Wednesday March 15 Daily Market Primer
- Stocks drop
- Oil volatility spikes
- Cambridge lays off
- Fed decides
- Dutch elect
Stocks
dropped again,
bond yields fell slightly, and oil continued to slide on Tuesday. It’s a
familiar story from the end of last year, as lower oil prices are pressuring
energy stocks and pulling down the market. Saudi Arabia, which has had a
schizophrenic oil policy for the last few months, raised production according
to reports yesterday, driving WTI down to $47, but it is rebounding strongly
this morning. Bloomberg wrote a story about the higher oil market
volatility (Oil Moves, below). It’s day two of the March Fed
meeting, it’s a lock that we will get a rate hike, and the decision will be out
at 2:00pm Eastern. Overseas stock markets are consistently higher
on Wednesday, and the E-Mini S&P500 future which we keep an eye on is pointing
up.
LAST
|
CHANGE
|
% CHANGE
|
|
20,837.37
|
-44.11
|
-0.21%
|
|
5,856.82
|
-18.97
|
-0.32%
|
|
2,365.45
|
-8.02
|
-0.34%
|
|
1,362.38
|
-7.91
|
-0.58%
|
|
2,671.51
|
-5.26
|
-0.20%
|
|
373.71
|
-1.52
|
-0.41%
|
|
Nikkei
225
|
19,577.38
|
-32.12
|
-0.16%
|
UK:
FTSE 100
|
7,369.92
|
12.07
|
0.16%
|
CBOE
Volatility
|
12.10
|
0.75
|
6.61%
|
Australia:
S&P/ASX 200
|
5,774.00
|
14.90
|
0.26%
|
3,241.76
|
2.43
|
0.08%
|
|
23,792.85
|
-35.10
|
-0.15%
|
|
Europe
Dow
|
1,626.64
|
-10.53
|
-0.15%
|
India:
S&P BSE Sensex
|
29,398.11
|
-44.52
|
-0.64%
|
France:
CAC 40
|
4,979.92
|
5.66
|
0.11%
|
Germany:
DAX
|
11,991.14
|
2.35
|
0.02%
|
Italy:
FTSE MIB
|
19,676.76
|
139.36
|
0.71%
|
Spain:
IBEX 35
|
9,971.30
|
66.20
|
0.67%
|
0.772
|
0/32
|
||
1.381
|
0/32
|
||
2.11
|
3/32
|
||
2.586
|
4/32
|
||
3.16
|
10/32
|
||
-0.821
|
1/32
|
||
0.43
|
5/32
|
||
48.67
|
0.95
|
1.99%
|
|
51.8
|
0.88
|
1.73%
|
|
3.017
|
0.024
|
0.80%
|
|
379.93
|
4.63
|
1.23%
|
|
2368
|
5
|
0.21%
|
US
retail sales for February grew only .1%, for the smallest gain in six months and matching the
consensus number. CPI rose .1% in Feburary after a .6% increase in
January, and is rising at a 2.7% YOY clip.
Cambridge
Associates, one of the first and largest of the institutional consulting giants,
laid off staff as fee
compression and competition from the proliferation of outsourced CIOs (OCIOs)
pressures the company. Cambridge and other large consultants, including
Seattle based Russell and LA based Wilshire Associates, have moved into money
management to diversify and bolster revenues from the pure consulting business,
where they are subject to the same fee pressures as the rest of the money
management industry.
The
Dutch general election starts today, and is being seen as another test of populisim
in Europe. The
face off is between the Liberal PM Mark Rutte and Geert Wilders, a devout
anti-Islamist who became famous in the US this week after Iowa senator Steve
King Tweeted in support of Wilders, creating a social media backlash.
Here’s
the news:
|
|
At 2 p.m. Eastern Time the Federal Reserve will announce its
latest monetary policy decision. If market and economist expectations are correct ,
the central bank will raise interest rates 25 basis points. Investors
will watch the post-decision press conference and the latest forecasts from
the bank closely to try to gauge the pace of future tightening. Bond
and currency markets are relatively quiet ahead of the
announcement.
|
|
|
Polling in the Netherlands general election has started, with
voters choosing from among 28 different parties vying for the right
to form the next government. The latest polls show that no party will come close to winning an
overall majority, so the post-election period will likely come down to
forming a coalition government. The far-right Freedom Party led by Geert Wilders lost ground in opinion polls
published yesterday.
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Volatility has returned to the crude
market, with oil seeing intra-day moves of more than 2 percent in
four of the last six sessions. Yesterday's news that Saudi Arabia
had raised production drove the price of a
barrel of West Texas Intermediate for April delivery close to $47, with
the price rebounding later in the session after a report showed U.S.
stockpiles dropping. For U.S. shale producers, these fluctuations are less of
a concern than might be expected as many of them have successfully hedged prices for most of the
rest of the decade.
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|
|
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Overnight, the MSCI Asia Pacific Index was little changed, while Japan's Topix index
dropped 0.2 percent as investors awaited decisions from central banks
including the Fed today and the Bank of Japan tomorrow. In Europe, the Stoxx
600 Index was 0.3 percent higher as of 5:47 a.m., with
commodity producers leading the gains. U.S. futures also pointed to a gain at the open.
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While the Fed decision is the headline economics news for
today, there are a lot of other things to watch out for. Already this
morning, U.K. employment statistics showed the unemployment rate unexpectedly falling to 4.7 percent, the
lowest level since 1975, while wage growth disappointed. At 8:30 a.m., U.S.
inflation and retail sales data for February will be released, with
expectations for headline CPI at 2.7 percent and a 0.1 percent rise in sales.
The
Fed is expected to hike rates. World Interest Rate probability data
provided by Bloomberg shows a 100% chance the Federal Reserve hikes interest
rates at Wednesday's meeting. Traders will be paying close attention to the
Fed's dot plot for hints of the projected rate-hike path.Stocks just did something they hadn't done since 1995. The S&P 500 hasn't closed down by 1% or more in 105 straight sessions, the longest streak in 22 years. UK unemployment dips. Unemployment in the UK fell to 4.7%, its lowest since the summer of 1975. Real wage growth slowed to 0.8%, however, its weakest since October 2014. The Netherlands is going to the polls. No party is expected to win an overall majority, with Prime Minister Mark Rutte's center-right party and Geert Wilders' far-right party expected to perform well, according to the BBC. Oil is making a comeback. West Texas Intermediate crude oil trades up 1.7% at $48.54 a barrel and is on track to end its six-day skid. Selling on Tuesday pushed the price down to $47.09, its weakest since the end of November. An early Twitter investor hates the stock. Venture capitalist Chris Sacca, who was one of Twitter's first investors, once said he would defend the stock like one of his children, but he now says he loves the service but hates the stock. Sacca tweeted that his fund sold most of its shares after Jack Dorsey was brought back as CEO in October 2015 and that he sold his personal shares in the fall of last year. Walgreens plans to sell more assets to win approval for its takeover of Rite Aid. The pharmacy chain is in talks to sell more assets to the Tennessee-based discount chain Fred's to win regulatory approval for its proposed takeover of Rite Aid, Bloomberg reports. Stock markets around the world are mixed. Hong Kong's Hang Seng (-0.2%) trailed in Asia, and Britain's FTSE (+0.3%) is out front in Europe. The S&P 500 is on track to open up 0.2% at 2,370. Earnings reporting is light. Oracle will report after markets close.
US economic data is heavy. Empire Manufacturing,
CPI, and retail sales will all be released at 8:30 a.m. ET, while the NAHB
Housing Market Index is due out at 10 a.m. ET. The US 10-year yield is down 2
basis points at 2.59%.
Health Warning
GOP leaders’ push for quick passage of the health-care proposal hit another snag as at least a dozen Republican senators expressed alarm over a nonpartisan report that projects the number of uninsured would grow by millions under the plan. The loss of more than two Republican votes in the Senate would kill the legislation, presuming all Democratic senators remained opposed. House leaders have hoped the plan’s momentum can overpower infighting over details, but reworking the bill to address the concerns of Senate Republicans—which include changes to Medicaid, the trajectory of premium prices and the impact on costs for older, low-income and rural Americans—could mean missing the goal of getting it through Congress by early April. And modifying the bill in ways that appease one faction of Republicans without alienating another will be delicate work.
A flood of natural gas swamping the U.S. is turning
into a global glut, sinking prices and dimming American producers’
hopes of exporting their way out. Natural-gas futures are down 25% over the
past 2½ months after rising 59% in 2016, and shares of gas-production
companies are among the worst performers of 2017, after a year in which both
Chesapeake Energy and Rice Energy more than doubled from their early lows.
Many investors wagered that new gas-fired power plants and record exports
would help burn off the U.S. excess, but the market continues to be dominated
by unpredictable weather and massive new supplies from fracking.
Steve Bannon’s
Journey
On Oct. 7, 2008, Marty Bannon watched with alarm as plunging stock markets dragged down his shares of AT&T, the nest egg he built during a 50-year career at the company. So he did the unthinkable: He sold. Now 95 years old, he still regrets the decision and seethes over Washington’s response to the economic crisis that forced it. His son, White House counselor and chief strategist Steve Bannon, says the moment crystallized his own antiestablishment outlook and helped trigger a decadelong political hardening. No official has more influence on a wider portfolio of issues than Mr. Bannon, who has become a litmus test for how people view the Trump administration. In an interview with the Journal, he discusses what led him to embrace “economic nationalism.”
Cloud of
Suspicion
In an age of hacking and surveillance, what could possibly go wrong with hundreds of millions of people storing personal data in a centralized warehouse? Still, companies like Google, Apple and Dropbox urge us to load our photos and sometimes even more precious documents onto “the cloud”—that is, huge racks of servers scattered around the world. But a lesser-known alternative is gaining traction: “personal cloud” storage, a hard drive that is in your home but that you can access online from anywhere. A private cloud makes a smaller target for hackers, though it isn’t without shortcomings of its own. Our Personal Technology columnist Geoffrey A. Fowler compares the options and offers tips to minimize the risk of being hacked. |
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Trump paid $38 million in
tax on a $150 million income, returns show.
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Carney's BOE tenure faces an awkward moment as his
closest ally departs.
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Hedge fund sees 30 percent return by betting only on
tomorrow, literally.
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It's a good time to find
a job in these countries, but don't expect a big
pay rise.
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These are the six biggest
WTO disputes you need to care about.
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Sports betting is starting to look a lot
like Wall Street.
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The only way to stop
Indians buying gold? Take away their cash.
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"It's a stock picker's market" is something people
say on financial TV all the time, but it's usually just meaningless nonsense. Except now,
theoretically, it might be true. After many years when the Fed was the only
game in town and everything was moving in lockstep, correlations are starting
to break down. So one should have the opportunity now to pick the right
stocks and actually beat the market. But as Dani Burger reports, even in 2017,
hardly anybody's picking stocks. What's happening is people are pouring tons
of money into ETFs. For the first time ever, correlation between sectors has
dropped below correlation between stocks. So rather than beat the market
using individual equities, people and institutions are just trying to beat
the market by picking the right sectors. Actual stock picking still seems to
be dying out. One investor cited in Dani's piece argues
that stock picking will return -- at least among big institutional investors
-- once there's more policy clarity in Washington. But the big picture is
that there doesn't seem to be anything visible on the horizon to halt the
massive secular trend away from selecting individual equities.
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Source:
Bloomberg, BI, WSJ, CFAI Fin. Newsbrief
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