TradeTheNews.com Weekly Market Update: Markets Remain Risk-On Despite Political Uncertainties and PBoC Warning
Fri, 20 Oct 2017 16:03 PM EST
US stocks rose for the sixth straight week despite a brief bout of risk aversion mid-week that emanated largely from overseas concerns. The political standoff in Catalonia and the PBoC Governor Zhou warning about excessive speculation were the latest additions to the wall of worry. But US economic data has stayed robust, led by manufacturing readings that have continued to surpass expectations. Employment components within the manufacturing data even showed acceleration, while continuing jobless claims made fresh four-decade lows yet again. The game of thrones for the upcoming Fed Chair vacancy appears to be drawing to a close, and reports indicated that Fed Governor Powell is now leading the pack. That news along with the Senate passage of a budget resolution lifted sentiment into Friday. The budget deal was seen as greasing the skids for an eventual tax cut package later this year or early in 2018. Rates moved up late in the week, buoyed by fiscal stimulus hopes and firming expectations for a December Fed hike. The US benchmark 10-year yield rose ~10 basis points on the week despite relative strength at the long end early on. For the week the DJIA gained 2%, the S&P500 added 0.9%, and the Nasdaq rose 0.4%.
In corporate news this week, earnings season shifted into gear, and while some big-name tech firms like IBM and PayPal posted strong results, a few big-cap CEOs had trouble explaining their quarterly reports. In United's post-earnings call, CEO Munoz admitted the airline had dug itself into a 'competitive hole', and his plea for more time to right the ship spooked investors and sent the stock plummeting. Proctor and Gamble reported in line with estimates, but its CEO said he's 'unable to discern' why US growth is lagging. GE posted a huge earnings miss, sending shares to a four-year low, as its management lowered the bar and noted the power business squeezed results. Skechers, however, surprised to the upside, beating earnings estimates handily on strong international growth, and giving the retail apparel sector a shot in the arm on Friday.
SUNDAY 10/15
(CN) CHINA SEPT NEW YUAN LOANS (CNY): 1.27T V 1.23TE
(CN) CHINA SEPT CPI M/M: 0.5% V 0.3%E; Y/Y: 1.6% V 1.6%E; PPI Y/Y: 6.9% V 6.4%E
MONDAY 10/16
IBM Announces new blockchain (technology behind bitcoin) banking solution related to clearing and settlement speeds; Invention to circumvent bank wire infrastructure
(ES) Catalan President Puigdemont response to PM Rajoy said to suspend independence mandate and seek dialogue - financial press citing letter to Rajoy
*(US) OCT EMPIRE MANUFACTURING: 30.2 V 20.5E (highest since Sept 2014)
NFLX Reports Q3 $0.29 v $0.32e, Rev $2.99B v $2.97Be
RIO.UK Reports Q3 Pilbara iron ore production 85.0Mt (100% basis), 83.2Mt y/y; shipments 85.8Mt (100% basis) v 85.2Mte v 80.9Mt y/y
TUESDAY 10/17
BN.FR Reports Q3 Rev €6.45B v €6.46Be
*(UK) SEPT CPI M/M: 0.3% V 0.3%E; Y/Y: 3.0% (highest since Apr 2012) V 3.0%E; CPI CORE Y/Y: 2.7% V 2.7%E
(EU) EURO ZONE SEPT FINAL CPI Y/Y: 1.5% V 1.5%E; CPI CORE Y/Y: 1.1% V 1.1%E
GS Reports Q3 $5.02 v $4.31e, Rev $8.33B v $7.64Be
CSX Reports Q3 $0.51 v $0.52e, Rev $2.74B v $2.78Be
(US) SEPT IMPORT PRICE INDEX M/M: 0.7% V 0.6%E; Y/Y: 2.7% V 2.6%E
(US) SEPT INDUSTRIAL PRODUCTION M/M: 0.3% V 0.3%E; CAPACITY UTILIZATION: 76.0% V 76.2%E
(US) OCT NAHB HOUSING MARKET INDEX: 68 V 64E
(US) Deputy AG Rosenstein: Justice Dept will review impact of 2016 Controlled Substances Act on DEA enforcement legislation
(US) AUG TOTAL NET TIC FLOWS: +$125B V -$7.3B PRIOR; NET LONG-TERM TIC FLOWS: $67.2B V $1.2B PRIOR
IBM Reports Q3 $3.30 v $3.28e, Rev $19.2B v $18.7Be
(HK) According to Centaline Hong Kong 2017 homes sale may reach new record of HK$186.9B - HK press
(CN) China President Xi: China will continue to grow at medium to high speed, economy shifting to period of seeking high quality - work report at 19th National Congress
WEDS 10/18
(HK) Hong Kong Govt: Property prices remain high but the pace of the rise has slowed
*(UK) AUG AVERAGE WEEKLY EARNINGS 3M/Y/Y: 2.2% V 2.1%E; WEEKLY EARNINGS EX BONUS 3M/Y: 2.1% V 2.0%E
(UK) Sept Jobless Claims Change: +1.7K v -0.2K prior; Claimant Count Rate: 2.3% 2.3% prior
*(UK) AUG ILO UNEMPLOYMENT RATE: 4.3% V 4.3%E (matches lowest reading since 1975)
*(US) SEPT HOUSING STARTS: 1.13M V 1.18ME; BUILDING PERMITS: 1.22M V 1.25ME
(US) Atlanta Fed maintains Q3 GDP at 2.7%, unchanged from 10/13
(US) Association of American Railroads weekly rail traffic report for week ending Oct 14th: 548.3K carloads and intermodal units, +3.1% y/y
CA.FR Reports Q3 Rev €21.9B v €21.84Be
AA Reports Q3 $0.72 adj v $0.77e, Rev $2.96B v $3.03Be; Tempers demand outlook
THURS 10/19
ROG.CH Reports Q3 (CHF) Rev 13.1B v 13.14Be
SAP.DE Reports Q3 Non-IFRS Net €1.21B v €1.09B y/y, non-IFRS Op profit €1.64B v €1.69Be, Rev €5.59B v €5.71Be
NESN.CH Reports Q3 (CHF) Rev 22.3B v 22.5Be
*(NZ) NEW ZEALAND LABOUR PARTY/GREEN PARTY (opposition) WINS FIRST PARTY SUPPORT TO FORM GOVT
UNA.NL Reports Q3 Rev €13.2B v €13.39Be
(ES) Spain central govt confirms to hold an emergency Cabinet meeting on Sat, Oct 21st to begin process of suspending Catalan autonomy under Article 155 (as speculated)
(UK) SEPT RETAIL SALES (EX AUTO/FUEL) M/M: -0.7% V -0.2%E; Y/Y: 1.6% V 2.2%E
*(US) OCT PHILADELPHIA FED BUSINESS OUTLOOK: 27.9 V 22.0E
(US) SEPT LEADING INDEX: -0.2% V +0.1%E
(RU) Russia Pres Putin: if the US leaves the Intermediate-Range Nuclear Forces Treaty, Russia will have immediate "symmetrical" response
SKX Reports Q3 $0.59 v $0.43e, Rev $1.10B v $1.06Be
(CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 2.50%; AS EXPECTED
FRI 10/20
941.HK Reports 9M (CNY) Net 92.1B v 88.1B y/y, EBITDA 211.3B v 200.4B y/y, Rev 569.5B v 542.7B y/y
SLB Reports Q3 $0.42 v $0.42e, Rev $7.91B v $7.91Be
PG CFO: "unable to discern why US growth is lagging" - earnings call comments
Fri, 20 Oct 2017 16:03 PM EST
US stocks rose for the sixth straight week despite a brief bout of risk aversion mid-week that emanated largely from overseas concerns. The political standoff in Catalonia and the PBoC Governor Zhou warning about excessive speculation were the latest additions to the wall of worry. But US economic data has stayed robust, led by manufacturing readings that have continued to surpass expectations. Employment components within the manufacturing data even showed acceleration, while continuing jobless claims made fresh four-decade lows yet again. The game of thrones for the upcoming Fed Chair vacancy appears to be drawing to a close, and reports indicated that Fed Governor Powell is now leading the pack. That news along with the Senate passage of a budget resolution lifted sentiment into Friday. The budget deal was seen as greasing the skids for an eventual tax cut package later this year or early in 2018. Rates moved up late in the week, buoyed by fiscal stimulus hopes and firming expectations for a December Fed hike. The US benchmark 10-year yield rose ~10 basis points on the week despite relative strength at the long end early on. For the week the DJIA gained 2%, the S&P500 added 0.9%, and the Nasdaq rose 0.4%.
In corporate news this week, earnings season shifted into gear, and while some big-name tech firms like IBM and PayPal posted strong results, a few big-cap CEOs had trouble explaining their quarterly reports. In United's post-earnings call, CEO Munoz admitted the airline had dug itself into a 'competitive hole', and his plea for more time to right the ship spooked investors and sent the stock plummeting. Proctor and Gamble reported in line with estimates, but its CEO said he's 'unable to discern' why US growth is lagging. GE posted a huge earnings miss, sending shares to a four-year low, as its management lowered the bar and noted the power business squeezed results. Skechers, however, surprised to the upside, beating earnings estimates handily on strong international growth, and giving the retail apparel sector a shot in the arm on Friday.
SUNDAY 10/15
(CN) CHINA SEPT NEW YUAN LOANS (CNY): 1.27T V 1.23TE
(CN) CHINA SEPT CPI M/M: 0.5% V 0.3%E; Y/Y: 1.6% V 1.6%E; PPI Y/Y: 6.9% V 6.4%E
MONDAY 10/16
IBM Announces new blockchain (technology behind bitcoin) banking solution related to clearing and settlement speeds; Invention to circumvent bank wire infrastructure
(ES) Catalan President Puigdemont response to PM Rajoy said to suspend independence mandate and seek dialogue - financial press citing letter to Rajoy
*(US) OCT EMPIRE MANUFACTURING: 30.2 V 20.5E (highest since Sept 2014)
NFLX Reports Q3 $0.29 v $0.32e, Rev $2.99B v $2.97Be
RIO.UK Reports Q3 Pilbara iron ore production 85.0Mt (100% basis), 83.2Mt y/y; shipments 85.8Mt (100% basis) v 85.2Mte v 80.9Mt y/y
TUESDAY 10/17
BN.FR Reports Q3 Rev €6.45B v €6.46Be
*(UK) SEPT CPI M/M: 0.3% V 0.3%E; Y/Y: 3.0% (highest since Apr 2012) V 3.0%E; CPI CORE Y/Y: 2.7% V 2.7%E
(EU) EURO ZONE SEPT FINAL CPI Y/Y: 1.5% V 1.5%E; CPI CORE Y/Y: 1.1% V 1.1%E
GS Reports Q3 $5.02 v $4.31e, Rev $8.33B v $7.64Be
CSX Reports Q3 $0.51 v $0.52e, Rev $2.74B v $2.78Be
(US) SEPT IMPORT PRICE INDEX M/M: 0.7% V 0.6%E; Y/Y: 2.7% V 2.6%E
(US) SEPT INDUSTRIAL PRODUCTION M/M: 0.3% V 0.3%E; CAPACITY UTILIZATION: 76.0% V 76.2%E
(US) OCT NAHB HOUSING MARKET INDEX: 68 V 64E
(US) Deputy AG Rosenstein: Justice Dept will review impact of 2016 Controlled Substances Act on DEA enforcement legislation
(US) AUG TOTAL NET TIC FLOWS: +$125B V -$7.3B PRIOR; NET LONG-TERM TIC FLOWS: $67.2B V $1.2B PRIOR
IBM Reports Q3 $3.30 v $3.28e, Rev $19.2B v $18.7Be
(HK) According to Centaline Hong Kong 2017 homes sale may reach new record of HK$186.9B - HK press
(CN) China President Xi: China will continue to grow at medium to high speed, economy shifting to period of seeking high quality - work report at 19th National Congress
WEDS 10/18
(HK) Hong Kong Govt: Property prices remain high but the pace of the rise has slowed
*(UK) AUG AVERAGE WEEKLY EARNINGS 3M/Y/Y: 2.2% V 2.1%E; WEEKLY EARNINGS EX BONUS 3M/Y: 2.1% V 2.0%E
(UK) Sept Jobless Claims Change: +1.7K v -0.2K prior; Claimant Count Rate: 2.3% 2.3% prior
*(UK) AUG ILO UNEMPLOYMENT RATE: 4.3% V 4.3%E (matches lowest reading since 1975)
*(US) SEPT HOUSING STARTS: 1.13M V 1.18ME; BUILDING PERMITS: 1.22M V 1.25ME
(US) Atlanta Fed maintains Q3 GDP at 2.7%, unchanged from 10/13
(US) Association of American Railroads weekly rail traffic report for week ending Oct 14th: 548.3K carloads and intermodal units, +3.1% y/y
CA.FR Reports Q3 Rev €21.9B v €21.84Be
AA Reports Q3 $0.72 adj v $0.77e, Rev $2.96B v $3.03Be; Tempers demand outlook
THURS 10/19
ROG.CH Reports Q3 (CHF) Rev 13.1B v 13.14Be
SAP.DE Reports Q3 Non-IFRS Net €1.21B v €1.09B y/y, non-IFRS Op profit €1.64B v €1.69Be, Rev €5.59B v €5.71Be
NESN.CH Reports Q3 (CHF) Rev 22.3B v 22.5Be
*(NZ) NEW ZEALAND LABOUR PARTY/GREEN PARTY (opposition) WINS FIRST PARTY SUPPORT TO FORM GOVT
UNA.NL Reports Q3 Rev €13.2B v €13.39Be
(ES) Spain central govt confirms to hold an emergency Cabinet meeting on Sat, Oct 21st to begin process of suspending Catalan autonomy under Article 155 (as speculated)
(UK) SEPT RETAIL SALES (EX AUTO/FUEL) M/M: -0.7% V -0.2%E; Y/Y: 1.6% V 2.2%E
*(US) OCT PHILADELPHIA FED BUSINESS OUTLOOK: 27.9 V 22.0E
(US) SEPT LEADING INDEX: -0.2% V +0.1%E
(RU) Russia Pres Putin: if the US leaves the Intermediate-Range Nuclear Forces Treaty, Russia will have immediate "symmetrical" response
SKX Reports Q3 $0.59 v $0.43e, Rev $1.10B v $1.06Be
(CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 2.50%; AS EXPECTED
FRI 10/20
941.HK Reports 9M (CNY) Net 92.1B v 88.1B y/y, EBITDA 211.3B v 200.4B y/y, Rev 569.5B v 542.7B y/y
SLB Reports Q3 $0.42 v $0.42e, Rev $7.91B v $7.91Be
PG CFO: "unable to discern why US growth is lagging" - earnings call comments