Market Overlook (01.10. 2017)
by Aaron. J | Hans. S | Yilin. Z
Macro News
America
U.S. Consumer Credit 24.53B vs. 18.48B forecast; U.S. Consumer Credit rose to a seasonally adjusted 24.53B, from 16.17B in the preceding month whose figure was revised up from 16.02B.
NFIB Small Business Optimism 105.8 vs. 99.6 forecast; National Federation of Independent Business said that NFIB Small Business Optimism rose to a seasonally adjusted annual rate of 105.8, from 98.4 in the preceding quarter. more-than-expected in the last quarter.
Canadian housing starts 207.0K vs. 195.0K forecast; Canadian housing starts rose to a seasonally adjusted annual rate of 207.0K, from 187.0K in the preceding month whose figure was revised up from 184.0K.
Canadian building permits -0.1% vs. 2.4% forecast; Canadian building permits fell to a seasonally adjusted annual rate of -0.1%, from 10.5% in the preceding month whose figure was revised up from 8.7%
Brazilian retail sales -3.5% vs. -5.5% forecast; Brazilian Retail Sales rose to a seasonally adjusted -3.5%, from -8.1% in the preceding month whose figure was revised up from -8.2%, Brazilian Retail Sales rose to a seasonally adjusted -3.5%, from -8.1% in the preceding month whose figure was revised up from -8.2%.
Euro
French Industrial Production 2.2% vs. 0.6% forecast; French Industrial Production rose to 2.2%, from -0.1% in the preceding month whose figure was revised up from -0.2%, more-than-expected last month.
Asia Pacific
Chinese CPI 2.1% vs. 2.3% forecast; Chinese CPI fell to an annual rate of 2.1%, from 2.3% in the preceding month. Chinese PPI 5.5% vs. 4.5% forecast, Chinese PPI rose to an annual rate of 5.5%, from 3.3% in the preceding month.
Japanese Household Confidence 43.1 vs. 41.3 forecast; Japanese Household Confidence rose to a seasonally adjusted annual rate of 43.1, from 40.9 in the preceding month, more-than-expected last month
Australian retail sales 0.2% vs. 0.4% forecast; Australian retail sales rose to a seasonally adjusted 0.2%, from 0.5% in the preceding month, less-than-expected last month
CommoditiesOil: Iraq Confirms Oil-Output Cut Even as Scheduled Exports Rise, Iraq has reduced its oil production by 160,000 barrels a day and will comply with cuts it agreed to make under an OPEC output deal, Oil Minister Jabbar Al-Luaibi said, even as ship loading data suggested that exports are set to increase next month; The latestWTI crude oil price is 52.09.
Gold prices rose to a six-week high on Tuesday, as the U.S. dollar weakened amid uncertainty surrounding the Federal Reserve’s pace of interest-rate hikes; The latest gold price is 1187.2 per ounce
U.S. natural gas rebounds 4% as forecasts turn colder; U.S. natural gas futures edged higher on Tuesday, rebounding from sharp losses in the prior session as forecasts for the end of January turned colder, boosting demand for the heating fuel.Natural gas for February delivery on the New York Mercantile Exchange jumped 4.2% to a session high of $3.239 per million British thermal units.
ForexU.S. Dollar edges lower against its major rivals on Tuesday, as some investors opted to unwind their bullish dollar bets ahead of President-elect Donald Trump’s first news conference since his election victory on Wednesday. The U.S. dollar index was down 0.15% at 101.77 by 5:57AM ET (10:57GMT), pulling further away from last week's 14-year high of 103.82.
British Pound tumbled after Prime Minister May said the U.K. would aim for a clean break from the EU. The pound fell 0.1 percent to $1.2152 as of 12:52 p.m. in London, after earlier touching $1.2108, the lowest since October. A drop to $1.10 would take the currency to the weakest since 1985.
RMB exchange rate: The offshore yuan is under pressure again, China's foreign currency holdings dropped for a sixth consecutive month to a new five-year low of $3.01 trillion in December. The latest CHY is 6.92; the latest CNH is 6.898.
The Australian dollar rebounded in Asia on Tuesday as retail sales at home weighed on the outlook though tame consumer prices offset concerns about a spike in producer prices; AUD/USD traded at 0.7378, up 0.31%, with the currency highly linked to trade with top market China.
PolicyPresident-elect Trump has named his son-in-law as a senior adviser, who will work with incoming Chief of staff Reince Priebus and chief strategist Stephen Bannon on Middle East issues and trade negotiations. Jared Kushner will not receive a salary while serving in the Trump administration, which could help alleviate legal problems stemming from federal anti-nepotism law.
President Obama will give his farewell address in Chicago. Reflecting upon his eight years in office, the speech will likely be Obama's final appeal to preserve his achievements as President, discuss the nation's economic growth during his tenure and "offer some thoughts on where we all go from here." Tonight's event will begin at 6 p.m.
Mexico's new foreign minister has pledged to negotiate with the United States "without fear" and is looking to support trade ties with Donald Trump, despite his threats to penalize companies shifting jobs south of the border. "We will negotiate with great confidence in ourselves... knowing how important Mexico is for the U.S. in economic, social and political terms," Luis Videgaray told Mexican ambassadors.
Company News
ExxonMobil (NYSE:XOM) did business with Iran, Syria and Sudan through a subsidiary while Rex Tillerson was a top executive of the oil giant and those countries were under U.S. sanctions as state sponsors of terrorism. ExxonMobil said the transactions were legal because Infineum was based in Europe and the transactions didn't involve any U.S. employees, but the connection is still likely to surface at Senate confirmation hearings tomorrow.
Consumer DiscretionaryVolkswagen AG (ETR:VOW3) executive was arrested and charged as part of a U.S. investigation into the German auto giant’s emissions- cheating scandal, with a federal complaint detailing how the company’s top management conspired to hide the cheating from regulators.
Tanger Factory Outlet Centers Inc. (NYSE:SKT) EVP Chad Perry sold 650 shares of the business’s stock in a transaction dated Monday, December 19th. The stock was sold at an average price of $35.03, for a total transaction of $22,769.50.
Consumer StablesMars (Private) is buying veterinary and dog day-care company VCA for $7.7 billion, a bid by the candy maker to dominate the fastgrowing pet-care business. The company that has given consumers M& M’s chocolates and Skittles for years Takes Bigger Bite Out of Pet-Care Industry.
McDonald’s Corp’s (NYSE: MCD) pulls back in China with deal. As competition grows in China, the restaurant chain is handing over the reins to a Chinese state-owned enterprise, in a deal that would value the business at as much as $2.08 billion. It is selling an 80% stake in its China operations to a group that includes Citic Ltd. and U.S. private- equity firm Carlyle Group LP. The Citic companies would own a combined 52% stake, while Carlyle would own 28%. The agreement is for 20 years and is expected to close this summer.
HealthcareValeant (NYSE:VRX) is continuing to shed non-core assets to repay debt, after inking a deal to sell its Dendreon cancer business for $820M. The drugmaker, Va,has just sold three skincare brands - CeraVe, AcneFree and Ambi - to L'Oreal (OTCPK:LRLCY) for $1.3B. The acquisitions "will nearly double the revenue of L’Oreal Active Cosmetics Division in the U.S." (VRX +12.4% premarket)
Japan Takeda Pharmaceutical (OTCPK:TKPYY) is willing to bolster its drug portfolio through fresh acquisitions after agreeing on Monday to buy Ariad Pharmaceuticals (NASDAQ:ARIA) for $5.2B. "Should the right deal come along we have the capacity," CEO declared. At the end of its last business year, Takeda (OTCPK:TKPYY) had $3.8B in cash and cash equivalents.
FinancialsBlackstone (NYSE:BX) is no longer in talks to buy a $5B stake in assets owned by Energy Transfer Partners (NYSE:ETP), the company building the controversial Dakota Access Pipeline. The discussions fell through after WSJ disclosed them last month, as ETP shares jumped as much as 5% on the report, hurting the economics of the deal.
Information TechnologyApple (NASDAQ:AAPL) is seeking to conduct "high-tech manufacturing" and assemble data center server gear at one of its plants in Mesa, Arizona, Amid pressure to build products at home,
Alibaba's (NYSE:BABA) Jack Ma met Donald Trump on Monday, when they discussed creating 1M new American jobs in five years. "Alibaba will create 1M U.S. jobs by enabling 1M American small businesses and farmers to sell American goods to China and Asian consumers on the Alibaba platform."
Alibaba (BABA) is leading a $2.6B bid to privatize Intime Retail Group (OTC:INTIY), a leading department store chain with 29 outlets and 17 shopping malls across China. This move aims to deepen its integration with brick-and-mortar stores. In 2015, Alibaba acquired a 20% stake in Suning, which operates over 1,600 Chinese stores that sell consumer electronics and appliances.
Facebook (NASDAQ:FB), will begin testing "mid-roll" ads in videos on its platform, a move aimed to help media companies and the social network generate revenue from their growing video audiences.
Snap (Private:CHAT) has established its international headquarters in Britain, where it will book all sales made outside the U.S. The move by the owner of Snapchat is an unusual one among top American tech companies. Most have chosen the the U.K.'s neighbors to take advantage of lower-tax regimes.
IBM (NYSE:IBM): Wall Street's largest back-office processing service is partnering with IBM to upgrade how payments and record-keeping for credit-default swaps are handled by putting the system on a blockchain by early next year.
Google (GOOG, GOOGL) is mulling over the sale of its SkyBox Imaging satellite business, now called Terra Bella, which it had acquired for $500M in 2014. Google is continuing to shed some of its bolder ventures. The most likely suitor is said to be Planet Labs, a startup that provides high-definition satellite images and videos of the Earth for commercial purposes.
Yahoo (NASDAQ:YHOO) will whittle down its board after completing its $4.8B deal with Verizon (NYSE:VZ), as CEO Marissa Mayer, co-founder David Filo and others step down as directors. Following the sale of its core internet business, Yahoo's RemainCo will change its name to Altaba, a combination of the words "alternate" and "Alibaba”, as Altaba’s remaining assets include Yahoo’s stake in Alibaba Group Holding Ltd. and Yahoo Japan.
Niantic and Nintendo’s (OTCPK:NTDOY) Pokemon Go and other augmented reality games are unlikely to be rolled out in China any time soon, after the state censor said it would not license them until potential security risks had been evaluated. Although not yet available in the world's largest smartphone gaming market, the game took the world by storm when it was released last year.
NVIDIA Corporation (NASDAQ:NVDA) was one of the top performers Monday with NVDA stock rising by a little over four percent. Nvidia rocked at the just-concluded CES 2017 at Las Vegas when it announced its plans for the AI “Co-Pilot” and its partnership with Audi to bring self-driving cars to market. Nvidia is also partnering with Alphabet Inc (NASDAQ:GOOGL), also known as Google, to make homes smarter.
Market Track
In Asia, Japan -0.8%. Hong Kong +0.8%. China -0.3%. India +0.7%.
In Europe, at midday, London +0.4%. Paris flat. Frankfurt +0.1%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude +0.5% to $52.24. Gold -0.1% to $1184.30.
Ten-year Treasury Yield flat at 2.38%
6:00 NFIB Small Business Optimism Index
8:55 Redbook Chain Store Sales
10:00 Job Openings and Labor Turnover Survey
10:00 Wholesale Trade
1:00 PM Results of $24B, 3-Year Note Auction
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