Positive sentiment continues to reign as trade deals come together

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Weekly Market Update: Positive sentiment continues to reign as trade deals come together

Fri, 17 Jan 04:38 PM EST/09:38 PM GMT

Investors saw the fantastic start to the new year continue this week, led by an ever rising equity market. As promised, the US and China signed the phase one trade agreement in DC and both sides remained optimistic that implementation will go smoothly. The deal was afforded increased goodwill after the US removed China’s currency manipulation designation ahead of the signing, though it remains unclear if and when US officials will be willing to cut Chinese tariffs further. Also on the trade front, the Senate passed the USMCA agreement sending the bill that updates trade arrangements with Canada and Mexico to the President’s desk. President Trump and his administration touted the positive trade developments throughout the week ahead of his Senate impeachment trial that is set to begin next Tuesday.

The US economic data stayed largely constructive with benign inflation readings coming alongside signals of improvement in the manufacturing sector. Friday’s single family housing starts saw the strongest reading since before the 2008 financial crisis, suggesting the industry is preparing for a jump in household formation resulting from the strong consumer environment. China Q4 data releases also calmed some investors’ nerves when GDP, retail sales, industrial production, and new loans data topped expectations. UK data largely underwhelmed, bolstering the belief the BOE could ease as early as this month. The pound and GILT yields moved lower for much of the week. US Treasury yields moved lower only to rebound late in the week spurred by news the US Treasury will be offering a new 20-year bond later this year. Gold and WTI crude futures found some support around $1550 and just below $60/barrel, respectively, following last week’s key reversal around the escalating Iran tensions. For the week, the S&P added 2%, the DJIA rose 1.8%, and the Nasdaq was up 2.3%.

In corporate news this week, major financial institutions kicked off earnings season. JPMorgan posted record profit, beating on its top and bottom line, as sentiment improves amid easing trade tensions. Wells Fargo, however, missed targets as legal challenges and low interest rates weighed on the company. Citigroup reported a beat on its top and bottom line, notching impressive revenue in its fixed-income unit. Goldman Sachs missed on profit after being hit with a $1.1B legal bill. Bank of America earnings and revenue came in above expectations, but a forecast for higher expenses concerned investors. Morgan Stanley posted outstanding Q4 results with strength seen across all its businesses. In the retail space, Target’s holiday same store sales disappointed, with notable weakness seen in its toys and electronics divisions. Five Below also posted weaker than expected holiday revenue, leading the company to cut its Q4 outlook. The Gap announced it no longer intends to spin off its Old Navy unit into a separate, publicly-traded company, backtracking on a plan it had announced early last year.


SUNDAY 1/12
(CN) China said there will be no significant reduction in new energy vehicle subsidies in 2020, 2020 NEV subsidy policy to remain relatively stable - financial press

MONDAY 1/13
FMCC Multifamily 2020 Outlook projects Originations will grow to $390B
(US) Democratic candidate Sen Booker (D-NJ) drops out of presidential race - press
V Confirms to acquire Plaid for $5.3B
(US) TREASURY SEMI-ANNUAL CURRENCY REPORT: confirms removal of China from designation as a currency manipulator; country must take necessary steps to avoid a persistently weak currency

TUESDAY 1/14
JPM Reports Q4 $2.57 v $2.32e, Managed Rev $29.2B v $27.3Be
C Reports Q4 $1.90 v $1.82e, Rev $18.4B v $17.7Be
(US) DEC CPI M/M: 0.2% V 0.3%E; CPI (EX-FOOD/ENERGY) M/M: 0.1% V 0.2%E; CPI NSA: 256.974 V 257.170E
(CN) Reportedly US officials have no plans to cut China duties further now; will verify China deal adherence of 'Phase 1' before considering further reduction of existing tariffs - press

WEDNESDAY 1/15
(UK) DEC CPI M/M: 0.0% V 0.2%E; Y/Y: 1.3% V 1.5%E (3-year low)
TGT Reports holiday SSS +1.4%, results came in below Co expectations
BAC Reports Q4 $0.74 v $0.68e, Rev $22.3B v $22.0Be
(RU) Russia PM Medvedev says govt (cabinet) to resign; President Putin will announce the makeup of the new govt
(US) JAN EMPIRE MANUFACTURING INDEX: 4.8 V 3.6E
(US) DEC PPI FINAL DEMAND MM: 0.1% V 0.2%E V 0.0% PRIOR; Y/Y: 1.3% V 1.3%E
(US) Association of American Railroads weekly rail traffic report for week ending Jan 11th: 501.6K, -9.6% y/y
(US) US and China officials sign 'Phase 1' trade deal at the White House
(US) FEDERAL RESERVE BEIGE BOOK: ECONOMY CONTINUED TO EXPAND MODESTLY IN LAST WEEKS OF 2019 (prior 'expanded modestly')

THURSDAY 1/16
2330.TW Reports Q4 (NT$) Net 116.0B v 111.3Be; Op 124.2B v 121Be; Rev 317.2B v 289.8B y/y
(TR) TURKEY CENTRAL BANK (CBRT) CUTS ONE-WEEK REPO RATE BY 75BPS TO 11.25%; AS EXPECTED
(US) DEC ADVANCE RETAIL SALES M/M: 0.3% V 0.3%E; RETAIL SALES (EX-AUTO) M/M: 0.7% V 0.5%E
(US) Senate passes USMCA trade deal; bill now goes to Pres Trump's desk for signing (as expected)
RIO.AU Reports Q4 Pilbara Iron Ore production 83.6Mt v 86.6 Mt y/y; Shipments 86.8Mt v 87.4Mt y/y
(CN) CHINA Q4 GDP Q/Q: 1.5% V 1.4%E; Y/Y: 6.0% V 6.0%E

FRIDAY 1/17
(UK) DEC RETAIL SALES (EX-AUTO/FUEL) M/M: -0.8% V +0.8%E; Y/Y: 0.7% V 3.0%E
FAST Reports Q4 $0.31 v $0.32e, Rev $1.28B v $1.29Be
STT Reports Q4 $1.98 adj v $1.70e, Rev $3.05B v $2.92Be
(US) DEC HOUSING STARTS: 1.608M V 1.380ME; BUILDING PERMITS: 1.416M V 1.460ME
(US) DEC INDUSTRIAL PRODUCTION M/M: -0.3% V -0.2%E; CAPACITY UTILIZATION: 77.0% V 77.0%E
(US) NOV JOLTS JOB OPENINGS: 6.800M V 7.250ME
BA During testing audit last weekend, 737 flight computers were reportedly not talking to each other at startup; unclear how long fix will take
(US) CDC to begin deploying staff to screen travelers arriving from Wuhan, China for novel coronavirus

Iran tensions deescalate and risk-on rally takes DJIA above 29,000

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Weekly Market Update: Iran tensions deescalate and risk-on rally takes DJIA above 29,000

Fri, 10 Jan 04:04 PM EST/09:04 PM GMT

Markets opened the week amid a cloud of headlines related to rising Iranian tensions. Stock indices briefly moved lower while gold and oil prices shot higher after Iran sent a salvo of missiles into two bases housing US troops in Iraq, retaliation for last week’s assassination of Quds commander Soleimani. Just hours after that attack, news broke that a Ukrainian Air Boeing 737-800 crashed shortly after takeoff in Tehran. The timing and circumstances invited a wave of speculation surrounding the cause of the downing and only added to the overall unease. By midweek though, tensions began to subside as it became clear that the US would not respond militarily after no casualties resulted from Iran’s missile attack. Gold futures reversed some $35 off of 7-year highs above $1600 and WTI crude briefly pushed above $65 before failing and quickly falling back below $60. Ultimately the significant technical reversal in those widely followed risk barometers came alongside renewed vigor for stocks as investors become comfortable that the Iran situation was deescalating. By Friday, the early 2020 momentum carried the Dow past 29K for the first time. Another solid US employment report, albeit short of consensus expectations for job gains, reinforced the belief the Fed will likely remain on hold in 2020. Treasury yields declined and the Greenback softened in the wake of the jobs data as well as news that House Speaker Pelosi would be sending the articles of impeachment over to the Senate next week, allowing the trial to move forward. For the week, the S&P was up 0.9%, the DJIA added 0.7%, and the Nasdaq rose for the fifth week in a row, gaining 1.8%.

In corporate news this week, Boeing's woes continued as new internal memos showed employees raised safety concerns during the development of the troubled 737MAX, and Boeing supplier Spirit Aerosystems announced it will lay off thousands of employees in response to the production halt for the aircraft. Macy’s posted a small decline in holiday same store sales, though less than anticipated, but announced the closure of 29 stores over the coming months. Kohl’s shares slid after reporting poor holiday sales and cutting its outlook, citing specific weakness in its women’s apparel business. Bed Bath and Beyond missed estimates again, withdrew its outlook, and issued a warning that sales and profit will remain pressured during next quarter, as well. Costco notched a healthy +7.8% Dec same store sales increase amid strong holiday demand. Homebuilder Lennar topped earnings estimates and saw its cash flow acceleration continuing into 2020, promising further debt repurchases and return of capital. Yum! Brands announced the $375M acquisition of Habit Burger Grill for $14/share in cash in a move to compete with Shake Shack.


MONDAY 1/6
JGB (JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.1% 10-year JGBs: avg yield: -0.0050% v -0.042% prior, bid to cover 3.70x v 3.28x prior

TUESDAY 1/7
(IR) Iran reportedly assessing 13 retaliation scenarios against US - Iranian press
(ES) Spain Parliament approves Sanchez bid to form a new govt (as expected)
Boeing 737-800 passenger plane operated by Ukraine company, crashes after takeoff in Iran

WEDNESDAY 1/8
066570.KR Reports prelim Q4 (KRW) Op 98.6B v 75.3B y/y, Rev 16.1T v 15.8T y/y (16.5Te)
*(EU) EURO ZONE NOV BUSINESS CLIMATE INDICATOR: -0.25 V -0.18E
LEN Reports Q4 $2.13 v $1.90e, Rev $6.97B v $6.70Be
WBA Reports Q1 $1.37 v $1.40e, Rev $34.3B v $34.6Be
*(US) DEC ADP EMPLOYMENT CHANGE: +202K V +160KE
(US) Pres Trump: Iran appears to be standing down; no Americans were harmed in last night's attack; to place new sanctions on Iran
(US) Association of American Railroads weekly rail traffic report for week ending Jan 4th: 414K, -5.1% y/y
*(US) NOV CONSUMER CREDIT: $12.5B V $16.0BE
BBBY Reports Q3 -$0.38 adj v $0.03e, Rev $2.76B v $2.86Be; withdraws FY19 guidance
COST Reports Dec SSS (ex-gasoline) +7.8%

THURSDAY 1/9
3382.JP Reports 9M Net ¥169.97B v ¥156.27B y/y; Op ¥319.1B v ¥304.3B y/y; Rev ¥4.98T v ¥5.07T y/y
(IR) CBS Transportation Correspondent: "US officials are confident Ukrainian Flt 752 was shot down by Iran. US intelligence picked up signals of the radar being turned on & satellite detected infrared blips of 2 missile launches, probably SA-15s, followed shortly by another infrared blip of an explosion."
*(US) TREASURY $16B 30-YEAR BOND REOPENING DRAWS 2.341%; BID TO COVER 2.54 V 2.46 PRIOR AND 2.26 OF THE LAST 8 REOPENINGS
BA Releases new internal communications on 737 MAX that shows employees raised safety concerns during the development process

FRIDAY 1/10
*(US) DEC AVERAGE HOURLY EARNINGS M/M: 0.1% V 0.3%E; Y/Y: 2.9% V 3.1%E; AVERAGE WEEKLY HOURS: 34.3 V 34.4E
Dow hits 29,000 mark for first time
SPR CEO: To lay off 2.8K employees at Kansas facility; not yet received notice from Boeing when MAX production will restart or what production rates will be when it does
(US) House Speaker Pelosi: House will send Trump impeachment articles to the Senate next week
(IE) Sinn Fein party accepts the Northern Ireland power sharing agreement; will re-enter devolved govt in Northern Ireland - press
(US) On day Iran Gen Soleimani was killed, a second secret US mission to kill a senior Iranian military official in Yemen was not successful - Washington Post

Stocks and commodities float higher in light holiday trading

TradeTheNews.com 

Weekly Market Update: Stocks and commodities float higher in light holiday trading

Fri, 27 Dec 04:10 PM EST/09:10 PM GMT

Stocks continued to push out to new highs in the holiday shortened trading week. A Santa Claus rally took full effect in predictably thin year-end trading. US and Chinese officials indicated they remain in close contact as they hammer out the text of a ‘phase one’ trade agreement for signing in January. The Dow was helped by news that Boeing’s CEO was finally being replaced as the 737 Max debacle drags into the New Year. Tesla shares also turned heads, rising past the notorious $420 level, to notch new highs as the electric car maker continues to impress with its rapid expansion in China. The US economic data was somewhat soft with both the Richmond Fed and new home sales figures coming up short of expectations. That along with strong demand for US Treasury coupon auctions enabled Treasury yields to drift lower. Gold popped back above $1,500 for the first time since October, coinciding with marginal weakness in the US dollar. For the week, the S&P added 0.6%, the DJIA rose 0.7%, and the Nasdaq gained 0.9%.


SUNDAY 12/22
(JP) Japan Chief Cabinet Sec Suga: Has not eased export controls on South Korea; changes to controls are just procedural

MONDAY 12/23
TSLA Reportedly agrees 5-yr loan facility of up to CNY10B (~$1.4B) with Chinese banks - press
(US) NOV PRELIMINARY DURABLE GOODS ORDERS: -2.0% V +1.5%E; DURABLES (EX-TRANSPORTATION): 0.0% V 0.2%E
BA Dennis A. Muilenburg resigns as CEO effective immediately; Names current Chairman David L Calhoun as CEO; effective Jan 13th 2020
(US) NOV NEW HOME SALES: 719K V 730KE
(CN) According to China Association of Automobile Manufacturers (CAAM) China 2019 auto sales are tracking to be -9% to -8%; see 2020 sales -2% and 2021 flat or slightly slower – press

TUESDAY 12/24
UBER Founder Travis Kalanick to resign from Board of Directors; effective Dec 31

WEDNESDAY 12/25

THURSDAY 12/26
UBER RBC's Mahaney sees Uber as top tech pick for 2020 - CNBC interview

FRIDAY 12/27
(EU) ECB ECONOMIC BULLETIN: Sees signs of stabilization in global economy beginning to emerge towards the end of the year
(US) Nevada reports Nov casino gaming Rev $937.5M, -3.1% y/y; Las Vegas strip Rev $517.9M, -3.1% y/y

Yield curve steepens and Santa Claus rally continues as uncertainty subsides

TradeTheNews.com 

Weekly Market Update: Yield curve steepens and Santa Claus rally continues as uncertainty subsides

Fri, 20 Dec 04:07 PM EST/09:07 PM GMT

Stock markets continued to ride a wave of momentum this week. US indices notched successive all-time highs as the week progressed. Trump administration trade negotiators were out en masse touting the merits of the ‘Phase 1’ trade deal reached with China last week, while officials on both sides acknowledge negotiators remained in close contact and are working towards the signing of an official agreement in January. As expected, the House voted to impeach President Trump on Wednesday, but Speaker Pelosi, in a sign of gamesmanship, did not submit the articles of impeachment to the Senate before Capitol Hill shut down for the holidays. The partisan environment did not hold up the passage of the USMCA though. Investors’ wiliness to add risk kept upward pressure in interest rates. The US 2/10-year yield spread widened to levels not seen since this summer, signaling receding global growth concerns. WTI crude futures bubbled above $60/bbl and gold prices remained in check. For the week, the S&P500 gained 1.7%, the DJIA added 1.1%, and the Nasdaq rose 2.2%.

In corporate news this week, Boeing announced it would suspend production of its beleaguered 737 MAX aircraft as the regulatory process to return the aircraft to the skies trudges on. Unilever cut its fully year revenue growth guidance, pointing to an economic slowdown in South Asia. PYPL beats, raises FY20 outlook. FedEx shares were pummeled after missing consensus and cutting its outlook yet again, while Amazon restricted third-party sellers from using FedEx Ground for Prime shipments, citing performance issues. US food flavorings maker IFF announced it would merge with DuPont’s nutrition and biosciences business to create a global ingredients behemoth valued at $45B. Remote connectivity provider LogMeIn entered into a definitive agreement to be acquired by affiliates of Francisco Partners and Evergreen Coast Capital (the PE affiliate of Elliott Management) at $86.05/share in cash for a $4.3B aggregate valuation. TiVo announced plans to merge with entertainment tech firm Xperi in a $3B deal, after scrapping its plans to split itself into two different entities.


MONDAY 12/16
*(DE) GERMANY DEC PRELIMINARY MANUFACTURING PMI: 43.4 V 44.6E (12th straight contraction)
*(EU) EURO ZONE DEC PRELIMINARY MANUFACTURING PMI: 45.9 V 47.3E (11th straight month of contraction)
*(UK) DEC PRELIMINARY PMI MANUFACTURING: 47.4 V 49.2E (8th straight month of contraction)
*(US) DEC EMPIRE MANUFACTURING: 3.5 V 4.0E
*(US) DEC PRELIMINARY MARKIT MANUFACTURING PMI: 52.5 V 52.6E
BA Confirms to suspend 737 MAX Production in January, will not layoff or furlough any employees

TUESDAY 12/17
UNA.NL Cuts FY19 underlying Rev growth 'slightly below prior guidance' (prior lower half of its 3-5% multi-year range); Cites economic slowdown in South Asia; Earnings, margin and cash are not expected to be impacted
*(US) NOV HOUSING STARTS: 1.365M V 1.345ME; BUILDING PERMITS: 1.482M V 1.418ME
*(US) NOV INDUSTRIAL PRODUCTION M/M: 1.1% V 0.8%E; CAPACITY UTILIZATION: 77.3% V 77.4%E
*(US) OCT JOLTS JOB OPENINGS: 7.267M V 7.009ME
FDX Reports Q2 $2.51 v $2.79e, Rev $17.3B v $17.6Be

WEDNESDAY 12/18
*(DE) GERMANY DEC IFO BUSINESS CLIMATE: 96.3 V 95.5E; CURRENT ASSESSMENT: 98.8 V 98.1E;
(US) Association of American Railroads weekly rail traffic report for week ending Dec 14th: 520.6K, -8.5% y/y
MU Reports Q1 $0.48 v $0.49e, Rev $5.14B v $5.03Be
*(AU) AUSTRALIA NOV EMPLOYMENT CHANGE: +39.9K V +15.0KE; UNEMPLOYMENT RATE: 5.2% V 5.3%E
*(US) HOUSE OF REPRESENTATIVES VOT TO IMPEACH PRESIDENT TRUMP: Article 1 Abuse of Power, passes ; Article 2 Obstruction, passes, as expected
*(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED; Adjusts wording on overseas risks

THURSDAY 12/19
*(SE) SWEDEN CENTRAL BANK (RIKSBANK) RAISES REPO RATE BY 25BPS TO 0.00%; AS EXPECTED
*(UK) NOV RETAILS SALES (EX-AUTO/FUEL) M/M: -0.6% V +0.4%E; Y/Y: 0.8% V 2.0%E
*(UK) BANK OF ENGLAND (BOE) DEC MINUTES: VOTED 7-2 TO LEAVE INTEREST RATES UNCHANGED AT 0.75%
(US) House of Representatives votes to approve USMCA trade bill; Vote was 385 to 41
NKE Reports Q2 $0.70 v $0.58e, Rev $10.3B v $10.1Be
(UK) Financial Conduct Authority chief executive Andrew Bailey reportedly has been selected as next Bank of England governor
X Guides Q4 adj -$1.15 v -$0.65e; Cuts FY20 CAPEX forecast to $875M (vs $950M prior); Cuts quarterly dividend by ~80% to $0.01, terminates stock buyback program

FRIDAY 12/20
(JP) JAPAN SAID TO EASE PART OF EXPORT CONTROLS WITH SOUTH KOREA- financial press
(US) Q3 FINAL GDP PRICE INDEX: 1.8% V 1.8%E; CORE PCE Q/Q: 2.1% V 2.1%E

Trade deals and UK vote reduce uncertainty into year end

TradeTheNews.com 

Weekly Market Update: Trade deals and UK vote reduce uncertainty into year end

Fri, 13 Dec 04:05 PM EST/09:05 PM GMT

Trading commenced this week supported by press reports that both the US and China were working feverishly to avoid the December 15 tariff deadline. By Friday, those efforts came to fruition when both sides confirmed a Phase 1 trade deal had been reached in principle and put on paper. China agreed to make efforts to increase purchases of US manufacturing, agriculture, energy, and services in return for President Trump’s decision to forgo the Dec 15 tariffs and an offer to reduce tariffs on one tranche that is already in place. Skeptics were quick to point out that details were sparse and the implementation could still face significant hurdles. Nevertheless, risk assets rallied into the trade announcement affording fresh all-time highs in the US stock market. Interest rates moved up largely on the back of those risk-on flows, driven by trade headlines. Other crosscurrents in Washington yielded a net positive for markets as the White House and House Democrats reached an agreement to ratify the USMCA North American trade agreement, even as the Dems moved to file articles of impeachment against President Trump. Fed Chairman Powell and newly minted ECB President Lagarde oversaw meetings where both central banks signaled rates will likely remain on hold for an extended period. The British Pound and investor risk sentiment overall was further supported by Thursday’s UK election that gave PM Boris Johnson’s Conservative party a resounding victory as voters backed his promise to deliver Brexit at the end of January. For the week, the S&P500 gained 0.7%, the DJIA added 0.4%, and the Nasdaq rose 0.9%.

In corporate news this week, Oracle shares fell after it reported a miss on earnings and guided in line with consensus. Broadcom posted a beat and raised its dividend, though investors were unenthused by slowing growth in the semiconductor business and a modest 2020 revenue forecast. Adobe shares rallied to record highs after topping estimates and demonstrating strength in its digital media division. Nucor forecast a Q4 profit well below market consensus, as lower prices have affected performance at its steel mills segment. The FTC is said to be considering an injunction against Facebook over how the company's products interact, and the government could take action as soon as January to block the technical integration of WhatsApp, Facebook Messenger, and Instagram. Merck agreed to acquire cancer drug developer ArQule for $2.7B, and UnitedHealth’s OptumRx division announced it would buy specialist pharmacist Diplomat for $300M in order to expand its pharmacy services. Sarepta shares surged after the FDA granted accelerated approval to its targeted treatment for rare Duchenne muscular dystrophy mutation.


SUNDAY 12/8
*(JP) JAPAN FINAL Q3 GDP Q/Q: 0.4% V 0.2%E; ANNUALIZED Q/Q: 1.8% V 0.6%E

TUESDAY 12/10
*(DE) GERMANY DEC ZEW CURRENT SITUATION SURVEY: -19.9 V -22.0E; EXPECTATIONS SURVEY: 10.7 V 0.3E (1st positive reading since April)
*(US) Q3 FINAL NONFARM PRODUCTIVITY: -0.2% V -0.1%E; UNIT LABOR COSTS: 2.5% V 3.4%E
(US) US and Chinese negotiators reportedly planning to delay Dec 15 tariffs - US financial press

WEDNESDAY 12/11
TKA.DE To decide on Elevator unit in Q1 2020; Targets €80M total gross savings over next 3 years through standardized products and optimized production network - Capital markets day
*(US) NOV CPI M/M: 0.3% V 0.2%E; CPI EX-FOOD/ENERGY M/M: 0.2% V 0.2%E; CPI NSA: 257.208 V 257.213E
(JP) Japan Investors Net Buying of Foreign Bonds: +¥235.8B v -¥511.1B prior week; Foreign Net Buying of Japan Stocks: -¥200.4B v +¥394B prior week
*(US) FOMC LEAVES TARGET RANGE UNCHANGED BETWEEN 1.50-1.75%; AS EXPECTED; DOT PLOT SIGNALS RATE HOLD THROUGH 2020

THURSDAY 12/12
SAN.FR BIOCORP and SANOFI Announced partnership to fit SoloStar insulin pens with Mallya Technology Worldwide
*(CH) SWISS NATIONAL BANK (SNB) LEAVES SIGHT DEPOSIT INTEREST RATE UNCHANGED AT -0.75%; AS EXPECTED
(CN) China 2019 vehicle sales seen at 25.8M units, -8% y/y - Industry Association CAAM
*(EU) ECB ALLOTS €97.7B VS. €120BE IN TLTRO-3 OPERATION
(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED; reiterates forward guidance
(US) NOV PPI FINAL DEMAND M/M: 0.0% V 0.2%E; Y/Y: 1.1% V 1.3%E
(EU) ECB's Lagarde: Reiterates forward guidance; inflation outlook muted but sees initial signs of economic stabilization - Prepared Remarks
(EU) ECB's Lagarde: Direction of inflation is good, but not at the objective - Q&A
NUE Guides Q4 $0.25-0.30 v $0.70e; steel mill performance expected to decrease due to lower steel prices; expects Q4 profitability of steel products to be best Q4 in segment history
(US) Fed Reports Q3 Financial Accounts: Household Change in Net Worth: $0.574T v $1.862T prior
*(US) TREASURY $16B 30-YEAR BOND REOPENING DRAWS 2.307%; BID TO COVER 2.46 V 2.23 PRIOR and 2.24 of the last 8 reopenings
FB FTC reportedly considering injunction action against Facebook over how company's products interact - press
ORCL Reports Q2 $0.90 v $0.88e, Rev $9.6B v $9.65Be
AVGO Reports Q4 $5.39 v $5.36e, Rev $5.78B v $5.76Be; raises dividend 22.6%
COST Reports Q1 $1.73 adj v $1.71e, Rev $37.0B v $37.3Be
(US) Pres Trump reportedly has signed off on US-China agreement, which includes delaying new round of tariffs - press
*(UK) GENERAL ELECTION EXIT POLL: CONSERVATIVES TO WIN OUTRIGHT MAJORITY IN PARLIAMENT
*(JP) JAPAN Q4 TANKAN LARGE MANUFACTURING INDEX: 0 V 3E (4th straight quarterly decline and lowest in over 6-years); OUTLOOK SURVEY: 0 V 3E

FRIDAY 12/13
*(US) NOV ADVANCE RETAIL SALES M/M: 0.2% V 0.5%E; RETAIL SALES (EX-AUTO) M/M: 0.1% V 0.4%E
(US) Pres Trump: We have agreed to a very large Phase One Deal with China. They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more. The 25% Tariffs will remain as is, with 7 1/2% put on much of the remainder

US/China Trade Sentiment Fluctuates Ahead of Strong Nov Employment Report

TradeTheNews.com 

Weekly Market Update: US/China Trade Sentiment Fluctuates Ahead of Strong Nov Employment Report

Fri, 06 Dec 04:03 PM EST/09:03 PM GMT

Stock markets opened the week under pressure as positive sentiment surrounding US-China trade talks ebbed. The President was in the UK meeting with NATO leaders, where he acknowledged a trade deal with China might not be possible until after the 2020 election. As foreshadowed by a surprise South American tariff announcement Monday, he struck a more contentious tone while meeting with NATO officials, which included new tariffs on French products in retaliation for the expected digital tax. By midweek, though, the pendulum began to swing back into more favorable territory surrounding the trade talks following a host of China sourced reports and more constructive commentary from administration officials. Hong Kong remained a potential flash point, but both sides appeared to remain in regular contact, reportedly plugging away towards a hopeful 'Phase 1' agreement before Trump’s Dec 15th tariff decision.

Friday’s November employment numbers handily surpassed expectations on nearly all accounts, though it was potentially helped by the late Thanksgiving calendar and the GM operations resumption. Nevertheless, risk assets continued to run up, affording US stock markets to move back into positive territory for the week. Oil prices held near multi-month highs as producers were able to cobble together an agreement to remove an additional 500K bpd when they met in Vienna. Rates finished the week near a one-month high and the US Treasury curve steepened in the wake of the Nov jobs report. For the week, the S&P and Dow added ~0.1% and the NASDAQ lost 0.1%.

In corporate news this week, Salesforce shares saw choppy trading after beating on the bottom line and raising its FY20 outlook, but Q4 guidance came in a little below consensus. Slack quarterly results topped expectations as competition with Microsoft’s Teams product intensifies. Ulta Beauty shares surged after posting an EPS beat despite continuing challenges in the cosmetics sector. Expedia CEO Mark Okerstrom and CFO Alan Pickerill announced their resignations amidst a strategy dispute between the board and senior management. Cleveland-Cliffs agreed to acquire AK Steel for ~$3.36/shr in an all-stock transaction as falling prices have roiled the steel sector. Google co-founders Page and Brin stepped down from their top management roles at the tech giant, as Sundar Pichai takes the reins at both Google and parent company Alphabet. United Airlines CEO Oscar Munoz said he would resign and that President Scott Kirby would take the airline’s leadership position.

SUNDAY 12/1
*(CN) CHINA NOV MANUFACTURING PMI (govt official): 50.2 V 49.5E (1st expansion in 7 months)
*(CN) CHINA NOV CAIXIN PMI MANUFACTURING: 51.8 V 51.5E (4th consecutive month of expansion, fastest rate of expansion in almost 3-years)

MONDAY 12/2
OPEC+ said to be discussing deepening current oil production cuts by at least 400K bpd at least until June - financial press
*(US) NOV ISM MANUFACTURING: 48.1 V 49.2E; PRICES PAID: 46.7 V 47.0E
(US) Atlanta Fed cuts Q4 GDP growth from 1.7% to 1.3%
(US) US offiicals reportedly considering loosening some intellectual property (IP) rules for drugmakers under the USMCA in order to win Democratic support - press
(FR) US issues decision in response to France digital tax: USTR will take action against digital tax regimes that discriminate against US companies; proposes $2.4B tariffs on French goods including sparkling wines, handbags, makeup, household goods, and cheeses
JGB (JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.1% 10-year JGBs: avg yield: -0.042% v -0.099% prior, bid to cover 3.28x v 3.62x prior (lowest btc since Aug 2016)

TUESDAY 12/3
(US) Sen Kamala Harris reportedly to drop out of Democratic primary contest - The Atlantic
(US) House Democrats in impeachment inquiry report claim Pres Trump used powers of his office to solicit foreign interference in 2020 US election
Reportedly OPEC+committee did NOT discuss deeper output cuts ahead of meetings this week - press
CRM Reports Q3 $0.75 v $0.66e, Rev $4.5B v $4.44Be
GOOGL CEO Larry Page and President Sergey Brin to step down from Alphabet; Google CEO Sundar Pichai will be the CEO of both Google and Alphabet going forward

WEDNESDAY 12/4
*(US) NOV ADP EMPLOYMENT CHANGE: +67K V +135KE (lowest rise since May 2019)
EXPE Announces 20M share buyback (14% of shares outstanding); CEO Mark Okerstrom and CFO Alan Pickerill to resign, effective immediately
*(US) NOV ISM NON-MANUFACTURING INDEX: 53.9 V 54.5E
(US) Association of American Railroads weekly rail traffic report for week ending Nov 30th: 436.9K, -23% y/y
(JP) Japan Investors Net Buying of Foreign Bonds: -¥511.1B v -¥150.8B prior week; Foreign Net Buying of Japan Stocks: +¥394B v ¥131.1B prior week

THURSDAY 12/5
*(EU) EURO ZONE Q3 FINAL GDP Q/Q: 0.2% V 0.2%E; Y/Y: 1.2% V 1.2%E
*(US) House Speaker Pelosi: confirms the House will draft Articles of Impeachment against President Trump
*(US) OCT FINAL DURABLE GOODS ORDERS: 0.5% V 0.6%E; DURABLES EX-TRANSPORTATION: 0.5% V 0.6%E
(US) Atlanta Fed raises Q4 GDP growth from 1.3% to 1.5%

FRIDAY 12/6
OPEC+ said to have agreed to a deepening of production cuts by 500K bpd (in-line with speculation)
*(US) NOV AVERAGE HOURLY EARNINGS M/M: 0.2% V 0.3%E; Y/Y: 3.1% V 3.0%E; AVERAGE WEEKLY HOURS: 34.4 V 34.4E

Stocks Rally into Thanksgiving Break Before Fading on Black Friday

TradeTheNews.com 

Weekly Market Update: Stocks Rally into Thanksgiving Break Before Fading on Black Friday

Fri, 29 Nov 01:04 PM EST/06:04 PM GMT

The Santa Claus rally continued this week, with US indices notching new record highs heading into the Thanksgiving break. Sentiment around US/China trade talks continued to be largely optimistic and even the President’s signing of the Hong Kong bill into law did little to sway that, at least initially. A burst of M&A announcements underscored animal spirits while supporting overall equity positioning this week, as well. Friday’s session saw a modest pullback led by weak trade in energy futures. Oil prices dropped 3.5% and natural gas slumped more than 6% ahead of next week’s OPEC+ meeting. Fed Chairman Powell echoed what we continue to hear from a wide array of Fed officials, namely that rates will remain on hold unless there is a significant change to the outlook. The latest reading of the Fed’s Beige Book offered little to suggest the US economy’s trajectory has changed materially. Treasury yields held in a tight range for much of the week before backing up modestly on Friday alongside the selling in equity markets. For the week the S&P rose 1%, the Dow gained 0.7% and the NASAQ added 1.7%.

In corporate news for this holiday-shortened week, Charles Schwab struck a $26B all-stock deal to acquire discount broker TD Ameritrade amid shrinking trade commissions throughout the industry. Novartis announced it would acquire The Medicines Company for $85/shr in cash, ahead of MDCO’s NDA filings for promising cholesterol treatment inclisiran. Tiffany confirmed it will be bought by LVMH for $135/shr in a cash deal valued at $16.2B, one of the largest acquisitions in luxury retail sector history. eBay sold its StubHub ticket seller unit to London-based exchange viagogo for $4.05B in cash, reuniting current viagogo CEO Eric Baker with the US company he co-founded in 2000. Apollo outbid Warren Buffett by reaching a deal to acquire Tech Data for $6.0B. As some earnings continued to trickle in, HPE reported a beat on its bottom line though its top line missed expectations, Dell cut its Rev forecast, citing a PC chip shortage, and VMWare topped consensus on both profit and sales.

MONDAY 11/25
*(DE) GERMANY NOV IFO BUSINESS CLIMATE: 95.0 V 95.0E; CURRENT ASSESSMENT: 97.9 V 97.9E
EBAY Confirms sale of StubHub to viagogo for $4.05B in cash
*(US) NOV DALLAS FED MANUFACTURING ACTIVITY INDEX: -1.3 V -3.8E
(US) Fed Chair Powell: Policy appropriately provided; supporting decisive return to 2% inflation and Fed goals; Reiterates stance that if outlook changes materially, policy will change as well

TUESDAY 11/26
(CN) China Ministry of Finance (MOF) to sell $6B USD-denominated 3-year, 5-year, 10-year and 20-year bonds (as speculated)
BBY Reports Q3 $1.13 v $1.04e, Rev $9.76B v $9.73Be
VOW3.DE Audi unit said to cut up to 9500 jobs by 2025 as part of labor deal - financial press
(US) Nevada reports Oct casino gaming Rev $1.02B, -3.9% y/y; Las Vegas strip Rev $538.5M, -9.3% y/y
CNI Teamsters union: normal operations at CN will resume Weds at 06:00 local time across Canada - press
*(US) NOV RICHMOND FED MANUFACTURING INDEX: -1 V 5E
*(US) NOV CONSUMER CONFIDENCE: 125.5 V 127.0E
*(US) OCT NEW HOME SALES: 733K V 705KE
(US) Democratic primary Quinnipiac poll: Biden 24% (+3), Buttigieg 16% (+6), Warren 14% (-14), Sanders 13% (-2)

WEDNESDAY 11/27
(EU) ECB President Lagarde: ECB must nurture, sustain trust in euro
DTE.DE Reportedly explores merger with Orange - German press
*(US) OCT PRELIMINARY DURABLE GOODS ORDERS: +0.6% V -0.9%E; DURABLES (EX-TRANSPORTATION): 0.6% V 0.1%E
(US) Atlanta Fed raises Q4 GDP growth to 1.7% from 0.4%
(US) Association of American Railroads weekly rail traffic report for week ending Nov 23rd: 521.9K, +10.6% y/y (first rise in 40 weeks)
(UK) YouGov MRP Poll reportedly shows significant Tory majority - UK's Guardian
*(US) FEDERAL RESERVE BEIGE BOOK: ECONOMY EXPANDED MODESTLY FROM OCT TO MID-NOVEMBER (PRIOR: "SLIGHT TO MODEST")
(JP) Japan Investors Net Buying of Foreign Bonds: -¥155.2B v +¥123.4B prior week; Foreign Net Buying of Japan Stocks: ¥131.7B v ¥111.0B prior week

THURSDAY 11/28
*(EU) EURO ZONE NOV BUSINESS CLIMATE INDICATOR: -0.23 V -0.14E
*(DE) GERMANY NOV PRELIMINARY CPI M/M: -0.8% V -0.6%E; Y/Y: 1.1% V 1.2%E
*(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.25%; AS EXPECTED

FRIDAY 11/29
*(DE) GERMANY NOV UNEMPLOYMENT CHANGE: -16.0K V +6.0KE; UNEMPLOYMENT CLAIMS RATE: 5.0% V 5.0%E

Stocks retreat from highs, still awaiting word on pending trade deals

TradeTheNews.com 

Weekly Market Update: Stocks retreat from highs, still awaiting word on pending trade deals

Fri, 22 Nov 04:06 PM EST/09:06 PM GMT

The week’s trading opened amid news of a surprise meeting between President Trump, Treasury Secretary Mnuchin and Fed Chairman Powell at the White House on Monday. Details were minimal but many speculated China was high on the list of issues discussed especially in light the recent reports that continued disagreements surrounding agricultural purchases and IP remain the key impediments to finalizing ‘Phase 1’ of the trade deal. Developments outside the scope of the trade deal added to the complexity after the US Congress overwhelmingly passed the Hong Kong Human Rights and Democracy Act. Both sides tried to downplay concerns, suggesting deal talks continued, and that Hong Kong won’t derail them. Nevertheless, intrigue grew over whether or not President Trump will sign the bill while reports out of China warned Hong Kong could very well become another obstacle to any Phase 1 trade deal. Dramatic testimony in the House impeachment inquiry overshadowed reports of progress being made Trump’s other pending trade deal, the USMCA.

The October FOMC minutes echoed what we have heard from a litany of Fed officials since that meeting; rates are on hold unless there is a material change in the outlook. US manufacturing data rebounded and topped expectations but continued to fare significantly better than overseas readings. Treasury yields drifted lower through the week, extending a recent trend, which included a flattening along the US curve. WTI crude prices rose and for much of the week held above the 50-day moving average at levels not seen since September. According to multiple reports OPEC+ produces are unlikely to deepen output cuts when they meet in early December, but the coordinated production levels are expected to be extended for another 6-months. US indices topped out at new high water marks on Tuesday before backing off on US/China-related hand wringing. The S&P fell for the first time in six week, slipping 0.3%, while the DJIA lost 0.5% and the Nasdaq dropped 0.3%.

In corporate news this week, a slew of retail companies reported to cap off the third quarter earnings season. Home Depot shares dropped despite an earnings beat as the company’s sales grew short of analyst estimates and the company cut its outlook citing the potential impact on consumers from recently announced tariffs. Lowe's posted a beat and raised its yearly forecast, as well as announced plans to restructure its Canadian operations. Kohl’s slashed its EPS guidance and predicted the current highly promotional environment will continue through the end of the year. Target shares surged after crushing earnings expectations and raising its outlook amid broad-based strength across multiple metrics. Macy’s cut its forecast, pointing to a warmer fall and weaker spending by international tourist customers. Gap outperformed already diminished expectations, despite cutting its FY19 same store sales outlook, while reaffirming its plans to spin off Old Navy. On the M&A front, Novartis is said to be among various suitors that are in talks to acquire The Medicines Co. LVMH reportedly raised its takeover offer to get Tiffany to open its books. HPQ’s board unanimously rejected the previously announced unsolicited bid from Xerox. PayPal announced it would buy rewards platform Honey Science for $4B, its largest ever acquisition.


MON 11/18
(US) Fed Chair Powell: Did not discuss expectations for monetary policy when meeting with President Trump and Treasury Sec Mnuchin at White House today - press
FCC Chair Pai: Calls for public auction of C-band airwaves - Tweet

TUES 11/19
MDCO Novartis said to among various suitors which are in talks on purchase of company - press
HD Reports Q3 $2.53 v $2.52e, Rev $27.2B v $27.5Be
KSS Reports Q3 $0.74 adj v $0.85e, Rev $4.63B v $4.67Be
*(US) OCT HOUSING STARTS: 1.314M V 1.320ME; BUILDING PERMITS: 1.461M V 1.385ME
(CA) Bank of Canada (BOC) Wilkins: while the policy rate may be low at 1.75%, there's still room to maneuver; economy and financial system are in a good position to weather potential global economic storm

WEDS 11/20
LOW Reports Q3 $1.41 v $1.35e, Rev $17.4B v $17.7Be
TGT Reports Q3 $1.36 v $1.18e, Rev $18.7B v $18.5Be
(US) House impeachment inquiry testimony: US Ambassador to EU Sondland says explicitly there was a "quid quo pro"
(CN) Phase 1 of US-China trade deal reportedly may not be completed this year; talks may be getting more complicated - press
*(US) FOMC OCT MINUTES FROM OCT 30TH MEETING: MOST SAW RATES AS APPROPRIATE UNLESS THERE IS A MATERIAL CHANGE; MOST SAW RATES AS WELL CALIBRATED
(JP) Japan Investors Net Buying of Foreign Bonds: ¥119.4B v ¥530.0B prior week; Foreign Net Buying of Japan Stocks: ¥110.3B v ¥569.8B prior week

THURS 11/21
TKA.DE Reports FY18/19 Net -€304M v -€62M y/y, adj EBIT €802M v €805Me, Rev €42.0B v €41.6Be; proposes suspending FY19 dividend
M Reports Q3 $0.07 v $0.01e, Rev $5.17B v $5.31Be
*(EU) ECB ACCOUNT OF OCTOBER POLICY MEETING (OCT MINUTES): Officials expressed concern over SPF inflation revision; strong call was made for unity of Governing Council
*(US) NOV PHILADELPHIA FED BUSINESS OUTLOOK: 10.4 V 6.0E
GPS Reports Q3 $0.53 v $0.51e, Rev $4.00B v $3.95Be

FRI 11/22
*(DE) GERMANY Q3 FINAL GDP Q/Q: 0.1% V 0.1%E; Y/Y: 0.5% V 0.5%E
*(FR) FRANCE NOV PRELIMINARY MANUFACTURING PMI: 51.6 V 50.9E (4th consecutive month of expansion)
(EU) ECB President Lagarde: Face a global environment that is marked by uncertainty; Europe needs a new policy mix - inaugural comments from Frankfurt
*(US) NOV PRELIMINARY MARKIT MANUFACTURING PMI: 52.2 V 51.4E (7-month high)
(US) NOV FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 96.8 V 95.7E

Mixed signals, but no roadblocks, allow equity markets to mark fresh record highs

TradeTheNews.com 

Weekly Market Update: Mixed signals, but no roadblocks, allow equity markets to mark fresh record highs

Fri, 15 Nov 04:16 PM EST/09:16 PM GMT

US stock indices continued to make new highs this week despite a modest pull back in Treasury yields. For a majority of the trading sessions, cautious optimism surrounding US/China trade negotiations underpinned a bid in equities. US administration officials, in particular, on multiple occasions expressed their belief we were still well on our way to a ‘Phase 1’ agreement. The assurances came in the wake of President’s Trumps Tuesday speech where he re-emphasized that new tariffs are still on the table if no deal can be reached, as well as various sourced press reports indicating talks had hit a snag over agriculture purchases and intellectual property protections. House speaker Pelosi suggested that a USMCA deal breakthrough may be imminent despite the palpably partisan environment in Washington as the House’s public impeachment hearings got underway.

Global economic data provided some mixed signals. US October headline CPI ran a bit hotter than expected but Friday’s retails sales and industrial production data disappointed. Germany avoided a technical recession with a slightly positive GDP print. That and a strong improvement in the November Euro Zone ZEW expectations index provided some green shoots. In Asia, Chinese industrial production and retails sales came in significantly short once again. Overall the incoming data did little to change the narrative around Fed policy. In his Capitol Hill testimony Chairman Powell repeated the Fed litany that in all likelihood monetary policy is now on hold unless there is a material change in the outlook. Interest rates retreated modestly on a global basis, but risk assets in general continued to perform well. Crude finished near the highs of the week and the VIX dropped back towards 12 through options expiration on Friday. US equity markets hit fresh all-time highs: the S&P moved up 0.9%, rising above 3,100, while the DJIA topped 28,000 with a 1.2% gain, and the Nasdaq rose 0.8%.

In corporate news this week, Google announced plans to partner with banks to begin offering a smart checking account to consumers next year. Disney launched its Netflix streaming video competitor Disney+ and surprised investors by announcing 10M signups within its first 24 hours. In the semis space, Applied Materials reported a beat on its top and bottom lines and guided above consensus, while Nvidia edged lower after forecasting a return to revenue growth in Q4 that the street viewed as conservative. Walgreens reportedly received a formal approach from KKR on a potential buyout. Canada’s OpenText acquired data security firm Carbonite for over $1.4 billion. American Outdoor Brands announced plans to separate into two independent publicly traded companies, splitting off its gun business Smith & Wesson amid ‘changes in the political climate.’


MON 11/11
WBA Reportedly KKR has made a formal approach to Walgreens about a possible buyout - press
TUES 11/12
VOD.UK Reports H1 adj €0.01 v €0.04 y/y, adj EBITDA €7.11B v €6.92B y/y, Rev €21.9B v €21.9B y/y
*(UK) OCT JOBLESS CLAIMS CHANGE: +33.0K V +13.5K PRIOR; CLAIMANT COUNT RATE: 3.4% V 3.3% PRIOR
*(DE) GERMANY NOV ZEW CURRENT SITUATION SURVEY: -24.7 V -22.3E; EXPECTATIONS SURVEY: -2.1 V -13.0E
(US) US is reportedly considering blocking the passage of the WTO's budget - press
WEDS 11/13
700.HK Reports Q3 (CNY) Net 20.4B v 23.5Be, Rev 97.2B v 99.0Be
GOOGL Reportedly to partner with banks to offer checking accounts to consumers - US financial press
*(US) OCT CPI M/M: 0.4% V 0.3%E; CPI EX FOOD AND ENERGY M/M: 0.2% V 0.2%E; CPI NSA: 257.346 V 257.200E
(US) Fed Chair Powell: rates remain on hold barring material change in outlook - Congressional testimony text release
(US) House Intelligence and Judiciary Committees begins pubic hearings on Impeachment Inquiry
(US) Fed Chair Powell: US economy can operate at lower rate of unemployment than thought - Testimony before joint economic committee
DIS Reports 10M signups for Disney+ since launch - press
(CN) US-China trade talks said to hit snag over specific US agriculture purchases; China also resisting commitments on tech transfers and enforcement mechanisms - press
(JP) Japan Investors Net Buying of Foreign Bonds: ¥528.8B v ¥668.1B prior week; Foreign Net Buying of Japan Stocks: ¥569.5B v ¥420.9B prior week
* (AU) AUSTRALIA OCT EMPLOYMENT CHANGE: -19.0K V +15.0KE (1st decline in 14 months and largest in 3 years); UNEMPLOYMENT RATE: 5.3% V 5.2%E
*(CN) CHINA OCT INDUSTRIAL PRODUCTION Y/Y: 4.7% V 5.4%E
*(CN) CHINA OCT RETAIL SALES Y/Y: 7.2% V 7.8%E
THURS 11/14
*(DE) GERMANY Q3 PRELIMINARY GDP Q/Q: +0.1% V -0.1%E; Y/Y: 0.5% V 0.5%E (avoids technical recession)
*(UK) OCT RETAIL SALES (EX-AUTO/FUEL) M/M: -0.3% V +0.2%E; Y/Y: 2.7% V 3.4%E
*(EU) EURO ZONE Q3 PRELIMINARY GDP Q/Q: 0.2% V 0.2%E; Y/Y: 1.2% V 1.1%E
WMT Reports Q3 $1.16 v $1.09e, Rev $128.0B v $129.0Be
*(US) OCT PPI FINAL DEMAND M/M: 0.4% V 0.3%E; Y/Y: 1.1% V 0.9%E
(US) Fed Chair Powell: labor force participation is a pressing US issue - House Budget Committee
(US) House Speaker Pelosi (D-CA): USMCA deal breakthrough may be imminent
(CN) US and China struggling to complete Phase 1 trade deal; Trump administration officials said to be frustrated that China hasn't offered enough to justify a reduction in US tariffs on Chinese goods - FT
AMAT Reports Q4 $0.80 v $0.76e, Rev $3.75B v $3.68Be
NVDA Reports Q3 $1.78 v $1.57e, Rev $3.01B v $2.90Be
FRI 11/15
*(US) OCT ADVANCE RETAIL SALES M/M: 0.3% V 0.2%E; RETAIL SALES (EX-AUTO) M/M: 0.2% V 0.4%E
*(US) OCT INDUSTRIAL PRODUCTION M/M: -0.8% V -0.4%E; CAPACITY UTILIZATION: 76.7% V 77.0%E

Santa Claus rally starts early amid talk of rolling back China tariffs

TradeTheNews.com 

Weekly Market Update: Santa Claus rally starts early amid talk of rolling back China tariffs

Fri, 08 Nov 04:02 PM EST/09:02 PM GMT

The breakout in US stock indices resumed this week as investors’ willingness to add to risk positions increased. Technicians and Dow theorists were heartened by widening participation into new high territory which now includes a confirmatory new high in the Transports for Dow theorists. Sentiment continued to be underpinned by reports that the US and China were discussing rolling back tariffs on the way to signing the first phase of a trade deal. Risk-on trade flows powered Treasury bond yields to jump to levels not seen since the summer. Heavy sovereign supply in both Europe and the US exacerbated the aggressive move up in rates. Rising rates and steepening yield curves helped financials assume a leadership role.

By Friday, the strength in equity markets petered out after President Trump and others within his administration emphasized that, despite what had been reported in the press, nothing had been agreed upon with regards tariff roll backs. Crude and copper prices drifted lower along with the Yuan as some of the risk-on flows perpetuated by trade hopes earlier in the week reversed, and gold ended off of lows after breaking back below $1,500. The Dollar index crept higher, approaching potential resistance at the 50-day moving average. For the week, the S&P gained 0.8%, the DJIA added 1.2%, and the Nasdaq rose 1.1%.

In corporate news this week, McDonald's CEO Steve Easterbook was forced to step down after the board determined he violated company policy in regards to a recent consensual relationship with an employee. Under Armour confirmed it was the subject of a federal accounting probe related to revenue recognition. Xerox offered to acquire HP Inc (HPQ) for $22/share, and HP confirmed that talks have been occurring intermittently. Bidu posted top and bottom line beats, citing strength in its video streaming division. Roku shares plunged after the company cut its EBITDA outlook despite notching better than expected earnings for the quarter. Dish Network rallied after reporting a Q3 that saw its pay TV net subs surprisingly increase. Disney shares also rallied on Friday after reporting strong earnings results ahead of next week’s official launch of the Disney+ streaming platform.


SUN 11/3
MCD Appoints President, McDonald's USA Chris Kempczinski new CEO; effective immediately; succeeds Steve Easterbrook, who has separated from the Company following violation of company policy and demonstrated poor judgment involving a recent consensual relationship with an employee
UA Confirms under investigation: Cooperating with US SEC and DoJ investigations, believe accounting practices and disclosures were appropriate - CNBC

MON 11/4
*(ES) SPAIN OCT MANUFACTURING PMI: 46.8 V 47.5E (5th straight contraction and lowest reading since Apr 2013)
*(US) SEPT FINAL DURABLE GOODS ORDERS: -1.2% V -1.1%E; DURABLES (EX-TRANSPORTATION): -0.4% V -0.3%E
(CN) US said to be considering removing some tariffs from China goods in order to secure partial trade deal - FT
SHAK Reports Q3 $0.31 v $0.20e, Rev $158M v $157Me

TUES 11/5
ARNC Reports Q3 $0.58 v $0.53e, Rev $3.56B v $3.60Be
*(US) OCT ISM NON-MANUFACTURING INDEX: 54.7 V 53.5E
*(US) SEPT JOLTS JOB OPENINGS: 7.024M V 7.063ME
WBA Reportedly considering deal with buyout firms to go private - press
(EU) Pres Trump reportedly to miss auto import tariff deadline next week in order to maintain leverage in broader US-EU trade talks, according to former officials - press
(CN) China PBOC sets Yuan Reference Rate: 7.0080 v 7.0385 prior (strongest fix since early Aug)
JGB (JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.1% 10-year JGBs: avg yield: -0.099% v -0.158% prior, bid to cover 3.62x v 3.42x prior
HPQ Xerox considers cash and stock takeover offer - US Financial Press

WEDS 11/6
*(US) Q3 NONFARM PRODUCTIVITY: -0.3% V +0.9%E; UNIT LABOR COSTS: 3.6% V 2.3%E
(US) Senior Trump administration official: Trump-Xi meeting could be delayed until Dec as talks continue over terms and venue; still possible that a US-China trade agreement will not be reached, but deal is more likely than not - press
BIDU Reports Q3 $1.76 v $1.25e, Rev $3.93B v $3.97Be (2 est)
(CN) China PBOC sets Yuan Reference Rate: 7.0008 v 7.0080 prior (strongest since Aug 7)
992.HK Reports Q2 Net $202.2M v $201Me, Op $441.7M v $784M y/y Rev $13.5B v $13.4B y/y
7203.JP Reports H1 Net ¥1.3T v ¥1.2T y/y; Op ¥1.4T v ¥1.3T y/y; Rev ¥15.3T v ¥14.7T y/y, announces stock buyback of ¥200B (~1.2% of market cap)

THURS 11/7
DTE.DE Reports Q3 adj Net €1.4B v €1.3B y/y, adj EBITDA (adj for leases) €6.48B v €6.44Be, Rev €20.2B v €19.1B y/y
SIE.DE Reports Q4 Net €1.32B v €1.01Be, Industrial Business EBITA €2.64B v €2.21B y/y, Rev €24.5B v €22.6B y/y
MT.NL Reports Q3 Net -$0.5B v -$0.5B y/y, EBITDA $1.06B v $943.2Me, Rev $16.6B v $16.8Be
(CN) China Commerce Ministry (MOFCOM): If China and US reach Phase 1 deal, both sides must cancel existing tariffs at the same time, with the same proportion based on agreement - weekly press conference
*(UK) BOE NOV MINUTES: VOTED 7-2 TO KEEP INTEREST RATES UNCHANGED AT 0.75%; First dovish dissent since July 2016
(CN) US govt spokesperson: US has agreed that first China trade deal would include tariff rollbacks - press
*(US) TREASURY $19B 30-YEAR BOND REOPENING DRAWS 2.430%; BID TO COVER 2.23 V 2.25 PRIOR
*(US) SEPT CONSUMER CREDIT: $9.5B V $15.0BE
(JP) Japan Investors Net Buying of Foreign Bonds: ¥668.1B v -¥1.02T prior week; Foreign Net Buying of Japan Stocks: ¥420.9B v +¥649.5B prior week
DISH Reports Q3 $0.66 v $0.59e, Rev $3.17B v $3.17Be; Pay-TV net additions 148K v -341K y/y

FRI 11/8
ACA.FR Reports Q3 Net €1.23B v €1.13Be, Rev €5.03B v €4.99Be

Fed ‘put’, easing uncertainty, and upside non-farm payrolls buoy markets

TradeTheNews.com   Weekly Market Update: Fed ‘put’, easing uncertainty, and upside non-farm payrolls buoy markets

US stock markets charged out of the gates this week buoyed by continued optimism on US/China trade talks and what appears to be some clarity surrounding Brexit. The S&P punched through this summer’s all time high amid general strength in global markets. Earnings season got into high gear, providing lots of information for traders to digest heading into Wednesday’s FOMC announcement. As expected on Wednesday, the Fed cut rates by 25bps and also signaled policy is now firmly on hold. Rates fell and the dollar weakened after Chair Powell said it would take a “material” reassessment of the Fed’s outlook to cause the central bank to alter policy at this point.

Thursday saw investors retreat to more of a risk-off posture after overnight reports suggested the Chinese continued to harbor significant doubts that any long-term trade deal is possible with the current administration. The report offered little in terms of new, incremental information and was quickly met with more upbeat tones out of Washington DC. On Friday, the equity breakout gathered steam with NASDAQ making is first new all-time high since July after a surprisingly strong October employment report. On top of better than expected payrolls growth, an upward revision to hourly earnings brought the year-over-year growth rate back up to 3.0%. The consumer looks to be in very solid shape heading into the all-important holiday season. Rates drifted marginally higher, recouping some of the post-Fed decision pull back, helped by a chorus of accompanying Fed commentary that solidified expectations that rate cuts are over for the time being. The S&P500 hit fresh all-time highs, rising 1.5% this week, while the DJIA gained 1.4%, and the Nasdaq added 1.7%.

In corporate news this week, Alphabet kicked off a heavy week of earnings reports with a big profit miss as the company continues to invest in cloud and machine learning infrastructure. Facebook posted beats on its top and bottom line amid solid daily active user growth in North America. Apple surpassed street estimates and issued solid guidance for the holiday quarter, while also noting continued growth in its wearables and services units. Kraft’s quarter surprised to the upside, pointing to a potential turnaround for the beleaguered food company. Fiat Chrysler and Peugeot confirmed renewed plans to merge into what would become the world’s fourth-largest automaker. Alphabet announced it would acquire Fitbit for $2.1B in cash, as the tech giant looks to jumpstart its wearables product line. Tiffany’s confirmed it had received an unsolicited non-binding proposal from LVMH, though mid-week reports indicated deal talks could be currently at a standstill. Twitter’s CEO announced that his social media platform would ban political ads, in sharp contrast to Facebook’s laissez faire policies to political promotions. Microsoft was announced as the winner of DoD’s $10B JEDI cloud computing contract, beating out Amazon.


MON 10/28
HSBA.UK Reports Q3 Net $3.0B v $3.9B y/y, adj Pretax $5.35B v $5.7Be, Rev $13.3B v $13.8B y/y
WBA Reports Q4 $1.43 v $1.41e, Rev $34.0B v $33.9Be; Raises cost savings target to >$1.8B by 2022
*(US) OCT DALLAS FED MANUFACTURING ACTIVITY INDEX: -5.1 V 1.0E
FIT Alphabet reportedly in talks to acquire Fitbit - press
DB1.DE Reports Q3 Adj EBITDA €461.7M v €470Me, Rev €734M v €730Me
GOOGL Reports Q3 $10.12 v $13.06 y/y, Rev $33B (ex $7.5B of TAC) v $32.8Be

TUES 10/29
BP.UK Reports Q3 Adj Net $2.25B v $1.8Be, Rev $68.29B v $72.67B y/y
GM Reports Q3 $1.72 v $1.18e, Rev $35.5B v $34.2Be; Cuts outlook as a result of the UAW strike
*(US) OCT CONSUMER CONFIDENCE: 125.9 V 128.0E
(UK) Parliament approves general election to be held on Thursday, Dec 12th - press

WED 10/30
AIR.FR Reports Q3 Net €989M v €957M y/y, Adj EBIT €1.60B v €1.4Be, Rev €15.3B v €15.9Be
CSGN.CH Reports Q3 (CHF) Net 881M v 813.5Me, adj Pretax 1.14B v 1.30B y/y, Rev 5.33B v 5.2Be
DBK.DE Reports Q3 adj Net -€832M v €229M y/y, adj Pretax -€687M v €506M y/y, Net Rev €5.26B v €5.6Be
066570.KR Reports final Q3 (KRW) Net 345.7B v 748.8B y/y; Op B v 781.1B prelim, Rev 15.7T v 15.7T prelim
BAYN.DE Reports Q3 Adj Net €1.04B v €2.87B y/y, adj EBITDA €2.29B v €2.24B y/y, Rev €9.83B v €9.75Be; Adjusts outlook to exclude discontinued operations
*(DE) GERMANY OCT UNEMPLOYMENT CHANGE: +6.0K V +3.0KE; UNEMPLOYMENT CLAIMS RATE: 5.0% V 5.0%E
*(EU) EURO ZONE OCT BUSINESS CLIMATE INDICATOR: -0.19 V -0.24E
GE Reports Q3 $0.15 v $0.12e, Rev $23.4B v $23.1Be
*(US) OCT ADP EMPLOYMENT CHANGE: +125K V +110KE
*(US) Q3 ADVANCE GDP PRICE INDEX: 1.7% V 1.9%E; CORE PCE Q/Q: 2.2% V 2.2%E
*(US) Q3 ADVANCE GDP ANNUALIZED Q/Q: 1.9% V 1.6%E; PERSONAL CONSUMPTION: 2.9% V 2.6%E
*(DE) GERMANY OCT PRELIMINARY CPI M/M: 0.1% V 0.0%E; Y/Y: 1.1% V 1.0%E
(US) Nevada reports Sept casino gaming Rev $1.06B, +6.8% y/y; Las Vegas strip Rev $584.2M, +7% y/y
*(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 1.75%; AS EXPECTED
(CL) Chile President Pinera: Chile to cancel the planned APEC Summit in Santiago next month amid ongoing protests - press
*(US) FOMC CUTS TARGET RANGE BY 25BPS TO 1.50-1.75%; AS EXPECTED
(US) Fed Chair Powell: Current stance of monetary policy is 'likely to remain appropriate' as long as model of economy continues to remain accurate; would respond accordingly if events materially affect outlook - FOMC press conf
TWTR CEO: Twitter will ban all political ads globally; final policy to be published on 11/15
(JP) Japan Investors Net Buying of Foreign Bonds: -¥1.02T v +¥536.1B prior week; Foreign Net Buying of Japan Stocks: ¥649.5B v +¥522.3B prior week
*(CN) CHINA OCT MANUFACTURING PMI (OFFICIAL): 49.3 V 49.8E (6th straight contraction)
*(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; (as expected); STRENGTHENS FORWARD GUIDANCE

THURS 10/31
SAN.FR Reports Q3 Business EPS €1.92 v €1.72e, Business Net €2.40B v €2.30B y/y, Rev €9.50B v €9.5Be
RDSA.NL Reports Q3 CCS EPS $0.59 v $0.68 y/y, Adj CCS Net $5.88B v $5.84B y/y, Rev $89.5B v $101.5B y/y
(CN) China said to doubt that any long term trade deal is possible with President Trump - financial press
*(IT) ITALY Q3 PRELIMINARY GDP Q/Q: 0.1% V 0.0%E; Y/Y: 0.3% V 0.2%E
KHC Reports Q3 $0.69 v $0.53e, Rev $6.08B v $6.10Be
(US) Pres Trump: "China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal, after APEC in Chile was canceled do to unrelated circumstances. The new location will be announced soon. President Xi and President Trump will do signing!'
*(US) OCT CHICAGO PURCHASE MANAGER INDEX (PMI): 43.2 V 48.0E (lowest since Dec 2015)
(US) House of Representatives has sufficient votes to pass impeachment inquiry measure (as expected)
*(CN) CHINA OCT CAIXIN PMI MANUFACTURING: 51.7 V 51.0E (3rd month of expansion and highest since Feb 2017)

FRI 11/1
*(UK) OCT PMI MANUFACTURING: 49.6 V 48.2E (6th straight month of contraction, but highest since Apr 2019)
*(US) OCT AVERAGE HOURLY EARNINGS M/M: 0.2% V 0.3%E; Y/Y: 3.0% V 3.0%E; AVERAGE WEEKLY HOURS: 34.4 V 34.4E
*(US) OCT CHANGE IN NONFARM PAYROLLS: +128K V +85KE
*(US) OCT ISM MANUFACTURING: 48.3 V 48.9E; PRICES PAID: 45.5 V 50.0E
(US) White House advisor Kudlow: we are working on 'tax cuts 2.0', want tax cuts for the middle class

Risk appetite not dampened by mixed bag of earnings and plodding progress on trade and Brexit deals

TradeTheNews.com Weekly Market Update: Risk appetite not dampened by mixed bag of earnings and plodding progress on trade and Brexit deals

Fri, 25 Oct 04:09 PM EST/09:09 PM GMT

Trading commenced this week amid continued uncertainty around Brexit and anxiety surrounding the onslaught of corporate earnings reports. Ultimately though, it was reports of steady progress on the US China trade front that pushed indices back towards all-time highs. Last Saturday the UK parliament backed a move that was intended to delay any Brexit deal approval. The supporters of the bill got their wish when on Tuesday MPs rejected PM Johnson’s accelerated timetable, forcing the government to call for a general election. Cable drifted lower throughout the week as the possibility of a ‘no deal’ Brexit at the end of the month continues to loom. A third of the S&P 500 reported Q3 results and many firms offered up cautious outlooks, citing well known macro factors, but investors in many cases seemed willing to look past the current environment, at least for the time being. Many of those same participants were rewarded on Friday when the White House reported continued headway during a scheduled call between the trade principles Lighthizer, Mnuchin and Vice Premier Liu. Notably, the reports of a constructive tone came in the wake of another hawkish speech from VP Pence on Thursday. For the week, the S&P gained 1.2%, coming within a point of all-time highs, while the DJIA added 0.7% and the Nasdaq rose 1.9%.

A raft of earnings took center stage on the corporate news front this week. Amazon’s earnings fell for the first time in over two years as one-day shipping costs exceeded expectations. Intel shares lifted after posting a beat on its top and bottom line and raising guidance. Boeing remained under pressure amid downgrades and an even uglier quarter than expected. Caterpillar missed analyst expectations and cut its outlook, citing flat demand and rising inventories. Biogen surged after it resubmitted a long-thought-dead Alzheimer’s drug, claiming that new analysis showed that aducanumab reduced decline in patients with early onset of the disease. In the sportswear space, both Under Armor and Nike announced CEO transitions. Texas Instruments’ revenue miss and underwhelming guidance hit its stock and the overall chip sector. Chipotle beat but tweaked its new restaurant openings lower as it launches drive-thru offerings at some locations. Tesla shorts got burned by a surprise quarterly profit and quicker than anticipated progression at its Shanghai factory. New California wildfires weighed on PG&E and EIX as the spotlight of blame remains on electric transmission equipment.


MON 10/21
SAP.DE Reports Q3 EPS €1.30 v €1.14 y/y; Op €2.09B v €1.74B y/y; Rev €6.81B v €6.03B y/y
941.HK Reports 9M (CNY) Net 81.8B v 92.1B y/y; EBITDA 225.5B v 214.1B y/y; Rev 566.7B v 567.7B y/y
TEVA Confirms settlement of Track 1 opioid cases in Ohio, and confirms agreement on global framework to settle remaining litigation under which it would pay up to $250M in cash over 10 years and donate up to $23B of treatments for opioid addiction

TUES 10/22
UBSG.CH Reports Q3 Net $1.05B v $1.0Be, Rev $7.13B v $7.37B y/y
BIIB New data show aducanumab reduced clinical decline in patients with early Alzheimer’s disease; Plans to submit BLA with Eisai in early 2020
PG Reports Q1 $1.36 v $1.24e, Rev $17.8B v $17.5Be
UPS Reports Q3 $2.07 v $2.06e, Rev $18.3B v $18.3Be
*(US) OCT RICHMOND FED MANUFACTURING INDEX: +8 V -7E
*(UK) PARLIAMENT REJECTS 'PROGRAMME MOTION' FOR ACCELERATED BREXIT BILL VOTING BY 308-322 MARGIN
TXN Reports Q3 $1.49 v $1.41e, Rev $3.77B v $3.81Be
SNAP Reports Q3 -$0.04 v -$0.05e, Rev $446.2M v $438Me
WHR Reports Q3 $3.97 v $3.96e, Rev $5.10B v $5.15Be
(CN) Chinese govt reportedly considering plans to replace Hong Kong Leader Lam with interim Chief Executive - FT
(HK) Hong Kong Leaders office declines to comment on report that Chief Exec Carrie Lam would be replaced

WEDS 10/23
HEIA.NL Reports prelim 9M Net €1.67B v €1.60B y/y; Q3 Organic Beer volume +2.3% v +2.3%e
CAT Reports Q3 $2.66 v $2.83e, Rev $12.8B v $13.4Be
BA Reports Q3 $1.45 v $2.04e, Rev $20.0B v $19.3Be; cuts monthly 787 production rate to 12 for ~2 yrs beginning in late 2020 (prior 14/month)
(US) Pres Trump: Turkey has said it is stopping combat and will make Syria ceasefire permanent; US will remove sanctions on Turkey
(US) New York Fed: overnight repo operations will increase to at least $120B (prior $75B) starting Thursday, October 24, 2019; term repo operations to increase to at least $45B (prior $35B)
MSFT Reports Q1 $1.38 v $1.25e, Rev $33.1B v $32.2Be
CP Reports Q3 C$4.61 v C$4.46e, Rev C$1.98B v C$1.96Be
TSLA Reports Q3 +$1.86 v -$0.15e, Rev $6.30B v $6.52Be
*(KR) SOUTH KOREA Q3 PRELIMINARY GDP Q/Q: 0.4% V 0.5%E; Y/Y: 2.0% V 2.0%E

THURS 10/24
NOKIA.FI Reports Q3 non-IFRS Net €0.05 v €0.05e, Rev €5.69B v €5.67Be; Cuts FY19 and FY20 guidance on margin pressure and additional 5G investments and additional digitalization investments
AZN.UK Reports Q3 Core EPS $0.99 v $0.71, Rev $6.41B v $6.20Be
*(FR) FRANCE OCT PRELIMINARY MANUFACTURING PMI: 50.5 V 50.2E (3rd consecutive month of expansion)
*(EU) EURO ZONE OCT PRELIMINARY MANUFACTURING PMI: 45.7 V 46.0E (9th straight contraction)
MMM Reports Q3 $2.58 v $2.47e, Rev $7.99B v $8.10Be
(EU) White House Adviser Navarro: Phase 1 of US-China trade agreement adopts "virtually entire chapter" from May agreement on intellectual property - financial press
*(US) SEPT PRELIMINARY DURABLE GOODS ORDERS: -1.1% V -0.7%E; DURABLES (EX-TRANSPORTATION): -0.3% V -0.2%E
*(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED; maintains forward guidance outlook
(EU) ECB's Draghi: Incoming data indicates more protracted weakness and prominent downside risk; inflation pressures remain muted - Prepared Remarks
(EU) ECB's Draghi: Assessment of negative rate environment has been positive but monitoring potential side effects- Q&A
*(US) OCT PRELIMINARY MARKIT MANUFACTURING PMI: 51.5 V 50.9E (6-month high)
*(UK) UK GOVT TO TABLE MOTION FOR GENERAL ELECTION ON DEC 12TH - SKY NEWS
*(US) SEPT NEW HOME SALES: 701K V 702KE
(US) VP Pence: if China ends unfair trade, US is ready for a new future; US is not seeking to contain China's development
AMZN Reports Q3 $4.23 v $4.46e, Rev $70.0B v $68.4Be
V Reports Q4 $1.47 v $1.43e, Rev $6.10B v $6.08Be; raises dividend by 20% to $0.30 from $0.25 (indicated yield 0.68%)
(JP) Japan Investors Net Buying of Foreign Bonds: +¥536.1B v +¥1.06T prior week; Foreign Net Buying of Japan Stocks: +¥522.3B v +¥508.1B prior week

FRI 10/25
ABI.BE Reports Q3 adj $0.94 v $1.06e, adj EBITDA $5.29B v $5.52Be, Rev $13.2B v $12.92B y/y
*(DE) GERMANY OCT IFO BUSINESS CLIMATE: 94.6 V 94.5E; CURRENT ASSESSMENT: 97.8 V 98.0E
3328.HK Reports Q3 (CNY) Net 17.4B v 16.5B y/y, NII 36.3B v 34.5B y/y
*(US) OCT FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 95.5 V 96.0E
(US) Weekly Baker Hughes Rig Count 830 v 851 w/w (-2.5% w/w)
GM Automotive News projects tentative UAW-GM agreement will be ratified