Wednesday November 30 Daily Market Primer
Stocks
edged up on Tuesday
with health care up and energy down, but this morning energy companies are
up “big league” and oil is surging on reports that OPEC will be able to reach a
deal to cut 1.2 million barrels a day in the meeting in Vienna. Late
yesterday news services started reporting that President Elect Trump
appointed two key cabinet posts, ex-Goldman Sachs banker and hedge fund manager
Steve Mnuchin for Treasury and billionaire investor Wilbur Ross for Commerce.
I was hoping for Warren Buffet for Commerce, but its nice to
see Wall Street won’t be banished from Washington. Stocks are mostly
positive overnight except for China, which is down 1%. S&P futures are
pointing…up at the moment.
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LAST
|
CHANGE
|
%
CHANGE
|
|
|
19,121.60
|
23.70
|
0.12%
|
|
|
5,379.92
|
11.11
|
0.21%
|
|
|
2,204.66
|
2.94
|
0.13%
|
|
|
1,328.22
|
-1.61
|
-0.12%
|
|
|
Global
Dow
|
2,460.72
|
4.31
|
0.18%
|
|
Stoxx
Europe 600
|
342.24
|
1.29
|
0.82%
|
|
Nikkei
225
|
18,308.48
|
1.44
|
0.82%
|
|
UK:
FTSE 100
|
6,827.21
|
55.21
|
0.82%
|
|
CBOE
Volatility
|
12.56
|
-0.34
|
-2.64%
|
|
Australia:
S&P/ASX 200
|
5,440.50
|
-17.00
|
-0.31%
|
|
3,250.03
|
-32.89
|
-1.00%
|
|
|
22,789.77
|
52.70
|
0.23%
|
|
|
Europe
Dow
|
1,477.04
|
12.02
|
0.98%
|
|
India:
S&P BSE Sensex
|
26,652.81
|
258.80
|
0.82%
|
|
France:
CAC 40
|
4,579.55
|
28.09
|
0.62%
|
|
Germany:
DAX
|
10,642.31
|
21.82
|
0.21%
|
|
Italy:
FTSE MIB
|
16,744.54
|
182.68
|
1.10%
|
|
Spain:
IBEX 35
|
8,676.10
|
9.10
|
0.10%
|
|
0.485
|
0/32
|
||
|
1.139
|
-3/32
|
||
|
1.824
|
-7/32
|
||
|
2.362
|
-20/32
|
||
|
3.022
|
-1 16/32
|
||
|
-0.734
|
-1/32
|
||
|
0.24
|
-7/32
|
||
|
48.53
|
3.3
|
7.30%
|
|
|
50.01
|
3.63
|
7.83%
|
|
|
3.311
|
-0.004
|
-0.12%
|
|
|
374.16
|
14.16
|
3.93%
|
|
|
2208.75
|
5
|
0.23%
|
Barclay’s,
Standard and Chartered, and RBS are under pressure after the latest round
of European bank stress tests came out yesterday. Mr. Trump has
jawboned Carrier Corp from moving 1000 jobs to Mexico, which is a big
psychological win, but may have negative policy implications according to this
very good analysis published on Bloomberg http://bit.ly/TrumpPledge.
Carrier, which makes air conditioning and refrigerators, is owned by United
Technologies, which is a big government contractor. Hmmmm…
Here’s
the news:
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|
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OPEC ministers are meeting in Vienna today, and oil is rising
amid hopes that a deal will be struck. A barrel of West Texas
Intermediate for January delivery was trading $2.72 higher at $47.94 by 5:39 a.m. ET in a volatile
session driven by attendees' comments to the press that a deal is
close.
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Former Goldman Sachs Group Inc. partner and Hollywood producer Steven
Mnuchin is said to be President-elect Donald Trump's choice to
be the next U.S. Treasury secretary. According to a
person familiar with the matter, Trump is also continuing to meet candidates
for the secretary of state role, with retired
Marine Corps General John F. Kelly and Massachusetts Governor Mitt
Romney still said to be in the running for position.
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|
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Bank of England Governor Mark Carney had a warning for the
European Union this morning when he said that the EU has a lot to lose if the British banking
system is damaged due to Brexit. This follows comments on Monday from ECB
President Mario Draghi where he warned the U.K. is likely to suffer most from a hard Brexit.
Carney's comments came as the BOE released the results of its latest stress
test, with Royal Bank of Scotland Group Plc forced to
bolster its capital plan after failing multiple hurdles. Shares in RBS were
down 4.3 percent by 5:19 a.m ET.
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Overnight, the MSCI Asia Pacific Index climbed 0.2 percent as
Samsung Electronics Co. surged to a record high, while Japan's Topix index
added 0.1 percent. In Europe, the Stoxx 600 Index was 0.1 percent higher at 5:24 a.m. ET as
trading remained thin ahead of the outcome of today's OPEC meeting. S&P
500 futures were also up 0.1 percent.
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Euro-area inflation accelerated to 0.6 percent year-over-year in November,
from 0.5 percent in October, with core inflation remaining unchanged at 0.8
percent. The ECB is due to meet next week to discuss whether it needs to
extend its asset-purchase plan ahead of the current March 2017 end date. In
the U.S. today, ADP employment change, mortgage applications and personal
income and spending data are all due.
Oil's
surging on OPEC optimism. Brent crude oil, the international benchmark, trades up 6.5%
at $50.47 a barrel on renewed hope the cartel will agree to a production cut
at Wednesday's meeting in Vienna.
Mnuchin
and Ross have been selected for Trump's Cabinet. Steve Mnuchin and Wilbur
Ross have been picked as Treasury secretary and commerce secretary for the
Trump administration, the duo confirmed Wednesday morning on CNBC.
The
Bank of England's stress tests found 3 banks had 'capital inadequacies.' Barclays, RBS, and
Standard Chartered were required to submit plans detailing how they would
raise capital and boost their resilience to financial shocks.
Euro-area
inflation ticks to highest level since April 2014. A flash estimate released
by Eurostat showed annual inflation rose 0.6% in November, up from the 0.5%
print in October. The euro is little changed near 1.0660 against the dollar.
Chinese
commodities got destroyed. Heavy selling took hold early in the session and never
relinquished, pushing aluminum, copper, and iron ore prices down between 3.6%
and 8%.
Hedge
funder Whitney Tilson has a new short. Speaking at the Robinhood
Conference on Tuesday, Tilson gave five reasons he was short Buffalo Wild
Wings, among them being he thought the stock was trading at an
"absurd" valuation of 62 times its trailing earnings per share.
Sony
is on track to crush Facebook and HTC in virtual reality sales. Sales of Sony's
PlayStation VR are on track to total 745,434 units in 2016, ahead of HTC
Vive's 450,083 and Facebook's Oculus Rift's 355,088.
Stock markets around the world mostly gain. China's Shanghai
Composite (-1%) lagged in Asia, and Britain's FTSE (+0.8%) outperforms in
Europe. The S&P 500 is set to open higher by 0.2% near 2,209.
Earnings reporting is light. American Eagle Outfitters
reports ahead of the opening bell, while Guess, La-Z-Boy, and PVH release
their quarterly results after markets close.
US economic data is heavy. ADP Employment Change
will be released at 8:15 a.m. ET before personal income, Chicago PMI, and
pending home sales are released at 8:30 a.m. ET, 9:45 a.m. ET, and 10 a.m.
ET, respectively. Then, at 2 p.m. ET, the Fed's latest Beige Book is
released. The US 10-year yield is higher by 4 basis points at 2.33%.
Trump’s Team
President-elect Donald Trump will name longtime banker and former Goldman Sachs executive Steven Mnuchin as Treasury secretary, turning to a campaign loyalist and fundraiser for the incoming administration’s top economic cabinet post. The choice is at odds with Mr. Trump’s message that economic and political elites have left the country damaged, but Mr. Mnuchin’s establishment profile may sit more comfortably with the Republicans in the Senate. The president-elect also is expected to name Wilbur Ross Jr. as his Commerce secretary nominee, selecting a fellow businessman whose name rings out in the Rust Belt. Mr. Trump selected former Labor Secretary Elaine Chao to be his transportation secretary. We report that after largely opposing his 2016 presidential campaign, financial-services executives are making fast friends with Mr. Trump. Meanwhile, Carrier has agreed to keep in Indiana roughly half of the 2,100 jobs it had planned to shift to Mexico, after a lobbying effort from the incoming Trump administration.
Back from the Abyss
U.S. home prices have climbed back above the record reached more than a decade ago, bringing to a close the worst period for the housing market since the Great Depression and stoking optimism for a more sustainable expansion. The average home price for September was 0.1% above the July 2006 peak, according to the S&P CoreLogic Case-Shiller U.S. National Home Price index released Tuesday. Adjusted for inflation, the index still is about 16% below the 2006 high. While prices have recovered, the market is flashing caution signs. The country is building far fewer homes than normal, the homeownership rate is near a five-decade low, and mortgages remain difficult to come by, especially for less-affluent buyers. Still, while housing has lagged behind some sectors of the economy in recent years, there are signs of gaining strength.
Rise of the Populists
Italian voters will decide Sunday on a constitutional change that would effectively strip the Senate of most of its powers. It is a gamble by Prime Minister Matteo Renzi—for Italy and abroad—and a centerpiece of his efforts to more quickly revamp Italy’s sickly economy. If he loses, Mr. Renzi has pledged to resign, making the vote a sign of confidence in his nearly three-year-old government, and a possible test of populism’s reach. Mr. Renzi’s popularity is declining, and recent polls suggest a no vote will prevail, though many voters remain undecided. Such an outcome would be the latest victory for antiestablishment politicians in a year that saw Brexit and a Trump presidential win, and would give a boost to Italy’s 5 Star Movement. Markets, meanwhile, have been unnerved at the prospect of a no vote.
Written in the Stars
The holiday shopping season has only just begun, but the reviews are already in—the online product reviews, that is. Retailers care more than ever about the commentary shoppers leave on their websites, and they are stepping up efforts to encourage more customers to share their thoughts. At the same time, chains are doing more to make the reviews useful and engaging, while discouraging anonymous commenters by verifying actual customers. Most retailers don’t hide or erase bad reviews. Increasingly, they monitor reviews and respond to complaints that might arise there. We explore why it turns out that five-star ratings aren’t the most influential: What’s known as “purchase likelihood” peaks when the average rating is between 4.2 and 4.5 stars. |
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How a $60 billion fund is
preparing for Trump.
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After Brexit and U.S.
election, it's Italy's turn to keep traders awake.
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Asia is about to face a significant dollar test.
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Source: Bloomberg, BI, WSJ, CFAI Fin. Newsbrief |
posted by Rich Barnett @ 9:01 AM
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