Market Overview (05.16.2017)
by Aaron.J | Hans.S | Yilin.Z
ContentsMarket Today
Indices
Currency
Commodities
Econ & Policy
Policy
Economic Indicators
Business News
Energy
Consumers
Financials
Information Tech
Telecommunication
Data Center
Equity
Bond
ETF Flow
Calendar
Economic Calendar
Market Today
S&P 500 (+0.4% at 2,402) Dow Jones (+0.4% at 20,982) NASDAQ (+0.4% at 2,402) U.S. stocks finished at record highs Monday, as rebounding oil prices lifted shares of commodity-driven companies on news that major producers were looking to extend output cuts until next year.
US Dollar Index (DXY): The dollar fell to six-month lows against a basket of the other major currencies on Tuesday as fresh concerns over the Trump administration and a slate of weak U.S. housing data weighed. The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.58% at 98.24, the lowest trough since November 9. (DXY: -0.60% at 98.22)
EUR/USD: The euro rose to the highest levels since November on Tuesday, while the dollar was broadly lower amid fresh concerns over the Trump administration following reports the U.S. president revealed classified information to Russia last week. Demand for the euro has been underpinned as investors shifted their attention back to the outlook for monetary policy as concerns over political risks receded after centrist was elected France's president over far-right nationalist Marine Le Pen last week. (EUR/USD: 0.89% at 1.1073)
British Pound: The pound pulled back from the day’s highs against the dollar on Tuesday after data showing that rose to its highest since September 2013 last month, underlining concerns over a squeeze on consumer spending. The Office for National Statistics said consumer prices rose by in April compared to economists' expectation for a 2.6% annual increase. (GBP/USD: 0.05% at 1.2902)
Japan Yen: USD/JPY is under modest pressure as the (DXY), which measures the greenback’s strength against a basket of six major currencies, is down nearly half a percent in today’s trading. As a result of the decline, DXY has broken to a new low in the broader downtrend dating back to early 2017. (USD/JPY: -0.25% at 113.5)
Gold gained and the dollar slumped on Tuesday, as investors sought a degree of haven market protection while sifting through reports that President Donald Trump shared classified information with top Russian officials at a meeting last week. (Gold Prices: +0.55% at $1,235.41)
Oil prices extended gains on Tuesday after top producers Saudi Arabia, Russia and Kuwait supported prolonging supply cuts until the end of March 2018 in an effort to drain a global glut. (Brent Crude Futures: +0.81% at $52.24 a barrel. West Texas Intermediate Futures: +0.82% at $49.25 a barrel)
Steel Shanghai rebar steel edged higher on Tuesday after a three-day fall, but gains were limited by concerns over plentiful supply and slow growth in demand in top consumer China. (Shanghai Steel Rebar Futures: +0.4% at 2,992yuan per tonne. Iron Ore Contract on the Dalian Commodity Exchange: +0.8% at 457.5 yuan a tonne.)
Econ & Policy
Americas
McMaster shoots down Russia reports: According to reports first published in the Washington Post, President Trump allegedly shared highly classified material during last week's meeting with Russia's foreign minister and ambassador. "The story that came out tonight as reported is false," National Security Adviser Lt. Gen. H.R. McMaster said outside the White House. "I was in the room. It didn't happen."
Latest unrest in Venezuela: A day that began with largely peaceful protests against Venezuela's socialist government took a violent turn Monday as fierce clashes between state security and demonstrators killed at least two people. Protesters have been on the streets daily since early April to demand elections, freedom for jailed activists, foreign humanitarian aid and autonomy for the opposition-controlled legislature.
Path forward for the TPP: Following Washington's exit from the TPP, the 11 remaining members have kick-started discussions on how to proceed without the U.S. and recently wrapped up talks in Toronto. "Since we have come thus far, Japan must now take on a leadership role and bring the talks forward," Shinzo Abe told CNBC. "Momentum" should not be lost, he added, but left the door open for a U.S. return to the deal.
Europe
Macron, Merkel discuss eurozone future: The EU's need for deep reforms is so dire that even the idea of changing the EU treaty is "not taboo," French President Emmanuel Macron said during his first joint news conference with Angela Merkel. "First, we need to work on what we want to change, and then if it turns out it needs a treaty change, then we're prepared to do that," the German Chancellor declared. Did Brexit come too early?
Ukraine seeks U.S. role in peace talks: Ukraine is pushing the Trump administration to take a direct role in peace talks over its eastern regions, including possible three-way talks with Moscow and Kiev on ending the violence. The U.S. initially led the charge to impose economic sanctions on Russia for the Kremlin's support of rebels, but left high-level political talks in European hands.
Middle East and Africa
IEA: Oil re-balancing is here: The oil market has essentially reached a balance and will continue to accelerate in the near term, the IEA said in its monthly report, just nine days before OPEC's much-anticipated ministerial meeting. The organization kept its global demand growth forecast unchanged at 1.3M bpd for 2017 due to slowdowns in previously robust consumer countries like the U.S., Germany and Turkey
EconomicsAmericas
US building permits declined 2.5% for April to an annual rate of 1.23mn. This was below estimates of 1.27mn for the month, although there was still a 5.7% annual increase. Single-family permits declined significantly on the month to below 800,000 which was the weakest reading for five months while there was a slight increase in permits for multiple-family residences.
U.S. home appliances shipments rise 13.7 percent year-on-year in April.
A private gauge of U.S. home builder sentiment unexpectedly rose in May to its second strongest level since the housing bust nearly a decade ago, as the existing supply of homes remained tight. The index of builder confidence in newly built, single-family homes climbed to 70 points from 68 in April.
Europe
Eurozone GDP increased 0.5% for the first quarter of 2017 which was in line with the preliminary reading released earlier in the month and the data also met consensus forecasts. GDP rose 0.5% for the fourth quarter of 2016 and the year-on-year rate was confirmed at 1.7%, down slightly from the 1.8% recorded for the previous quarter.
The mood among German investors improved further in May to reach its highest since July 2015. The economic sentiment index rose to 20.6 from 19.5 points in the previous month. The Reuters consensus forecast was for a rise to 22.0.
European car sales fell 6.8 percent in April due to a fall in demand for Volkswagen-branded cars, fewer trading days during Easter, and thanks to a double-digit sales drop in Britain. Registrations dropped to 1.23 million cars last month in the European Union and European Free Trade Association (EFTA) countries, down from 1.32 million a year earlier.
U.K. annual inflation rises more than expected in April. the rate of rose from the year before by a seasonally adjusted 2.7% last month, compared to forecasts for a 2.6% advance and a 2.3% rise in March. , which excludes food, energy, alcohol, and tobacco costs rose at a seasonally adjusted rate of 2.4% last month, higher than forecasts for a gain of 2.2% and compared to the 1.8% advance registered in March.
Business News
SolarCity founder Lyndon Rive (and cousin of Elon Musk), who steered the growth of the biggest U.S. residential solar company before driving its sale to Tesla (NASDAQ:TSLA), is leaving the electric vehicle maker in June. "My skill set and what I love doing is starting and running companies," he told Reuters. "I can hand off the baton and give myself the opportunity to do something that could also have another impact."
IndustrialsToshiba plunged over 12% overnight after forecasting a return to profit over the next 12 months, notwithstanding the highly complicated sale of its flash memory business. Unless it can sell the division, Toshiba's (OTCPK:TOSYY) net equity will probably remain at around negative ¥540B ($4.8B) for two straight years through March 2018. Its shares also run the risk of being delisted.
ConsumersHackers claim to have stolen an upcoming Disney (NYSE:DIS) movie for a ransom, and will release the film if the company doesn't transfer the fee via bitcoin. CEO Bob Iger said he's not paying, but is working with the FBI on the matter. The issue is reminiscent of Netflix's (NASDAQ:NFLX) recent troubles with Orange is the New Black, which had most of its new season released online by hackers.
Ford (NYSE:F) plans to slash its global workforce (currently 200K) by about 10%, WSJ reports. The job cuts are expected to be outlined as early as this week. Ford shares have suffered during CEO Mark Fields's three-year tenure and the company's market value has slipped far behind those of Tesla (TSLA) and General Motors (NYSE:GM).
Happy Anniversary! It's now been twenty years since Amazon (NASDAQ:AMZN) made its public debut on the Nasdaq and in that time shares have gone from $1.50 on a split-adjusted basis to $960. What started as an online book seller has evolved into a retailing giant and dominant provider of cloud technology. Amazon currently has a market cap of $465B, with annual revenues of $136B.
FinancialsHSBC has settled claims by a group of U.S. bondholders that it conspired with rivals to rig Libor. "We are pleased the matter is resolved," said HSBC spokesman Rob Sherman, but he didn't disclose the terms of the settlement. The benchmark interest rate is used to set rates on hundreds of trillions of dollars of transactions, including for credit cards, student loans and mortgages.
JPMorgan (NYSE:JPM) shareholders are gathering in Wilmington, Delaware for the bank’s annual meeting at 10 a.m. Investors are likely to be awaiting what Jamie Dimon will say about the Trump administration's policies and the economy. The SkyBridge Alternatives Conference, or SALT, a three-day event for hedge fund managers, will also begin in Las Vegas.
Information TechnologyFacebook is still accessible in Thailand - one of the most Facebook-active countries in Asia - despite concerns that authorities would shut down the social network. Thailand's telecoms regulator said last week it would give Facebook (NASDAQ:FB) until Tuesday to take down 131 web addresses with content deemed threatening to security or which violated strict "lese majeste" laws.
Yahoo has announced plans to buy back $3B of its common stock - a proposal that will expire on June 13. The company said the purpose of the offer, which will see a purchase price of at least $37 a share, is to provide liquidity to stockholders forced to sell their stock. Yahoo (NASDAQ:YHOO) shares have hardly moved on the news, up just 0.5% premarket.
Microsoft's 21st annual CEO Summit kicks off today in Redmond, Washington, where leaders will discuss the ties between business and technology. The summit follows last week's Microsoft (MSFT) Build event, where the company unveiled a new update to Windows, which allows users to jump easily from mobile to desktop, and hand-held controllers for virtual reality.
Telecommunication ServicesVodafone (NASDAQ:VOD), weighed down by its Indian unit and foreign currency movement, posted a full-year loss of €6.1B. The mobile operator expects earnings and cash flow to improve, however, with lower spending and increased customer revenue. "Our confidence in the outlook is demonstrated by another 2% increase in our dividend," CEO Vittorio Colao declared. VOD +4% premarket.
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
Emerging Market
ETF Flow
Asset Class
Asset Class: Equity
Geography Regions
Geography Regions: Asia Pacific
Calendar
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Sources