Thu 17 Aug 2017


watch Nightly Business Report. watch Bloomberg Technology.
watch Business leaders quit … watch with Larry Summers’ support … watch but Gary Cohn decides to remain.
watch Apple CEO Tim Cook also slams Trump Washington Post.

YCombinator: How to Build the Future:
watch Mark Zuckerberg (16 Aug 2016). Watch time 25 min
watch Elon Musk (15 Sep 2016). Watch time 20 min
watch Drew Houston (23 Feb 2017). Watch time 31 min

In Portfolioticker today

Today at the stock market

bull/bearU.S. stocks sold off on Thursday, pushing the S&P 500 to its lowest in a month, as escalating worries about the Trump administration’s ability to push through its agenda rattled investors. The benchmark index also posted its biggest percentage fall since 17 May 2017.

  • The Dow Jones Industrial Average .DJI fell 274.48 points, or 1.25%, to end at 21,750.39.
  • The S&P 500 .SPX lost 38.05 points, or 1.54%, to 2,430.06.
  • The Nasdaq Composite .IXIC dropped 123.20 points, or 1.94%, to 6,221.91.Reuters

Trump Slump

A sense of growing unease gripped financial markets as Donald Trump exacerbated the controversy sparked by a racist rally in Virginia and terrorists struck a crowded street in Barcelona Terrorist Attack.

U.S. stocks retreated and a measure of market volatility spiked higher, while Treasuries rose with the yen as investors sought havens. Gold jumped.

Stocks began the day lower on speculation Trump’s policy agenda was increasingly imperiled after he disbanded two advisory councils staffed by CEOs and slammed Republican members of Congress who were critical of his remarks on race. Rumors that Gary Cohn would resign as head of the national economic council added to the selling before reports that he’d opted to stay on momentarily buoyed the market. Cohn has been leading the president’s efforts on tax reform.

“Certainly the Cohn stuff started it and while there isn’t much out there yet about what’s happening now in Barcelona, it’s also adding to it. And in the background is Donald Trump and everything negative that’s swirling around him. Is he going to be able to get anything done that was expected?” Robert Parks, managing director in equity derivatives at RJ O’Brien and Associates LLC, said by phone.

While Cohn’s continued presence in the White House brought a measure of calm to markets, it failed to end the controversy sparked by Trump’s polarizing remarks, leaving his agenda with an uncertain future. The terror news was a reminder that geopolitical unrest remains a threat to global growth, with nerves still raw after last week’s escalation of tensions on the Korean peninsula.

Still, some strategists cautioned that equity markets don’t appear poised to crack – at least not right now. “A correction is coming at some point, catalysts are not always obvious. But with central banks pulling back from the tapering mode, we doubt this is it,” Andrew Brenner, head of international fixed income for National Alliance Capital Markets, wrote in an email.

Earlier, European stocks dropped as minutes from the region’s last central bank meeting revealed concern among officials that the currency could overheat.

  • The Stoxx Europe 600 Index fell 0.6%.
  • The U.K.’s FTSE 100 Index fell 0.6%.
  • Germany’s DAX Index fell 0.5%, the biggest slide in a week.
  • The MSCI Emerging Market Index fell 0.8%.

Gold and tin were among the best performing metals, and zinc traded near a 10-year high. Most European bonds edged higher as they tried to catch up to U.S. yields. Sterling slipped after growth in U.K. retail sales dropped.Bloomberg

Cohn to Remain

Top White House economic adviser Gary Cohn, who has been leading the Trump administration’s effort to overhaul the U.S. tax code, will remain in his position as director of the National Economic Council, a White House official said.

Cohn, who was said to be particularly upset over President Donald Trump’s remarks on the violence in Charlottesville, Virginia, has no plans to resign, the official said, speaking on condition of anonymity.

Financial markets swooned as concern spread that Cohn might leave. The S&P 500 Index tumbled to the lowest level this week, while Treasuries erased earlier losses.

Market analysts consider Cohn’s continued presence a positive sign, though they are wrestling with whether the fallout from Trump’s polarizing remarks on race-related issues will damage his administration’s tax-cutting, deregulation and pro-growth agenda.

Cohn, who is Jewish, stood beside the president at the freewheeling press conference Tuesday in which Trump appeared to draw an equivalency between neo-Nazi demonstrators and counterprotesters in the weekend violence in Virginia. Cohn was at the event because it had been scheduled to address infrastructure policy.

Rumors had been circulating since then that the former Goldman Sachs Group Inc. executive was considering leaving the White House. Officials haven’t been able to say whether Trump and Cohn have spoken since Tuesday.

Trump has previously said that Cohn is one of the top contenders for Federal Reserve chair when Janet Yellen’s term ends in 2018.Bloomberg

Market indices

market_20170817

Index Ticker Today Change 31 Dec 16 YTD
S&P 500 SPX (INX) 2,430.01 -1.55% 2,238.83 +8.53%
DJIA INDU 21,750.73 -1.25% 19,762.60 +10.06%
NASDAQ IXIC 6,221.91 -1.95% 5,383.12 +15.58%

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

Index Currency Today Change 31 Dec 16 YTD
USD-denominated Index USD 2.789 -1.82% 2.105 +32.53%
Valuation Rate USD/AUD 0.79387 -0.51% 0.72663 +9.25%
AUD-denominated Index AUD 3.517 -1.34% 2.895 +21.47%

Portfolio stock prices

Stock Ticker Today Change 31 Dec 16 YTD
Alphabet A GOOGL $927.66 -1.76% $792.45 +17.06%
Alphabet C GOOG $910.98 -1.72% $771.82 +18.03%
Apple AAPL $157.86 -1.92% $115.82 +36.29%
Amazon AMZN $960.57 -1.80% $749.87 +28.09%
Ebay EBAY $34.85 -1.44% $29.69 +17.37%
Facebook FB $166.91 -1.82% $115.05 +45.07%
PayPal PYPL $59.29 -1.66% $39.47 +50.21%
Twitter TWTR $15.87 -1.79% $16.30 -2.64%
Visa V $102.16 -1.12% $78.02 +30.94%
VMware VMW $95.77 -0.92% $78.73 +21.64%

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) rose 0.2% after Wednesday’s decline.
The EUR fell 0.3% to USD 1.1729.
Britain’s GBP fell 0.2% to USD 1.2871.
Bloomberg

AUD

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

Oil and Gas Futures

Futures prices

Prices are as at 15:48 ET

  • NYMEX West Texas Intermediate (WTI): $47.02/barrel +0.51% Chart
  • ICE (London) Brent North Sea Crude: $50.90/barrel +1.25% Chart
  • NYMEX Natural gas futures: $2.92/MMBTU +1.07% Chart

flag_australia AU: Labour Force, Australia, July 2017

"Collins St, 5p.m.", John Brack (1955) National Gallery of Victoria

“Collins St, 5p.m.”, John Brack (1955) National Gallery of Victoria

Press Release Extract [ser_abs1]

Monthly trend full-time employment increased for the 10th straight month in July 2017, according to figures released by the Australian Bureau of Statistics (ABS) today. Full-time employment grew by a further 29,000 persons, while part-time employment decreased by 3,000 persons, underpinning a total increase in employment of 26,000 persons.

“Full-time employment has now increased by around 220,000 persons since September 2016, and makes up the majority of the 250,000 person increase in employment over the period,” Chief Economist for the ABS, Bruce Hockman, said.

Over the past year, trend employment increased by 259,000 persons (or 2.2 per cent), which is above the average year-on-year growth over the past 20 years (1.9 per cent).

The rate of employment growth (2.2 per cent) was greater than the growth in the population aged 15 years and over (1.6 per cent), which was reflected in an increase in the employment to population ratio (which is a measure of how employed the population is). This ratio increased by 0.4 percentage points since July 2016, up to 61.4 per cent, the highest it has been since April 2013.

Over the past year the three states and territories with the strongest growth in employment were Tasmania (4.0 per cent), Victoria (3.1 per cent) and Queensland (2.7 per cent).

The trend monthly hours worked increased by 5.2 million hours (0.3 per cent) to 1,696.4 million hours in July 2017.

The trend unemployment rate in Australia remained at 5.6 per cent in July 2017, and the labour force participation rate remained at 65.0 per cent.

Trend series smooth the more volatile seasonally adjusted estimates and provide the best measure of the underlying behaviour of the labour market.

The seasonally adjusted number of persons employed increased by 28,000 in July 2017. The seasonally adjusted unemployment rate was 5.6 per cent and the labour force participation rate was 65.1 per cent.

Australian Bureau of Statistics, “6202.0 Labour Force, Australia, July 2017.“, 17 Aug 2017 More

flag_australia AU: Average Weekly Earnings, Australia, May 2017

Press Release Extract [ser_abs2]

In the twelve months to May 2017, Full-Time Adult Average Weekly Ordinary Time Earnings increased by 1.8% to $1,543.80. The Full-Time Adult Average Weekly Total Earnings in May 2017 was $1,608.40, a rise of 2.1% from the same time last year.

Key Figures, Australia May 2017 12 Months
Trend
Full-time adult average weekly ordinary time earnings $1,543.80 +1.8%
Full-time adult average weekly total earnings $1,608.40 +2.1%
All employees average weekly total earnings $1,177.70 +1.6%
Original
Full-time adult average weekly ordinary time earnings $1,543.20 +1.8%
Full-time adult average weekly total earnings $1,605.60 +2.1%
All employees average weekly total earnings $1,179.00 +1.6%

Australian Bureau of Statistics, “6302.0 Average Weekly Earnings, Australia, May 2017.“, 17 Aug 2017 More

flag_europe EU: International Trade in Goods. Jun 2017

ship_roro

Press Release Extract [ser_eu1]

Euro area

The first estimate for euro area (EA19) exports of goods to the rest of the world in June 2017 was €187.2 billion, an increase of 3.9% compared with June 2016 (€180.2 bn). Imports from the rest of the world stood at €160.7 bn, a rise of 6.2% compared with June 2016 (€151.3 bn). As a result, the euro area recorded a €26.6 bn surplus in trade in goods with the rest of the world in June 2017, compared with +€28.9 bn in June 2016. Intra-euro area trade rose to €157.5 bn in June 2017, up by 3.5% compared with June 2016.

eu_ea_trade_20170817

In January to June 2017, euro area exports of goods to the rest of the world rose to €1 087.1 bn (an increase of 7.9% compared with January-June 2016), while imports rose to €979.4 bn (an increase of 11.6% compared with January-June 2016). As a result the euro area recorded a surplus of €107.7 bn, compared with +€129.3 bn in January-June 2016. Intra-euro area trade rose to €927.4 bn in January-June 2017, up by 7.5% compared with January-June 2016.

European Union

The first estimate for extra-EU28 exports of goods in June 2017 was €158.0 billion, up by 4.0% compared with June 2016 (€151.9 bn). Imports from the rest of the world stood at €150.9 bn, up by 3.9% compared with June 2016 (€145.2 bn). As a result, the EU28 recorded a €7.1 bn surplus in trade in goods with the rest of the world in June 2017, compared with +€6.7 bn in June 2016. Intra-EU28 trade rose to €286.2 bn in June 2017, +3.9% compared with June 2016.

eu_ea_trade_20170817

In January to June 2017, extra-EU28 exports of goods rose to €931.1 bn (an increase of 9.6% compared with January-June 2016), while imports rose to €928.7 bn (an increase of 10.7% compared with January-June 2016). As a result, the EU28 recorded a surplus of €2.5 bn, compared with +€11.0 bn in January-June 2016. Intra-EU28 trade rose to €1 675.5 bn in January-June 2017, +7.0% compared with January-June 2016.

Eurostat, “Euro area international trade in goods surplus €26.6 bn, €7.1 bn surplus for EU28 – Jun 2017“, 17 Aug 2017 More

flag_europe EU: Inflation (HICP). Jul 2017

Press Release Extract [ser_eu2]

Euro area annual inflation was 1.3% in July 2017, stable compared with June 2017. In July 2016 the rate was 0.2%. European Union annual inflation was 1.5% in July 2017, also stable compared to June 2017. A year earlier the rate was 0.2%. These figures come from Eurostat, the statistical office of the European Union.

eu_cpi_20170817

The lowest annual rates were registered in Ireland (-0.2%), Cyprus (-0.1%), Bulgaria and Finland (both 0.6%). The highest annual rates were recorded in Lithuania (4.1%), Estonia (3.9%), Latvia and the United Kingdom (both 2.6%). Compared with June 2017, annual inflation fell in four Member States, remained stable in eight and rose in sixteen.

eu_cpi_states_20170817

The largest upward impacts to the euro area annual inflation came from accommodation services (+0.10 percentage points), package holidays (+0.06 pp) and air transport (+0.05 pp), while telecommunication (-0.11 pp), vegetables (-0.05 pp) and fruit (-0.04 pp) had the biggest downward impacts.

Eurostat, “Inflation (HICP). Jul 2017“, 17 Aug 2017 More

flag_usa US: Unemployment Insurance Weekly Claims

Press Release Extract [ser_4]

insurance

In the week ending August 12, the advance figure for seasonally adjusted initial claims was 232,000, a decrease of 12,000 from the previous week’s unrevised level of 244,000. The 4-week moving average was 240,500, a decrease of 500 from the previous week’s unrevised average of 241,000.

unemployment

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending August 5, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 5 was 1,953,000, a decrease of 3,000 from the previous week’s revised level. The previous week’s level was revised up 5,000 from 1,951,000 to 1,956,000. The 4-week moving average was 1,960,250, a decrease of 6,000 from the previous week’s revised average. The previous week’s average was revised up by 1,250 from 1,965,000 to 1,966,250.

Employment and Training Administration, “Unemployment Insurance Weekly Claims Report“, 17 Aug 2017 (08:30) More

flag_japan Japan update

Trade Statistics (Provisional). Jul 2017

japan_roro_20170819

Comment: TradingEconomics

Japan’s trade surplus fell 17.0 percent to JPY 418.77 billion in July of 2017 from JPY 504.53 billion in the same month a year earlier but above market consensus of a surplus of JPY 392.0 billion. Exports rose 13.4 percent from a year earlier to JPY 6,494.89 billion while imports increased by 16.3 percent to JPY 6,076.19 billion. Balance of Trade in Japan averaged 368.17 JPY Billion from 1963 until 2017, reaching an all time high of 1608.67 JPY Billion in September of 2007 and a record low of -2795.04 JPY Billion in January of 2014.TradingEconomics

Imports to Japan jumped 16.3 percent from a year earlier to JPY 6,076.1 billion in July 2017, albeit short of market expectations of a 17 percent gain. Imports improved over June as purchases increased for most categories: Mineral fuels (25.9 percent), of which LNG (46.8 percent); electrical machinery (17.2 percent); chemicals (5.1 percent); machinery (29 percent); others (5.4 percent), of which scientific optical equipment (21.4 percent); foodstuff (12.8 percent); manufactured goods (22.2 percent); and raw materials (30.7 percent). In contrast purchases for transport equipment dropped 6.5 percent. Among major trading partners, imports grew from China (13.1 percent), the US (13.9 percent), Australia (36.1 percent), South Korea (21.9 percent), Taiwan (22.4 percent), and the EU (3.1 percent). Imports in Japan averaged 2877.59 JPY Billion from 1963 until 2017, reaching an all time high of 8047.03 JPY Billion in January of 2014 and a record low of 162.06 JPY Billion in January of 1963.TradingEconomics

Press Release Extract [ser_jp_trade]

jp_trade_20170817

Ministry of Finance – Customs and Tariff Bureau, “Trade Statistics (Provisional). Jul 2017“, 14 Aug 2017 More

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

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