Market Overview (05.02.2017)
by Aaron.J | Hans.S | Yilin.Z
Market Today
Indices
Commodities
Currency
Econ & Policy
Economic Indicators
Policy
Business News
Industrials
Consumers
Information Tech
Data Center
Equity
Bond
ETF Flow
Calendar
Economic Calendar
Market Today
S&P 500 (+0.2% at 2,388) Dow Jones (-0.1% at 20,913) NASDAQ (+0.7% at 6,092) U.S. stocks finished mostly higher on Monday, buoyed by shares of financial and technology companies as Wall Street raced toward its best quarter of earnings in five-and-a-half years.
FTSE 100 (+0.5% at 7,238) U.K. stocks rose Tuesday, with trading in May kicking off with BP PLC and Shire PLC gaining after earnings reports from the oil producer and the drug maker, and with a report showing British manufacturing activity PMI hit a three-year high.
Nikkei 225 (+0.7% at 19,446) Japan's Nikkei share average rose to six-week highs on Tuesday in a holiday-shortened week, getting a lift from robust earnings and gains on Wall Street.
US Dollar Index (DXY): The dollar held steady against other major currencies on Tuesday, as the previous session’s downbeat U.S. data continued to weigh and as investors remained cautious ahead of the Federal Reserve’s policy decision on Wednesday. (DXY: -0.01% at 98.96)
Japan Yen: The yen held slightly weaker and the Aussie gained in Asia on Tuesday on a survey on manufacturing from China came in softer than expected and investors looked ahead to the latest interest rate review by the Australian central bank. (USD/JPY: 0.35% at 112.23)
British Pounds: The pound was little changed against the U.S. dollar on Tuesday, after the release of upbeat U.K. manufacturing activity data, as investors remained cautious ahead of the Federal Reserve’s policy meeting this week. (GBP/USD: 0.23% at 1.2915)
Gold futures settled sharply lower Monday, with the yellow metal booking its lowest finish in three weeks, following U.S. data that imply a strong rebound in second-quarter economic growth. (Gold Prices: -0.09% at $1,252.11)
Oil prices gained moderately Tuesday, helped by a softer dollar, even as oversupply concerns centered now on Libyan output and rising U.S. production keep a lid on the market. (Brent Crude Futures: +0.62% at $51.84 a barrel. WTI Futures: +0.41% at $49.04 a barrel)
Steel futures climbed to their highest in almost a month on Tuesday, supported by restocking demand following a long holiday weekend that also lifted raw material iron ore. (Shanghai Steel Rebar Futures: +2.2% at 3,134 yuan per tonne. Iron Ore Contract: +5.8% at 539 yuan tonne.)
Econ & Policy
Europe
The Eurozone unemployment rate of 9.5% for March was unchanged from February’s figure and compared with consensus expectations of a further small decline to 9.4% for the month. There was still a significant decline from the 10.2% rate in March 2016 and the latest reading equalled the lowest rate for close to 8 years.
HS Markit's Manufacturing PMI for the euro zone jumped to 56.7 in April from March's 56.2, reaching its highest level since April 2011. The figure was one tick down from a preliminary reading of 56.8. Euro zone factory activity hits six-year high in April.
German manufacturing PMI, which accounts for about a fifth of the economy, inched down to 58.2 in April from March's 71-month high of 58.3. German manufacturing activity held near a six-year high at the start of the second quarter, a survey showed on Tuesday, suggesting factories will continue to support economic growth in Europe's biggest economy.
The UK Markit PMI manufacturing index strengthened to 57.3 for April from 54.3 the previous month and compared with an expected reading of 54.0. The index has been above the 50.0 level for nine months in a row and the latest reading was the strongest for three years.
Asia and Pacific
Japan’s Monetary Base 19.8% vs. 21.2% forecast from 20.3% in the preceding month.
Japan April services PMI falls to 52.2 from 52.9 in March on a seasonally adjusted basis. as new business growth slows; The index for new business fell to 52.2 from 52.8 in March, while the business expectations index eased slightly to 55.0 from 55.4 in that month.
Reserve Bank of Australia held interest rates at a record low 1.5% on Tuesday as expected, citing conditions consistent with maintaining its inflation objectives, but noting house prices rising "briskly."
Indian manufacturing activity expanded for a fourth consecutive month in April, helped by stronger growth in new orders although rises in output and employment slowed. The Nikkei/Markit Manufacturing Purchasing Managers' Index , compiled by IHS Markit, held steady at March's 52.5 last month.
South Korean CPI 1.9% vs. 2.0% forecast from 2.2% in the preceding month.
PolicyAmericas
Trump said to be replacing the Comtroller of the Currency: President Trump plans to replace Comptroller of the Currency Thomas Curry as early as this week, according to The Wall Street Journal. Joseph Otting, a former banker at OneWest Bank who worked with Treasury Secretary Steven Mnuchin, is said to be under consideration for the position. The White House hasn't commented on the report.
Fed expected to leave interest rates level: The Federal Reserve's policy-making committee holds a meeting today and tomorrow. While trading on Fed funds futures contracts implies less than 5% probability of a rate hike, the language in the FOMC statement could be crucial for investors in assessing the June meeting. The tweaking of words by the Fed will hold even more weight since Fed Chair Janet Yellen is not scheduled to hold a press conference following the two-day meeting.
Asia and Pacific
BOJ's Kuroda supportive of Chinese infrastructure bank: Bank of Japan Governor Haruhiko Kuroda gave a strong endorsement for the expansion of the Asian Infrastructure Investment Bank at a seminar today in Yokohama. "Infrastructure needs are huge and it's simply not possible for the Asian Development Bank and the World Bank to fill the gap completely," said Kuroda. China created the AIIB in 2015 in a development some caution will increase its global leadership position to an uncomfortable level.
Business News
Another day, another high: Tesla (NASDAQ:TSLA) continued to accelerate right into its Q1 earnings release, as investors have now bid up the stock +50% YTD. The strong buying action comes ahead of a management update that will include more details on Model 3 production. "The Model 3 is on track to start limited vehicle production in July and to steadily ramp production to exceed 5,000 vehicles per week at some point in the fourth quarter and 10,000 vehicles per week at some point in 2018," CEO Elon Musk said recently. Will tomorrow's presser include any changes to that forecast?
ConsumersJD.com (NASDAQ:JD) eyes taking stake in Tokopedia: Chinese e-commerce giant JD.com Inc. is in talks to take a major stake in Indonesian firm Tokopedia. Sources indicate that a JD investment of hundreds of millions of dollars could increase the valuation of Tokopedia to over $1B. Tokopedia is a major rival of Alibaba (NYSE:BABA).
Kelley Blue Book forecasts new car sales in the U.S. will fall 3.1% Y/Y in April to 1.445M units. Sales for mid-size SUVs/crossovers are expected to be 8%, while compact and small car sales are seen falling. General Motors (NYSE:GM) is expected to pick up market share during the month from Detroit peers Ford (NYSE:F) and Fiat Chrysler Automobiles (NYSE:FCAU). Kelley Blue Book's forecast for 2017 calls for U.S. auto sales in the range of 16.8-17.3M units, which represents a 1% to 4% decline from last year. Barclay thinks it's important for sentiment that the April seasonally adjusted selling rate comes in at 17M or over.
Coach (NYSE:COH) earnings preview: It's earnings time for Coach, which is expected to post revenue of $1.018B and EPS of $0.44. Analysts see the retailer posting a 1.4% improvement in comparable sales during the quarter. Recent channel checks from Wolfe Research indicated Coach is seeing solid sell-through in the +$400 price category. Beyond the numbers, Coach management could be pressed on the earnings call about the company's M&A track. Recent speculation has Coach in the mix to acquire Jimmy Choo (OTCPK:JYMHF) and Kate Spade (NYSE:KATE).
Angie's List (NASDAQ:ANGI) jumps 44% on report of IAC deal offer: M&A buzz lit a torch under Angie's List in AH trading. The Wall Street Journal reported that IAC/InterActiveCorp (NASDAQ:IAC) wants to buy the home-service review site for $8.50 per share. The bid values Angie's List at more than $500M. Shares of Angie's skyrocketed 41% in AH trading.
Information TechnologyApple earnings on tap: The world's largest company by market capitalization reports earnings after the bell. Apple (NASDAQ:AAPL) is expected to post revenue of $53B and EPS of $2.02. Sales of iPhones are forecast to increase 1% year over year to 52M, a relatively low mark by Apple standards as many consumers are seen waiting for the iPhone 8. Keep an eye on the growth reported by Apple for its services business after it increased at a solid 18% pace in Q4 to $7.2B, as well as the amount of dividends and buybacks doled out of Cupertino to shareholders. Apple hit a new all-time high of $147.20 yesterday.
Microsoft (NASDAQ:MSFT) event scheduled in NYC: An intriguing press conference will take place in New York City today when Microsoft hosts the "Learn What's Next" event. Based off of the #MicrosoftEDU hashtag being used for the event, it appears the company could be planning to make a major announcement related to the education sector. Microsoft is focusing on the education business after Chromebooks have seen a massive market share increase in U.S. schools over the last several years.
Twitter (NYSE:TWTR) announces several more video streaming deals: Fresh off a Sunday deal with Bloomberg to launch 24-hour video, Twitter is rolling out even more video deals to fill in its vision for streaming content. At a NewFront sales presentation, the company said it was partnering with BuzzFeed, Vox Media, MLB Advanced Media and Live Nation, as well as the NFL, PGA and WNBA. Shares of Twitter are + 17% over the last month.
Data Center
Equity
S&P500
Dow Jones 30
Bond
World Bond Yield Curve
Sovereign Debt Movement
Sovereign 5Y Debt CDS
U.S. Municiple Bond
U.S. Investment Grade Bond
U.S. High Yield Bond
Emerging Market
ETF Flow
Asset Class
Asset Class: Equity
Geography Regions
Geography Regions: Asia Pacific
Calendar
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