Market Overview (11.16.2017)

Contents 

Market Today  

 

•  Indices

• Currency

• Commodities  

Econ & Policy 

• Economic Indicators

• Policy

Business News 

• Industrials 

• Consumers

• Financials

• Information Tech

• Telecommunication

Calendar  

• Economic Calendar

Market Today

Indices

S&P 500 (-0.6% at 2,565) Dow Jones (+0.6% at 23,271) NASDAQ (-0.5% at 6,706) Stocks slumped today and the S&P 500 suffered a "significant" drop, as investors continued to fret about the flattening yield curve and the possibility of tax reform.

Forex

US Dollar Index (DXY): The dollar rebounded from four-week lows against the yen on Thursday, as global markets regained some of their risk appetite after a sharp sell-off in stocks and the greenback - and heavy flows into safe-haven assets - over the past week. (DXY: 0.10% at 93.81)

EUR/USD: The EUR/USD is trading lower on Thursday. Lower demand for risky assets and the divergence between the hawkish U.S. Federal Reserve and the dovish European Central Bank is weighing on the Forex pair. (EUR/USD: -0.14% at 1.1774)

British Pound: The British Pound held onto UK retail sales-led modest gains and pushed the GBP/USD pair back closer to the 1.3200 handle. The pair gained some positive traction following the release of better-than-expected UK monthly retail sales data and helped reverse an early dip to the 1.3135 region led by the latest Brexit headlines, which indicated that the EU plans to reject the UK's proposal for a bespoke trade deal. (GBP/USD: 0.21% at 1.3201)

Japan Yen: The USD/JPY pair extended its pull-back the mid-European session highs and has now moved on the brink of breaking below the 113.00 handle post-US economic data. The pair, however, has managed to hold with modest daily gains, supported by surging US Treasury bond yields and the prevalent risk-on environment, which tends to dent the Japanese Yen's safe-haven appeal. (USD/JPY: 0.11% at 112.99)

Commodities

Gold continues to hold on to modest overnight gains following weaker-than-expected data manufacturing data from the Philadelphia Federal Reserve. (Gold Prices: +0.23% at $1,279.44)

Oil prices showed little change Thursday, with the muted action coming after a slump in the prior session that was blamed on a surprise jump in U.S. supplies. (Brent Crude Futures: -0.48% at $61.57 a barrel. WTI Futures: -0.27% at $55.18 a barrel)

Steel: Chinese coke futures rose on Thursday as mills in the world’s top steel producer increased prices to offset the cost of higher raw materials, but steel prices eased. (Shanghai Steel Rebar Futures: -1.6% at 3,680 yuan per tonne. Iron Ore Contract: -2.1% at 410.06 yuan tonne.)

Econ & Policy

Economy

Americas

U.S. weekly jobless claims unexpectedly rise. Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 249,000 for the week ended Nov. 11, the Labor Department said on Thursday. It was the second straight weekly increase.

U.S. Import and Export Prices Miss Forecasts in October. The U.S. Bureau of Labor Statistics said import prices increased by a seasonally adjusted 0.2% last month, compared expectations for a 0.4% rise. Import prices had risen by 0.8% in September, revised from an initial 0.7% advance. Export prices were unchanged from a month earlier in October, compared to forecasts for a 0.4% gain. That followed a 0.7% advance a month earlier that was revised from an initial reading of a 0.8% increase.

Philippines third-quarter economy grows at fastest pace in a year. Gross domestic product rose 6.9 percent in the third quarter from a year earlier, the statistics agency said on Thursday, picking up from the upwardly revised 6.7 percent pace in the second quarter.

U.S. core inflation pushes higher; retail sales rise. The rise in the consumer price index, excluding the volatile food and energy categories, reported by the Labor Department on Wednesday likely clears the way for the U.S. central bank to raise interest rates next month.

Europe

Euro Zone Inflation Continues to Slow. The European Union's statistics office said the revised reading showed that the consumer price index rose at an annual rate of 1.4% in October, down from 1.5% in September. Meanwhile the index rose by 0.1% month-over-month in October, revised down from 0.4% in the preliminary reading.

UK Retail Sales Rise More Than Forecast in October. Retail sales in the UK rose more than expected in October, bolstering optimism over the British economy, official data showed on Thursday. In a report, UK Office for National Statistics said that retail sales increased by 0.3% in October from the prior month, compared to the previous 0.7% decline which was revised from an initial 0.8% drop.

Asia and Pacific

Australia jobless rate lowest since 2013, no boon for wages. Australian employment rose for a 13th straight month in October, the longest stretch of gains since the early 1990s, while the jobless rate dipped to its lowest in over 4-1/2 years. Thursday's figures from the Australian Bureau of Statistics showed 3,700 net new jobs were eked out in October. That was short of forecasts of a 17,500 rise, but September was revised up to a solid increase of 26,600 from the first estimate of a gain of 19,800.

Policy

Americas

Tax bill thrown into uncertainty? Becoming the first GOP voice of dissent, Sen. Ron Johnson said he's opposed to the revised Senate Republican tax plan because it unfairly benefits corporations more than other types of businesses. It comes as the House prepares to vote today on its own version of the tax bill, which would cut taxes by more than $1.4T over a decade and broadly rewrite the business tax code.

Trump hails trip to Asia "Trade abuses harm the U.S. and its workers, but no more," President Trump said at the White House after returning from his nearly two-week trip to Asia. "The 21 APEC leaders, for the first time ever, recognized the importance of fair and reciprocal trade, recognized the need to address unfair trade practices, and acknowledged that the [World Trade Organization] is in strong need of reform."

Europe

Greece debt swap ahead of bailout exit: Greece has launched a €30B debt swap in a bid to shore up confidence and boost market liquidity ahead of a hoped-for exit from its current bailout program next August. The country's Public Debt Management Agency invited private bondholders to swap 20 small-size issues for five new ones with longer maturities of between five and 25 years.

Middle East and Africa

Zimbabwe transition or coup? President Robert Mugabe's refusal to publicly resign is stalling plans by the military to swiftly install a transitional government in Zimbabwe. It wants to claim the action isn't a coup to head off tension with the Southern African Development Community, which includes Zimbabwe and South Africa, Bloomberg reports. The group previously intervened when the army took over in Lesotho.

Business News 

Industrial

European Union supports Bombardier in trade dispute with Boeing: The EU is backing Bombardier (OTCQX:BDRAF, OTCQX:BDRBF) and the U.K. in a trade dispute with Boeing (NYSE:BA), arguing that the U.S. investigation into the CSeries program "shows significant shortcomings." Boeing claims Bombardier launched "an aggressive campaign" to dump the CSeries in the U.S. and offered the new jet to Delta (NYSE:DAL) at "absurdly low" prices.

Consumers

The spotlight falls on electric trucks: Months after teasing the big rig, Tesla (NASDAQ:TSLA) will take the lid off its electric truck at 8 p.m. PT tonight at its Design Studio in Hawthorne, CA. While it's not the only company with plans to push forward with semis, many are eyeing Elon Musk and his efforts to kill the diesel engine. In the works for two years, the vehicle is aimed squarely at cleaning up the freight industry. TSLA +0.9% premarket.

NYT: Koch brothers get involved in new Meredith effort to buy Time: While talks between the two fizzled earlier this year, Time (NYSE:TIME) is in discussions to sell itself to Meredith (NYSE:MDP), sources told the NYT. The deal is being backed by the billionaire Koch brothers and a $500M equity injection. Both sides hope to move quickly enough to be able to announce a transaction soon after Thanksgiving.

Peltz claims win, P&G says not yet: Following a preliminary vote recount, Nelson Peltz has claimed victory in his proxy fight to win a seat on Procter & Gamble's (NYSE:PG) board, but the company refused to concede and said it wants to see a certified result before declaring a winner. Shares of P&G rose more than 3% in AH trading, indicating some investors welcomed Trian's effort to shake up management and improve financial results.

Legionnaires' case increase at Disneyland: The number of people diagnosed with Legionnaires' disease after spending time in Anaheim or Disneyland (NYSE:DIS) increased to 15, according to Orange County health officials. While two of patients have died, neither of them visited Disneyland. Legionnaires' disease is a form of atypical pneumonia that is usually spread by breathing in mist that contains Legionella bacteria.

VW earmarks €10B for Chinese electric cars: Seeking to comply with upcoming stringent rules, Volkswagen (OTCPK:VLKAY) plans to spend €10B by 2025 to develop and manufacture all-electric and plug-in hybrid cars in China. VW intends to launch 15 of the so-called new energy vehicle models over the next two to three years, and an additional 25 after 2025, China chief Jochem Heizmann told Reuters.

Financials

 Square comments on bitcoin steps: Square's latest venture into the world of bitcoin is less of a validation of the cryptocurrency than it is a testament to innovation, CFO Sarah Friar told CNBC. "We're a payment innovator. So this isn't sellers asking to accept bitcoin, this is individuals using Square Cash (NYSE:SQ) to make payments." Bitcoin briefly gained over 11% yesterday on the news.

Information Technology

FCC plans vote to kill net neutrality: The FCC is set to unveil plans next week for a final vote in December to reverse a landmark 2015 net neutrality order, which reclassified internet service providers as if they were utilities. The move will reignite a years-long debate that has seen Republicans and broadband providers seeking to eliminate the rules, while Democrats and technology companies support them.

Baidu unveils a smart home speaker: The battle for AI-enabled smart speakers is also being waged in China, with Baidu (NASDAQ:BIDU) introducing its Raven H, which will go on sale in December. At 1,699 yuan ($256), it's pricier than devices from JD.com (NASDAQ:JD) or Alibaba (NYSE:BABA), but it includes a voice-powered remote control for smart home devices. The speaker was designed by Raven Tech, a startup that Baidu acquired in February.

Telecommunication Services

T-Mobile aims for 5G network by 2020: With U.S. carriers looking to the next-generation of mobile networks, T-Mobile (NASDAQ:TMUS) has given a timeline for when it will get on board. "We are committed to roll out 5G across the nation by 2020," Chief Technology Officer Neville Ray said at the Morgan Stanley European Technology, Media and Telecoms Conference in Barcelona.

Telecom, media sector rethink for S&P: Starting in September 2018, S&P Dow Jones Indices (SPGI, CME, NWS) will combine telecom, media and entertainment company shares into a single sector. The move reflects a wave of M&A and "an evolution in the way we communicate and access entertainment content." It's a long-anticipated overhaul of the company's stock market indexes, including the benchmark S&P 500.

AT&T surfaces in NAFTA negotiations: Mexico has shot down a proposal by the U.S. to include provisions in the NAFTA that would benefit AT&T (NYSE:T). "You cannot have an agreement... that gives a tailor’s cut, a perfect handiwork, to a specific company," said Economy Minister Ildefonso Guajardo. AT&T entered the Mexican market in 2014, spending $4.4B to buy the No.3 and No.4 wireless carriers, but a recent supreme court ruling upended Mexico's telecom reform.

Calendar

Economic Calender

8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
8:30 Import/Export Prices
9:10 Fed's Mester: Monetary Policy
9:15 Industrial Production
9:45 Bloomberg Consumer Comfort Index
10:00 NAHB Housing Market Index
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

·END·

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