING CLAIMS: 1.741M V 1.74ME
(US) Fed Reports Q1 Financial Accounts: Household Change in Net Worth: $1.028T v $2.076T prior
*(US) APR CONSUMER CREDIT: $9.3B V $14.0BE (smallest in seven months)
(CN) China 2018 trade surplus may narrow by about 10% (implies surplus of about $380.3B*) - China Securities Journal
(AR) Argentina signed 36-month stand-by agreement with the IMF, provides for preliminary financing amount of $50B (above the $40B credit line that was speculated)
(JP) JAPAN Q1 FINAL GDP Q/Q: -0.2% V -0.1%E; ANNUALIZED Q/Q: -0.6% V -0.4%E
ANT.IPO Series C equity funding round said to close; co. said to raise ~$14.0B (above expectations, world's largest ever fundraising) - US financial press
FRI JUNE 8
AAPL Reportedly warns suppliers of 20% fewer component orders for iPhones debuting in the latter half of 2018 - Japan press
DPW.DE Cuts FY18 EBIT €3.2B (prior €4.18B), FCF >€1.0B (prior >€1.5B), Affirms FY20 Adj EBIT >€5B; Announces restructuring to PeP division
(CH) Swiss referendum on Sunday, Jun 10th that could abolish traditional bank lending and allow only money created by the SNB
(CA) CANADA MAY NET CHANGE IN EMPLOYMENT: -7.5K V +23.5KE (2nd straight decline); UNEMPLOYMENT RATE: 5.8% V 5.8%E
(SA) Saudi Arabia reportedly has increased oil production by 100K bpd in June ahead of implementation of Iran sanctions - press
Fri, 08 Jun 2018 16:03 PM EST
US stock markets pushed higher this week, easily scaling a wall of worry heading into the G7 meeting this weekend. Both President Trump and his counterparts steadily escalated rhetoric heading into what are expected to be contentious trade talks between allies. Investors also had to contend with the run-up to the US/North Korea summit and Brexit negotiations that seem to be heading nowhere fast. US data, though, remained at robust levels, with manufacturing and services PMIs topping expectations, potentially giving the Trump Administration further ammunition to play hardball in trade negotiations. Major US indices broke out to the best levels since March in some cases, while the Russell 2000 and the NASDAQ continued to touch fresh all-time highs. For the week the DJIA gained 2.8%, the S&P500 rose 1.6%, and the Nasdaq added 1.2%.
US Treasury yields moved up, helped by the release of solid growth figures and receding pessimism around rising yields in Southern Europe. The US dollar continued to retreat modestly in what some viewed as positioning ahead of key central bank meetings next week. The Euro surpassed 1.18 briefly as many expect the ECB to announce an exit to QE next week. Emerging market currencies stayed in focus, with central banks in Turkey and Brazil taking aggressive actions to fight declining exchange rates. Copper prices edged higher for six straight sessions, helped by Chilean supply concerns and data that showed Chinese imports jumped to an 18-month high in May.
In corporate news this week, Microsoft announced a $7.5B acquisition of cloud source code repository GitHub, a move that signals a further warming by the software giant towards open source. AthenaHealth initiated a process to explore strategic alternatives and also announced its CEO would step down amid the company’s fight against a takeover offer from activist Elliott Management. Reports emerged that the EU is set to announce in July a fine against Google as part of its market dominance probe into Android’s mobile OS platform. Apple shares dropped after Nikkei reported that the tech giant has warned suppliers of 20% fewer component orders for iPhones debuting in the latter half of 2018. Twitter lifted on news that its stock would be added to the S&P 500 index, and the company subsequently announced a $1B convertible notes offering. Tesla CEO Musk affirmed at a shareholder meeting that the auto manufacturer would reach its Model 3 production target of five thousand units/week this month. Starbucks Chairman Schultz announced he was stepping down from his post, igniting speculation that the politically minded executive may initiate a presidential run in the near future.
SUN JUNE 3
(CN) 3rd round of trade talks between China and US end without a deal: China comments: two sides have made "concrete progress"; any move by the US to impose punitive tariffs would derail the negotiations
MON JUNE 4
(EU) EURO ZONE JUN SENTIX INVESTOR CONFIDENCE: 9.3 V 18.5E
BHP.AU Escondida mine workers reportedly have not ruled out strike action at start of wage talks - press
TUES JUNE 5
(UK) MAY SERVICES PMI: 54.0 V 53.0E (22nd month of expansion)
HDS Reports Q1 $0.70 v $0.63e, Rev $1.39B v $1.35Be; May daily net sales tracking ~ +19% y/y
*(US) MAY ISM NON-MANUFACTURING COMPOSITE: 58.6 V 57.6E
WED JUNE 6
*(IN) INDIA CENTRAL BANK (RBI) RAISES REPURCHASE RATE BY 25BPS TO 6.25%; NOT EXPECTED (1st rate hike since Jan 2014)
FAST Reports May Net Sales $431.4M, +12.5% y/y
*(US) Q1 FINAL NONFARM PRODUCTIVITY: 0.4% V 0.6%E; UNIT LABOR COSTS: 2.9% V 2.8%E
(US) APR TRADE BALANCE: -$46.2B V -$49.0BE
ATHN Initiates process to explore strategic alternatives; CEO Bush steps down, effective immediately; Jeff Immelt appointed executive chairman
(US) Association of American Railroads weekly rail traffic report for week ending June 2nd: 509.7K, +3.2% y/y
GOOGL EU reportedly set to release negative finding in its Google investigation - FT
(JP) Japan Investors Net Buying of Foreign Bonds: -¥1.67T v -¥700.2B prior week (largest net sales in over 1-year); Foreign Net Buying of Japan Stocks: -¥527.6B v -¥380.0B prior week
COST Reports May SSS (ex-gas) 8.0%; US SSS (ex-gas) 8.7% v 5.6%e
THURS JUNE 7
*(EU) EURO ZONE Q1 FINAL GDP Q/Q: 0.4% V 0.4%E; Y/Y: 2.5% V 2.5%E
(IE) UK Govt publishes backstop proposal (as anticipated): Expects future trade deal in place by Dec 2021; range of options on how time limit would be done on Irish backstop
*(US) INITIAL JOBLESS CLAIMS: 222K V 220KE; CONTINUING CLAIMS: 1.741M V 1.74ME
(US) Fed Reports Q1 Financial Accounts: Household Change in Net Worth: $1.028T v $2.076T prior
*(US) APR CONSUMER CREDIT: $9.3B V $14.0BE (smallest in seven months)
(CN) China 2018 trade surplus may narrow by about 10% (implies surplus of about $380.3B*) - China Securities Journal
(AR) Argentina signed 36-month stand-by agreement with the IMF, provides for preliminary financing amount of $50B (above the $40B credit line that was speculated)
(JP) JAPAN Q1 FINAL GDP Q/Q: -0.2% V -0.1%E; ANNUALIZED Q/Q: -0.6% V -0.4%E
ANT.IPO Series C equity funding round said to close; co. said to raise ~$14.0B (above expectations, world's largest ever fundraising) - US financial press
FRI JUNE 8
AAPL Reportedly warns suppliers of 20% fewer component orders for iPhones debuting in the latter half of 2018 - Japan press
DPW.DE Cuts FY18 EBIT €3.2B (prior €4.18B), FCF >€1.0B (prior >€1.5B), Affirms FY20 Adj EBIT >€5B; Announces restructuring to PeP division
(CH) Swiss referendum on Sunday, Jun 10th that could abolish traditional bank lending and allow only money created by the SNB
(CA) CANADA MAY NET CHANGE IN EMPLOYMENT: -7.5K V +23.5KE (2nd straight decline); UNEMPLOYMENT RATE: 5.8% V 5.8%E
(SA) Saudi Arabia reportedly has increased oil production by 100K bpd in June ahead of implementation of Iran sanctions - press
Sunday, June 3, 2018
Barrons weekend summary
Barrons weekend summary: Positive feature on LNC; cautious on DLTR
Cover story: The current situation for recent and near-retirees is dicey, even for those with solid savings; “Retirement calculators often use historical average market returns—as much as 12% for stocks and 6% for bonds—but even the rosiest of optimists don’t expect anything near that over the next decade.”
Features:
1) Political risks aside, Europe’s fundamentals look decent, and the loss of confidence in the euro could be a boon for the region’s multinational corporations, lifting exports and profits;
2) Positive on LNC: Despite an industry downturn, the firm, which specializes in variable annuities, has delivered respectable returns, and shares remain a bargain;
3) Cautious on ETCG, GBTC: Digital currency securities have made millions for investors who got in early, but they trade at huge premiums to their underlying net asset value and could be affected by future regulatory shifts;
4) Cautious on AAPL: At this year’s Worldwide Developers Conference, Apple could unveil augmented reality, artificial intelligence, and cross-platform app features that might allay investor concerns about the iPhone.
Tech Trader: “Cloud computing is altering how the Street looks at company financials and what it will pay for stocks;” The upside is that companies can sell more to the same customers over years, but the risk is that firms become too inward looking and miss new trends.
Trader: One of the problems the market faces is that leadership is too narrow, says Satya Pradhuman of Cirrus Research, noting the high valuation of the best-performing large-cap stocks relative to the market; Cautious on DLTR: Shares are down, and while investors could hold on in hopes of a bounce, they may be better off cutting their losses and closing out their positions; The promise of managed-futures strategies in a portfolio is that they generate uncorrelated returns, but that doesn’t matter if returns are consistently negative.
Interview: Rob Arnott, founder of Research Affiliates, says index-fund managers can do better by going after overlooked alpha, and that AAPL shouldn’t be in the S&P 500.
Profile: Eddie Yoon, manager of Fidelity Select Medical Technology and Devices Portfolio (FSMEX) and Fidelity Select Health Care Portfolio (FSPHX), doesn’t view healthcare as a defensive sector and invests for “secular growth” (FSPHX top 10 holdings: UNH, BDX, BSX, HUM, AMGN, VRTX, AZN, SYK, BAX, ISRG).
Follow-Up: Positive on CRM: One of Salesforce’s strengths is that its customers are “sticky” because the software pairs so well with so many applications from other vendors.
European Trader: Many of the world’s largest metal producers already have operations in the U.S. and can shift production there to avoid Donald Trump’s recently imposed tariffs, and they have substantial markets elsewhere to draw on.
Emerging Markets: Very little is clear about Brazil’s short-term outlook, given years of corruption scandals affecting all of the established political parties, but many investors still aren’t fleeing.
Commodities: “The Atlantic hurricane season has just begun, raising the potential for disruptions in a variety of commodities markets, from oil and natural gas to crops such as oranges and cotton.”
Streetwise: Banks should avoid getting involved in social causes such as gun control, says Vito Racanelli, and their fiduciary duty is to earn the best return for shareholders by servicing legal businesses.
Friday, June 1, 2018
European Political Upheaval and Trump Trade Spat No Problem for Humming US Economy
TradeTheNews.com Weekly
Market Update: European Political Upheaval and Trump Trade Spat No Problem for
Humming US Economy
Fri, 01 Jun 2018 16:04 PM EST
Investors returned from the US holiday break to find markets under siege from threats in the European political apparatus. Italy looked headed for another election and Spanish PM Rajoy’s fate looked bleak sparking a risk off rally out of stocks into the core European and US Treasury bonds. The president stoked trade war concerns when he suggested they were moving forward with the process that will result in $50B in tariffs on additional Chinese products ahead of talks in Beijing . The administration doubled down on Thursday slapping steel and aluminum tariffs on partners in Europe and North America. The decision sparked swift backlash and counter tariffs announcements from friends on both sides of the Atlantic, but the market reaction was relatively muted. By Friday the political winds laid down after Italian politician obtained approval for a populist government to take the reins and Spain saw socialist leader Sanchez ascend to PM.
US indices briefly tested the 50-day moving average on Tuesday before navigating through global trade headlines for much of the week. Friday’s stronger than expected May employment report and solid ISM data gave investors increased confidence that the US economy has gained momentum and is unlikely to be deterred by geopolitics. The US 10-year yield careened towards 2.75% in the Italy induced safe have flows before backing up above 2.9% post jobs report. The Dollar largely stabilized at higher levels as European inflation figures showed some signs of life but questions remain on how the political winds in Europe will affect ECB thinking. Crude oil prices consolidated near 1.5 month lows ahead of this month’s highly anticipated OPEC producers meeting. For the week the S&P rose 0.5%, the Dow backtracked 0.5% and the NASDAQ gained 1.6%.
In corporate news, a report early in the week that Apple was set to employ only OLED screens in its future iPhone models sent OLED names higher, though analysts quickly cast doubt on the feasibility of such a move. Michael Kors shares slipped after reporting and guiding its SSS flat, despite beating on top and bottom line guidance. GM rose on a report that SoftBank Vision Fund planned to invest $2.25B in its GM Cruise self-driving unit. American steel names saw late-week strength on the US administration's implementation of tariffs against major allies. May US auto sales topped expectations, continuing to be buoyed by SUV and pickup demand. And Petrobras shares sputtered Friday on news that its CEO resigned in response to the government’s move to lower diesel prices amid trucker strikes.
SUNDAY 5/27
(IT) Italy President Mattarella said to have blocked the formation of a new government amid concerns that the coalition could hurt the country's membership in the Euro; Italy President and Cottarelli expected to meet on Monday - US financial press
(CN) PBOC RAISES OPEN MARKET OPERATION (OMO ) RATE ON 28-DAY REVERSE REPO BY 5BPS TO 2.85% FROM 2.80% (AS EXPECTED)
MONDAY 5/28
(IT) ITALY DEBT AGENCY (TESORO) SELLS €1.75B VS. €1.25-1.75B INDICATED RANGE IN ZERO COUPON MAR 2020 CTZ; AVG YIELD: +0.35% V -0.275% PRIOR; BID-TO-COVER: 1.86X V 1.58X PRIOR
(ES) Spain Ciudadanos Party leader Rivera (opposition): Legislature is over; has abandoned his agreement with PM Rajoy (as expected) - speech
(EU) EU Industrial policy chief Bienkowska: Seeing the end of the road for diesel cars, European Union consumers may do as much as regulators to propel the the region's car sector into the electricity-powered age - press
TUESDAY 5/29
(CN) White House to proceed with plans to impose 25% tariffs on $50B worth of imported goods from China - press
(US) MAY DALLAS FED MANUFACTURING ACTIVITY: 26.8 V 23.0E
CRM Reports Q1 $0.74 v $0.43e, Rev $3.01B v $2.94Be
WEDNESDAY 5/30
(FR) FRANCE Q1 PRELIMINARY GDP Q/Q: 0.2% V 0.3%E; Y/Y: 2.2% V 2.1%
(DE) GERMANY MAY CPI SAXONY M/M: 0.5% V 0.0% PRIOR; Y/Y: 2.2% V 1.6% PRIOR
(ID) INDONESIA CENTRAL BANK (BI) RAISES 7-DAY REVERSE REPO RATE BY 25BPS TO 4.75%; AS EXPECTED
(DE) GERMANY MAY UNEMPLOYMENT CHANGE: -11K V -10KE; UNEMPLOYMENT CLAIMS RATE: 5.2% (record low) V 5.3%E
(EU) EURO ZONE MAY BUSINESS CLIMATE INDICATOR: 1.45 V 1.29E; CONSUMER CONFIDENCE (FINAL): 0.2 V 0.2E
(IT) ITALY DEBT AGENCY (TESORO) SELLS TOTAL €3.571B VS. €2.5-4.0B INDICATED RANGE IN 5-YEAR AND 10-YEAR BTP BONDS
(DE) GERMANY MAY PRELIMINARY CPI M/M: 0.5% V 0.3%E; Y/Y: 2.2% V 1.9%E
(US) MAY ADP EMPLOYMENT CHANGE: +178K V +190KE
(US) Q1 PRELIMINARY GDP ANNUALIZED Q/Q: 2.2% V 2.3%E; PERSONAL CONSUMPTION: 1.0% V 1.2%E
(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATE UNCHANGED AT 1.25%; AS EXPECTED
(US) Conference Board May Total online job ads 4.70M v 4.75M m/m v 4.80M y/y; New ads 1.87M v 2.01M m/m v 2.01M y/y
(US) Association of American Railroads weekly rail traffic report for week ending May 26th: 565.5K, +4.4% y/y
(US) FEDERAL RESERVE BEIGE BOOK: ECONOMIC ACTIVITY ROSE AT A MODERATE OR BETTER PACE IN ALL 12 FED DISTRICTS
(EU) US said to plan to go ahead with tariffs on European Union steel and aluminum - press
(HK) Press speculates that Macau gaming Rev in May will be +15% y/y
THURSDAY 5/31
(FR) FRANCE MAY PRELIMINARY CPI M/M: 0.4% V 0.3%E; Y/Y: 2.0% V 1.9%E
GM SoftBank Vision Fund to invest $2.25B in GM Cruise, the company's self-driving unit
(US) INITIAL JOBLESS CLAIMS: 221K V 228KE; CONTINUING CLAIMS: 1.726M V 1.73ME
(US) APR PERSONAL INCOME: 0.3% V 0.3%E; PERSONAL SPENDING: 0.6% V 0.4%E
(US) Nevada reports April casino gaming Rev $953.7M, +7.6% y/y; Las Vegas strip Rev $499.5M, +5.1% y/y
(US) Commerce Sec Ross: Trump administration imposes metal tariffs on Canada, Mexico and EU as of midnight (as speculated)
(US) APR PENDING HOME SALES M/M: -1.3% V +0.4%E; Y/Y: +0.4% V -4.3% PRIOR
(US) Atlanta Fed raises Q2 GDP forecast to 4.7% from 4.0% prior
(IT) Five Star official: League and Five Star parties have reached agreement on coalition govt - press
COST Reports Q3 $1.70 v $1.68e, Rev $31.6B v $31.7Be
(JP) BoJ announcement related to daily bond buying operation; Trims planned 5-10 year JGB purchase to ¥430B v ¥450B prior
FRIDAY 6/1
(HK) Macau May Gaming Rev MOP25.49B, Y/Y: 12.1% v 17%e
(UK) MAY MANUFACTURING PMI: 54.4 V 53.5E (22nd month of expansion)
(US) MAY CHANGE IN NONFARM PAYROLLS: +223K V +190KE
(CA) Pres Trump tweets: "Canada has treated our Agricultural business and Farmers very poorly for a very long period of time. Highly restrictive on Trade! They must open their markets and take down their trade barriers! They report a really high surplus on trade with us. Do Timber & Lumber in U.S.?"
Fri, 01 Jun 2018 16:04 PM EST
Investors returned from the US holiday break to find markets under siege from threats in the European political apparatus. Italy looked headed for another election and Spanish PM Rajoy’s fate looked bleak sparking a risk off rally out of stocks into the core European and US Treasury bonds. The president stoked trade war concerns when he suggested they were moving forward with the process that will result in $50B in tariffs on additional Chinese products ahead of talks in Beijing . The administration doubled down on Thursday slapping steel and aluminum tariffs on partners in Europe and North America. The decision sparked swift backlash and counter tariffs announcements from friends on both sides of the Atlantic, but the market reaction was relatively muted. By Friday the political winds laid down after Italian politician obtained approval for a populist government to take the reins and Spain saw socialist leader Sanchez ascend to PM.
US indices briefly tested the 50-day moving average on Tuesday before navigating through global trade headlines for much of the week. Friday’s stronger than expected May employment report and solid ISM data gave investors increased confidence that the US economy has gained momentum and is unlikely to be deterred by geopolitics. The US 10-year yield careened towards 2.75% in the Italy induced safe have flows before backing up above 2.9% post jobs report. The Dollar largely stabilized at higher levels as European inflation figures showed some signs of life but questions remain on how the political winds in Europe will affect ECB thinking. Crude oil prices consolidated near 1.5 month lows ahead of this month’s highly anticipated OPEC producers meeting. For the week the S&P rose 0.5%, the Dow backtracked 0.5% and the NASDAQ gained 1.6%.
In corporate news, a report early in the week that Apple was set to employ only OLED screens in its future iPhone models sent OLED names higher, though analysts quickly cast doubt on the feasibility of such a move. Michael Kors shares slipped after reporting and guiding its SSS flat, despite beating on top and bottom line guidance. GM rose on a report that SoftBank Vision Fund planned to invest $2.25B in its GM Cruise self-driving unit. American steel names saw late-week strength on the US administration's implementation of tariffs against major allies. May US auto sales topped expectations, continuing to be buoyed by SUV and pickup demand. And Petrobras shares sputtered Friday on news that its CEO resigned in response to the government’s move to lower diesel prices amid trucker strikes.
SUNDAY 5/27
(IT) Italy President Mattarella said to have blocked the formation of a new government amid concerns that the coalition could hurt the country's membership in the Euro; Italy President and Cottarelli expected to meet on Monday - US financial press
(CN) PBOC RAISES OPEN MARKET OPERATION (OMO ) RATE ON 28-DAY REVERSE REPO BY 5BPS TO 2.85% FROM 2.80% (AS EXPECTED)
MONDAY 5/28
(IT) ITALY DEBT AGENCY (TESORO) SELLS €1.75B VS. €1.25-1.75B INDICATED RANGE IN ZERO COUPON MAR 2020 CTZ; AVG YIELD: +0.35% V -0.275% PRIOR; BID-TO-COVER: 1.86X V 1.58X PRIOR
(ES) Spain Ciudadanos Party leader Rivera (opposition): Legislature is over; has abandoned his agreement with PM Rajoy (as expected) - speech
(EU) EU Industrial policy chief Bienkowska: Seeing the end of the road for diesel cars, European Union consumers may do as much as regulators to propel the the region's car sector into the electricity-powered age - press
TUESDAY 5/29
(CN) White House to proceed with plans to impose 25% tariffs on $50B worth of imported goods from China - press
(US) MAY DALLAS FED MANUFACTURING ACTIVITY: 26.8 V 23.0E
CRM Reports Q1 $0.74 v $0.43e, Rev $3.01B v $2.94Be
WEDNESDAY 5/30
(FR) FRANCE Q1 PRELIMINARY GDP Q/Q: 0.2% V 0.3%E; Y/Y: 2.2% V 2.1%
(DE) GERMANY MAY CPI SAXONY M/M: 0.5% V 0.0% PRIOR; Y/Y: 2.2% V 1.6% PRIOR
(ID) INDONESIA CENTRAL BANK (BI) RAISES 7-DAY REVERSE REPO RATE BY 25BPS TO 4.75%; AS EXPECTED
(DE) GERMANY MAY UNEMPLOYMENT CHANGE: -11K V -10KE; UNEMPLOYMENT CLAIMS RATE: 5.2% (record low) V 5.3%E
(EU) EURO ZONE MAY BUSINESS CLIMATE INDICATOR: 1.45 V 1.29E; CONSUMER CONFIDENCE (FINAL): 0.2 V 0.2E
(IT) ITALY DEBT AGENCY (TESORO) SELLS TOTAL €3.571B VS. €2.5-4.0B INDICATED RANGE IN 5-YEAR AND 10-YEAR BTP BONDS
(DE) GERMANY MAY PRELIMINARY CPI M/M: 0.5% V 0.3%E; Y/Y: 2.2% V 1.9%E
(US) MAY ADP EMPLOYMENT CHANGE: +178K V +190KE
(US) Q1 PRELIMINARY GDP ANNUALIZED Q/Q: 2.2% V 2.3%E; PERSONAL CONSUMPTION: 1.0% V 1.2%E
(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATE UNCHANGED AT 1.25%; AS EXPECTED
(US) Conference Board May Total online job ads 4.70M v 4.75M m/m v 4.80M y/y; New ads 1.87M v 2.01M m/m v 2.01M y/y
(US) Association of American Railroads weekly rail traffic report for week ending May 26th: 565.5K, +4.4% y/y
(US) FEDERAL RESERVE BEIGE BOOK: ECONOMIC ACTIVITY ROSE AT A MODERATE OR BETTER PACE IN ALL 12 FED DISTRICTS
(EU) US said to plan to go ahead with tariffs on European Union steel and aluminum - press
(HK) Press speculates that Macau gaming Rev in May will be +15% y/y
THURSDAY 5/31
(FR) FRANCE MAY PRELIMINARY CPI M/M: 0.4% V 0.3%E; Y/Y: 2.0% V 1.9%E
GM SoftBank Vision Fund to invest $2.25B in GM Cruise, the company's self-driving unit
(US) INITIAL JOBLESS CLAIMS: 221K V 228KE; CONTINUING CLAIMS: 1.726M V 1.73ME
(US) APR PERSONAL INCOME: 0.3% V 0.3%E; PERSONAL SPENDING: 0.6% V 0.4%E
(US) Nevada reports April casino gaming Rev $953.7M, +7.6% y/y; Las Vegas strip Rev $499.5M, +5.1% y/y
(US) Commerce Sec Ross: Trump administration imposes metal tariffs on Canada, Mexico and EU as of midnight (as speculated)
(US) APR PENDING HOME SALES M/M: -1.3% V +0.4%E; Y/Y: +0.4% V -4.3% PRIOR
(US) Atlanta Fed raises Q2 GDP forecast to 4.7% from 4.0% prior
(IT) Five Star official: League and Five Star parties have reached agreement on coalition govt - press
COST Reports Q3 $1.70 v $1.68e, Rev $31.6B v $31.7Be
(JP) BoJ announcement related to daily bond buying operation; Trims planned 5-10 year JGB purchase to ¥430B v ¥450B prior
FRIDAY 6/1
(HK) Macau May Gaming Rev MOP25.49B, Y/Y: 12.1% v 17%e
(UK) MAY MANUFACTURING PMI: 54.4 V 53.5E (22nd month of expansion)
(US) MAY CHANGE IN NONFARM PAYROLLS: +223K V +190KE
(CA) Pres Trump tweets: "Canada has treated our Agricultural business and Farmers very poorly for a very long period of time. Highly restrictive on Trade! They must open their markets and take down their trade barriers! They report a really high surplus on trade with us. Do Timber & Lumber in U.S.?"
Saturday, May 26, 2018
North Korea Summit Sidetracked; Euro Fate Back on the Radar
TradeTheNews.com Weekly
Market Update: North Korea Summit Sidetracked; Euro Fate Back on the Radar
Fri, 25 May 2018 16:04 PM EST
- Investors opened the week bidding up risk assets on news that the Trump administration had at least for now, put on hold $150B in tariffs aimed at Chinese goods. The positive vibes were short lived though. Wednesday the administration revealed they were studying a plan for new tariffs on imported vehicles, based on national security grounds that could run as high as 25%. Then the next day Trump disclosed he had notified North Korean officials that the June summit was off for now, sparking speculation that China hawks would use the setback as ammunition to take a harder line in ongoing trade negotiations. Wednesday’s FOMC minutes were viewed in a more dovish light than many had expected and that along with the consternation surrounding geopolitics resulted in a significant decline in US Treasury yields sending the 10-year back below 3%. By Thursday risk off flows had gained momentum as uneasiness surrounding the incoming populist government in Italy continued to send Italian bond yields higher. By Friday the contagion had spread to Spain as questions around PM Rojoy’s government sent spreads to German government bond yields to some the widest levels seen since the European debt crisis early this decade. The Euro dropped below 1.17 for the first time since Dec. Crude prices were slammed late in the week, falling 4% on Friday alone, as oil producers all but confirmed they were likely to allow production rates to rise next month when they meet in order to keep markets balanced. For the week the S&P rose 0.3%, the Dow added 0.2% and the NASDAQ was up more than 1%.
- In corporate news this week, Wabtec rose on plans to merge with GE’s Transportation unit, in a deal valued at $11B. Comcast shares fell after confirming it was readying a bid to rival Disney's for Fox assets. Micron surged towards all-time highs on a buyback announcement and a guidance raise. In the retail space, Tiffany beat consensus and reported 9% America comp sales growth; Best Buy shares were hurt by lackluster guidance; L Brands fell on a disappointing outlook; and Gap missed on its bottom line. Deutsche Bank said it planned to cut back its US and CEMEA equities groups, with overall job reductions that could reach 10,000 positions. Foreign automakers were weighed down by reports that the White House was looking into new tariffs on imported vehicles. And Fiat Chrysler dropped on Friday after announcing a 4.8M vehicle recall in the US due to malfunctions with its cruise-control software.
SUNDAY 5/20
(US) Treasury Sec Mnuchin: planned tariffs on Chinese steel and aluminum, as well as $150 billion worth of other Chinese goods, would be put on hold as talks with China proceed - press
(US) Treasury Sec Mnuchin: President Trump is more interested in striking a good deal with Canada and Mexico than quickly finishing NAFTA talks in order to get a vote from Congress this year - press
MONDAY 5/21
WAB Confirms to merge with GE transportation in deal valued at $11.1B; To receive $2.9B in cash upfront
(TW) Chipmakers expected to raise prices for 8NM process - Digitimes
TUESDAY 5/22
(CN) China Govt plans to cut the import duty on cars from 25% to 15%, effective July 1st - financial press
(US) MAY RICHMOND FED MANUFACTURING INDEX: 16 V 10E
(CN) Treasury Sec Mnuchin: steel and aluminum tariffs will remain in force against China - remarks in congressional hearing
FB CEO: Facebook is ready to make significant investments to keep people safe; improvements will significantly impact profitability - remarks to EU
(CN) President Trump: not pleased with how trade talks went with China; talks were a start but am not satisfied
(US) FDA Commissioner Gottlieb: FDA could allow for easier path for gene therapy approval; first focus to be on hemophilia products in pipeline
Reportedly OPEC may consider raising production at the June meeting to offset production decline in Venezuela and Iran export disruptions due to US sanctions - press
(US) President Trump said to aim for 10% cut in European steel and aluminum exports to the US - press
WEDNESDAY 5/23
*(FR) FRANCE MAY PRELIMINARY MANUFACTURING PMI: 55.1 V 53.7E (20th month of expansion)
*(DE) GERMANY MAY PRELIMINARY MANUFACTURING PMI: 56.8 V 57.9E (41st month of expansion)
(EU) EURO ZONE MAY PRELIMINARY MANUFACTURING PMI: 55.5 V 56.1E (58th month of expansion)
(UK) APR CPI M/M: 0.4% V 0.5%E; Y/Y: 2.4% V 2.5%E; CPI CORE Y/Y: 2.1% V 2.2%E (lowest annual reading in a year)
TGT Reports Q1 $1.32 v $1.38e, Rev $16.8B v $16.5Be
TIF Reports Q1 $1.14 v $0.84e, Rev $1.03B v $961Me; Authorizes $1B share repurchase program (7.8% of market cap)
(US) Casino workers union votes to authorize a strike at any time starting June 1st (first time in 3 decades)
(US) MAY PRELIMINARY MARKIT MANUFACTURING PMI: 56.6 V 56.5E (44-month high)
(US) APR NEW HOME SALES: 662K V 680KE
PPB.UK Announces combination of Betfair US with FanDuel; to contribute its existing US assets along with $158M in cash
(TR) Turkey Central Bank held extraordinary rate meeting to evaluate developments in recent period - press
(US) Association of American Railroads weekly rail traffic report for week ending May 19th: 546.4K, +3.6% y/y
(TR) Turkey Central Bank (CBRT): raises Late Liquidity Window (LLW) by 300bps to 16.50% (intra-meeting move)
(IR) Iran Supreme Leader announces 7 conditions for European nations if they want Iran to remain in the nuclear accord
(US) US President Trump: Confirms has given Commerce Dept the order to consider probe on auto imports under Section 232 review (as speculated)
*(KR) BANK OF KOREA (BOK) LEAVES REPO RATE UNCHANGED AT 1.50%; AS EXPECTED
THURSDAY 5/24
992.HK Reports Q4 Net $33M v $107M y/y, Rev $10.6B v $9.60B y/y
DB Finalizes equities business review; to reduce Equities Sales & Trading business headcount by ~25% (total full-time positions to fall from over 97K to well below 90K (over 7K in cuts, in-line with earlier reports)
(DE) GERMANY JUN GFK CONSUMER CONFIDENCE: 10.7 V 10.8E
*(DE) GERMANY Q1 FINAL GDP Q/Q: 0.3% V 0.3%E; Y/Y: 2.3% V 2.3%E; GDP NSA Y/Y: 1.6% V 1.6%E
(FR) FRANCE MAY BUSINESS CONFIDENCE 106 V 108E; MANUFACTURING CONFIDENCE: 109 V 108E
(US) Department of Justice (DOJ) said to weigh criminal probe of Bitcoin price rigging - press
*(UK) APR RETAIL SALES (EX AUTO FUEL) M/M: 1.3% V 0.5%E; Y/Y: 1.5% V 0.1%E
(NK) North Korea said to have carried out the demolition of one of its nuclear test sites - financial press
BBY Reports Q1 $0.82 v $0.75e, Rev $9.11B v $8.78Be
(US) INITIAL JOBLESS CLAIMS: 234K V 220KE; CONTINUING CLAIMS: 1.741M V 1.75ME
(KR) President Trump sends letter to North Korea's Kim: says inappropriate to have June 12th summit at this time; looks forward very much to meeting some day
GPS Reports Q1 $0.42 v $0.45e, Rev $3.78B v $3.61Be; affirms FY18 guidance
(KR) North Korea Vice Foreign Min Kim Kye Gwan: Willing to talk with US at 'any time'; no change in will to do the best for peace - KCNA
486.HK Says Oleg Deripaska resigns as non-executive board member; effective May 25 2018
FRIDAY 5/25
MAERSKB.DK Said to introduce 'emergency' bunker surcharge in order to deal with the higher costs of marine fuel - FT
(ES) Spain Ciudadanos Party said to be willing to back a no-confidence measure unless PM Rajoy calls for a snap election
(US) APR PRELIMINARY DURABLE GOODS ORDERS: -1.7% V -1.3%E; DURABLES EX TRANSPORTATION: 0.9% V 0.5%E
FCAU To recall 4.8M vehicles in the US over software in powertrain control modules; in certain vehicles drivers 'could be unable to cancel cruise-control'
(KR) Pres Trump: we'll see what happens about Korea summit after North Korea's 'nice statement'; summit could still be on for June 12th
(US) MAY FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 98.0 V 98.8E
763.HK Pres Trump reportedly has reached 'tentative deal' with China over ZTE - Fox Business
(US) Atlanta Fed cuts Q2 GDP forecast to 4.0% from 4.1% prior
Fri, 25 May 2018 16:04 PM EST
- Investors opened the week bidding up risk assets on news that the Trump administration had at least for now, put on hold $150B in tariffs aimed at Chinese goods. The positive vibes were short lived though. Wednesday the administration revealed they were studying a plan for new tariffs on imported vehicles, based on national security grounds that could run as high as 25%. Then the next day Trump disclosed he had notified North Korean officials that the June summit was off for now, sparking speculation that China hawks would use the setback as ammunition to take a harder line in ongoing trade negotiations. Wednesday’s FOMC minutes were viewed in a more dovish light than many had expected and that along with the consternation surrounding geopolitics resulted in a significant decline in US Treasury yields sending the 10-year back below 3%. By Thursday risk off flows had gained momentum as uneasiness surrounding the incoming populist government in Italy continued to send Italian bond yields higher. By Friday the contagion had spread to Spain as questions around PM Rojoy’s government sent spreads to German government bond yields to some the widest levels seen since the European debt crisis early this decade. The Euro dropped below 1.17 for the first time since Dec. Crude prices were slammed late in the week, falling 4% on Friday alone, as oil producers all but confirmed they were likely to allow production rates to rise next month when they meet in order to keep markets balanced. For the week the S&P rose 0.3%, the Dow added 0.2% and the NASDAQ was up more than 1%.
- In corporate news this week, Wabtec rose on plans to merge with GE’s Transportation unit, in a deal valued at $11B. Comcast shares fell after confirming it was readying a bid to rival Disney's for Fox assets. Micron surged towards all-time highs on a buyback announcement and a guidance raise. In the retail space, Tiffany beat consensus and reported 9% America comp sales growth; Best Buy shares were hurt by lackluster guidance; L Brands fell on a disappointing outlook; and Gap missed on its bottom line. Deutsche Bank said it planned to cut back its US and CEMEA equities groups, with overall job reductions that could reach 10,000 positions. Foreign automakers were weighed down by reports that the White House was looking into new tariffs on imported vehicles. And Fiat Chrysler dropped on Friday after announcing a 4.8M vehicle recall in the US due to malfunctions with its cruise-control software.
SUNDAY 5/20
(US) Treasury Sec Mnuchin: planned tariffs on Chinese steel and aluminum, as well as $150 billion worth of other Chinese goods, would be put on hold as talks with China proceed - press
(US) Treasury Sec Mnuchin: President Trump is more interested in striking a good deal with Canada and Mexico than quickly finishing NAFTA talks in order to get a vote from Congress this year - press
MONDAY 5/21
WAB Confirms to merge with GE transportation in deal valued at $11.1B; To receive $2.9B in cash upfront
(TW) Chipmakers expected to raise prices for 8NM process - Digitimes
TUESDAY 5/22
(CN) China Govt plans to cut the import duty on cars from 25% to 15%, effective July 1st - financial press
(US) MAY RICHMOND FED MANUFACTURING INDEX: 16 V 10E
(CN) Treasury Sec Mnuchin: steel and aluminum tariffs will remain in force against China - remarks in congressional hearing
FB CEO: Facebook is ready to make significant investments to keep people safe; improvements will significantly impact profitability - remarks to EU
(CN) President Trump: not pleased with how trade talks went with China; talks were a start but am not satisfied
(US) FDA Commissioner Gottlieb: FDA could allow for easier path for gene therapy approval; first focus to be on hemophilia products in pipeline
Reportedly OPEC may consider raising production at the June meeting to offset production decline in Venezuela and Iran export disruptions due to US sanctions - press
(US) President Trump said to aim for 10% cut in European steel and aluminum exports to the US - press
WEDNESDAY 5/23
*(FR) FRANCE MAY PRELIMINARY MANUFACTURING PMI: 55.1 V 53.7E (20th month of expansion)
*(DE) GERMANY MAY PRELIMINARY MANUFACTURING PMI: 56.8 V 57.9E (41st month of expansion)
(EU) EURO ZONE MAY PRELIMINARY MANUFACTURING PMI: 55.5 V 56.1E (58th month of expansion)
(UK) APR CPI M/M: 0.4% V 0.5%E; Y/Y: 2.4% V 2.5%E; CPI CORE Y/Y: 2.1% V 2.2%E (lowest annual reading in a year)
TGT Reports Q1 $1.32 v $1.38e, Rev $16.8B v $16.5Be
TIF Reports Q1 $1.14 v $0.84e, Rev $1.03B v $961Me; Authorizes $1B share repurchase program (7.8% of market cap)
(US) Casino workers union votes to authorize a strike at any time starting June 1st (first time in 3 decades)
(US) MAY PRELIMINARY MARKIT MANUFACTURING PMI: 56.6 V 56.5E (44-month high)
(US) APR NEW HOME SALES: 662K V 680KE
PPB.UK Announces combination of Betfair US with FanDuel; to contribute its existing US assets along with $158M in cash
(TR) Turkey Central Bank held extraordinary rate meeting to evaluate developments in recent period - press
(US) Association of American Railroads weekly rail traffic report for week ending May 19th: 546.4K, +3.6% y/y
(TR) Turkey Central Bank (CBRT): raises Late Liquidity Window (LLW) by 300bps to 16.50% (intra-meeting move)
(IR) Iran Supreme Leader announces 7 conditions for European nations if they want Iran to remain in the nuclear accord
(US) US President Trump: Confirms has given Commerce Dept the order to consider probe on auto imports under Section 232 review (as speculated)
*(KR) BANK OF KOREA (BOK) LEAVES REPO RATE UNCHANGED AT 1.50%; AS EXPECTED
THURSDAY 5/24
992.HK Reports Q4 Net $33M v $107M y/y, Rev $10.6B v $9.60B y/y
DB Finalizes equities business review; to reduce Equities Sales & Trading business headcount by ~25% (total full-time positions to fall from over 97K to well below 90K (over 7K in cuts, in-line with earlier reports)
(DE) GERMANY JUN GFK CONSUMER CONFIDENCE: 10.7 V 10.8E
*(DE) GERMANY Q1 FINAL GDP Q/Q: 0.3% V 0.3%E; Y/Y: 2.3% V 2.3%E; GDP NSA Y/Y: 1.6% V 1.6%E
(FR) FRANCE MAY BUSINESS CONFIDENCE 106 V 108E; MANUFACTURING CONFIDENCE: 109 V 108E
(US) Department of Justice (DOJ) said to weigh criminal probe of Bitcoin price rigging - press
*(UK) APR RETAIL SALES (EX AUTO FUEL) M/M: 1.3% V 0.5%E; Y/Y: 1.5% V 0.1%E
(NK) North Korea said to have carried out the demolition of one of its nuclear test sites - financial press
BBY Reports Q1 $0.82 v $0.75e, Rev $9.11B v $8.78Be
(US) INITIAL JOBLESS CLAIMS: 234K V 220KE; CONTINUING CLAIMS: 1.741M V 1.75ME
(KR) President Trump sends letter to North Korea's Kim: says inappropriate to have June 12th summit at this time; looks forward very much to meeting some day
GPS Reports Q1 $0.42 v $0.45e, Rev $3.78B v $3.61Be; affirms FY18 guidance
(KR) North Korea Vice Foreign Min Kim Kye Gwan: Willing to talk with US at 'any time'; no change in will to do the best for peace - KCNA
486.HK Says Oleg Deripaska resigns as non-executive board member; effective May 25 2018
FRIDAY 5/25
MAERSKB.DK Said to introduce 'emergency' bunker surcharge in order to deal with the higher costs of marine fuel - FT
(ES) Spain Ciudadanos Party said to be willing to back a no-confidence measure unless PM Rajoy calls for a snap election
(US) APR PRELIMINARY DURABLE GOODS ORDERS: -1.7% V -1.3%E; DURABLES EX TRANSPORTATION: 0.9% V 0.5%E
FCAU To recall 4.8M vehicles in the US over software in powertrain control modules; in certain vehicles drivers 'could be unable to cancel cruise-control'
(KR) Pres Trump: we'll see what happens about Korea summit after North Korea's 'nice statement'; summit could still be on for June 12th
(US) MAY FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 98.0 V 98.8E
763.HK Pres Trump reportedly has reached 'tentative deal' with China over ZTE - Fox Business
(US) Atlanta Fed cuts Q2 GDP forecast to 4.0% from 4.1% prior
Saturday, May 19, 2018
Barrons weekend summary
Barrons weekend summary: positive on consumer stocks PEP, KO and PG
Cover story: Profile of Jack Bogle, founder of the Vanguard Group and inventor of the index fund; Bogle addresses criticisms that indexing has destabilized the market, suggests how the ETF might come to an end, and says that if the market faces a long bout of underperformance, the necessity of lower costs will increase.
Features: 1) Profile of Donald Trump’s chief economic advisor, Larry Kudlow, who “may be the last great hope for those still trying to reconcile Trump’s policies with old-school conservative economic principles”; 2) Asset managers, proprietary trading firms, bitcoin miners, and retail investors are growing more comfortable with bitcoin, despite a recent price drop of 58% since December; 3) Positive on PEP, KO, PG: Consumer stocks make sense for income-hungry investors—with the potential for mid-single-digit earnings growth ahead and decent yields, ten percent one-year total returns are within reach.
Tech Trader: ROKU is shifting from a hardware company to a graphical user interface for TV brands that don’t want to make their own software, becoming a home page for viewers and a portal for 6,000 channels; its shares are a bet on the future of TV.
Trader: A good part of the recent improvements in the market, such as supercharged earnings growth, may already have been baked into the market high of January 26; Cautious on LOW: Company has trailed rival HD in important metrics such as same-store sales and profit margins, but is taking steps in the right direction, such as the addition of three new board members; Cautious on AVAV, KTOS: Drone makers face a range of challenges, including a whistleblower suit at AeroVironment and cash-flow problems at Kratos, and activist investor Ben Axler has criticized both companies.
Profile: Andrew Mattock, lead manager of the Matthews China fund, who says China demands that investors be open to new ideas, and be nimble amid constant change in the country (top 10 holdings: BABA, Tencent, Agricultural Bank of China, China Construction Bank, China Life Insurance, Sino Biopharmaceutical, Ping An Insurance Group, China National Building Material, BIDU).
Follow-Up: A deal between CBS and VIA seems remote, but CBS still holds significant value for shareholders, with NFL games and top-rated prime-time shows both popular by today’s TV standards.
European Trader: Positive on William Hill, GVC Holdings, 888 Holdings: U.K. companies are a good way for investors to benefit from legalized sports betting, and all likely to see gains ahead. E
merging Market: The complicated and uncertain political situation in Malaysia, where events “are weird even by contemporary global standards,” makes investing in the country difficult.
Commodities: “Prices for diesel fuel may revisit records within the next year or two affecting many markets, from refiners to transportation to agriculture.”
Streetwise: Donald Trump deserves more credit than he gets for the strength of the U.S. economy, says Brett Arends, despite the erratic nature of his approach to governing.
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