Fri 2 Dec 2016

In Portfolioticker today

Today at the stock market NBR

bull/bearTreasuries rose, the dollar fell and stocks were little changed after the latest jobs report delivered a mixed picture on the strength of the labor market as investors assess the Federal Reserve’s plans to raise interest rates.

The S&P 500 added less than 0.1% to 2,191.95, hovering near a two-week low. Real-estate shares and utilities rose, while financial companies fell. MSCI’s global gauge rose less than 0.1% at 4 p.m. in New York. The Stoxx Europe 600 Index retreated for a second day. Emerging-market shares dropped.

U.S. government bond yields slumped the most in three months and the greenback dropped against major peers. Brent oil capped its biggest weekly gain since 2009 after OPEC approved its first supply cut in eight years, with attention now shifting to compliance with the deal and how other producers will react to a price rally. Gold futures gained for the first time in four sessions amid signs of political uncertainty ahead of an Italian referendum this weekend.

U.S. hiring picked up in Nov 2016, while the unemployment rate tumbled to a 9-year (Aug 2007) low on a drop in the number of people in the workforce and wages unexpectedly declined, providing a mixed picture of the labor market. The 178,000 gain followed a 142,000 rise in Oct 2016 that was less than previously estimated, a Labor Department report showed Friday. The median forecast in a Bloomberg survey called for a 180,000 advance. The jobless rate fell 0.3 percentage point to 4.6% as labor participation dropped for a second month.

“This is a mixed number, but overall the story for December is unlikely to change. Given the mixed to weaker print, I think market pricing for 2017 rate hikes could stand to decline somewhat over the near-term,” said Gennadiy Goldberg, an interest-rate strategist at TD Securities LLC.Bloomberg

The shape of market indices today
^ Market indices today Chart: Yahoo Finance

Market indices

Index Ticker Today Change 31 Dec 15 YTD
S&P 500 SPX (INX) 2,191.95 +0.03% 2,043.94 +7.24%
DJIA INDU 19,170.42 -0.12% 17,425.03 +10.01%
NASDAQ IXIC 5,255.65 +0.08% 5,007.41 +4.95%

The portfolio today

Index values

Index Currency Today Change 31 Dec 15 YTD
USD-denominated Index USD 2.023 +0.27% 1.939 +4.29%
Valuation Rate USD/AUD 0.74998 +0.41% 0.73374 +2.21%
AUD-denominated Index AUD 2.697 -0.15% 2.643 +2.03%

Stock price movements

The shape of the portfolio today
^ The shape of the portfolio today Chart: Yahoo Finance

Portfolio stock prices

Stock Ticker Today Change 31 Dec 15 YTD
Alphabet A GOOGL $764.46 +0.02% $778.01 -1.75%
Alphabet C GOOG $750.50 +0.34% $758.88 -1.11%
Apple AAPL $109.90 +0.37% $105.26 +4.40%
Amazon AMZN $740.34 -0.45% $675.89 +9.53%
Ebay EBAY $28.42 +3.76% $27.48 +3.42%
Facebook FB $115.40 +0.26% $104.66 +10.26%
Linkedin LNKD $195.20 -0.06% $225.08 -13.28%
PayPal PYPL $38.62 +0.73% $36.20 +6.68%
Twitter TWTR $17.93 -0.55% $23.14 -22.52%
Visa V $75.72 +0.38% $77.55 -2.36%
VMware VMW $78.76 +0.92% $56.57 +39.22%

52-week performance

USD and AUD denominated indices over the past 52 weeks (Chart: Bunting)
^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting

FX: USD/AUD

USD

DXY movements
^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg

The Bloomberg Dollar Spot Index (DXY) slipped 0.3%.

Britain’s GBP rallied after the anti-Brexit Liberal Democrats gained a U.K. parliamentary seat in a by-election, a result that may complicate Prime Minister Theresa May’s efforts to begin the process of leaving the European Union early next year.Bloomberg

AUD

AUD movements
^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com

Oil and Gas Futures

Futures prices

Oil closed at the highest in more than a year in London and New York.Bloomberg

Prices are as at 15:47 EDT

  • NYMEX West Texas Intermediate (WTI): $51.59/barrel +1.04% Chart
  • ICE (London) Brent North Sea Crude: $54.39/barrel +0.83% Chart
  • NYMEX Natural gas futures: $3.45/MMBTU -1.54% Chart

flag_australia Australia: Retail Trade. Oct 2016

Press Release Extract

Current Prices

The trend estimate rose 0.4% in October 2016. This follows a rise of 0.4% in September 2016 and a rise of 0.3% in August 2016.

The seasonally adjusted estimate rose 0.5% in October 2016. This follows a rise of 0.6% in September 2016 and a rise of 0.6% in August 2016.

In trend terms, Australian turnover rose 3.3% in October 2016 compared with October 2015.

The following industries rose in trend terms in October 2016: Food retailing (0.4%), Household goods retailing (0.7%), Cafes, restaurants and takeaway food services (0.8%) and Other retailing (0.1%). Department stores (-0.2%) and Clothing, footwear and personal accessory retailing (-0.1%) fell in trend terms in October 2016.

The following states and territories rose in trend terms in October 2016: Queensland (0.7%), New South Wales (0.3%), Victoria (0.4%), South Australia (0.2%), the Australian Capital Territory (0.6%), Western Australia (0.1%), Tasmania (0.2%) and the Northern Territory (0.2%).

Australian Bureau of Statistics, “8501.0: Retail Trade. Oct 2016“, 2 Dec 2016 title=”Source: ABS” target=”more” class=”more”>More

flag_australia Australia: CBA Lifts Property Lending Rates

au_property_20161202
^ Apartment towers in South Melbourne, Victoria, Australia

The Commonwealth Bank of Australia is the latest bank to increase costs for home buyers seeking to lock in their interest rate, raising rates on a range of fixed-rate home loans.

The country’s biggest lender on Friday raised interest rates by 0.2 percentage points to 4.24% for its 3-year owner-occupied fixed-rate loan, the most popular term. 2-year fixed rates will rise 0.15 per cent to 4.14%, while 5-year fixed rates will increase 0.6 per cent to 4.74%. As part of the changes, which also applied to investor loans, it reduced rates on 4-year fixed rates by 0.2 percentage points to 4.14%.The Age

Other banks commenced raising rates last week:

  • 23 Nov 2016: ME Bank raised its variable rates by up to 10 basis points. Fixed rates are rising by up to 15 basis points.
  • 23 Nov 2016: Bank of Sydney raised 5-year fixed rates by up to 60 basis points.
  • 23 Nov 2016: Bank of Queensland raised its fixed rates by 20 basis points.
  • 24 Nov 2016: Westpac’s RAMS raised its fixed interest rates by up to 0.4 percentage points. The changes mean that all fixed-rate loans offered by the lender will have interest rates of more than 4%.
  • 25 Nov 2016: Westpac became the first major bank to increase interest rates on its fixed rate home loans and investment loans, but market watchers expect others to follow. Property investors who take a Westpac 5-year fixed rate mortgage will see an increase of 0.6 percentage points to 4.59% in the interest rate – the biggest of the increases. Those who already have a Westpac fixed rate loan will be unaffected. The Westpac five-year fixed rate home loan interest rate for owner-occupiers will jump by 0.54 percentage points to 4.39%. One and 4-year fixed rates for both owner occupiers and investors remain unchanged. Rates on 2 and 3-year terms for owner occupiers and investors will rise by up to 0.3 percentage points.

flag_europe Europe: Producer Price Index

Press Release Extract

In October 2016, compared with September 2016, industrial producer prices rose by 0.8% in the euro area (EA19) and by 1.0% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In September 2016 prices increased by 0.1% in both zones.

In October 2016, compared with October 2015, industrial producer prices fell by 0.4% in the euro area, while it rose by 0.2% in the EU28.

eu_ppi_20161202

Monthly comparison by main industrial grouping and by Member State

The 0.8% increase in industrial producer prices in total industry in the euro area in October 2016, compared with September 2016, is due to rises of 2.6% in the energy sector, of 0.3% for non-durable consumer goods and of 0.1% for both intermediate goods and durable consumer goods, while prices remained stable for capital goods. Prices in total industry excluding energy rose by 0.1%.

In the EU28, the 1.0% increase is due to rises of 3.5% in the energy sector, of 0.3% for non-durable consumer goods, of 0.2% for both intermediate goods and capital goods and of 0.1% for durable consumer goods. Prices in total industry excluding energy rose by 0.1%.

The largest increases in industrial producer prices were recorded in Estonia (+3.3%), the Netherlands (+2.7%) and Belgium (+2.5%), while decreases were observed in Latvia (-0.8%), Italy, Luxembourg and Slovenia (all -0.2%).

Annual comparison by main industrial grouping and by Member State

The 0.4% decrease in industrial producer prices in total industry in the euro area in October 2016, compared with October 2015, is due to price falls of 1.5% in the energy sector and of 0.8% for intermediate goods, while prices increased by 0.5% for both capital goods and non-durable consumer goods and by 1.0% for durable consumer goods. Prices in total industry excluding energy remained stable.

In the EU28, the 0.2% price increase is due to rises of 1.0% for durable consumer goods, of 0.9% for capital goods, of 0.7% for non-durable consumer goods and of 0.5% in the energy sector, while prices fell by 0.5% for intermediate goods. Prices in total industry excluding energy also rose by 0.2%.

The largest decreases in industrial producer prices were observed in Luxembourg (-7.3%), Slovakia (-2.9%) and Latvia (-2.6%), and the highest increases in the United Kingdom (+4.5%), Belgium (+2.2%) and Sweden (+2.0%).

Eurostat, “Industrial producer prices up by 0.8% in euro area – Up by 1.0% in EU28 – October 2016 compared with September 2016More

flag_usa USA: Jobs Report. Nov 2016

Press Comment

U.S. employers boosted hiring in Nov 2016 and the unemployment rate dropped to 4.6%, its lowest level since Aug 2007, making it almost certain that the Federal Reserve will raise interest rates later this month.

Nonfarm payrolls increased by 178,000 jobs in Nov 2016 after increasing by 142,000 in Oct 2016, the Labor Department said on Friday. The solid employment gains likely reflect growing confidence in the economy, which has been marked by rising consumer spending and inflation.

Economists surveyed by Reuters had forecast payrolls rising by 175,000 in Nov 2016 and the unemployment rate remaining unchanged at 4.9%. [Economists surveyed by Bloomberg had forecast payrolls rising in Nov 2016 by 180,000 in a range of 140,000 to 250,000. More]

“The decline in the unemployment rate and the unambiguous decrease in labor market slack are likely to place further upward pressure on inflation. This report easily clears the bar for a December rate hike,” said Michael Gapen, chief economist at Barclays in New York.

But wages fell for the first time in nearly a year after 2 straight months of solid increases. Economists partially blamed the drop in average hourly earnings on a calendar quirk, which they expect Fed officials will overlook at their 13-14 Dec 2016 policy meeting. Wages are expected to rebound in Dec 2016.

Average hourly earnings fell 3 cents, or 0.1%, after shooting up 0.4% in Oct 2016 and rising 0.3% in Sep 2016. Average hourly earnings fell for workers in mining, manufacturing and utilities.

November’s drop lowered the year-on-year gain in wages to 2.5% in Nov 2016 from an increase of 2.8% in Oct 2016, which was the largest rise in nearly 7½ years.

“This is likely to be a temporary setback, as further tightening in labor market conditions should increase competition for skilled labor and support stronger wage growth,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.

“It is not that firms aren’t trying to hire, they just cannot find qualified workers at the wages they want to pay,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. Reuters

Press Release Extract

The unemployment rate declined to 4.6 percent in November, and total nonfarm payroll employment increased by 178,000, the U.S. Bureau of Labor Statistics reported today. Employment gains occurred in professional and business services and in health care.

Household Survey Data

In November, the unemployment rate decreased by 0.3 percentage point to 4.6 percent, and the number of unemployed persons declined by 387,000 to 7.4 million. Both measures had shown little movement, on net, from August 2015 through October 2016.

us_ue_20161202

Among the major worker groups, the unemployment rate for adult men declined to 4.3 percent in November. The rates for adult women (4.2 percent), teenagers (15.2 percent), Whites (4.2 percent), Blacks (8.1 percent), Asians (3.0 percent), and Hispanics (5.7 percent) showed little or no change over the month.

The number of job losers and persons who completed temporary jobs edged down by 194,000 to 3.6 million in November. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.9 million and accounted for 24.8 percent of the unemployed. Over the past 12 months, the number of long-term unemployed was down by 198,000.

The civilian labor force participation rate, at 62.7 percent, changed little in November, and the employment-population ratio held at 59.7 percent. These measures have shown little movement in recent months.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 5.7 million, changed little in November but was down by 416,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

In November, 1.9 million persons were marginally attached to the labor force, up by 215,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 591,000 discouraged workers in November, little different from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million persons marginally attached to the labor force in November had not searched for work for reasons such as school attendance or family responsibilities.

Establishment Survey Data

Total nonfarm payroll employment rose by 178,000 in November. Thus far in 2016, employment growth has averaged 180,000 per month, compared with an average monthly increase of 229,000 in 2015. In November, employment gains occurred in professional and business services and in health care.

us_jobs_20161202

Employment in professional and business services rose by 63,000 in November and has risen by 571,000 over the year. Over the month, accounting and bookkeeping services added 18,000 jobs. Employment continued to trend up in administrative and support services (+36,000), computer systems design and related services (+5,000), and management and technical consulting services (+4,000).

Health care employment rose by 28,000 in November. Within the industry, employment growth occurred in ambulatory health care services (+22,000). Over the past 12 months, health care has added 407,000 jobs.

Employment in construction continued on its recent upward trend in November (+19,000), with a gain in residential specialty trade contractors (+15,000). Over the past 3 months, construction has added 59,000 jobs, largely in residential construction.

Employment in other major industries, including mining, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government, changed little over the month.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in November. In manufacturing, the workweek declined by 0.2 hour to 40.6 hours, while overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours.

In November, average hourly earnings for all employees on private nonfarm payrolls declined by 3 cents to $25.89, following an 11-cent increase in October. Over the year, average hourly earnings have risen by 2.5 percent. Average hourly earnings of private-sector production and nonsupervisory employees edged up by 2 cents to $21.73 in November.

The change in total nonfarm payroll employment for September was revised up from +191,000 to +208,000, and the change for October was revised down from +161,000 to +142,000. With these revisions, employment gains in September and October combined were 2,000 less than previously reported. Over the past 3 months, job gains have averaged 176,000 per month.

Bureau of Labor Statistics, “The Employment Situation – Nov 2016” 2 Dec 2016 (08:30) More

flag_japan Japan update

Currency: USD/JPY

JPY movements
^ JPY movements against the USD over the past month (mouseover for inverse) Chart: xe.com

Stockmarket: Nikkei 225

N225 movements
^ Nikkei N225 movements over the past week Chart: Yahoo Finance

flag_china China update

Currency: USD/CNY

CNY movements
^ CNY movements against the USD over the past month (mouseover for inverse) Chart: xe.com

Stockmarket: CSI300

CSI300 movements
^ Shanghai CSI300 movements over the past week Chart: Yahoo Finance