Market Overview (11.10.2017)
Market Today
Indices
Currency
Commodities
Econ & Policy
Economic Indicators
Policy
Business News
Industrials
Consumers
Health Care
Financials
Information Tech
Calendar
Economic Calendar
Market Today
S&P 500 (-0.5% at 2,585) Dow Jones (-0.5% at 23,462) NASDAQ (-0.6% at 2,584) U.S. equities fell on Thursday, pulling back from record highs, on worries that a corporate tax cut could be delayed. A proposed plan by Senate Republicans would push slashing the corporate tax rate from 35 percent to 20 percent until 2019. The move contrasts with a bill working its way through the House. The proposed Senate measure would also alter the individual tax system.
US Dollar Index (DXY): The dollar held steady near one-week lows against other major currencies on Friday, as concerns over the fate of a highly-anticipated U.S. tax reform bill continued to dampen demand for the greenback. U.S. Senate Republicans unveiled a plan on Thursday which would reduce the corporate tax rate to 20% from 35% and make other significant changes to the individual tax system. However, investors remain cautious as Senate Republican leaders said that they were considering postponing the implementation of the major corporate tax cut until 2019. (DXY: -0.07% at 94.34)
EUR/USD: With the value of bitcoin soaring to new records and some predicting a crash, central banks around the world have come under pressure to monitor these assets, evaluating their potential threat to stability. “The so-called private ‘cryptocurrencies’ can never prevail as general money substitutes,” Constancio said in Rome. (EUR/USD: 0.08% at 1.165)
British Pound: GBP/USD rose 0.21% to trade at 1.3173 after the UK Office for National Statistics said manufacturing and industrial production both increased by 0.7% in September and both beating expectations for a 0.3% uptick. Year-on-year, manufacturing production increased more than expected by 2.7% in September, while industrial production advanced by 2.5%. (GBP/USD: 0.39% at 1.3197)
CommoditiesGold prices are slightly lower in early U.S. trading Friday, on a minor correction after this week’s good gains that saw prices hit a three-week high on Thursday. (Gold Prices: -0.05% at $1,284.97)
Oil prices paused their rally Friday, having soared over the past week after top exporter Saudi Arabia detained hundreds of individuals in a corruption investigation. (Brent Crude Futures: +0.09% at $63.99 a barrel. WTI Futures: -0.03% at $57.15 a barrel)
Steel: Chinese iron ore futures drifted down for a third day in a row on Friday amid concerns that consumption of the steelmaking commodity in the world’s top user would be reduced as steel producers slash production over winter. (Shanghai Steel Rebar Futures: +0.3% at 3,796 yuan per tonne. Iron Ore Contract: -1.4% at 462.5 yuan tonne.)
Econ & Policy
Americas
OPEC opens door to U.S.-Asia trade for battered crude shippers. Cuts in OPEC output that have led to a surge in U.S. oil exports to Asia may prove a godsend for struggling global shippers, driving rates for large crude shipments to China, India and other major oil importers sharply higher over the next year.
Asia and Pacific
Japan households' financial assets rising thanks to Abenomics. An improving job market driven by Japan's economic recovery and booming stock prices helped increase households' net worth this year, a survey showed, suggesting the benefits of Prime Minister Shinzo Abe's reflationist "Abenomics" policies are broadening. Households' average financial assets rose 6.8 percent from a year ago to 11.5 million yen ($101,447) in 2017 thanks to a 25 percent rise in Japanese stock prices
Japan manufacturers' mood slips but hovers near decade high. The Reuters Tankan indicated that sentiment in both manufacturing and non-manufacturing remained elevated and that the outlook was also firm, reflecting strong domestic and overseas demand. The sentiment index for manufacturers fell to 27 from a decade-high of 31 in October. Sentiment deteriorated sharply among producers of industrial materials such as refined oils and chemicals, likely reflecting worsening terms of trade due to a weakening yen and rising oil prices.
Hong Kong's economy cools in third quarter, but on track for strong 2017. Hong Kong's trade-reliant economy posted slower growth in the third quarter, but strong consumption and rebounding exports led the government to nudge up its growth outlook for 2017. Supported by improving retail sales, a rebound in mainland tourist arrivals and strong global trade, the economy grew a seasonally-adjusted 0.5 percent in the third quarter. That compared with upwardly revised 1.1 percent growth previously. From a year earlier, the economy expanded 3.6 percent in the third quarter compared with revised 3.9 percent growth in the second. Economists had forecast an expansion of 3.5 percent.
PolicyAmericas
Worries over tax reform delays： U.S. stock index futures are heading lower, while the dollar is poised for its biggest weekly drop in a month, as investors fret about tax reform delays. U.S. Senate Republicans have unveiled a plan that differs from the House's version on several key fronts, including when to slash corporate tax rate, deductions for state and local taxes, and the estate tax. The House is set to vote on its measure next week, but the Senate's timetable is less clear.
Europe
Brexit talks on Northern Ireland: In order to avoid "a hard border on the island," the EU is demanding Britain accept that Northern Ireland may need to remain inside the European customs union and single market following Brexit. The view directly contradicts the U.K. position and comes as EU and British task forces meet in Brussels for round six of Brexit negotiations.
Asia and Pacific
Trump won't meet Putin at APEC summit: Ahead of the fourth leg of his 12-day Asia trip, President Trump praised Chinese leader Xi Jinping as "highly respected" after a visit that was said to have set a "new blueprint" for handling U.S.-China relations. "Regarding a Putin meeting, there was never a meeting confirmed, and there will not be one that takes place [at APEC] due to scheduling conflicts," White House Press Secretary Sarah Sanders told reporters.
Trump delivers speech at APEC summit: "We will make bilateral trade agreements with any Indo-Pacific nation that wants to be our partner," President Trump told leaders at the summit in Vietnam. "What we will no longer do is enter into large agreements that will make meaningful enforcement practically impossible." Additionally, Washington will "no longer tolerate the audacious theft of intellectual property and chronic trade abuses."
Trump visit: U.S.-China deal list expands: The U.S. has also revealed a list of the 37 major deals signed during Trump's trip through Asia. Besides the companies announced earlier, contracts were awarded to ADM (NYSE:ADM), Cheniere Energy (NYSEMKT:LNG), DowDuPont (NYSE:DWDP), Terex (NYSE:TEX), Textron (NYSE:TXT) and Thermo Fisher (NYSE:TMO), for a total value of over $250B.
Liberalization of China's financial sector: Following the visit, China has taken further steps toward liberalizing its financial system, saying it will remove foreign ownership limits on banks and asset management companies, while allowing overseas firms to take majority stakes in local securities ventures and insurers. The country has already made big strides in opening its equity and bond markets to foreigners.
Middle East and Africa
Ratcheting up the rhetoric - Saudis, Iran: After calling for sanctions on Iran for its "support of terrorism," Saudi Arabia and its Gulf allies have ordered their citizens to immediately leave Lebanon, escalating a dispute over the influence of Iranian ally Hezbollah. Saudi Arabia said it also plans to cut oil exports to all the regions it ships to next month as the kingdom and fellow nations press on with their OPEC-backed supply cuts.
Business News
Alibaba's Singles' Day sales event coming Saturday, could top $24B in sales: Millions of Chinese consumers will be glued to their smartphones tomorrow for an annual shopping extravaganza known as Singles Day. Alibaba's (NYSE:BABA) event, which brought in $17.8B in 2016, surpasses what retailers earn from both Black Friday and Cyber Monday in the U.S. Citigroup even estimates sales this year could top $24B. BABA +0.4% premarket.
Nintendo weighs upping Switch production: Nintendo plans to up the pace of production for its Switch game console next year, WSJ reports, showing the company's deepening confidence in the device. The plan, which would see production of 25M-30M units in its next fiscal year, is still in the early stages, but Nintendo (OTCPK:NTDOY) could aim higher depending on this year's holiday season.
Ford tests bionic auto workers: Robots have replaced many U.S. manufacturing workers, but new mechanical exoskeletons being tested by Ford (NYSE:F) may help factory workers function like bionic people. Two of the automaker's U.S. factories are trying out upper-body devices developed by Ekso Bionics (NASDAQ:EKSO), which are designed to increase productivity and reduce the physical damage of repetitive tasks over many years. EKSO +2.9% premarket.
GM plans Nov. 30 investor event on the 'autonomous future' of driving: Self-driving boost? General Motors (NYSE:GM) has scheduled an investor event for Nov. 30, which will outline "our vision for an autonomous future." An innovation that seemed a few years away from commercialization is advancing rapidly. In the next few months, Google's (GOOG, GOOGL) Waymo will launch a robo-taxi service in the Phoenix area that will have no human driver in the front seat.
HealthcareSale/IPO of Ortho-Clinical Diagnostics? Carlyle Group is exploring a sale or IPO of Ortho-Clinical Diagnostics that could be valued at more than $7B, including debt, Reuters reports. A divestment of the U.S. diagnostics company, which Carlyle (NASDAQ:CG) acquired from Johnson & Johnson (NYSE:JNJ) in 2014 for $4B, would show how buyout firms can turn unloved businesses of major firms into lucrative investments within a few years.
FinancialsStocks snooze through correction in high-yield: The two largest junk bond ETFs, State Street's JNK and BlackRock's HYG, are at their lowest levels in seven months as declines and fresh outflows inject volatility into the asset class. The downward movement has been intensified by lackluster quarterly results by some of the largest high-yield bond issuers, which are often among the biggest holdings of the popular ETFs.
SEC: New cyber breach guidelines: Public companies will soon face new guidelines for how they report cybersecurity breaches to investors as the SEC updates the directions it gave corporations over six years ago. Among the issues the commission should tackle are fully defining the level of cyber intrusion that demands a public disclosure, said William Hinman, the SEC's recently installed director of corporation finance.
Information TechnologyToshiba weighs major capital raise: Desperate for cash to avoid a possible delisting, Toshiba (OTCPK:TOSYY) is considering the sale of new shares worth as much ¥600B ($5.3B). Speculation that existing shareholders would be diluted by the capital raise sent shares down by as much as 8% in Tokyo overnight. This also follows the recent sale of its prized chip unit, Toshiba Memory, to a group led by Bain Capital for $18B.
Twitter learned lessons from Trump deactivation: "It should never have been possible" for a single staffer to temporarily deactivate President Trump's Twitter (NYSE:TWTR) account, Jack Dorsey told the NYT's DealBook conference. "There are a number of things that came out of this for us... We started looking into what we can improve and where we have weaknesses, where we have gaps. Second, particular policies around what agents have control over and what they don't."
Another setback for Uber in London: Uber has lost an appeal to overturn a decision by a tribunal which said its drivers deserved workers' rights such as the minimum wage, in a blow to the taxi app as it battles to keep its license in London. The case was rejected at the Employment Appeal Tribunal in central London. UBER has also been forced to quit several countries, such as Denmark and Hungary.
Calendar
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
·END·
Contact: askalphanyc@gmail.com
Sources