Week: 5 – 11 Jun 2017


This week’s Nightly Business Reports: Monday Tuesday Wednesday Thursday Friday
WSS Puerto Ricans vote to become USA’s 51 State.

flag_europe EU: Political Environment

UK: EU Members Harden Their Position on Brexit

Formal Brexit talks are due to begin on 19 Jun 2017, the same day as the Queen’s speech, at which point it will be known whether May has secured the support of a majority of MPs for her policy agenda. The UK’s Department for Exiting the European Union (DExEU) sent a note to the European commission on Friday evening to signal that the government was operational and pre-negotiation talks about logistics should begin this week as planned.

In a sign of growing impatience with the shambolic state of the British side of the talks, senior EU sources said that if London insisted on talking about a free trade deal before the issues of its divorce bill, citizens rights and the border in Ireland were sufficiently resolved, it would be met with a blunt response. “If they don’t accept the phased negotiations then we will take a year to draw up a new set of negotiating guidelines for Barnier,” one senior EU diplomat said, adding that the EU could not understand Britain’s continued claim that it would be able to discuss trade and the divorce terms in parallel.

The EU’s 27 leaders formally agreed to give Barnier a narrow set of tasks at a summit in Apr 2017 and they have no intention of rethinking the so-called phased approach when they meet May at a European summit on 22-23 Jun 2017.Guardian (UK)

UK Prime Minister Theresa May’s insistence on starting Brexit negotiations on Monday is questioned by Britons who think the prime minister’s calamitous election setback means she should now seek to stay in the EU single market. However, in the year since Britain voted to leave the European Union, the other 27 EU states have hardened their common position and narrowed British options for avoiding a “hard Brexit”.

Article 50 allows for an extension to the two-year deadline if the other states unanimously agree. However EU leaders will hesitate to open a divisive issue among them and want Britain out before European Parliament elections in May 2019.Reuters

‘The election has not usurped the EU referendum, but it has reshaped the kind of Brexit that is deliverable politically. Only a soft Brexit will now command the majority [Theresa May] needs in parliament’, former Liberal Democrat leader Nick Clegg said on Sunday. Grandees at both ends of the political spectrum have spent the weekend dusting down options for how Britain might still leave the European Union but crucially stay within the single market. The so-called “Norway option” would see Britain remain within the European Economic Area – and therefore maintain full access to the single market – by rejoining the European Free Trade Association (EFTA), along with Norway, Switzerland and others.Guardian (UK)

EU Position on Brexit

On 29 Apr 2017 Donald Tusk set out the EU’s position on Brexit negotiations. Statement

Last Friday (9 Jun 2017) Tusk wrote to May: “Our shared responsibility and urgent task now is to conduct the negotiations on the UK’s withdrawal from the European Union in the best possible spirit, securing the least disruptive outcome for our citizens, businesses and countries after March 2019. The timeframe set by Article 50 of the Treaty leaves us with no time to lose.”

On 20 Jun 2017 the European Commission’s General Affairs Council will meet in Luxembourg to “prepare the European Council (Art.50) of 22 June 2017. Ministers will discuss the state of play of Brexit negotiations, after the first round of talks with the UK which are expected to start that same week.

The Brexit negotiations follow the UK notification of its intention to withdraw from the EU (under article 50 of the Treaty of the EU) on 29 March 2017.

In the margins of the General Affairs Council (Art.50), ministers will discuss the procedure to decide on the relocation of the two EU agencies currently based in the UK: the European Medicines Agency (EMA) and the European Banking Authority (EBA). The two agencies will need to be relocated in the context of the UK withdrawal from the EU. The future location will need to be decided by common agreement of the EU27 member states.

The President of the European Council, Donald Tusk, and the President of the Commission, JeanClaude Juncker, have suggested to member states a specific procedure for this. This involve a vote by the 27 member states in the autumn following an assessment of the applications based on objective criteria. The EU27 leaders are expected to endorse the procedure in the margins of the European Council (Art.50) of 22 June. EC

FR: Macron’s REM Party Likely To Win French Election

French President Emmanuel Macron’s party is on course for an overwhelming parliamentary majority after Sunday’s first round of voting for the National Assembly left traditional parties in disarray. Forecasts based on partial results showed Macron widening his centrist revolution, with his Republique en Marche (Republic on the Move, REM) party and its ally MoDem tipped to win between 400 and 445 seats in the 577-member National Assembly in next Sunday’s second round.

The estimates showed REM and MoDem winning between 32% and 33% in the first round, ahead of the Republicans on 21%-21.5% and the FN on 13%-14%. But the vote was marked by record low turnout of 49%, possibly reflecting fatalism among Macron’s opponents in the face of his seemingly unstoppable advance, experts said.

Next weekend’s second round: Few MPs were elected outright on Sunday. If no candidate wins over 50%, the 2 top-placed contenders go into the second round – along with any other candidate who garners at least 12.5% of registered voters in the district.AFP

GR: Greek Bailout Agreement May Be Next Week

Jeroen Dijsselbloem, President of the EuroGroup (euro zone finance ministers) expects a “deal on the full completion of the second review” at the Eurogroup meeting in Luxembourg on 15 Jun 2017, his spokesman said on Friday. A conclusion of the second review of the EUR 86 billion (USD 96 billion) bailout would include the unblocking of new loans for Athens, which are needed to pay debts due in Jul 2017.

Some euro zone lenders, led by Germany, have linked the disbursement of new financial aid to IMF participation in the bailout program, which is in turn linked to new debt relief for Greece to improve its financial stability. In spite of the growing optimism, a meeting of euro zone representatives on Thursday did not achieve much progress, leaving key issues in the hands of EuroGroup finance ministers next week, two EU officials told Reuters.

Christine Lagarde, Managing Director of the International Monetary Fund (IMF), is set to attend next week’s EuroGroup meeting, a further sign that differences between the IMF and Greece’s EU creditors are narrowing on additional debt relief measures for Athens.Reuters

flag_usa US: Puerto Rico’s Citizens Vote to Become USA’s 51st State

Puerto Rico on Sunday overwhelmingly voted for statehood. However on an island where voter participation often hovers around 80%, just 23% of registered voters cast ballots. Voting stations accustomed to long lines were virtually empty on Sunday. 97% percent of the votes in Sunday’s nonbinding referendum favored statehood, an increase over the results of a 2012 referendum (in which 6% of Puerto Ricans voted to cut ties with USA). In previous referendums (1967, 1993 and 1998) Puerto Ricans voted in favour of US statehood.

Puerto Rico came under US control in 1898 after the Spanish-American War. In 1917 Puerto Ricans became US citizens. In 1952 US President Harry S Truman approved a law under which Puerto Rico became an official US commonwealth. On 3 Mar 2017 Puerto Rico declared bankruptcy with USD 73 billion of debt, 11.5% unemployment, and 46% of the population of 3.4 million living in poverty. Promoting Puerto Rico’s status from commonwealth to State would increase the flow of funds from US taxpayers to the island.

Puerto Rico’s governor, Ricardo A. Rosselló of the pro-statehood New Progressive Party, said he planned to take the victory to Washington and press Congress to admit Puerto Rico to the union. “Today, we the people of Puerto Rico are sending a strong and clear message to the US Congress … and to the world … claiming our equal rights as American citizens”, Rosselló said in a news release.

But Congress, the only body that can approve new states, will ultimately decide whether Puerto Rico’s status changes. For Congress to consider this, Sunday’s results would need to be repeated in another referendum expected in Oct 2017.CNN NY Times

The stock market

home Market indices

Index 9 Jun 17 Week 2 Jun 17 Month 31 May 17 Year 30 Dec 16
S&P 500 2,431.77 -0.30% 2,439.07 +2.00% 2,384.20 +8.62% 2,238.83
DJIA 21,271.97 +0.31% 21,206.29 +1.58% 20,940.51 +7.64% 19,762.60
NASDAQ 6,207.92 -1.55% 6,305.80 +2.65% 6,047.61 +15.32% 5,383.12

Portfolio

Index performance

indices_20170609

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

home This week’s performance

Index 9 Jun 17 Week 2 Jun 17 Month 31 May 17 Year 30 Dec 16
USD Index 2.676 -3.67% 2.778 +3.66% 2.582 +27.15% 2.105
Valuation rate 0.75798 +1.22% 0.74888 +0.55% 0.75382 +4.31% 0.72663
AUD Index 3.532 -4.81% 3.710 +3.10% 3.426 +21.97% 2.895

home Portfolio stocks this week

AAPL: Apple, Inc This week Change Last week home
Friday close $148.98 -4.16% $155.45
P/E (historical) 17.42 Change 18.18
P/E (1 year fwd) 17.34 Change 17.13
Target (1 year) NASDAQ consensus $159Change, range $85 ↔ $202
Analyst recommendations 17 strong buy, 6 buy, 6Change hold, 2 sell
Last earnings report Q2/2017 2 May 2017
SEC filings Edgar Search CIK 0000320193
AAPL
^ Apple price movements this week (mouseover for 1-year view) Chart: Google Finance

AMZN: Amazon Com, Inc This week Change Last week home home
Friday close $978.31 -2.82% $1,006.73
P/E (historical) 183.89 Change 189.05
P/E (1 year fwd) 153.77 Change 149.09
Target (1 year) NASDAQ consensus $1,087.5Change, range $700 ↔ $1,300Change
Analyst recommendations 22Change strong buy, 4 buy, 5 hold, 1 sell
Last earnings report Q1/2017 27 Apr 2017
SEC filings Edgar Search CIK 0001018724
AMZN
^ Amazon price movements this week (mouseover for 1-year view) Chart: Google Finance

EBAY: Ebay, Inc This week Change Last week home home
Friday close $34.94 -1.08% $35.32
P/E (historical) 5.00 Change 5.06
P/E (1 year fwd) 21.90 Change 21.08
Target (1 year) NASDAQ consensus $35, range $28 ↔ $41Change
Analyst recommendations 7 strong buy, 1 buy, 15 hold, 1 sell
Last earnings report Q1/2017 19 Apr 2017
SEC filings Edgar Search CIK 0001065088
EBAY
^ Ebay price movements this week (mouseover for 1-year view) Chart: Google Finance

FB: Facebook, Inc This week Change Last week home home
Friday close $149.63 -2.59% $153.61
P/E (historical) 35.58 Change 40.60
P/E (1 year fwd) 31.64 Change 30.92
Target (1 year) NASDAQ consensus $167.5, range $135 ↔ $192
Analyst recommendations 21 strong buy, 3 buy, 2 hold
Last earnings report Q1/2017 3 May 2017
SEC filings Edgar Search CIK 0001326801
FB
^ Facebook price movements this week (mouseover for 1-year view) Chart: Google Finance

GOOGL: Alphabet, Inc This week Change Last week home home
Friday close $970.12 -2.61% $996.12
P/E (historical) 32.75 Change 33.68
P/E (1 year fwd) 29.22 Change 28.32
Target (1 year) NASDAQ consensus $1,050, range $880 ↔ $1,250
Analyst recommendations 22 strong buy, 3 buy, 2 hold
Last earnings report Q1/2017 27 Apr 2017
SEC filings Edgar Search CIK 0001288776
GOOGL
^ Alphabet (GOOG) price movements this week (mouseover for 1-year view) Chart: Google Finance

GOOG: Alphabet, Inc This week Change Last week home home
Friday close $949.83 -2.64% $975.60
GOOG
^ Alphabet (GOOG) price movements this week (mouseover for 1-year view) Chart: Google Finance

PYPL: PayPal Holdings, Inc This week Change Last week home home
Friday close $53.40 -0.22% $53.52
P/E (historical) 45.25 Change 45.35
P/E (1 year fwd) 39.41 Change 38.52
Target (1 year) NASDAQ consensus $51, range $39 ↔ $61Change.
Analyst recommendations 17 strong buy, 3 buy, 11Change hold, 0Change sell
Last earnings report Q1/2017 26 Apr 2017
SEC filings Edgar Search CIK 0001633917
PYPL
^ Paypal price movements this week (mouseover for 1-year view) Chart: Google Finance

TWTR: Twitter, Inc This week Change Last week home home
Friday close $16.90 -7.70% $18.31
Target (1 year) NASDAQ consensus $14, range $10 ↔ $20.
Analyst recommendations 1 strong buy, 13Change hold, 1 underperform, 9 sell.
Last earnings report Q1/2017 26 Apr 2017
SEC filings Edgar Search CIK 0001418091
TWTR
^ Twitter price movements this week (mouseover for 1-year view) Chart: Google Finance

V: Visa, Inc This week Change Last week home home
Friday close $94.56 -1.65% $96.15
P/E (historical) 47.28 Change 48.08
P/E (1 year fwd) 28.68 Change 28.48
Target (1 year) NASDAQ consensus $100, range $89 ↔ $112
Analyst recommendations 16 strong buy, 3 buy, 2 hold
Last earnings report Q2/2017 20 Apr 2017
SEC filings Edgar Search CIK 0001403161
V
^ Visa price movements this week (mouseover for 1-year view) Chart: Google Finance

VMW: VMware, Inc This week Change Last week home
Friday close $87.63 -8.11% $95.36
P/E (historical) 29.51 Change 32.11
P/E (1 year fwd) 25.17 Change 27.28
Target (1 year) NASDAQ consensus $100Change, range $67 ↔ $116Change
Analyst recommendations 10 strong buy, 3 buy, 15Change hold
Last earnings report Q4/2016 26 Jan 2017
SEC filings Edgar Search CIK 0001124610
VMW
^ VMware price movements this week (mouseover for 1-year view) Chart: Google Finance

home flag_australia FX: USD/AUD

usd/aud
^ AUD movements against the USD this week (mouseover for 1-year view) Chart: xe.com

Australian economic indicators Trading Economics

Australian economic charts RBA Chart Pack