Friday, 18 August 2017

Wall Street futures in red as Trump-CEOs scandal weighs on sentiment

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US stock indexes dropped sharply on Thursday amid rising concerns that tension between President Donald Trump and business leaders will affect his ability to push key economic reforms in Congress later in the year.

The Dow Jones industrial average fell more than 270 points to end 1.2 percent lower at 21,750.73, with Cisco System on top of decliners.

The tech giant was down about 4 percent to trade at $31.04 after it confirmed sales will continue to decline in the present quarter between 1 and 3 percent.

Also, rumors that White House top business advisor Gary Cohn could resign as director of the National Economic Council weighed on market sentiment.

While Cohn has previously showed himself unsatisfied with Trump comments on the violent clashes in Charlottesville, Virginia, a WH official confirmed "Gary is focused on his responsibilities as NEC Director and any reports to the contrary are 100% false."

On the corporate front, Wal-Mart displayed better-than-expected second quarter earnings as the company reported more activity both in its online platform and in-store. But that wasn’t enough to hold prior gains, leaving retail stocks up for a noticeable downward correction.

The S&P 500 moved down 1.5 percent to stand around 2,430.01 by the closing bell, as information technology faced strong losses. The tech-heavy Nasdaq composite sank by 1.9 percent to 6,221.91, marking its third-biggest intraday retreat in 2017.

  • Dow Jones Industrial Average: -274.14 / -1.24% / 21750.73
  • Standard & Poor’s 500: -38.10 / -1.54% / 2430.01
  • Nasdaq Composite: -123.19 / -1.94% / 6221.91

On the data front, initial jobless claims came in at 232,000, down from an initially forecasted decline to 240,000. The Philadelphia Fed manufacturing index for August rose to 18.9, outperforming expectations of 18.5. Industrial production increased 0.2 percent in July, falling short from a forecasted 0.3 percent build.

The Street was also shocked by a terrorist attack on Barcelona. A van crashed into dozens of people in the city center of the coastal city. Authorities confirmed death toll of 13 people and more than a hundred injured.

Market players are waiting for preliminary readings on Michigan consumer expectations and consumer sentiment as of 14:00 GMT, with 81.0 and 94.0 seen.

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Weekly Outlook: Aug 21 - Aug 25

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Monday

No relevant economic data is expected.

Tuesday

Europe: Germany is first on the line with a fresh reading on the ZEW current conditions and economic sentiment surveys as of 09:00 GMT. Researchers will also present economic sentiment for the euro zone. One hour later, the United Kingdom will release August's CBI industrial trends orders.

Wednesday

Europe: Markit Economics will present preliminary readings on their services and manufacturing PMI indexes for Germany at 07:30 GMT. Same reports will be available for the eurozone half an hour later.

United States: as for the US services and manufacturing PMI indexes, the release is scheduled at 13:34 GMT. But that's not all for the day. New home sales for July will also be in focus, especially as housing starts fell by 4.8 perfect in June, according to the Commerce Department. The Energy Information Administration will show its official crude and refined products inventories at 14:30 GMT.

Thursday

Europe: the UK will play an important role on Thursday as markets will receive BBA Mortgage Approvals, Business Inventories and a preliminary look at the second-quarter gross domestic product at 08:30 GMT.

United States: across the Atlantic, central bank leaders from around the world kick off the first day of Fed's Jackson Hole symposium. Existing home sales for July are up at 14:00 GMT.

Asia: the Tokyo core CPI for August will be presented as of 23:30 GMT, together with Japan's national core consumer price index.

Friday

Europe: Germany's preliminary second-quarter gross domestic product will be out at 06:00 GMT. Investors will pay close attention to this report as they assess expectations for a future reduction of ECB stimulus later in the year. The lfo business climate survey is also on schedule at 08:00 GMT together with current assessment and business expectations for August.

United States: durable goods orders for July will be released as of 12:30 GMT. Baker Hughes will present its weekly oil rigs count at 17:00 GMT.

Fort Financial Services
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What’s next? – USDJPY 18.08.17

No comments : Posted by Valentine at 03:23 Labels:

USDJPY

The dollar/yen was down 0.46 percent as of 08:50 GMT on Friday to trade at 109.05, as the Japanese currency strengthened on the back of Trump’s tensions with the business sector.

In the Asian session this morning, China said house prices rose 9.7 percent in July against a previous month advance of 10.2 percent.

Rumors that National Economic Council Chairman Gary Cohn was resigning due to Trump’s recent remarks on violent incidents in Charlottesville, Virginia, weighed on market sentiment on Thursday. A White House official said Mr. Cohn had no intention to leave his job.

“Cohn is focused on his responsibilities as NEC Director and any reports to the contrary are 100% false,” the WH official related to the matter said.

On the data front, initial jobless claims fell by 12,000 to a seasonally adjusted 232,000 in the week ended August 12, the Labor Department reported.

Also, the Federal Reserve Bank of Philadelphia said that manufacturing index moved to a seasonally adjusted 18.9 this month, against expectations for a 18.5 reading.

The US dollar index, which gauges the greenback against a basket of six major currencies, was down 0.13 percent at 93.43 by the time of this writing.

The yen is seen as a safe-haven currency and therefore, the terrorist attack in Barcelona pushed it upwards against its American rival.

Ahead in the day, investors will count on preliminary readings on Michigan consumer expectations and consumer sentiment as of 14:00 GMT, with 81.0 and 94.0 seen.

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What’s next? – DAX 18.08.17

No comments : Posted by Valentine at 03:21 Labels:

DAX

The DAX futures traded 0.73 percent lower at 12,110.5 points as of 08:10 GMT on Friday, with market risk-off sentiment taking the lead following a terrorist attack in Barcelona.

On Thursday afternoon, a white van was driven into a crowd in Las Ramblas, one of Barcelona’s busiest tourist areas, located at the very heart of the city.

According to the government, thirteen people were killed and more than 100 people were injured in this attack. Terrorist group Islamic State Claimed responsibility for it.

Traders opted to turn into safe-havens and leave equities behind as fears quickly spread.

Earlier today, Germany’s production price index rose 0.2 percent in July, beating expectations for a 0.1 percent increase and a previous month unchanged reading. However, upbeat data has proven not to have serious effects on the direction of the benchmark lately.

Yesterday, attention was directed to the latest minutes of the European Central Bank’s monetary policy meeting. The document showed that policymakers were concerned about a possible overshoot in the euro back in July.

The euro has been gaining positions against the US dollar and other rivals lately, making EU exports more expensive overseas and therefore, less of an interesting option for buyers.

"Concerns were expressed about a possible overshooting in the repricing by financial markets, notably the foreign exchange markets, in the future, [...] It was underlined that the still favourable financing conditions could not be taken for granted."

Germany stocks ended mixed on Thursday in Frankfurt, with retail, pharmaceuticals and utilities pushing upwards, while banking, construction and transportation weighed on the benchmark.

The best performers of the session were RWE, which added 1.09 percent to trade, followed by Fresenius Medical Care rising 1.01 percent to 79.920 and Linde up 0.45 percent to 166.00.

The worst performers of the session were Deutsche Bank easing 3.22 percent to 14.110, Commerzbank falling 2.86 percent to 10.880 and Heidelbergcement down 1.43 percent to 80.580.

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What’s next? – GOLD, OIL 18.08.17

No comments : Posted by Valentine at 01:14 Labels:

GOLD

Gold prices rose in Asian trade on Friday, moving to two-month highs, as a terrorist attack in Spain increased demand for safe-haven assets.

On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.62 percent or $6.70 up at $1,299.10 a troy ounce as of 07:20 GMT.

A van was driven into pedestrians in one of Barcelona’s most popular areas in the summer season. The attack left 13 people dead and more than 100 injured.

While the so-called terrorist organization Islamic State claimed responsibility for this particular attack, Spanish authorities haven’t confirmed it yet.

A weaker US dollar was also supporting the yellow metal. Eight CEOs left the government’s business advisory councils on Wednesday in response to Trump’s remarks over the violence in Charlottesville, Virginia. Trump had said not only white supremacist were to blame.

Also, rumors that White House top economic adviser Gary Cohn was also leaving his job weighed on market sentiment. A WH official later denied such intentions from Cohn. Traders believe tensions between the administration and business leaders can affect further reforms.

The US dollar index, which gauges the greenback against a basket of six major currencies, was down 0.18 percent at 93.37.

Gold is sensitive to interest rates moves, which increase the opportunity cost of holding non-yielding assets such as the metal.

OIL

Oil futures rose in early trading hours on Friday, with market participants awaiting rig count data from the United States as the cheering effect of inventory data continued.

The US West Texas Intermediate crude futures traded 0.70 percent higher at $47.42 per barrel as of 07:40 GMT, while the London-based Brent contracts on the ICE Futures Exchange in London were up 0.27 percent to $51.17 a barrel.

On Thursday, benchmarks settled in green territory following a report from the US Energy Information Administration that shows crude reserves falling the most in eleven months.

The Energy Information Administration reported a 8.9 million barrels drop in the week ended August 11, beating expectations for a 3 million barrels drop.

However, gasoline reserves added 22,000 barrels, compared to a forecasted decline of 1.1 million barrels. Distillate products stockpiles rose by 702,000 barrels.

The agency also said weekly oil production moved to a two-year peak of 9.502 million barrels per day, adding 79,000 bpd last week, boosting oversupply worries among investors.

Traders are concerned about OPEC’s inability to counteract the ongoing supply overhang. The oil cartel extended its output cuts agreement until March 2018, with a volume of reduction standing at 1.8 million barrels per day.

A recent report from the Paris-based International Energy Agency said OPEC’s rate of compliance with the deal fell to 75 percent in July.

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Thursday, 17 August 2017

Trump-CEOs tensions weigh on sentiment; Wall Street index futures down

No comments : Posted by Valentine at 03:10 Labels:

Wall Street stock indexes were set for a lower open on Thursday, with market participants digesting mixed FOMC minutes as they looked ahead of new economic reports later in the day.

Today’s agenda includes the release of initial jobless claims, the Philly Fed manufacturing index for August as of 12:30 GMT. Industrial production for July will be out at 13:15 GMT.

Traders will also be paying attention to speeches from Dallas Fed President Robert Kaplan and Minneapolis Fed President Neel Kashkari at 17:00 GMT and 17:45 GMT respectively.

The Dow Jones industrial average ended in green territory on Wednesday, with United Technologies and Home Depot recovering from previous session losses.

The S&P 500 was moving around breakeven, with materials supporting the benchmark and as energy sector stocks pushed it downwards.

The tech-heavy Nasdaq composite was up 0.19 percent as Apple stocks rose to all-time highs.

  • Dow Jones Industrial Average: 25.88 / 0.12% / 22024.87
  • Standard & Poor’s 500: 3.50 / 0.14% / 2468.11
  • Nasdaq Composite: 12.10 / 0.19% / 6345.11

Building permits for July notched down 4.1 percent, while housing starts dropped 4.8 percent, both missing expectations for a 2.0 percent decline and a 0.5 percent build respectively.

Minutes of July’s Federal Reserve monetary policy meeting confirmed what investors have already noted in the last few weeks, there are two very strong, very different positions regarding interest rate moves. While some policymakers expressed concern about low inflation levels, others insisted that waiting too long to raise rates could be damaging for the economy.

"...some participants expressed concern about the recent decline in inflation, which had occurred even as resource utilization had tightened, and noted their increased uncertainty about the outlook for inflation," the minutes said.

Another key issue mentioned in the minutes was the plan to unwind Fed’s massive balance sheet later this year. The “relatively soon” expression showed up once again.

"Participants generally agreed that, in light of their current assessment of economic conditions and the outlook, it was appropriate to signal that implementation of the program likely would begin relatively soon," the document said.

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ECB Not In A Hurry To Cut Stimulus; Wait Continues

No comments : Posted by Valentine at 03:08 Labels:

The Federal Reserve symposium at Jackson Hole, Wyoming has been shaken up by reports saying European Central Bank President Mario Draghi will not be announcing any policy-related decision during the event.

According to a report from news agency Reuters, Mario Draghi will rather focus on the topic of the event - “Fostering a dynamic global economy” and leaving policy aside.

While investors were of course expecting Draghi to move forward with his hawkish rhetoric regarding monetary policy normalization, it was actually an easy guess that he would opt to wait until fall to unveil any concrete measure on that subject.

Why? You know there is no one single answer to that. However, keep in mind that Germany, the bloc's first economy, is holding elections in September.

And as it's now a fashion in Europe, power will be at stake between status quo Angela Merkel and anti-EU far-right ultra-conservative movements. Familiar? Yes indeed, a clue: baguette :)

The Jackson Hole meeting is an annual event which gathers central bankers from all around the world to discuss one specific topic. Nevertheless, there were several occasions when the conference was used by policymakers to announce key decisions.

ECB disappointing news came hard on the euro, sending the EURUSD to an intraday low of 1.1692 on Wednesday. The obvious immediate measure for the ECB is to reduce its massive bond-purchasing program of €60 billion per month.

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