Thursday March 30 Daily Market Primer
- Stocks, oil up; yields, $ down
- Rosengren says 3 hikes, more Fed speak today
- Seattle dominates billionaires list
LAST
|
CHANGE
|
% CHANGE
|
|
20,659.32
|
-42.18
|
-0.20%
|
|
5,897.55
|
22.41
|
0.38%
|
|
2,361.13
|
2.56
|
0.11%
|
|
1,371.64
|
4.38
|
0.32%
|
|
2,693.72
|
-2.13
|
-0.08%
|
|
375.70
|
-1.50
|
-0.40%
|
|
Nikkei
225
|
19,063.22
|
-154.26
|
-0.80%
|
UK:
FTSE 100
|
7,351.67
|
-22.05
|
-0.30%
|
CBOE
Volatility
|
11.54
|
0.01
|
0.09%
|
Australia:
S&P/ASX 200
|
5,896.20
|
22.70
|
0.39%
|
3,210.24
|
-31.08
|
-0.96%
|
|
24,301.09
|
-90.96
|
-0.37%
|
|
Europe
Dow
|
1,661.03
|
-16.94
|
0.39%
|
India:
S&P BSE Sensex
|
29,647.42
|
115.99
|
-1.01%
|
France:
CAC 40
|
5,066.56
|
-2.48
|
-0.05%
|
Germany:
DAX
|
12,213.64
|
10.64
|
0.09%
|
Italy:
FTSE MIB
|
20,225.54
|
-51.26
|
-0.25%
|
Spain:
IBEX 35
|
10,359.40
|
-8.20
|
-0.08%
|
0.78
|
0/32
|
||
1.278
|
-0/32
|
||
1.924
|
0/32
|
||
2.38
|
0/32
|
||
2.982
|
3/32
|
||
-0.743
|
0/32
|
||
0.33
|
5/32
|
||
49.39
|
-0.12
|
-0.24%
|
|
52.13
|
-0.29
|
-0.55%
|
|
3.191
|
-0.04
|
-1.24%
|
|
383.54
|
-1.27
|
-0.33%
|
|
2353.5
|
-3.5
|
-0.15%
|
Initial
jobless claims,
which as you come out every Thursday, were 258K, 3K lower than the prior
week, but a little higher than expected. There are three more
speeches today from what seem to be increasingly vocal Fed presidents.
Seattle
billionaires Bill Gates and Jeff Bezos have the top two slots on the
Bloomberg Billionaire’s’ Index, after Amazon’s stock price rise move
yesterday put Bezos over Buffet and Spanish retail magnet Amancio Ortega
(Inditex S.A.). Unlike the Forbes list, which is published annually, the
Bloomberg index attempts to track billionaire net worth in real time.
Here’s
the news:
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Federal Reserve Bank of Boston President Eric Rosengren said
yesterday that the Federal Reserve should hike rates three more times this year, a call that is
more hawkish than the 'two-hike' line that has been held by most
other regional presidents this week. Market-implied odds currently show a 20
percent chance that rates will end the year above 1.5 percent. Bank of
Cleveland President Loretta Mester, Bank of Dallas President Robert Kaplan
and New York Fed President William Dudley are all due to speak later
today.
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|
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After the nine-month hiatus between the vote and the start of
negotiations ended yesterday, the work of disentangling the U.K. from the EU begins.
Prime Minister Theresa May has already hit something of a roadblock after the
attempt, in her letter, to tie security to trade ran into
immediate opposition from European leaders. Analysts are not bearish on this
leg of Brexit yet, with BlackRock Inc. saying they are long the pound, while Citigroup Inc. sees
the FTSE 100 rallying to 8,000 by the middle of next
year.
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Consumer-price growth in Spain weakened for the first time in
almost a year, coming in at 2.1 percent for March. German regional inflation
numbers are being released throughout the morning, with Saxony data showing a
drop to 1.8 percent from 2.4 percent. Economists expect the euro-zone
flash inflation number due tomorrow to show a drop to 1.8 percent. The
European Commission said its index of executive and consumer sentiment
for the currency area dipped to 107.9 from 108 in February.
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Overnight, the MSCI Asia Pacific Index fell 0.5 percent, while Japan's Topix
Index dropped 0.9 percent. In Europe, the Stoxx 600 Index was broadly unchanged at 5:41 a.m. with
oil stocks among the best performers following gains in the commodity. U.S. stock market
futures slipped 01. percent.
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At 8:30 a.m. weekly U.S. jobless claims numbers are out, with
expectations for a drop to 247,000 from last week's 261,000. Also at that
time, the third reading for fourth-quarter U.S. GDP is released, but
expectations are for a slight revision higher, to 2.0 percent. In its
decision at 3 p.m. Mexico's central bank is expected to raise rates by 25
basis points.
Jeff
Bezos is the second-richest man in the world. Shares of Amazon rallied
2.1% on Wednesday, propelling Bezos' net worth to $75.6 billion, according to
the Bloomberg Billionaires Index.Lululemon collapses after earnings. Shares of Lululemon fell by as much as 16% in after-hours trade on Wednesday after the company said it expected sales at stores open for at least one year to decline in the first quarter in the "low-single digits" on a constant dollar basis. JPMorgan is reportedly looking into office space in Ireland. The investment bank is looking into office space in Dublin that can hold up to 1,000 employees as it looks to shift jobs out of London in response to Brexit, Bloomberg says. Legg Mason is cutting jobs. The investment firm is laying off about 30 employees, or 3% of its administrative staff, as it looks to shift toward low-fee investing, Bloomberg reports. None of layoffs will affect investment personnel. Oil is struggling to get back above $50. West Texas Intermediate crude oil is down 0.3% at $49.38 a barrel as it fights for its first close above $50 since March 8. South Africa's finance minister could be on the way out. President Jacob Zuma has vowed to fire his finance minister, Pravin Gordhan, AFP says. The South African rand is stronger by 0.7% at 12.9535 per dollar. Fed speak is heavy. Cleveland's Mester (9:45 a.m. ET), Dallas' Kaplan (11 a.m. ET), San Francisco's Williams (11:15 a.m. ET), and New York's Dudley (4:30 p.m. ET) all take the mic Thursday. Stock markets around the world are lower. China's Shanghai Composite (-1%) lagged in Asia, and Britain's FTSE (-0.2%) trails in Europe. The S&P 500 is set to open down 0.4% near 2,351. Earnings reporting is light. Dell Technologies reports ahead of the opening bell.
US economic data flows. GDP-Third Estimate,
personal consumption, core PCE, and initial j0bless claims will all be
released at 8:30 a.m. ET. The US 10-year yield is little changed at 2.38%.
Nafta After All
The Trump administration is signaling to Congress that in coming negotiations with Mexico and Canada it will seek mostly modest changes to the North American Free Trade Agreement, a deal President Donald Trump called a “disaster” during the campaign. An administration draft proposal being circulated in Congress by the U.S. trade representative’s office would keep some of the most controversial provisions, including one establishing an arbitration panel that investors in the three nations can use to resolve civil claims, bypassing local courts. The document appears to represent a compromise between trade hawks and moderates. We also report that expectations are fading of a rapid rapprochement with Russia, as the White House pushes off Kremlin proposals for a meeting with President Putin and takes an increasingly skeptical view of reaching a grand bargain with Moscow.
Adieu EU
British Prime Minister Theresa May on Wednesday began the U.K.’s march out of the EU, starting the clock on negotiations that will have reverberations across Europe. Tim Barrow, Britain’s ambassador to the EU, handed European Council President Donald Tusk a letter formally notifying the bloc that the U.K. will be the first member state ever to leave. In the letter Mrs. May offered what some read as a warning—couched in a diplomatic tone—that the U.K. sees its military and security contributions as a vital card it can play in the coming talks to win better EU market access. But Britain’s hand has weakened since the Brexit vote, writes our Europe File columnist Simon Nixon. We also look at companies and countries scrambling to adjust to the retreat of globalization.
Nuclear Option
Westinghouse filed for chapter 11 bankruptcy protection Wednesday, setting off a showdown between its Japanese parent, Toshiba, and a major U.S. utility, and threatening to complicate relations between the two countries’ governments. The runaway costs from four half-finished nuclear reactors Westinghouse is building in the southeastern U.S. have threatened the viability of Toshiba, whose precarious finances have attracted the attention of Japan’s government. Now Toshiba faces an angry customer in Tom Fanning, the CEO of Southern Co., primary owner of two of the reactors. He characterized completion of the pair, which the U.S. government has backed with an $8 billion loan guarantee, as an international political issue. Within hours of the bankruptcy filing, Westinghouse was rushing to assure its biggest customer in China that four reactors it is building south of Shanghai won’t be affected.
"Damage control" is the
primary objective for the EU in upcoming negotiations over the withdrawal of
the UK, said European Council President Donald Tusk. The EU will focus on
reducing the cost that Brexit is likely to impose on member states, citizens
and businesses, he said. Reuters (29 Mar.), New Europe (29 Mar.), Politico Pro (subscription required) (29 Mar.)
Personal investors in China are leading the world in a massive
move toward making investments via smartphone apps, a trend that accounted
for $200 billion in transactions in 2015, according to some estimates. The
development has sparked concerns over this booming but loosely regulated
market, with many investments proving to be fraudulent and the companies
offering them illegal. The Wall Street Journal (tiered subscription model)
The Senate banking committee has
said it will vote next week on whether to approve the appointment of Jay
Clayton as head of the Securities and Exchange Commission. Clayton, whom
President Donald Trump nominated for the post, will still need to obtain full
Senate approval if the April 4 vote goes in his favor.
Reuters (29 Mar.), The Wall Street Journal (tiered subscription model) (29
Mar.)
Half of retail investors want
advisers to give more information about environmental, social and governance
investing, a survey by State Street's Center for Applied Research found.
Among investors knowledgeable about ESG investing, 83% obtained information
from research or from friends and family, rather than from advisers.
ThinkAdvisor (free registration) (28 Mar.)
Almost all of the world's biggest
banks have failed to implement technology that lets them properly manage
risk, the Basel Committee on Banking Supervision said in a report. Dozens
rely on manual risk reports and on IT systems fragmented along business lines
and legal entities that are incompatible with one another, the report said.
Bank for International Settlements (March 2017), MLex (subscription required) (28 Mar.)
Scores of Builders Raise Their Hands to Design Trump
Border Wall
Republicans Fuel Uncertainty Over Health Law’s Fate
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Source:
Bloomberg, BI, WSJ, CFAI Fin. Newsbrief
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