Market Overview (05.04.2017)
by Aaron.J | Hans.S | Yilin.Z
ContentsMarket Today
Indices
Currency
Commodities
Econ & Policy
Policy
Economic Indicators
Business News
Energy
Industrials
Consumers
Health Care
Financials
Information Tech
Data Center
Equity
Bond
ETF Flow
Calendar
Economic Calendar
Market Today
S&P 500 (-0.1% at 2,388) Dow Jones (0.0% at 20,957) NASDAQ (-0.4% at 6,073) U.S. stocks headed south on Wednesday, as investors digested the Federal Reserve’s decision to keep monetary policy on hold. In a unanimous decision, the Fed voted to keep the federal funds rate in a range of 0.75% to 1%, where it has stood since March. Central bank officials signaled they would remain on a gradual path of policy normalization despite the recent slowdown in U.S. economic growth.
FTSE 100 (+0.4% at 7,267) U.K. blue-chip stocks rose Thursday, helped by earnings-driven jumps for Royal Dutch Shell PLC and HSBC Holdings PLC, as data showed U.K. services-sector activity on the rise.
Nikkei 225 (0.7% at 19,446) Even with the yen gaining significant muscle, combined net profit at Japan's major listed companies is set to soar to a record level for the year ended March 2017.
US Dollar Index (DXY): The dollar rose to fresh six-week highs against the yen on Thursday, boosted by bets for more rate hikes by the this year, while the euro and sterling rose, lifted by robust service sector reports. (DXY: -0.31% at 98.96)
EUR/USD: The and the pound firmed Thursday after upbeat economic data. The euro-zone rose to 56.8 in April, slightly more than estimated. Euro-area in March rose 0.3% beating estimates, reinforcing the strengthening European recovery story. The euro was also buoyed by polls indicating a clear win for Emmanuel Macron in the French presidential run-off. (EUR/USD: 0.42% at 1.0932)
British Pounds: The pound was at the day’s highs against the dollar on Thursday after data showing that activity in the accelerated to a four-month high in April. (GBP/USD: 0.25% at 1.29)
Gold prices nursed in North American trade on Thursday, falling to the lowest level in around six weeks after the Federal Reserve left the door open to raising interest rates in June. The Federal Reserve on Wednesday, as was widely expected, and gave a positive assessment of the U.S. economy, suggesting it was still on track for two more rate hikes this year. (Gold Prices: -1.61% at $1228.37)
Oil prices extended in North American trading on Thursday, sliding to the lowest level since November amid growing fears over a global supply glut. Crude has been under pressure in recent weeks amid fears that an ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance global oil supply and demand. U.S. drillers last week added rigs for the 15th week in a row, reaching the highest level since August 2015. The relentless increase in U.S. output has overshadowed pledged output cuts by major producers. (Brent Crude Futures: -1.85% at $49.84 a barrel. WTI Futures: -2.05% at $46.84 a barrel)
Econ & Policy
Americas
Healthcare bill gains traction: Top Republicans are expressing optimism over today's healthcare vote in the U.S. House, while Democratic leaders blast the revised bill, noting it's not yet been analyzed by the Congressional Budget Office. The legislation comes after President Trump endorsed a plan adding $8B over five years to help fund high-risk pools and cover the cost of patients with pre-existing conditions.
FOMC stays on hold, rate hikes remain on tap: The Fed kept interest rates on hold at its May meeting, but maintained expectations for further 2017 rate hikes. In a unanimous statement - the committee said it "views the slowing in growth during the first quarter as likely to be transitory" and believes the "fundamentals... remain solid." The dollar pushed higher following the news, putting pressure on gold and oil.
Puerto Rico declares 'bankruptcy': With its creditors at its heels and coffers depleted, Puerto Rico has sought what is essentially bankruptcy relief under PROMESA, a federal law enacted last summer. According to the island's oversight board, the territory is "unable to provide its citizens effective services," crushed by $74B in debt and $49B in pension liabilities.
Bank of Canada Governor in Mexico: Bank of Canada Governor Stephen Poloz will deliver a speech in Mexico City today at an event sponsored by a Mexican-Canadian business group, CanCham Mexico. His speech comes as the Trump administration hopes to start discussions on renegotiating NAFTA. Talks could begin as soon as this summer.
Protests continue in Venezuela: Protests in Caracas have claimed at least one more fatality, bringing the total number of people killed to more than 30 in several weeks of unrest. Venezuelans are taking to the streets as President Maduro begins the process of overhauling the country's constitution amid a political and economic crisis.
Europe
Le Pen, Macron in final debate: Marine Le Pen and Emmanuel Macron squared off last night in their final TV debate, laying bare their profoundly different visions for the country. The two clashed over security, the economy and their relationship with Europe. Campaigning will continue through Sunday, when voters hit the polls for the second round of France's presidential election.
Asia and Pacific
Pyongyang rebukes China for 'betrayal': "China should no longer recklessly try to test the limitations of our patience," said the commentary released by North Korea's official news agency, warning it could trigger "grave consequences." KCNA added that China has regularly "infringed upon the strategic interests" in becoming closer to the U.S. and thus committed a "betrayal" in the process.
EconomyAmericas
Initial jobless claims declined to 238,000 in the week ending April 29th from 257,000 previously and compared with consensus forecasts of a smaller decline to 246,000. The four-week moving average, however, increased slightly to 243,000 from 242,250 previously.
U.S. non-farm productivity -0.6% vs. 0.2% forecast from 1.8% in the preceding quarter.
The (FOMC) left the Federal Funds interest rates on hold in the 0.75-1.00% range. The decision was in line with consensus forecasts. There were no dissents from the decision to leave interest rates unchanged with a 10-0 vote. The FOMC expects weaker GDP growth for the first-quarter to be transitory with moderate growth overall and the evidence suggests that the labor market has continued to strengthen even as growth in economic activity slowed.
Canadian trade balance -0.14B vs. -0.80B forecast from -1.08B in the preceding month.
Europe
Euro Zone Services PMI 56.4 vs. 56.2 forecast from 56.2 in the preceding quarter. The composite output edged higher to 56.8 from the flash reading of 56.7 and both the services and composite were at the highest level for six years. In the services sector, new-business growth remained robust, although there has been a slight slowdown over the past three months.
Euro Zone Retail Sales 0.3% vs. 0.1% forecast from 0.5% in the preceding month.
French Services PMI 56.7 vs. 57.7 forecast from 57.7 in the preceding month; French manufacturing companies expect to boost investments this year by six percent, the most since 2011, a quarterly survey by the INSEE official statistics office showed on Thursday.
German Services PMI 55.4 vs. 54.7 forecast from 54.7 in the preceding month.
Asia and Pacific
China April Caixin/Markit services PMI fell to 51.5 from March's 52.2, the fourth monthly decline in a row and suggesting the sector grew at its weakest pace since May 2016.
Australia’s trade balance 3.107B vs. 3.400B forecast from 3.657B in the preceding month. Exports rose at a seasonally adjusted 2% in March, after rising 1% the previous month. On the opposite side of the ledger, imports 5%, following a 5% drop in February. Coal and iron ore prices have stoked faster growth in the Australian economy, with exports playing a bigger role in the expansion.
Business News
U.S. diesel sales for VW (OTCPK:VLKAY): While it resumed selling diesel cars in the U.S. last month, Volkswagen just disclosed positive data for April. Diesels accounted for nearly 12% of sales, a sign consumer demand for such cars had not been dampened by its emissions scandal. There's still a ways to go... before the crisis, diesels accounted for about 25% of VW brand sales across America.
IndustrialsAmerican Airlines (NASDAQ:AAL) is further shrinking the space for passengers on its newest Boeing (NYSE:BA) 737 jetliners, allowing it to cram in more travelers. Space between most rows will be trimmed to 30 inches, an inch less than on its existing 737-800s, and at least three rows will have only 29 inches. It moves American closer to deep discounters such as Spirit (NYSE:SPR) and Frontier Airlines (Pending:FRNT).
ConsumersTesla (NASDAQ:TSLA) slipped 1.5% in extended trade after posting a wider-than-expected first quarter loss. However, revenues more than doubled from a year ago as record deliveries boosted sales. Tesla also said its Model 3 remains on track to begin production in July as it spends heavily to meet the tight deadline for its mass-market sedan.
Verizon (NYSE:VZ) gets rights to NFL London game: A ticket to watch an NFL game can be expensive, but the price tag to stream a match-up can be more outrageous: Verizon will reportedly pay $21M to stream just one NFL game this fall. The week-three match-up in London, between the Baltimore Ravens and Jacksonville Jaguars, will be distributed across Verizon's AOL platform, go90 and Complex.
HealthcareAetna (NYSE:AET) will not sell Obamacare individual insurance plans in Virginia next year, citing "growing uncertainty" in the market and $200M in expected losses on the business this year. Aetna already has sharply curbed its 2017 participation in the marketplace to cover just four states and left open the question of whether it will sell individual health plans anywhere next year.
FinancialsThe NCAU has received a $400M payment from Credit Suisse (NYSE:CS) in connection with toxic residential MBSs that led to the failure of three credit unions during the financial crisis. That settles the 19th of 20 lawsuits the agency has filed in the last six years. Its legal recoveries related to failed corporate credit unions have already reached $5.1B.
Facebook (NASDAQ:FB) shares fell 1.5% from an all-time high, despite posting a big earnings beat, while Q1 revenue rose around 50% Y/Y to just over $8B. The company added 80M monthly users in the first three months of the year, as ad revenue soared, but investors appeared focused on its new earnings format. Facebook will no longer report adjusted figures.
WhatsApp (FB) was caught in the crossfire. The popular messaging service went down for a few hours, affecting users across the globe. "We have now fixed the issue and apologize for the inconvenience," WhatsApp said via email.
Phishing with Google (GOOG, GOOGL) Docs? Apparently spreadsheets make good bait. A computer attack that mimicked Google's cloud-based document software spread across U.S. news organizations and other institutions on Wednesday. Not only did the malicious link look remarkably realistic, but the email that delivered it appeared to come from someone users already know and replicated Google's login system.
Apple (NASDAQ:AAPL) is starting a $1B fund to promote advanced manufacturing jobs in the United States, a sector already high on its list of priorities. "By doing that, we can be the ripple in the pond... those manufacturing jobs create more jobs around them because you have a service industry that builds up around them," Apple's Tim Cook told Jim Cramer.
Waymo parent Alphabet (GOOG, GOOGL) has presented documents showing that UBER worked to buy a startup from engineer Anthony Levandowski while he was still working on self-driving technology at Alphabet. High stakes? Alphabet hopes the documents will help persuade a federal judge to temporarily block parts of Uber's driverless-car program.
Data Center
Equity
S&P500
VIX
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
U.S. Corporate Bond CDS
ETF Flow
Asset Class
Asset Class: Equity
Geography Regions
Geography Regions: Asia Pacific
Calendar
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