Fri 18 Aug 2017


watch Nightly Business Report. watch Bloomberg Technology.
watch Today Trump fired … Stephen Bannon, his Chief Strategist Bloomberg Reuters
watch Carl Icahn quits as Trump’s special advisor on regulatory reform. Statement Reuters

In Portfolioticker today

Today at the stock market

bull/bearU.S. stocks closed lower after another volatile session on Friday as the latest White House shake-up kept investors jittery about the outlook for the Trump agenda. Reuters

  • The S&P 500 lost 4.46 points, or 0.18%, to 2,425.55.
  • The Dow Jones Industrial Average fell 76.22 points, or 0.35%, to 21,674.51.
  • The Nasdaq Composite dropped 5.39 points, or 0.09%, to 6,216.53.

Stocks rallied from early session lows after the White House announced that Steve Bannon would be leaving his job as chief strategist on Friday. Oil surged, while havens such as gold and the yen gave back some gains.

U.S. equity gauges briefly bounced into positive territory on the news, but ended down for the day. In Europe, stocks extended their declines after a terrorist attack in Barcelona added to unease about U.S. policy paralysis and lingering tensions over North Korea. Treasuries fell and the dollar weakened.

The removal of Bannon, the former chairman of Breitbart News and a controversial key adviser to President Donald Trump, may quell some of the fallout from Trump’s remarks on violence in Charlottesville, Virginia, which continue to raise questions about his ability to retain his team and focus on his economic plans.

Earlier Friday, former Republican presidential candidate Mitt Romney called on Trump to “acknowledge he was wrong” and apologize to the American people. Speculation that former Goldman Sachs Group Inc. President Gary Cohn, was poised to resign as head of the National Economic Council roiled markets on Thursday, until the White House issued a statement that he was staying.

“Picking fights and getting criticized by members of one’s own party don’t help in pursuing one’s agenda,” Peter Boockvar, chief market analyst at The Lindsey Group, wrote in a note to clients Friday.

Investors pulled $1.3 billion from equity funds in the week ending Aug. 16 as tensions over the Korean peninsula escalated, according to EPFR Global data. Outflows from U.S. stock funds were triple that, suggesting doubts about Trump’s stimulus plans are an additional worry. Heightened terror fears added to the malaise after at least 13 people died when a van plowed into pedestrians in Barcelona Thursday.

“The terror attacks in the U.S. and Spain just add to all the other geopolitical mess,” Simon Quijano-Evans, a strategist at London-based Legal & General Investment Management Ltd., said in a note to clients. “At some stage that is likely to culminate into a more extreme market reaction.”

Still, Naoki Fujiwara, chief fund manager of Shinkin Asset Management Co. in Tokyo, cautioned investors against drawing any long-term conclusions because the terrorist attack in Spain and political turmoil in the U.S. don’t amount a trend.

“Both the U.S. and Japanese economies are doing well, and what’s most important is the direction of U.S. monetary policy. As long as the fundamentals are steady, the market will recover,” Fujiwara said.Bloomberg

Market indices

market_20170818

Index Ticker Today Change 31 Dec 16 YTD
S&P 500 SPX (INX) 2,425.55 -0.19% 2,238.83 +8.34%
DJIA INDU 21,674.51 -0.36% 19,762.60 +9.67%
NASDAQ IXIC 6,216.53 -0.09% 5,383.12 +15.48%

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 2.785 -0.15% 2.105 +32.34%
Valuation Rate USD/AUD 0.79837 +0.56% 0.72663 +9.87%
AUD-denominated Index AUD 3.492 -0.71% 2.895 +20.62%

Portfolio stock prices

Stock Ticker Today Change 31 Dec 16 YTD
Alphabet A GOOGL $926.18 -0.16% $792.45 +16.87%
Alphabet C GOOG $910.67 -0.03% $771.82 +17.98%
Apple AAPL $157.50 -0.23% $115.82 +35.98%
Amazon AMZN $958.47 -0.22% $749.87 +27.81%
Ebay EBAY $34.78 -0.20% $29.69 +17.14%
Facebook FB $167.41 +0.30% $115.05 +45.51%
PayPal PYPL $59.44 +0.25% $39.47 +50.59%
Twitter TWTR $15.99 +0.79% $16.30 -1.91%
Visa V $102.51 +0.28% $78.02 +31.38%
VMware VMW $96.27 +0.50% $78.73 +22.27%

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) fell 0.3%.
The EUR rose 0.4% to USD 1.1764.
Britain’s GBP rose less than 0.1% to USD 1.2876.
Japan’s JPY rose 0.4% to 109.17 per USD.
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): $48.67/barrel +3.36% Chart
  • ICE (London) Brent North Sea Crude: $52.86/barrel +3.59% Chart
  • NYMEX Natural gas futures: $2.90/MMBTU -1.06% Chart

flag_usa US: UOM Consumer Confidence Index (Preliminary). Aug 2017

Press Comment: Bloomberg

Consumer sentiment climbed in August to a seven-month high as a measure of the outlook for the U.S. economy and personal finances registered the largest one-month advance since the end of 2011, according to University of Michigan survey data released Friday. Half of all consumers in each of the last three Michigan surveys reported that their finances had recently improved, the best reading since 2000, the report showed. Americans were also upbeat about their financial prospects in the year ahead.

Stronger household views about their financial well-being probably shows consumer spending will continue to expand and power the economy. A robust labor market remains a primary driver behind the improving attitudes about the economy. A favorable outlook for the economy was anticipated by 55 percent of all respondents, the highest share in two years. The caveat is that most Republican households expected gains, while most Democrats forecast declines.

The report showed an interesting change in how people are approaching their spending decisions. Confidence in the job market and incomes are playing a greater role, rather than low prices and borrowing costs.

Consumer sentiment has recovered following a two-month slide as President Donald Trump’s legislative agenda ran into several roadblocks. The partisan divide on economic outcomes has continued to increase as a series of foreign and domestic policy difficulties has refocused attention from plans for infrastructure spending and tax reform.Bloomberg

Press Release Extract [ser_11]
Index Aug 17 Jul 17 Aug 16 M-M% Y-Y%
Index of Consumer Sentiment 97.6 93.4 89.8 +4.5% +8.7%
Current Economic Conditions 111.0 113.4 107.0 -2.1% +3.7%
Index of Consumer Expectations 89.0 80.5 78.7 +10.6% +13.1%

Consumer confidence rose in the first half of August to its highest level since January due to a more positive outlook for the overall economy as well as more favorable personal financial prospects. The two component indices moved in opposite directions, with the Current Conditions Index falling slightly from its decade peak, and the Expectations Index posting a more substantial rebound. As with the overall Sentiment Index, the component indices nearly regained the peak levels recorded earlier in 2017. Too few interviews were conducted following Charlottesville to assess how much it will weaken consumers’ economic assessments. The fallout is likely to reverse the improvement in economic expectations recorded across all political affiliations in early August. Moreover, the Charlottesville aftermath is more likely to weaken the economic expectations of Republicans, since prospects for Trump’s economic policy agenda have diminished. Nonetheless, the partisan difference between the optimism of Republicans and the pessimism of Democrats is still likely to persist, with Independents remaining as the bellwether group. At this point, the data continue to indicate a gain of 2.4% in personal consumption expenditures in 2017.

University of Michigan, “UOM Consumer Confidence Index (Preliminary). Aug 2017“, 18 Aug 2017 (10:00) More

flag_usa US: NY Fed Increases Nowcast for GDP

Press Release Extract [ser_ser_gdp]

 The New York Fed Staff Nowcast stands at 2.1% for 2017:Q3.
News from this week’s data releases increased the nowcast by 0.1 percentage point.
Positive surprises from retail sales, survey, and industrial production data outweighed negative surprises from housing data.

New York Federal Reserve, “Nowcasting Report, Updated: August 18, 2017“, 18 Aug 2017 More

flag_usa US: Mass Resignation of Members of the President’s Committee on the Arts and Humanities

Every member of Donald Trump’s Committee on the Arts and the Humanities has resigned in protest at his comments on the violence in Charlottesville, Virginia.

Mr Trump has maintained his view that “many sides” were to blame for the tragic deaths of Heather Heyer, a counter-protester to neo-Nazis, the Klu Klux Klan, and other white supremacists, as well as Virginia state police officers H Jay Cullen and Berke MM Bates.

“Ignoring your hateful rhetoric would have made us complicit in your words and actions,” the letter read. It was posted by actor and former Obama White House administration adviser Kal Penn on Twitter.

The strongly worded letter said Mr Trump’s values “are not American”.

When taken together, the first letters of each of the paragraphs in the letter also read “RESIST”

“Supremacy, discrimination, and vitriol are not American values…We must be better than this. We are better than this. If this is not clear to you, then we call on you to resign your office, too,” the letter reads.Independent (UK)

us_arts_quit_20170818

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

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