Market Overview (05.03.2017)
by Aaron.J | Hans.S | Yilin.Z
Market Today
Indices
Currency
Commodities
Econ & Policy
Economic Indicators
Policy
Business News
Energy
Industrials
Consumers
Financials
Information Tech
Telecommunication
Data Center
Equity
Bond
ETF Flow
Calendar
Economic Calendar
Market Today
S&P 500 (+0.1% at 2,391) Dow Jones (+0.2% at 20,950) NASDAQ (+0.1% at 6,095) Wall Street traded aimlessly on Tuesday, as the Federal Reserve began its two-day policy meeting following a string of data releases that raised doubts about the health of the U.S. economy.
FTSE 100 (-0.3% at 7,229) U.K. stocks dropped on Wednesday, as commodity stocks fell alongside a slide in metals prices and as shares in supermarkets moved lower after downbeat market-share data.
Nikkei 225 (+0.7% at 19,445) The Nikkei Stock Average has reached a high not seen since the dot-com bubble, reflecting overseas investors' growing anticipation of strong earnings.
US Dollar Index (DXY): The dollar held onto gains against other major currencies on Wednesday, after the release of upbeat U.S. employment data, although investors remained cautious ahead of the Federal Reserve’s monthly policy decision due later in the day. (DXY: 0.14% at 98.92)
EUR/USD: The euro and sterling both remained slightly lower against the firmer U.S. dollar on Wednesday, despite solid economic reports out of the euro zone and the UK as investors awaited the upcoming Federal Reserve policy statement. (EUR/USD: -0.13% at 1.0916)
Japan Yen: Higher US and European bond yields, allied with stronger risk appetite, have curbed defensive yen demand with strengthening to 6-week highs, but dollar momentum is likely to slow ahead of Wednesday’s Fed statement. (USD/JPY: 0.25% at 112.28)
British Pounds: was off Brexit concern lows as U.K. construction activity unexpectedly rose. The construction rose to 53.1 in April from 52.2 in March. It was expected to fall to 52.0. Sterling was under pressure as the Financial Times estimated the EU Brexit bill would be raised to €100 bn. (GBP/USD: -0.13% at 1.2923)
Gold prices remain under pressure, but are unchanged, testing support above 200-day moving average as the private sector continued to generate jobs, according to the latest data from private-payrolls processor ADP. (Gold Prices: -0.19% at $1,252.73)
Oil prices rebounded on Wednesday after preliminary data showed a much higher-than-expected fall in U.S. crude stockpiles, but concern over OPEC's output cuts and rising output in Libya and the United States capped gains. (Brent Crude Futures: +0.63% at $50.78 a barrel. WTI Futures: +0.5% at $47.9 a barrel)
Steel futures dropped on Wednesday, snapping a five-day winning streak and dragging down raw material iron ore, amid a still shaky outlook for demand in the world's top consumer. (Shanghai Steel Rebar Futures: -0.9% at 3,104 yuan per tonne. Iron Ore Contract: -1.2% at 524.5 yuan tonne.)
Econ & Policy
Americas
U.S. private employers added 177,000 jobs in April, which was very close to expectations of an increase of around 175,000 and the lowest gain for four months. The March increase was revised slightly lower to 255,000 from the original estimate of 263,000.
U.S. Total Vehicle Sales 16.88M vs. 17.10M forecast from 16.62M in the preceding month. U.S. sales were down in April for the big automakers: Ford fell 7% from April a year ago; , 5.8%; , 6.8%; and , 4.4%. Volkswagen was the exception, rising 3.1% as the company paid off diesel owners in the emissions-cheating scandal and persuaded large numbers to stick with the brand.
Europe
Eurozone GDP increased 0.5% for the first quarter of 2017 which was in line with consensus forecasts. This was also the same growth rate reported for the fourth quarter of 2016 which was revised up from an original 0.4%. The year-on-year edged down to 1.7% from 1.8% previously and was also in line with consensus forecasts.
Euro zone PPI -0.3% vs. -0.1% forecast from 0.0% in the preceding month.
German unemployment rate holds steady at record low of 5.8%. The number of unemployed people declined by a seasonally adjusted from a month earlier, compared to forecasts for a drop of 12,000. Jobless claims fell by 29,000 in March.
The UK Markit construction PMI index strengthened to 53.1 for April from 52.2 previously. The reading was above consensus forecasts of 52.0 and the strongest figure for four months. New orders and output both increased at the fastest pace of 2017 and employment increased at the fastest pace since May 2016.
New Zealand unemployment rate 4.9% vs. 5.2% forecast from 5.2% in the preceding quarter; New Zealand’s employment change 1.2% vs. 0.8% forecast.
PolicyAmericas
Fed rate rise unlikely: Investors aren't betting the Fed will raise its short-term interest rates today following Friday’s weak GDP report, which showed the U.S. economy growing at a 0.7% annual rate. The decision will be announced at 2:00 p.m. ET. Market-implied probabilities still show an over 50% chance of two rate hikes by the end of the year, so the FOMC statement will be scrutinized for further hints about an increase in June.
Puerto Rico besieged by lawsuits: Failing to reach a restructuring agreement, Puerto Rico has been hit with a fresh round of lawsuits just hours after a stay on litigation expired. Aurelius Capital Management and Monarch Alternative Capital sued the commonwealth in Manhattan, seeking to recoup past-due payments, while Ambac Assurance (NASDAQ:AMBC), which has $10B in guarantees on the line, filed suits challenging the territory's debt-cutting plan.
In need of "a good shutdown"?: "Our country needs a good 'shutdown' in September to fix mess!" President Trump tweeted on Tuesday, calling for voters to elect more Republican Senators in 2018 or to undercut the ability to block legislation with filibusters. The suggestion to "change the rules now to 51%" is a variation of the so-called "nuclear option," which was deployed by the GOP during the Gorsuch Supreme Court fight.
Europe
Hefty cost for Brexit divorce bill: The EU has raised its opening demand for Britain's Brexit bill to an upfront gross payment of up to €100B, according to FT analysis of new stricter demands driven by France and Germany. Over a period of a decade or more, the figure would be reduced in net terms to roughly €55B-€75B as the U.K. received its share of EU spending and repaid loans.
Le Pen: Euro is a deadweight: "The euro has protected no one, quite the contrary. The euro has been a deadweight for prices, a deadweight for jobs, a deadweight for the competitiveness of our businesses," said Marine Le Pen, France's far-right presidential candidate. She wants to replace the euro with a looser type of currency, alongside a national one, which would begin circulation within two years.
Merkel: Russian sanctions must remain: Germany's Angela Merkel met with Vladimir Putin yesterday in Sochi, saying only implementing the Minsk accords would lift EU sanctions. Trump spoke with the Russian president later by phone, agreeing they must "do all they can to end the violence" in Syria. Meanwhile, Palestinian leader Mahmoud Abbas is due to arrive at the White House today to discuss the path forward in the Palestinian-Israeli conflict.
Middle East and Africa
Oil rises after hours on bullish inventory number: Crude prices bounced back overnight as a decline in U.S. inventories underpinned the market, although a dip in compliance with OPEC efforts to reduce output capped gains. "There is precautionary buying following API data and leading to EIA data tonight," said Ric Spooner, chief market analyst at CMC Markets. WTI futures are now up 1% after falling below $48 a barrel.
Business News
The planned sale of a stake in Saudi Aramco (Private:ARMCO) will occur through an IPO in 2018, and the holdings sold "will not be very far off 5%," according to Deputy Crown Prince Mohammed bin Salman. The listing, expected to raise tens of billions of dollars, is a centerpiece of the government's ambitious plan - known as Vision 2030 - to diversify the economy beyond oil.
Solar companies are in the spotlight. The SEC is examining whether Sunrun (NASDAQ:RUN) and SolarCity (NASDAQ:TSLA) have adequately disclosed how many customers canceled contracts after signing up for home solar-energy systems, WSJ reports. Investors use that cancellation metric as one way to gauge the companies' health.
IndustrialsLawmakers issue warning to airlines: Airlines including United (NYSE:UAL), Alaska (NYSE:ALK), American (NASDAQ:AAL) and Southwest (NYSE:LUV) were all in the congressional hot seat yesterday as members of the House Transportation Committee grilled executives about their business practices. "If we don't see meaningful results by the next hearing, I can assure you, you won't like the outcome," said Chairman Bill Shuster. "If we act, it's going to be one-size-fits-all.
ConsumersWriters, studios avert strike with last-minute deal: The Writers Guild of America has reached a tentative agreement for a new film and TV contract, averting a potentially devastating strike that would have impacted the fall season. The finale even came with a plot twist - an intervention from studio executives, who normally take a less hands-on approach to union talks. Related tickers: CBS, DIS, CMCSA, FOX, FOXA, SNE, TWX, VIA, VIAB
Volkswagen (OTCPK:VLKAY) is talking to Exxon Mobil (NYSE:XOM) and Gazprom (OTCQX:GZPFY) to back its efforts in promoting cars that run on natural gas, trying to overcome Dieselgate,. "We are now really trying to think out of the box and find solutions that can be helpful at least in this transition period of 10 to 20 years," CEO Matthias Mueller told Austria's ORF radio.
NuTonomy, the startup that beat UBER to the streets with a robot taxi, is partnering with Peugeot (OTCPK:PEUGF) to test self-driving cars in Singapore. On-road trials will involve the 3008 SUV. The project seeks to work on "level 5" autonomous capable vehicles, which require no driver input, allowing the firms to study how an "on-demand autonomous vehicle mobility service" performs.
FinancialsMoody's has cut Ericsson's (NASDAQ:ERIC) credit rating to junk as a weakening profit outlook erodes confidence in new CEO Borje Ekholm, while it tries to engineer a successful turnaround,. Provisions and restructuring charges will lead to "credit metrics that will no longer be commensurate with investment-grade ratings," said analyst Alejandro Nunez. ERIC -2.1% premarket
Here come quadruple-leveraged ETFs: Marking a first for the growing sector, the SEC has approved a request to trade quadruple-leveraged ETFs. Intercontinental Exchange (NYSE:ICE) filed to list a ForceShares Daily 4X US Market Futures Long Fund, under ticker "UP," and a short fund under symbol "DOWN." It comes as the Senate confirmed Jay Clayton to head the SEC, a change in leadership that could influence future investment products.
JPMorgan (NYSE:JPM) is planning to move hundreds of London-based bankers to expanded offices in Dublin, Frankfurt and Luxembourg, as it prepares for the U.K. to lose easy access to the EU's single market. "We are going to use the three banks we already have in Europe as the anchors for our operations," said Daniel Pinto, the firm's head of investment banking.
BNP Paribas (OTCQX:BNPQF) posted a 4.4% rise in Q1 profits, thanks to a boost in its fixed income and equities trading units. Aiming to experiment and spot early trends, Barclays (NYSE:BCS) is opening the "biggest fintech center in Europe," located in east London. China's HNA Group increased its stake in Deutsche Bank (NYSE:DB) to almost 10%, making it the top shareholder in Europe's largest investment bank.
Information TechnologyMicrosoft's (NASDAQ:MSFT) new suite of education products shows its determination to reverse a major shift that has recently taken place in U.S. classrooms, where Google's (GOOG, GOOGL) Chromebook is now the computer of choice. Taking a shot at Apple (NASDAQ:AAPL)? Microsoft also rolled the Surface Laptop - a $999 device that comes with similar hardware specifications as the latest MacBook, but with newer processors.
Twitter closed 4% higher on Tuesday after Mark Cuban disclosed he had started buying TWTR shares because the company "finally got its act together on artificial intelligence." Fresh off a deal with Bloomberg to launch a 24-hour live newsfeed, Twitter also announced 16 more video deals, including partnerships with LiveNation, the WNBA, PGA Tour, BuzzFeed and Viacom (VIA, VIAB).
Telecommunication ServicesT-Mobile (NASDAQ:TMUS) expects to deploy a 5G network nationwide by 2020, helped by the airwaves it acquired (to the tune of $8B) in last month's FCC spectrum auction,. The pledge comes as AT&T (NYSE:T) and Verizon (NYSE:VZ) pour billions of dollars into wireless airwave licenses that might support the technology.
Data Center
Equity
S&P500
VIX
Bond
Sovereign Debt Movement
Sovereign 5Y Debt CDS
U.S. Municiple Bond
U.S. Investment Grade Bond
U.S. High Yield Bond
U.S. Corporate Bond CDS
ETF Flow
Asset Class
Asset Class: Equity
Geography Regions
Geography Regions: Asia Pacific
Calendar
7:00
8:15
8:30
8:30
9:45
10:00
10:30
2:00 PM
·END·
Contact: askalphanyc@gmail.com
Sources