Friday February 10 Daily Market Primer
- Stocks at records
- Ban ban upheld
- Abenomics meets Trumponomics
- “SEE YOU IN COURT” lights up social media
US
stocks love talk of tax reform, and rose yesterday mainly on a single comment
by President Trump that they would be doing something “phenomenal in terms of
tax”. This happened during a meeting with US airline executives.
The Dow, S&P, and Nas all rose about .6%, with S&P financials
running ahead 1.4%. Asian stocks closed up Friday, but stocks are
mostly down in Europe as the Brexit vote in the House of Lords looms and
Greek debt is back in the headlines. Treasuries fell and yields
rose, with the US 10 year at just over 2.4%. Oil rallied on a report
from the IEA saying that OPEC is actually enforcing the recent
agreement. Commodities continue to rally, and iron ore futures passed
$100 per ton. US stock futures are looking for more gains this
morning.
LAST
|
CHANGE
|
% CHANGE
|
|
20,172.40
|
118.06
|
0.59%
|
|
5,715.18
|
32.73
|
0.58%
|
|
2,307.87
|
13.20
|
0.58%
|
|
1,378.53
|
19.79
|
1.46%
|
|
2,611.67
|
4.03
|
0.15%
|
|
366.32
|
-0.47
|
-0.13%
|
|
Nikkei
225
|
19,378.93
|
471.26
|
2.49%
|
UK:
FTSE 100
|
7,254.88
|
25.38
|
0.35%
|
CBOE
Volatility
|
10.93
|
-0.52
|
-4.54%
|
Australia:
S&P/ASX 200
|
5,720.60
|
56.00
|
0.99%
|
3,196.70
|
13.52
|
0.42%
|
|
23,574.98
|
49.84
|
0.21%
|
|
Europe
Dow
|
1,585.45
|
3.39
|
0.02%
|
India:
S&P BSE Sensex
|
28,334.25
|
4.55
|
0.21%
|
France:
CAC 40
|
4,819.46
|
-6.78
|
-0.14%
|
Germany:
DAX
|
11,663.54
|
20.68
|
0.18%
|
Italy:
FTSE MIB
|
18,784.73
|
-162.71
|
-0.86%
|
Spain:
IBEX 35
|
9,377.60
|
-60.80
|
-0.64%
|
0.541
|
0/32
|
||
1.198
|
-1/32
|
||
1.888
|
-3/32
|
||
2.416
|
-6/32
|
||
3.02
|
-6/32
|
||
-0.77
|
-0/32
|
||
0.329
|
-5/32
|
||
53.55
|
0.55
|
1.04%
|
|
56.29
|
0.66
|
1.19%
|
|
3.027
|
-0.114
|
-3.63%
|
|
400.96
|
2.44
|
0.61%
|
|
2306.25
|
2
|
0.09%
|
Japanese
prime minister Shinzo Abe is in Washington for meetings with President Trump, and just gave a speech
to congress reminding everyone that the Japanese have been building car
factories in the US for a long time. Mr. Trump apparently committed to
a ‘One China’ policy in a call with President Xi after upsetting the apple cart
by talking to the president of Taiwan after the election.
Secretary of State Rex Tillerson had previously stated the US position in
testimony to the Senate, but Mr. Trump’s confirmation could help ease tensions
with China.
It’s
never good when someone uses ALL CAPS in social media, and President Trump’s
“SEE YOU IN COURT,” tweet following the 9th Circuit Court decision
was no exception, as it drew a furious response on Twitter on other social
media, not to mention late night talk shows. Some of them are pretty
funny, like the ones pointing out that judges spend every single day…in
court. And, according to several reports this morning, the Chinese and
other countries are selling US treasuries (Debt Dump, below).
Have
a great weekend, here’s the news:
|
|
President Donald Trump promised
to "SEE YOU IN COURT"
after a federal appeals
court upheld the temporary freeze on his travel ban imposed by
a court in Seattle.
It now seems certain that the case will head to the Supreme Court,
although the timing of any challenge is unclear. Separately, the president
promised to release a “phenomenal”
tax plan in the coming weeks, without offering any details of what is in
store.
|
|
|
Crude prices rallied more than
one percent after the International Energy Agency said that OPEC has achieved
the best compliance in
its history with respect to an agreement to curb
production. A barrel of West Texas Intermediate for March delivery was at $53.51
at 5:29 a.m ET, after the IEA also said that demand for the commodity was
rising faster than expected, aiding efforts to rebalance the market, which
has been trying to deal with excess production.
|
|
|
British Prime Minister Theresa
May's vision for Brexit is antagonizing EU
officials, setting the stage for bruising negotiations
following the triggering of Article 50 of the Lisbon Treaty. May's threats on
tax and security policy if she doesn't get a favorable deal are increasing
the chances of her getting no deal at all, according to five
Brussels-based diplomats who spoke on condition of anonymity. There was better news on the
economy front as data released showed U.K. industrial
production beat estimates for the end of 2016, and the trade deficit
narrowed.
|
|
|
Overnight, the MSCI Asia
Pacific Index rose 0.9 percent,
while Japan's Topix index rallied 2.2 percent as the yen weakened boosting
exporters. In Europe, the Stoxx 600 Index was 0.1 percent higher
at 5:42 a.m. ET as the resource sector continued to outperform. U.S. stock
futures also gained.
Short-term Greek debt rallied as the country's creditors may present the
government with a framework of measures required for completing the nation’s
stalled bailout review, according to people
familiar with the matter.
|
|
||
Iron ore futures on the Dalian
Commodity Exchange surged past $100 a
ton, while spot ore rose to $83.84 a dry ton, the highest
since October 2014, amid optimism about the outlook for consumption. The rise
came after official data showed that China's exports surged 7.9 percent
from a year earlier in dollar terms, leaving the country with a trade surplus
of $51.4 billion. Better news for China on the political front too as
Trump reaffirmed the U.S. 'one-China'
policy in a call with President Xi Jinping.
Stocks
are at all-time highs. Thursday's gain of 0.6% across the board ran all three of the
major averages into record territory. The S&P 500 is set to open up 0.1%
near 2,311.Trump changes his tune on the 'One China' policy. In his first phone call as president with Chinese President Xi Jinping, President Donald Trump said he would honor the policy that China and Taiwan belong to a single country. Trump's border wall would reportedly cost $21.6 billion. The wall would be built in sections and take more than three years to complete, Reuters reports, citing a US Department of Homeland Security internal report. China's January trade data blew away expectations. Exports climbed 7.9% in US dollar terms while imports jumped 16.7%, making for a trade surplus of $51.35 billion, the highest since January 2016. The data may be affected by distortions from the Lunar New Year holiday. The eurozone and IMF have reached a common stance on Greece. Details of the agreement are unclear and are being presented to Greece on Friday, Reuters reports. Greece's two-year yield is down 130 basis points at 8.28%%. British industry had a blowout December. Industrial production in the UK climbed 4.3% versus a year ago in December, well ahead of the 3.2% growth that economists had forecast, according to data released Friday by the Office for National Statistics. Oil is rallying on OPEC. West Texas Intermediate crude oil is higher by 0.9% at $53.46 a barrel after data released by the International Energy Agency showed a record-high 90% compliance to the OPEC output deal in the first month, Reuters reports. Investment in the marijuana industry isn't slowing down under Trump. Industry executives who spoke with Business Insider said they hoped Attorney General Jeff Sessions, who has been outspoken against legalizing marijuana, will focus his attention on President Trump's priorities, like overhauling immigration, rather than picking a fight with legal marijuana. Yelp is plunging after its revenue outlook misses. Shares sank by as much as 11% after Thursday's closing bell when the company announced its first-quarter revenue would be in a range of $195 million to $199 million, below the $204.4 million that was expected by the Bloomberg consensus.
US economic data flows. University of Michigan
consumer confidence will be released at 10 a.m. ET, and the Baker Hughes rig
count will cross the wires at 1 p.m. ET. The US 10-year yield is higher by 2
basis points at 2.41%.
Separation
of Powers
A federal appeals court on Thursday unanimously ruled against President Trump’s executive order on immigration and refugees, saying such a travel ban shouldn’t go into effect while courts consider whether it goes too far in limiting travelers to the U.S. The ruling is the biggest legal setback so far for Mr. Trump as president and sent a powerful message about checks and balances within America’s more-than 200-year-old government. The appeals court declined to take a position on the most pointed accusation leveled at the Trump administration—that the travel ban discriminated against Muslims. Instead, the panel ruled the travel ban likely violated the due process rights of travelers. Mr. Trump called the decision “political” and added: “We’re going to see them in court and I look forward to doing it.” The Trump administration could seek emergency intervention to end the restraining order from a larger panel of Ninth Circuit judges or the Supreme Court immediately, a process that could play out in a matter of days but wouldn’t fully resolve legal questions surrounding the president’s order.
The
World Turned Upside Down
Mr. Trump’s combative approach to world affairs is scrambling political dynamics in countries across the globe, bolstering some candidates who promise to stand up to the new U.S. leader and potentially reshaping America’s alliances. From Germany to Mexico to Iraq, political opposition to Mr. Trump is an increasingly popular brand that appeals to those who broadly disapprove of his world view or who have been put off by some of his early moves. Multinational organizations such as the EU and NATO are racing to formulate a unified response to what promise to be dramatic shifts in U.S. policy. Mr. Trump is seeking to advance his agenda one personal relationship at a time, his aides say. And late last night, we reported that in a phone call Thursday with Chinese President Xi Jinping, Mr. Trump affirmed the “One China” policy that has long underpinned Sino-U. S. relations. That looks already like an important retreat from where Mr. Trump initially seemed to be tracking politics. A White House visit Friday by Japanese Prime Minister Shinzo Abe offers the next test.
Debt
Dump
Foreign buyers, led by China, are taking a smaller slice of the debt issued by the U.S. and other major economies. That shift may test the long-held belief that overseas money has kept interest rates low in the developed world. For much of this century, the world’s money increasingly sought the harbors of the bond markets of big, Western nations, principally the U.S. but also Germany and Britain. During that period those countries, and their citizens and companies, borrowed money at remarkably low interest rates. The receding foreign tide comes amid other momentous changes for the global economy and interest rates, including a turn in many political corners away from free trade and glimmers of inflation that are encouraging major central banks to pare back their unprecedented economic stimulus measures.
When US President Donald
Trump and Japanese Prime Minister Shinzo Abe meet Friday in Washington, D.C.,
foreign exchange rates might be among issues discussed, a high-ranking White
House official said. Abe has said currency issues are not an appropriate
matter for the meeting.
Nikkei Asian Review (Japan) (tiered subscription model) (10
Feb.), Bloomberg (09 Feb.), The Japan News by The Yomiuri Shimbun (09 Feb.), The Wall Street Journal (tiered subscription model) (09
Feb.)
The International Monetary
Fund is making "irresponsible demands" that are disrupting Greece's
bailout, said George Katrougalos, the Greek alternate foreign minister for EU
affairs. The IMF's positions are the only obstacles standing in the way of
the EU and Greece coming to an agreement on the next phase of the financial
rescue, he said.
|
Germany's central bank
brought 216 tons of gold home from New York and Paris in 2016 as it increased
the pace of repatriation, which began in 2013. The Bundesbank began
repatriation in response to concerns from lawmakers and the public that Germany
had less gold in foreign vaults than it claimed or that it would be unable to
access the gold when needed.
Citigroup commodities
strategist Aakash Doshi has compiled data showing a strong rise in passive
commodity-index assets held by retail and institutional investors to $391
billion in January, 53% higher than the figure a year earlier. Assets in
actively managed funds also rose to $91.5 billion, a two-year high.
Blackstone has signed a deal
to acquire the employee-benefits outsourcing business of international
insurance brokerage Aon for $4.8 billion, people familiar with the matter said.
The operation manages benefits for about 15% of the US population.
The three largest bitcoin
exchanges in China say they are putting the brakes on withdrawals in response
to requirements imposed by the People's Bank of China. Huobi and OKCoin
suspended withdrawals outright, while BTC China said all withdrawals will
undergo a 72-hour review.
Bloomberg (10 Feb.),
Friedman (John Lamparski/Getty
Images)
|
Nasdaq is setting up a
venture capital arm that will invest in financial-technology companies, with an
aim to integrate their products into its own business, sources said. Nasdaq,
one of the first to invest in blockchain, is a supporter of innovation, and CEO
Adena Friedman has said "areas of focus for us in terms of big projects
are all around technology."
|
BlackRock unit iShares has
filed with the Securities and Exchange Commission for two bond
exchange-traded funds pursuing distinct strategies. The iShares Edge
Investment Grade Enhanced Bond ETF would buy investment-grade debt, while the
iShares Edge High Yield Defensive Bond ETF would buy below-investment-grade
debt.
How the flash crash trader's $50 million fortune
vanished.
Reflation trade in doubt
as Trump faith starts to falter.
|
|
The world according to a free-range short
seller with nothing to lose.
|
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How do you know a populist when
you see one?
|
|
For Citigroup, past performance
is a guide to future results.
|
|
A retired business professor stashed $200 million
in Swiss bank accounts.
|
|
What if Trump's wall were solar powered?
|
|
The clash between big tech
companies these days often looks like a giant zero-sum battle to rule the
world. From Google, Facebook, Amazon, Microsoft to Apple, large tech
companies have sought to become the singular dominant platform on top of
which we mere mortals conduct our daily lives. So who will win? Yesterday on
Bloomberg TV, we spoke to Derek Thompson
(disclosure: a friend), who is the author of a new book called
Hit Makers about what it takes in modern media to make a
blockbuster. His key thesis: despite the hype, nothing really goes
"viral." Rather, big hits are planned out and depend on big
broadcast channels. In other words, controlling distribution still matters a
great deal. Thompson reckons the company best positioned to dominate the
future right now is Amazon. He likens Amazon Prime's business model to the
cable-TV bundle of channels that made ludicrous amounts of money throughout
the 20th century, which served as a sort-of "private sector tax."
Prime, with its diverse offerings and monetization opportunities -- ranging
from physical goods to digital services -- is both a must-have bundle for
consumers and an incredibly powerful mode of distribution. Anyway, it's a
fascinating metaphor and framework for thinking about media and tech. Watch
the clip here
and definitely check out his book.
|
|
Source:
Bloomberg, BI, WSJ, CFAI Fin. Newsbrief
posted by Rich Barnett @ 7:50 AM
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