Wednesday August 24 Daily Market Primer
US
stocks moved modestly up on Tuesday in thin trading. Markets are
lackluster ahead of Fed Chair Janet Yellen’s keynote address at the Kansas
City Fed’s annual conclave in Jackson Hole on Friday. Oil rose
yesterday, then resumed its drop this morning on high US supply data, with
Brent crude below $50 and WTI at about $47. Global stocks were mostly
up overnight and the US market has opened slightly down this morning.
|
18547.3
|
17.88
|
0.10%
|
|
|
5260.08
|
15.47
|
0.30%
|
|
|
2186.9
|
4.26
|
0.20%
|
|
|
1248.58
|
8.84
|
0.71%
|
|
|
2464.62
|
8.42
|
0.34%
|
|
|
16597.3
|
99.94
|
0.61%
|
|
|
345.55
|
1.95
|
0.57%
|
|
|
6853.38
|
-15.13
|
-0.22
|
|
|
12.41
|
0.03
|
0.24%
|
|
|
5561.7
|
7.9
|
0.14%
|
|
|
3085.88
|
-3.83
|
-0.12%
|
|
|
22820.78
|
-178.15
|
-0.77%
|
|
|
28059.94
|
69.73
|
0.25%
|
|
|
16597.3
|
99.94
|
0.61%
|
|
|
2869.57
|
19.14
|
0.67%
|
|
|
0.312
|
0/32
|
||
|
0.754
|
-1/32
|
||
|
1.14
|
0/32
|
||
|
1.553
|
-1/32
|
||
|
2.239
|
-3/32
|
||
|
-0.618
|
0/32
|
||
|
-0.085
|
-3/32
|
||
|
47.38
|
-0.72
|
-1.50%
|
|
|
49.48
|
-0.48
|
-0.96%
|
|
|
2.809
|
0.015
|
0.54%
|
|
|
364.36
|
-2.68
|
-0.73%
|
|
|
2186
|
0.75
|
0.03%
|
Have
we reached peak ETF? Maybe, with Blackrock dropping 10 ETFs in their lineup http://bit.ly/BlackRockDrops. It
looks like the big banks want to get in on the digital currency revolution by
creating their own (Banks Pitch, below). They must not
be watching Mr. Robot season 2. And, Sanford Bernstein has put out a
negative and opinionated note on passive investing: http://bit.ly/BernsteinPassive.
It couldn’t be because Bernstein is one of the biggest purveyors of
quantitative stock selection models on Wall Street could it? No, it couldn't be.
Here’s
the news:
Oil leads commodities lower
After a bump yesterday afternoon following reports that
Iran may support an OPEC output freeze, oil has
resumed its drop this morning. A barrel of West Texas Intermediate for
October delivery traded at $47.35 at 5:48 a.m. ET, down 75 cents,
after industry data showed U.S. stockpiles rose. Iran also said
this morning that it may not attend next month's OPEC meeting in
Algiers. In industrial metals, copper dropped to $4,690.50 a metric ton, erasing all of
2016's gains as China cut imports of the commodity to the
lowest level in 17 months while exports surged.
Italy earthquake
A powerful earthquake hit central Italy overnight, causing considerable damage and loss of life. The 6.2
magnitude quake struck at 3:36 a.m. local time and has left at least
38 people dead, with that toll continuing to climb through the morning.
EM struggles
Turkey's benchmark Borsa Istanbul 100 Index fell as much as 2.9 percent this morning after
the country's armed forces launched an offensive against Islamic State, which
included putting ground forces inside Syria. In South Africa, Finance
Minister Pravin Gordhan has said he is getting legal advice after receiving a summons for questioning by an
elite police unit. The country's central bank this morning said South Africa
has "too much inflation" to lower interest
rates, despite sluggish growth expectations for 2016.
Markets mixed
Overnight, the MSCI Asia Pacific Excluding Japan Index dropped 0.4 percent with Japan's Topix index
bucking the regional trend to close 0.7 percent higher, with exporters
leading the gains. In Europe, the Stoxx 600 Index was 0.4 percent higher at 6:14 a.m. ET with
trading in the dog days of August seeing volatility at its lowest level since
March 2015. S&P 500 futures were up 0.1 percent.
Waiting for Jackson Hole
The main event markets are watching this week is Janet
Yellen's speech at 10 a.m. on Friday in Jackson
Hole, Wyoming. Amid a very quiet August, this summit is being seen
as a chance for the Fed Chair to signal her rate change intentions for the
back end of the year.
Wednesday's
the first anniversary of a chaotic day in the markets. The S&P 500 lost 77.7
points, or 3.9%, and China's Shanghai Composite crashed more than 8%, less than
a week after the People's Bank of China announced it was devaluing its
currency, the yuan. In an afternoon note that day, Brean Capital's Peter Tchir
wrote, "I am nervous that in the time it took me to type this the Dow
could be plus or minus 200 points since I started."
Germany's
economy slowed in the second quarter. Europe's largest economy
saw growth slow to 0.4% in the second quarter, down from the 0.7% growth
experienced in the first quarter. The euro is down 0.2% at 1.1280.
US
crude stocks are piling up. West Texas Intermediate crude oil trades lower by 1.6% at
$47.33 a barrel after data released Tuesday by the American Petroleum Institute
showed crude stocks unexpectedly rose last week.
The
US government is buying 11 million pounds of cheese because no one else will. The US Department of
Agriculture is buying $20 million worth of cheese to help alleviate a surplus
that is at a 30-year high.
Tesla
announced a big upgrade. CEO Elon Musk said Tuesday that the Model S and the Model X
would offer batteries that will extend their ranges to 315 miles and 289 miles.
Additionally, both models will receive an upgrade to their "Ludicrous
Mode."
Pfizer
isn't done spending money. On Monday, Pfizer announced it was buying the cancer drugmaker
Medivation for $14 billion. Fast forward to Wednesday, and the company announced
it's paying AstraZeneca as much as $1.575 billion plus royalties for part of
its antibiotics business, The Wall Street Journal reports.
Qantas
is awarding 25,000 employees for its record full-year profit. The Australian airline is
giving a $3,000 bonus to employees who were included in its 18-month pay freeze
after staging one of the greatest turnarounds in Australian corporate history.
Trump’s Narrowing Path
As the traditional Labor Day kickoff of the fall presidential race approaches, Donald Trump faces an increasingly narrow path to the White House. A Trump victory over Hillary Clinton likely would require a sweep of a set of battleground states where he is competitive but trailing in recent opinion polls—Ohio, Florida, Pennsylvania and North Carolina. Mrs. Clinton, by contrast, could win with just one of them, partly because Democrats start with a larger number of states that historically side with them. Meanwhile, Mr. Trump has been asking for support from African-American voters and said he was open to “softening” immigration laws to accommodate law-abiding people who are in the country illegally, if they “contribute to society.” We also report that both candidates are facing questions over transparency for conducting their fundraisers behind closed doors. And questions are piling up around Mrs. Clinton’s emails and what they tell us about links between the Clinton Foundation and her tenure at the State Department.
As the traditional Labor Day kickoff of the fall presidential race approaches, Donald Trump faces an increasingly narrow path to the White House. A Trump victory over Hillary Clinton likely would require a sweep of a set of battleground states where he is competitive but trailing in recent opinion polls—Ohio, Florida, Pennsylvania and North Carolina. Mrs. Clinton, by contrast, could win with just one of them, partly because Democrats start with a larger number of states that historically side with them. Meanwhile, Mr. Trump has been asking for support from African-American voters and said he was open to “softening” immigration laws to accommodate law-abiding people who are in the country illegally, if they “contribute to society.” We also report that both candidates are facing questions over transparency for conducting their fundraisers behind closed doors. And questions are piling up around Mrs. Clinton’s emails and what they tell us about links between the Clinton Foundation and her tenure at the State Department.
Border Offensive
Turkish and American military forces launched a major offensive in northwestern Syria against Islamic State fighters early Wednesday as they try to sever the extremist group’s vital supply routes, the Turkish government announced. Turkish special forces, aided by U.S.-coalition warplanes and Turkish artillery units, moved into northern Syria before dawn, according to Turkey’s state-run Anadolu news agency, and Turkish jets bombed Islamic State forces inside Syria. Turkish artillery units had been pounding Islamic State forces holding a strategic border town in Syria for two days as the military—shaken by last month’s thwarted coup attempt—looks to re-establish its role as a key player in the fight on its doorstep. Turkey stepped up its shelling after a suspected Islamic State bomber killed dozens of men, women and children on Saturday at a wedding celebration in the southeastern city of Gaziantep.
Turkish and American military forces launched a major offensive in northwestern Syria against Islamic State fighters early Wednesday as they try to sever the extremist group’s vital supply routes, the Turkish government announced. Turkish special forces, aided by U.S.-coalition warplanes and Turkish artillery units, moved into northern Syria before dawn, according to Turkey’s state-run Anadolu news agency, and Turkish jets bombed Islamic State forces inside Syria. Turkish artillery units had been pounding Islamic State forces holding a strategic border town in Syria for two days as the military—shaken by last month’s thwarted coup attempt—looks to re-establish its role as a key player in the fight on its doorstep. Turkey stepped up its shelling after a suspected Islamic State bomber killed dozens of men, women and children on Saturday at a wedding celebration in the southeastern city of Gaziantep.
Get Organized
Garages hold the lawn mower, sports equipment, old paint cans and…a host of bad feelings. One in four people said they can’t fit even one car into their garage and some 20% of homeowners said they have argued with their spouse about the state of their garage. Fed up and out of space, more people are confronting the mess. We explore how families are reimagining the space, while sales of garage-organization products are expected to continue increasing. Another sticky situation for parents is how to navigate your child’s media use. What’s popular changes rapidly and families’ rules may differ widely. We offer tips for managing screen-time, even on play dates. We also explore why 4 a.m. is the most productive hour for some busy professionals and parents.
Garages hold the lawn mower, sports equipment, old paint cans and…a host of bad feelings. One in four people said they can’t fit even one car into their garage and some 20% of homeowners said they have argued with their spouse about the state of their garage. Fed up and out of space, more people are confronting the mess. We explore how families are reimagining the space, while sales of garage-organization products are expected to continue increasing. Another sticky situation for parents is how to navigate your child’s media use. What’s popular changes rapidly and families’ rules may differ widely. We offer tips for managing screen-time, even on play dates. We also explore why 4 a.m. is the most productive hour for some busy professionals and parents.
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Kuroda (Toru Yamanaka/AFP/Getty Images)
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The Bank of Japan is prepared to sponsor research, analysis and
development of financial technology "to enhance the welfare of
financial-service users, as well as economic activities," Governor
Haruhiko Kuroda says. Reuters
Deutsche Bank, Santander, BNY Mellon and ICAP are supporting UBS'
utility settlement coin, a digital currency they are presenting to central
banks as a standard for clearing and settling trades. Financial Times (tiered subscription model)
Stock markets around the world are mostly
higher.
Spain's IBEX (+0.6%) leads the gains in Europe after Japan's Nikkei (+0.6%)
paced the advance in Asia. Britain's FTSE (-0.2%) and Hong Kong's Hang Seng
(-0.8%) are notable laggards. S&P 500 futures are up 1.75 points at
2,187.00.
Earnings reporting remains light. Express reports ahead of
the opening bell, while HP Inc. and Williams Sonoma release their quarterly
results after markets close.
US economic data flows. FHFA House Price Index
crosses the wires at 9 a.m. ET, and existing home sales will be released at 10
a.m. ET. Then, at 10:30 a.m. ET, US crude-oil inventories will be released. The
US 10-year yield is up 1 basis point at 1.56%.
Bernstein: Passive investing is worse for society than Marxism.
Why BOE overpaying for bonds is not necessarily a bad thing.
How to stay rich in Europe: Inherit money for 700 years.
Ten reasons why Bank of America thinks U.S. stocks have an 'elevated risk of correction.
Putin's election grip is so tight, even his nemesis can take part.
Liberal, moderate or conservative? See how Facebook labels you.
What to do about housing affordability in America's hottest
real estate markets? In areas like New York City, Los Angeles, Washington D.C. and
the Bay Area, home prices have been surging for years, making buying a home
all-but impossible for those who aren't rich. Here's one solution: slow the
economy and create fewer jobs. In an interview yesterday with Curbed San Francisco,
the Mayor of Palo Alto Patrick Burt proposed basically that as a way to deal
with housing stress in his community. "We're looking to increase the
rate of housing growth, but decrease the rate of job growth," said Burt.
It sounds really silly to hear a mayor say that, particularly when he's
referring to an economic boom (tech in the Bay Area) that's the envy of the
world. But his comment about decreasing the rate of job growth would sound
less weird if it came from a central banker contending with a surging rate of
inflation and an economy at risk of "overheating." Burt's proposal
is not that different, except that he's talking on a micro scale. The Palo
Alto housing market, meanwhile, has been the subject of much fascination lately
due to the resignation of planning commissioner Kate Vershov Downing
because of what she said were regulations that made the city unaffordable. On
that note, we'll have her on BloombergTV this evening at 4:30 ET, so
tune in if you're interested in one of the country's trickiest housing
stories.
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Source:
Bloomberg, BI, WSJ, CFAI Fin. Newsbrief, Reuters, FT
posted by Rich Barnett @ 7:21 AM
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