Mon 21 Aug 2017

watch Nightly Business Report time_26 26 min. watch Bloomberg Technology time_46 46 min.
watch Bloomberg TV: Joint defence exercises at South Korea. time_4 4 min
watch Bloomberg TV: Donald Trump’s Afghanistan Policy. time_3 3 min
watch Australia’s Generational Wealth Divide is Biting (HILDA) time_2 2 min

In Portfolioticker today

  • Today at the stock market Opinion
  • The portfolio today Opinion
  • News

    Today at the stock market

    bull/bearThe S&P 500 ended slightly higher on Monday after two sessions of losses, but simmering tensions between the United States and North Korea kept investors on edge and a drop in oil prices weighed on energy shares.

    • The S&P 500 gained 2.82 points, or 0.12%, to 2,428.37. Almost 280 stocks rose, while 220 retreated.
    • The Dow Jones Industrial Average rose 29.24 points, or 0.13%, to 21,703.75.
    • The Nasdaq Composite dropped 3.40 points, or 0.05%, to 6,213.13.Reuters

    Most U.S. stocks rose, while the dollar edged lower amid growing unease about persistent low inflation and as investors await central bank speeches at Jackson Hole.

    The S&P 500 Index eked out an advance in the final hour of trading to halt a 2-day slide that had taken stocks to the lowest level since Jul 2017, trading 18% below the 30-day average. Emerging-market equities edged higher, while European shares slipped. The JPY strengthened past 109 per USD. Treasuries climbed, gold resumed its trudge toward $1,300 per ounce and oil fell.

    In markets outside USA:

    • The Stoxx Europe 600 Index fell 0.4%.
    • The MSCI All-Country World Index rose 0.1%.
    • Germany’s DAX Index lost 0.8%.
    • The MSCI Emerging Market Index rose 0.3%.
    • Japan’s Topix index fell 0.1% at the close with volume was about 16% below the 30-day intraday average.
    • South Korea’s Kospi index fell 0.1%.
    • Australia’s S&P/ASX 200 Index fell 0.4%, with BlueScope Steel Ltd. tumbling as much as 23% after the company reported disappointing earnings.
    • Hong Kong’s Hang Seng Index rose 0.4% and the Shanghai Composite Index rose 0.6%.
    • The MSCI Asia Pacific Index fell 0.1%.

    Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi will be among the officials addressing this year’s installment of the annual conference hosted by the Kansas City Fed. The summit, held at a Wyoming mountain retreat, comes as central banks in advanced economies grapple with ending years of unprecedented monetary easing, even as stubbornly tepid inflation clouds the outlook.

    “The key event this week is the Jackson Hole central bank policy forum which begins on Thursday. The market spotlight will likely focus on Yellen, given the generally low U.S. inflation environment and the likelihood of Fed balance sheet reduction occurring relatively soon,” Citigroup strategists including Peter Goves wrote in a note to clients.Bloomberg

    Market indices


    Index Ticker Today Change 31 Dec 16 YTD
    S&P 500 SPX (INX) 2,428.37 +0.11% 2,238.83 +8.46%
    DJIA INDU 21,703.75 +0.13% 19,762.60 +9.82%
    NASDAQ IXIC 6,213.13 -0.06% 5,383.12 +15.41%

    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 2.780 -0.20% 2.105 +32.08%
    Valuation Rate USD/AUD 0.79871 +0.04% 0.72663 +9.91%
    AUD-denominated Index AUD 3.484 -0.24% 2.895 +20.33%

    Portfolio stock prices

    Stock Ticker Today Change 31 Dec 16 YTD
    Alphabet A GOOGL $920.87 -0.57% $792.45 +16.20%
    Alphabet C GOOG $906.66 -0.44% $771.82 +17.47%
    Apple AAPL $157.21 -0.18% $115.82 +35.73%
    Amazon AMZN $953.29 -0.54% $749.87 +27.12%
    Ebay EBAY $34.24 -1.55% $29.69 +15.32%
    Facebook FB $167.78 +0.22% $115.05 +45.83%
    PayPal PYPL $59.40 -0.07% $39.47 +50.49%
    Twitter TWTR $16.11 +0.72% $16.30 -1.17%
    Visa V $103.22 +0.69% $78.02 +32.29%
    VMware VMW $97.01 +0.77% $78.73 +23.21%



    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% to the lowest since 3 Aug 2017.
    The EUR rose 0.4% to USD 1.1810.
    Britain’s GBP climbed 0.2% to USD 1.29.
    Japan’s JPY rose 0.4% to 108.82 per USD, the strongest in almost four months on a closing basis.


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

    Oil and Gas Futures

    Futures prices

    Prices are as at 15:47 EDT

    • NYMEX West Texas Intermediate (WTI): $47.46/barrel -2.16% Chart
    • ICE (London) Brent North Sea Crude: $51.68/barrel -1.97% Chart
    • NYMEX Natural gas futures: $2.96/MMBTU +2.39% Chart

    flag_usa US: Trump’s Afghanistan Policy

    President Donald Trump announced an open-ended commitment to Afghanistan that will put as many as 4,000 more U.S. troops into the nation’s longest-lasting conflict and keep American forces there as long as it takes to bring the Taliban to the negotiating table.

    The decision marks a turnabout for Trump, who during the campaign only grudgingly acknowledged the need for the U.S. presence in Afghanistan and promised to eschew nation-building abroad to focus resources at home.

    “Our nation must seek an honorable and enduring outcome worthy of the tremendous sacrifices that have been made,” Trump said Monday in a nationally televised address from the Fort Myer Army base in Virginia. “The consequences of a rapid exit are both predictable and unacceptable.”

    Trump is now the third U.S. president to struggle with how to get out of Afghanistan, a country beset by ethnic, religious, cultural and tribal factions amplified by foreign powers including the U.S. as well as neighboring Pakistan and Russia. That mixture has stymied foreign armies for centuries.

    Trump declined to specify the number of troops the U.S. would have in Afghanistan, but his strategy gives the green light to a plan by Defense Secretary James Mattis to bolster training and support for the Afghan army with roughly 4,000 additional personnel — a 50 percent increase in the current American military presence. Mattis said in a statement Monday night that several U.S. allies also have committed to increasing troop numbers.

    Just as Trump has said China is the key to another longstanding U.S. foreign policy dilemma — persuading North Korea to dismantle its nuclear programs — the president’s approach focuses on making Pakistan a central component of his strategy.

    “We can no longer be silent about Pakistan’s safe havens for terrorist organizations, the Taliban, and other groups that pose a threat to the region and beyond,” Trump said. “Pakistan has much to gain from partnering with our effort in Afghanistan. It has much to lose by continuing to harbor terrorists.”

    Rather than a bold break with previous U.S. strategy in Afghanistan, Trump is making an incremental adjustment that emphasizes diplomatic and economic pressure as much as military might. But the approach fits a pattern that’s emerged in Trump’s foreign policy agenda, which avoids the Obama administration penchant for setting firm deadlines or milestones to get what the U.S. wants.

    “A core pillar of our new strategy is a shift from a time-based approach to one based on conditions,” Trump said. “I’ve said many times how counterproductive it is for the United States to announce in advance the dates we intend to begin, or end, military operations.”

    Still, he said, the U.S. commitment “is not unlimited, and our support is not a blank check.” He called his new approach “principled realism.”

    How the new strategy is received by the public and lawmakers may determine whether Trump can put behind him the multiple controversies and missteps of the past week, one of his most tumultuous in office.Bloomberg 21 Aug 2017 (21:00 EDT)

    flag_japan Japan update

    Currency: USD/JPY

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

    Stockmarket: Nikkei 225

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

    flag_china China update

    The Chinese government has officially put the brakes on Chinese companies pouring big money into overseas property development, issuing rules likely to have a significant impact in Australia. China’s State Council issued the first rules on overseas investment by Chinese companies on Friday. A new banned list includes casinos and defence technology, while overseas property development and hotels are classified as “restricted”.

    Chinese companies bought 38% of all the residential property development sites sold in Australia in 2016, spending AUD 2.4 billion, according to a Knight Frank report this year. But China’s National Development and Reform Commission declared on Friday that the property sector was “not the real economy” and companies investing overseas in real estate could be harming China’s financial stability by increasing capital outflows. The commission has labelled the overseas buying spree by China’s biggest private companies in recent years as “irrational”.

    Companies that violate the foreign investment rules would be punished, the State Council statement said. The State Council said China will instead encourage companies to invest in projects that contribute infrastructure to its hallmark foreign police, the Belt and Road Initiative (BRI), which is seeking to build new rail and shipping links for trade.

    Australia hasn’t signed a Belt and Road memorandum of understanding with China. Australian Trade Minister Steve Ciobo said this year the Free Trade Agreement with China meant bilateral trade was already developing well outside of the BRI.The Age

    Currency: USD/CNY

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

    Stockmarket: CSI300

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