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29Th July 2016
OVERNIGHT MARKETS AND NEWS
Sep
E-mini S&Ps (ESU16 -0.13%)
this morning are trading slightly lower by -0.15% on some nervousness ahead of today's
GDP report, but the market is seeing support from overnight rallies in Alphabet
and Amazon.com following positive quarterly earnings news for those companies
after Thursday's close. The U.S. markets are mainly looking ahead to today's
U.S. Q2 GDP report, where the market consensus yesterday fell by about 1/2
point to +2.0% due to the release of additional inventory and trade data.
The
Euro Stoxx 50 index is up +0.44% today on support from a rally in banking
shares on some positive bank earnings results. Traders are awaiting the release
of the European bank stress tests after today's U.S. close at 4PM ET. Eurozone
Q2 GDP rose +0.3% q/q and +1.6% y/y, in line with market expectations but down
from the Q1 pace of +0.6% q/q. The Eurozone June unemployment rate was
unchanged at 10.1%. Eurozone July core inflation was unchanged at +0.9% y/y.
The
Nikkei today closed +0.56% after a volatile day of trading on the BOJ's
less-than-expected monetary stimulus measures. However, Japanese banks rallied
on the news that the BOJ did not cut its policy rate further into negative
territory. The Bank of Japan today announced an expansion of its asset purchase
program by raising the size of its ETF purchase plan by 2.7 trillion ($26
billion) a year. The BOJ also expanded a dollar-lending facility to $24
billion. However, the BOJ left its policy rate unchanged at -0.10% and left its target unchanged for
expanding the monetary base by 80 trillion yen. The BOJ said it will conduct a
"comprehensive assessment" of its monetary policy at its next meeting
on Sep 20-21. The BOJ said it
will not change its goal of achieving a 2% inflation goal at the earliest
possible time.
Other
Asian stock markets today closed mostly lower: Hong Kong -1.28%, China Shanghai -0.50%, Taiwan -1.02%, Australia +0.10%,
Singapore-1.71%, South Korea -0.15%,
India -0.56%, Turkey -0.13%.
The
Russian central bank today left its key rate unchanged at 10.5%, which was in
line with market expectations.
Sep
10-year T-notes (ZNU16 -0.05%)
this morning are down -3.5 ticks, undercut by a -0.27 point sell-off in Sep bunds and some
disappointment about the BOJ's QE program.
The
dollar index (DXY00 -0.55%)
is down -0.52 points (-0.54%) this morning mainly
because of a sharp -1.98 yen (-1.88%) sell-off in USD/JPY (^USDJPY).
The yen rallied sharply today after the BOJ disappointed on its limited new
monetary stimulus measures. EUR/USD (^EURUSD)
is up +0.0037 (+0.33%).
Commodity
prices are down -0.53% this morning. Sep WTI crude oil (CLU16 -0.85%) is down by -0.40 (-0.95%) as the rout continues on high
inventories and rising U.S. oil production. Sep gasoline (RBU16 -1.35%) is down -0.0154 (-1.18%). Aug gold (GCQ16 +0.05%) is up +0.6 (+0.05%) but Sep
silver (SIU16 -0.46%) is down -0.107 (-0.53%) and Sep copper (HGU16 -0.38%) is down -0.011 (-0.48%) as industrial metals were
undercut by the BOJ's disappointing stimulus plans. Grains this morning are
lower with Dec corn down -2.25 (-0.66%), Nov beans down -8.00 (-0.82%), and Sep wheat down -4.00 (-0.98%). Softs are mixed with Oct
sugar up +0.04 (+0.21%), Sep coffee -1.00 (-0.70%), Sep cocoa up +16 (+0.56%),
and Dec cotton down-0.98 (-1.34%).The Total Investment & Insurance
Solutions
Key
U.S. news today includes: (1) Q2 GDP (expected +2.0% q/q annualized, Q1 +1.1%),
(2) Q2 employment cost index (expected +0.6%, Q1 +0.6%), (3) San Francisco Fed
President John Williams (non-voter) speaks at an event in Cambridge,
Massachusetts titled “Policy Dialogue: What’s Left in the Fed’s Toolkit,” (4)
Jul Chicago PMI (expected -2.8 to 54.0, Jun +7.5 to 56.8), (5) final-July
University of Michigan U.S. consumer sentiment (expected +0.7 to 90.2,
prelim-Jul -4.0 to 89.5), (6) Dallas Fed President
Robert Kaplan speaks at a moderated Q&A at the Independent Bankers
Association of New Mexico annual meeting.
There
are 18 of the S&P 500 companies that report earnings today with notable
reports including: UPS (consensus 1.43), Exxon (0.64), Chevron (0.32), AbbVie
(1.20), Merck (0.91).
U.S.
IPO's scheduled to price today: none.
Equity conferences this
week include: none.
Sep
E-mini S&Ps this morning are trading slightly lower by -0.15% on some nervousness ahead of today's
GDP report, but the market is seeing support from overnight rallies in Alphabet
and Amazon.com following positive quarterly earnings news for those companies
after Thursday's close. Thursday's closes: S&P 500 +0.16%, Dow Jones -0.09%, Nasdaq +0.30%. The S&P 500
on Thursday closed slightly higher on carry-over support from Wed's FOMC
post-meeting statement suggesting that a rate hike is not likely until at least
December. Stocks also received a boost from expectations for the BOJ on Friday
to announce new monetary stimulus measures. Stocks were undercut by new Census
Bureau data that produced a 1/2 point cut in forecasts for Friday's U.S. Q2 GDP
report. In addition, petroleum companies saw continued weakness as Sep crude oil
fell by another -1.9% to a new 3-month low.The Total Investment & Insurance
Solutions
· Alphabet (GOOG +0.56%) is up +3% in overnight trading
after reporting Q2 adjusted EPS of $8.42 late Thursday, above the consensus of
$8.03, on mobile adds and cost controls.
·
Amazon.com (AMZN +2.16%) rallied as much as +4% in
after-hours trading yesterday and is up +1.4% this morning after Q3 revenue
guidance was stronger than expected.
·
NextEra Energy (NEE)
agreed to buy the Oncor Electric Delivery Co. LLC utility unit from Energy
Future Holdings in a deal worth $18.4 billion as part of the process of
allowing Energy Future Holdings to emerge from bankruptcy.
·
Wynn Resorts (WYNN +2.37%) fell -5% in
after-hours trading on disappointment about a 24% drop in Macau betting.
·
Stamps.com (STMP +1.63%) rallied by +5% in after-hours
trading after management raised its full-year revenue and EPS guidance.
·
Expedia (EXPE +1.77%) fell -6% in
after-hours trading after saying that there was some lost booking time involved
in moving Orbitz to its back-end technology platform, causing a Q2 revenue
miss.
·
Earnings reports this
morning have been mostly positive with reports including UPS (UPS -0.06%) (1.43 vs 1.427), Merck (MRK -0.29%) (0.93 vs 0.91), Tyco (TYC -0.72%) (0.54 vs 0.53), Xerox (XRX -0.90%) (0.30 vs 0.25), Ventas (VTR +1.33%) (1.04 vs 1.034), Phillips 66 (PSX +1.13%) (0.94 vs 0.933). Disappointing
reports include Cigna (CI -1.55%) (1.98 vs 2.37) and Public
Service Enterprise Group (PEG -0.16%) (0.17 vs 0.58). The Total Investment & Insurance
Solutions
·
Sep 10-year T-notes this
morning are down -3.5 ticks. Thursday's closes: TYU6 +0.5,
FVU6 +0.5. Sep 10-year T-notes on Thursday closed slightly higher on carryover
support from Wednesday's FOMC post-meeting statement that did not suggest an
imminent Fed rate hike. In addition, new Census Bureau data released on
Thursday resulted in a 1/2 point cut in expectations for Friday's Q2 GDP
report. The Total Investment &
Insurance Solutions
The dollar index is down -0.52 points (-0.54%) this morning mainly
because of a sharp -1.98 yen (-1.88%) sell-off in USD/JPY. The
yen rallied sharply today after the BOJ disappointed on its limited new
monetary stimulus measures. EUR/USD is up +0.0037 (+0.33%). Thursday's closes:
Dollar index-0.383 (-0.39%),
EUR/USD +0.0019 (+0.17%), USD/JPY -0.13 (-0.12%). The dollar index on Thursday
closed moderately lower on the market's dovish interpretation of Wednesday's
FOMC's post-meeting statement. Meanwhile, USD/JPY closed mildly lower as the
market waits to see if the BOJ on Friday will announce aggressive new stimulus
measures as expected.
Sep WTI crude oil this
morning is down by -0.40 (-0.95%) as the rout continues on high
inventories and rising U.S. oil production. Sep gasoline is down-0.0154 (-1.18%). Thursday's closes: CLU6 -0.78 (-1.86%), RBU6 -0.0161 (-1.22%). Sep crude oil and gasoline
on Thursday closed lower with Sep crude oil posting another new 3-month low.
Crude oil continued to be undercut by Wed's EIA report that showed a +1.67
million bbl rise in U.S. crude oil inventories (vs expectations of -2.5 million
bbls) and a +0.2% increase in U.S. oil production to 8.515 million bpd, the
third straight weekly gain that now totals +1.0%. The Total Investment & Insurance Solutions
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