Fri 2 Jun 2017


 NBR  Nightly Business Report.  BTV   Bloomberg Technology.
 BTV  Bloomberg TV: Bill Gross discusses the jobs report
 BTV  Bloomberg TV: U.S. National Economic Council Director Gary Cohn discusses the jobs report and tax reform
Essential Update: Internet Trends 2017 [Recommend you read the report]
Code 2017 Mary Meeker (KPCB): Internet Trends 2017 Slide Deck (355) Report (PDF)
Code 2016 Mary Meeker (KPCB): Internet Trends 2016

In Portfolioticker today

Today at the stock market

bull/bearThe USD weakened and Treasuries advanced with gold after the latest jobs report offered mixed signals on the strength of the American labor market, while U.S. stocks pushed to fresh records as technology shares extended a rally.

The Nasdaq 100 Index jumped more than 1% to an all-time high as Microsoft Corp. surged the most in 6 months to a record. Gains in rate-sensitive shares drove the S&P 500 Index to a new high after the 10-year Treasury yield slumped to the lowest level of the year following wage growth and hiring that was below forecasts. The Bloomberg dollar index (DXY) fell to the lowest since Nov 2016. Gold jumped and oil capped its worst week in a month.

  • The S&P 500 climbed 0.3% to a record 2,438.38 as of 4 p.m. in New York. The index rose 0.9% in the week, led by gains of at least 2% in phone and health-care shares. Energy producers slumped 2.4% and banks lost 0.9%.
  • The Dow Jones Industrial Average rose 0.2% to 21,190, and briefly climbed above 21,200 for the first time.
  • The Nasdaq Composite Index extended its record, rising 1.5% in the week.
  • The Russell 2000 added 1.7% during USA’s 4 day week.
  • The Stoxx Europe 600 Index increased 0.2%, to cap a 0.3% advance in the week.
  • Emerging-market equities rose 0.6%, paring a loss in the 5 days to 0.2%. The MSCI index is up 18% so far in 2017.

The latest jobs report likely won’t deter the Federal Reserve from increasing interest rates in two weeks as the economy continues to grind higher even as Washington shows few signs of moving forward with tax and spending reforms. Global equities have advanced more than 10% this year to set fresh records as data showed growth in the world’s largest economy is intact.

“The unemployment number that came out was well below expectations, and we have a market that’s starting to rethink the Fed’s strategy. There’s a lot of stuff going on. But we’re still in a flows market. We’re getting closer to a correction every day, but I think you’re going to have a melt-up first,” said Andrew Brenner, head of international fixed income for National Alliance Capital Markets.Bloomberg

Market indices

:-) The three market indices closed on record highs.

Index Ticker Today Change 31 Dec 16 YTD
S&P 500 SPX (INX) 2,439.07 +0.37% 2,238.83 +8.94%
DJIA INDU 21,206.29 +0.29% 19,762.60 +7.30%
NASDAQ IXIC 6,305.80 +0.94% 5,383.12 +17.14%

The portfolio today

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

Index values

:-) Our USD-denominated index closed on a record high of 2.778 beating the record of 2.752 set on 30 May 2017.
:-) Our AUD-denominated index closed on a record high of 3.710 beating the record of 3.695 set on 12 May 2017.

Index Currency Today Change 31 Dec 16 YTD
USD-denominated Index USD 2.778 +1.25% 2.105 +31.99%
Valuation Rate USD/AUD 0.74888 +0.85% 0.72663 +3.06%
AUD-denominated Index AUD 3.71 +0.40% 2.895 +28.13%

Portfolio stock prices

:-) Amazon closed on a record high of $1,006.73 beating the record of $996.70 set on 30 May 2017.
:-) Ebay closed on a record high of $35.32 beating the record of $35.22 set on 25 May 2017.
:-) Facebook closed on a record high of $153.61 beating its record of $152.78 set on 2 May 2017.
:-) PayPal closed on a record high of $53.52 beating its record of $52.21 set on 31 May 2017.
:-) Visa closed on a record high of $96.15 beating its record of $95.23 set on 31 May 2017.

Stock Ticker Today Change 31 Dec 16 YTD
Alphabet A GOOGL $996.12 +0.79% $792.45 +25.70%
Alphabet C GOOG $975.60 +0.89% $771.82 +26.40%
Apple AAPL $155.45 +1.48% $115.82 +34.21%
Amazon AMZN $1,006.73 +1.08% $749.87 +34.25%
Ebay EBAY $35.32 +1.52% $29.69 +18.96%
Facebook FB $153.61 +1.37% $115.05 +33.51%
PayPal PYPL $53.52 +0.68% $39.47 +35.59%
Twitter TWTR $18.31 -1.19% $16.30 +12.33%
Visa V $96.15 +0.79% $78.02 +23.23%
VMware VMW $95.36 -2.09% $78.73 +21.12%

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) retreated 0.4% to the lowest level since Nov 2016, and was down 0.5% for the week.
Britain’s GBP was little changed at USD 1.2887.
The EUR strengthened 0.6% to USD 1.1283.
Japan’s JPY gained 0.9% to 110.40/USD, after falling 0.5% on Thursday.
Bloomberg

AUD

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

Oil and Gas Futures

Futures prices

West Texas Intermediate crude dropped 1.5% to settle at $47.66/barrel. Prices fell 4.3% in the week, the most since 5 May 2017, as U.S. crude production expanded to the highest level since Aug 2015, countering a slide in stockpiles.Bloomberg

Prices are as at 15:49 ET

  • NYMEX West Texas Intermediate (WTI): $47.76/barrel -1.24% Chart
  • ICE (London) Brent North Sea Crude: $50.04/barrel -1.17% Chart
  • NYMEX Natural gas futures: $3.00/MMBTU -0.30% Chart

flag_europe EU: Industrial Producer Prices, Domestic Market (PPI). Apr 2017

Press Release Extract [ser_73]

In April 2017, compared with March 2017, industrial producer prices remained stable in both the euro area (EA19) and the EU28, according to estimates from Eurostat, the statistical office of the European Union. In March 2017 prices fell by 0.3% in the euro area and by 0.2% in the EU28.

In April 2017, compared with April 2016, industrial producer prices rose by 4.3% in the euro area and by 4.8% in the EU28.

Monthly comparison by main industrial grouping and by Member State

Industrial producer prices in total industry remained stable in the euro area in April 2017, compared with March 2017, due to rises of 0.3% for non-durable consumer goods, of 0.2% for intermediate goods and of 0.1% for both capital goods and durable consumer goods, while prices fell by 0.6% in the energy sector. Prices in total industry excluding energy rose by 0.2%.

Prices in the EU28 remained stable due to rises of 0.4% for non-durable consumer goods, of 0.3% for durable consumer goods, of 0.2% for intermediate goods and of 0.1% for capital goods, while prices fell by 0.4% in the energy sector. Prices in total industry excluding energy rose by 0.2%.

The highest increases in industrial producer prices were observed in Bulgaria (+1.3%), Greece (+0.6%), Latvia and the United Kingdom (both +0.5%), and the largest decreases in Ireland (-0.9%), Sweden (-0.7%), France and Slovakia (both -0.6%).

Annual comparison by main industrial grouping and by Member State

The 4.3% increase in industrial producer prices in total industry in the euro area in April 2017, compared with April 2016, is due to rises of 9.1% in the energy sector, of 4.0% for intermediate goods, of 2.4% for non-durable consumer goods, of 0.9% for capital goods and of 0.7% for durable consumer goods. Prices in total industry excluding energy rose by 2.5%.

In the EU28, the 4.8% price increase is due to rises of 11.8% in the energy sector, of 4.0% for intermediate goods, of 2.6% for non-durable consumer goods, of 1.2% for capital goods and of 1.1% for durable consumer goods. Prices in total industry excluding energy rose by 2.8%.

The largest increases in industrial producer prices were recorded in Belgium (+12.8%), the Netherlands (+8.7%) and the United Kingdom (+8.1%), while a price decrease was observed in Luxembourg (-2.7%).

Eurostat, “Industrial Producer Prices, Domestic Market (PPI). Apr 2017“, 2 Jun 2017 More

flag_usa US: International Trade in Goods and Services. Apr 2017 and Annual Update

Press Release Extract [ser_55]

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $47.6 billion in April, up $2.3 billion from $45.3 billion in March, revised. April exports were $191.0 billion, $0.5 billion less than March exports. April imports were $238.6 billion, $1.9 billion more than March imports.

The April increase in the goods and services deficit reflected an increase in the goods deficit of $2.3 billion to $68.4 billion and a decrease in the services surplus of less than $0.1 billion to $20.8 billion.

Year-to-date, the goods and services deficit increased $22.1 billion, or 13.4 percent, from the same period in 2016. Exports increased $44.3 billion or 6.1 percent. Imports increased $66.4 billion or 7.5 percent.

The average goods and services deficit decreased $0.4 billion to $45.9 billion for the three months ending in April.

  • Average exports of goods and services decreased $0.2 billion to $191.4 billion in April.
  • Average imports of goods and services decreased $0.6 billion to $237.3 billion in April.

Year-over-year, the average goods and services deficit increased $5.6 billion from the three months ending in April 2016.

  • Average exports of goods and services increased $10.5 billion from April 2016.
  • Average imports of goods and services increased $16.0 billion from April 2016.

Exports of goods decreased $0.5 billion to $126.9 billion in April.

Exports of goods on a Census basis decreased $0.4 billion.

  • Consumer goods decreased $0.7 billion.
    o Artwork, antiques, stamps, and other collectibles decreased $0.4 billion.
    o Pharmaceutical preparations decreased $0.2 billion.
  • Automotive vehicles, parts, and engines decreased $0.5 billion.
    o Passenger cars decreased $0.3 billion.
  • Foods, feeds, and beverages increased $0.6 billion.
    Net balance of payments adjustments decreased $0.2 billion.

Exports of services increased $0.1 billion to $64.0 billion in April.

  • Travel (for all purposes including education) increased $0.1 billion.
  • Transport, which includes freight and port services and passenger fares, decreased $0.1 billion.

Imports of goods increased $1.8 billion to $195.3 billion in April.

Imports of goods on a Census basis increased $1.8 billion.

  • Consumer goods increased $1.9 billion.
    o Cell phones and other household goods increased $1.8 billion.
    o Artwork, antiques, stamps, and other collectibles increased $0.5 billion.
  • Capital goods increased $0.9 billion.
  • Industrial supplies and materials decreased $1.5 billion.
    o Crude oil decreased $1.9 billion.
  • Net balance of payments adjustments decreased $0.1 billion.

Imports of services increased $0.1 billion to $43.3 billion in April.

  • Travel (for all purposes including education) increased $0.1 billion.
  • Transport decreased $0.1 billion.

Real Goods in 2009 Dollars – Census Basis

The real goods deficit increased $2.9 billion to $63.5 billion in April.

  • Real exports of goods decreased $0.5 billion to $123.9 billion.
  • Real imports of goods increased $2.4 billion to $187.4 billion.

Goods by Selected Countries and Areas: Monthly – Census Basis

The April figures show surpluses, in billions of dollars, with South and Central America ($2.7), Hong Kong ($2.0), Singapore ($0.9), Brazil ($0.3), and United Kingdom ($0.2). Deficits were recorded, in billions of dollars, with China ($32.1), European Union ($13.2), Mexico ($6.4), Germany ($5.5), Japan ($5.0), Italy ($3.0), Canada ($2.6), India ($1.6), South Korea ($1.5), Taiwan ($1.3), France ($1.2), OPEC ($1.1), and Saudi Arabia ($0.2).

  • The deficit with Italy increased $1.0 billion to $3.0 billion in April. Exports decreased $0.2 billion to $1.4 billion and imports increased $0.8 billion to $4.4 billion.
  • The deficit with France increased $1.0 billion to $1.2 billion in April. Exports decreased $0.7 billion to $2.6 billion and imports increased $0.2 billion to $3.7 billion.

Bureau of Economic Analysis, “International Trade in Goods and Services. Apr 2017 and Annual Update“, 2 Jun 2017 More

flag_usa US: The Employment Situation (Jobs Report). May 2017

Press Release Extract [ser_74]

Total nonfarm payroll employment increased by 138,000 in May, and the unemployment rate was little changed at 4.3 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care and mining.

Household Survey Data

us_ue_20170602

The unemployment rate, at 4.3 percent, and the number of unemployed persons, at 6.9 million, changed little in May. Since January, the unemployment rate has declined by 0.5 percentage point, and the number of unemployed has decreased by 774,000.

Among the major worker groups, the unemployment rate for Whites edged down to 3.7 percent in May. The jobless rates for Blacks (7.5 percent), Asians (3.6 percent), and Hispanics (5.2 percent), as well as those for adult men (3.8 percent), adult women (4.0 percent), and teenagers (14.3 percent), showed little or no change.

Among the unemployed, the number of job losers and persons who completed temporary jobs declined by 211,000 to 3.3 million in May. The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged over the month at 1.7 million and accounted for 24.0 percent of the unemployed.

The labor force participation rate declined by 0.2 percentage point to 62.7 percent in May but has shown no clear trend over the past 12 months. The employment-population ratio edged down to 60.0 percent in May.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 5.2 million in May. 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 May, 1.5 million persons were marginally attached to the labor force, down by 238,000 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 355,000 discouraged workers in May, down by 183,000 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 1.1 million persons marginally attached to the labor force in May had not searched for work for reasons such as school attendance or family responsibilities.

Establishment Survey Data

us_jobs_20170602

Total nonfarm payroll employment increased by 138,000 in May, compared with an average monthly gain of 181,000 over the prior 12 months. In May, job gains occurred in health care and mining.

Employment in health care rose by 24,000 in May. Hospitals added 7,000 jobs over the month, and employment in ambulatory health care services continued to trend up (+13,000). Job growth in health care has averaged 22,000 per month thus far in 2017, compared with an average monthly gain of 32,000 in 2016.

Mining added 7,000 jobs in May. Employment in mining has risen by 47,000 since reaching a recent low point in October 2016, with most of the gain in support activities for mining.

In May, employment in professional and business services continued to trend up (+38,000). The industry has added an average of 46,000 jobs per month thus far this year, in line with the average monthly job gain in 2016.

Employment in food services and drinking places also continued to trend up in May (+30,000) and has grown by 267,000 over the past 12 months.

Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, and government, showed little change over the month.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in May. In manufacturing, the workweek also was unchanged at 40.7 hours, while overtime edged up by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.6 hours.

In May, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $26.22. Over the year, average hourly earnings have risen by 63 cents, or 2.5 percent. In May, average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents to $22.00.

The change in total nonfarm payroll employment for March was revised down from +79,000 to +50,000, and the change for April was revised down from +211,000 to +174,000. With these revisions, employment gains in March and April combined were 66,000 less than previously reported. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 121,000 per month.

Bureau of Labor Statistics, “The Employment Situation (Jobs Report). May 2017“, 2 Jun 2017 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: Google Finance

The Nikkei 225 Stock Average breached 20,000 for the first time since Dec 2015, as a weaker JPY and positive economic data fueled a rally that’s lured foreign investors back to the world’s third-largest market. The Nikkei 225 rose 1.6% to close at 20,177.28, bringing its gain since an Apr 2017 low to 11%. The rally came as the nation’s corporate profits climbed to a record and attracted foreign investors, who snapped up more than USD 13 billion in Japanese stocks in 8 straight weeks through 26 May 2017 after being net sellers earlier in the year. Data released this week showed Japan’s unemployment rate held at a two-decade low, and capital spending for the first quarter of the year topped estimates. “A lot of people are recognizing that the Japanese economy is showing a bit more life. Equities in Japan are doing better than what USD/JPY is suggesting it should do. It’s an improvement and people are looking more macro-bullish of Japan,” said Ken Peng, a Hong Kong-based investment strategist at Citi Private Bank.Bloomberg

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: Google Finance