Fri 15 Sep 2017


watch Nightly Business Report. watch Bloomberg Tech. watch PBS NewsHour.
watch Cassini crashes into Saturn. Time Line Final Image

In Portfolioticker today

Today at the stock market

bull/bearU.S. stocks capped the best week since Jan 2017, with the S&P 500 Index climbing above 2,500 for the first time, as investors showed resilience in the face of a North Korean missile test. The dollar weakened after an unexpected decline in Aug 2017 retail sales raised concern over the economy’s strength.

  • The S&P 500 Index rose 0.18% to a record 2,500.22.
  • The Dow Jones Industrial Average Index rose 0.29% to a record 22,268.34.
  • The NASDAQ Composite Index rose 0.30% to 6,448.47.
  • The Stoxx Europe 600 Index fell 0.3%.
  • The MSCI All-Country World Index rose 0.2%.
  • The MSCI Emerging Market Index rose 0.2%.
  • The U.K.’s FTSE 100 Index fell 1.1%.

Investors largely shrugged off the latest rise in tensions on the Korean peninsula and a terrorist attack in London, with haven assets from the yen to gold declining. The S&P 500 took the round-number milestone in the final minutes of trading to end the week with a 1.6% advance. The Dow Jones Industrial Average also closed at a record. The USD pared its biggest weekly gain since Feb 2017 as the Bank of England’s hawkish shift bolstered the pound. Oil ended near $50/barrel to cap its best week since Jul 2017. Yields on 10-year Treasuries topped 2.2%.

With economic themes back in the foreground, markets are showing signs of becoming conditioned to provocative actions from North Korea, which has launched more than a dozen missiles this year and tested a nuclear device. The Aug 2017 decline in sales and downward revisions to the prior months make it more likely that consumption, the biggest part of the economy, will be hard-pressed to match the 3.3% growth pace of the prior quarter.

“Retail sales were weak but some of that is built in because you caught a piece of the hurricanes,” said Andrew Brenner, the head of international fixed income at Natalliance Securities. “Central banks trump everything else right now. They’re going to become much more important in the next wave of where markets move.”

Volume was unusually high Friday because of a quarterly event known as quadruple witching, when futures and options contracts on indexes and individual stocks expire.Bloomberg

Market indices

:-) The S&P500 closed on a record 2,500.23, up 0.18% on its 13 Aug 2017 record of 2,498.37.
:-) The DJIA closed on a record 22,268.34, up 0.29% on yesterday’s record of 22,203.48.

Market indices
^ Market indices today (mouseover for 12 month view) Chart: Google Finance

Index Ticker Today Change 31 Dec 16 YTD
S&P 500 SPX (INX) 2,500.23 +0.18% 2,238.83 +11.67%
DJIA INDU 22,268.34 +0.29% 19,762.60 +12.67%
NASDAQ IXIC 6,448.47 +0.30% 5,383.12 +19.79%

Portfolio Indices

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 2.840 +0.55% 2.105 +34.96%
Valuation Rate USD/AUD 0.8053 +0.19% 0.72663 +10.82%
AUD-denominated Index AUD 3.531 +0.36% 2.895 +21.96%

Portfolio stock prices

:-) Ebay closed on a record $38.36, up 0.13% on yesterday’s record of $38.31.

Stock Ticker Today Change 31 Dec 16 YTD
Alphabet A GOOGL $935.08 -0.54% $792.45 +17.99%
Alphabet C GOOG $920.42 -0.50% $771.82 +19.25%
Apple AAPL $159.88 +1.01% $115.82 +38.04%
Amazon AMZN $986.95 -0.54% $749.87 +31.61%
Ebay EBAY $38.36 +0.13% $29.69 +29.20%
Facebook FB $171.64 +0.39% $115.05 +49.18%
PayPal PYPL $62.51 +0.43% $39.47 +58.37%
Twitter TWTR $18.01 -1.10% $16.30 +10.49%
Visa V $105.30 -0.74% $78.02 +34.96%
VMware VMW $110.25 -0.46% $78.73 +40.03%

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 fell 0.2%.
The EUR rose 0.2% to USD 1.1941.
Britain’s GBP gained 1.3% to USD 1.3568, the strongest in almost 15 months.
Japan’s JPY dipped 0.6% to 110.92 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

West Texas Intermediate rose 0.1% to $49.93/barrel. Prices rose almost 5% in the week, buoyed by higher demand forecastsBloomberg

Prices are as at 15:49 ET

  • NYMEX West Texas Intermediate (WTI): $49.95/barrel +0.12% Chart
  • ICE (London) Brent North Sea Crude: $55.57/barrel +0.18% Chart
  • NYMEX Natural gas futures: $3.03/MMBTU -1.17% Chart

flag_europe EU: Job Vacancy Rate. Q2/2017

Press Release Extract [ser_eu_vacancies]

The job vacancy rate in the euro area (EA19) was 1.9% in the second quarter of 2017, stable compared with the previous quarter and up from 1.7% in the second quarter of 2016, according to figures published by Eurostat, the statistical office of the European Union. In the EU28, the job vacancy rate was 2.0% in the second quarter of 2017, up from 1.9% recorded in the previous quarter and from 1.8% in the second quarter of 2016.

eu_jobvacancies_20170915

In the euro area, the job vacancy rate in the second quarter of 2017 was 1.6% in industry and construction, and 2.2% in services. In the EU28, the rate was 1.7% in industry and construction, and 2.3% in services.

Member States

Among the Member States for which comparable data are available (see country notes), the highest job vacancy rates in the second quarter of 2017 were recorded in the Czech Republic (3.6%), Belgium (3.3%), Germany (2.7%), the Netherlands, Austria and the United Kingdom (all 2.6%) as well as Sweden (2.5%). In contrast, the lowest rates were observed in Greece (0.7%), Bulgaria, Spain and Cyprus (all 0.8%) as well as Portugal (0.9%).

eu_jobvacancies_states_20170915

Compared with the same quarter of the previous year and among the Member States for which data are comparable over time, the job vacancy rate in the second quarter of 2017 rose in nineteen Member States, remained stable in four and fell in Cyprus (-0.2 percentage points), Bulgaria, Greece and Slovakia (all -0.1 percentage points). The largest increases were registered in the Czech Republic (+0.7 percentage points), the Netherlands and Austria (both +0.6 percentage points), Belgium and Slovenia (both +0.5 percentage points).

Eurostat, “Second quarter of 2017: Euro area job vacancy rate at 1.9%, EU28 rate at 2.0%“, 15 Sep 2017 More

flag_europe EU: International Trade in Goods. Jul 2017

Press Release Extract [ser_eu_trade]

Euro area

The first estimate for euro area (EA19) exports of goods to the rest of the world in July 2017 was €177.7 billion, an increase of 6.1% compared with July 2016 (€167.6 bn). Imports from the rest of the world stood at €154.6 bn, a rise of 8.2% compared with July 2016 (€142.8 bn). As a result, the euro area recorded a €23.2 bn surplus in trade in goods with the rest of the world in July 2017, compared with +€24.8 bn in July 2016. Intra-euro area trade rose to €145.6 bn in July 2017, up by 5.6% compared with July 2016.

eu_trade_20170915

In January to July 2017, euro area exports of goods to the rest of the world stood at €1 265.1 bn (an increase of 7.7% compared with January-July 2016) and imports at €1 135.0 bn (an increase of 11.2% compared with January- July 2016). As a result, the euro area recorded a surplus of €130.2 bn, compared with +€154.1 bn in January-July 2016. Intra-euro area trade rose to €1 074.0 bn in January-July 2017, up by 7.3% compared with January-July 2016.

European Union

The first estimate for extra-EU28 exports of goods in July 2017 was €155.8 billion, up by 9.7% compared with July 2016 (€142.1 bn). Imports from the rest of the world stood at €146.9 bn, up by 5.6% compared with July 2016 (€139.1 bn). As a result, the EU28 recorded a €8.8 bn surplus in trade in goods with the rest of the world in July 2017, compared with +€3.0 bn in July 2016. Intra-EU28 trade rose to €260.3 bn in July 2017, +5.3% compared with July 2016.

eu28_trade_20170915

In January to July 2017, extra-EU28 exports of goods stood at €1 087.3 bn (an increase of 9.6% compared with January-July 2016) and imports at €1 076.5 bn (an increase of 10.1% compared with January-July 2016). As a result, the EU28 recorded a surplus of €10.8 bn, compared with +€14.0 bn in January-July 2016. Intra-EU28 trade rose to €1 938.3 bn in January-July 2017, +6.9% compared with January-July 2016.

Eurostat, “July 2017: Euro area international trade in goods surplus €23.2 bn, €8.8 bn surplus for EU28“, 15 Sep 2017 More

flag_europe EU: Annual Growth in Labour Costs. Q2/2017

Press Release Extract [ser_eu_wages]

Hourly labour costs rose by 1.8% in the euro area (EA19) and by 2.2% in the EU28 in the second quarter of 2017, compared with the same quarter of the previous year. In the first quarter of 2017, hourly labour costs increased by 1.4% and 1.6% respectively. These figures are published by Eurostat, the statistical office of the European Union.

eu_wage_growth_20170915

The two main components of labour costs are wages & salaries and non-wage costs. In the euro area, wages & salaries per hour worked grew by 2.0% and the non-wage component by 0.8%, in the second quarter of 2017 compared with the same quarter of the previous year. In the first quarter of 2017, the annual changes were +1.3% and +1.6% respectively. In the EU28, hourly wages & salaries rose by 2.4% and the non-wage component by 1.6% in the second quarter of 2017. In the first quarter of 2017, annual changes were +1.5% and +1.9% respectively.

Breakdown by economic activity

In the second quarter of 2017 compared with the same quarter of the previous year, hourly labour costs in the euro area rose by 1.5% in industry, by 2.0% in construction, by 2.1% in services and by 1.4% in the (mainly) non- business economy. In the EU28, labour costs per hour grew by 2.2% in industry, by 1.6% in construction, by 2.7% in services and by 1.7% in the (mainly) non-business economy

Member States

eu_wage_growth_states_20170915

In the second quarter of 2017, the highest annual increases in hourly labour costs for the whole economy were registered in Romania (+18.6%), Hungary (+13.0%), the Czech Republic (+11.1%), Bulgaria (+11.0%) and Lithuania (+10.4%). A decrease was recorded in Finland (-0.3%).

Eurostat, “Second quarter of 2017: Annual growth in labour costs at 1.8% in euro area, At 2.2% in EU288“, 15 Sep 2017 More

flag_usa US: Monthly Sales for Retail and Food Services (Advance Estimate). Aug 2017

Press Release Extract [ser_us_retail_adv]

Advance Estimates of U.S. Retail and Food Services

Advance estimates of U.S. retail and food services sales for August 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $474.8 billion, a decrease of 0.2 percent (±0.5 percent) from the previous month, and 3.2 percent (±0.7 percent) above August 2016. Total sales for the June 2017 through August 2017 period were up 3.2 percent (±0.7 percent) from the same period a year ago. The June 2017 to July 2017 percent change was revised from up 0.6 percent (±0.5 percent) to up 0.3 percent (±0.1 percent).

Retail trade sales were down 0.3 percent (±0.5 percent) from July 2017, and up 3.3 percent (±0.7 percent) from last year. Nonstore Retailers were up 8.4 percent (±1.6 percent) from August 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 7.5 percent (±1.9 percent) from last year.

US Census Bureau, “Advance Monthly Sales for Retail and Food Services, August 2017“, 15 Sep 2017 (08:30) More

flag_usa US: Manufacturing and Trade: Inventories and Sales. Jul 2017

Press Release Extract [ser_us_durables]

Sales

The combined value of distributive trade sales and manufacturers’ shipments for July, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,358.8 billion, up 0.2 percent (±0.1 percent) from June 2017 and was up 4.9 percent (±0.4 percent) from July 2016.

Inventories

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,873.9 billion, up 0.2 percent (±0.1 percent) from June 2017 and were up 3.0 percent (±0.3 percent) from July 2016.

Inventories/Sales Ratio

The total business inventories/sales ratio based on seasonally adjusted data at the end of July was 1.38. The July 2016 ratio was 1.40.

US Census Bureau, “Manufacturing and Trade Inventories and Sales, July 2017“, 15 Sep 2017 (10:00) More

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

Press Release Extract [ser_11]
Index Sep 17 Aug 17 Sep 16 M-M% Y-Y%
Index of Consumer Sentiment 95.3 96.8 91.28 -1.5% +4.5%
Current Economic Conditions 113.9 110.9 104.2 +2.7% +9.3%
Index of Consumer Expectations 83.4 87.7 82.7 -4.9% +0.8%

Consumer confidence edged downward in early September due to concerns over the outlook for the national economy. Consumers’ assessments of current economic conditions improved, however, with the Current Conditions Index reaching the highest level since November of 2000. The two hurricanes had a greater impact on expected economic conditions. Across all interviews in early September, 9% spontaneously mentioned concerns that Harvey, Irma, or both, would have a negative impact on the overall economy. Among those who mentioned the hurricanes, the Sentiment Index was 80.2, while among those who did not spontaneously mention either hurricane, the Sentiment Index remained unchanged from last month at 96.8. Given the widespread devastation in Texas and Florida, it is not surprising to find these very negative initial reactions, nor would it be surprising if these negative assessments last longer than following most past hurricanes. While consumers anticipated slight increases in gas prices and a slightly higher overall inflation rate, those concerns were neutralized by the best assessments of their financial situation in more than a decade. Renewed gains in incomes as well as rising home and equity values have acted to counterbalance the negative impacts from the hurricanes. Given the current resilience of consumers, recent events are unlikely to derail confidence.

University of Michigan, “UOM Consumer Confidence Index (Preliminary). Sep 2017“, 15 Sep 2017 (10:00) More

flag_usa US: Industrial Production. Aug 2017

Industrial output in the US shrank 0.9% month-over-month in August of 2017, following an upwardly revised 0.4% gain in July and missing market expectations of a 0.1% increase. It is the first drop in industrial output since Jan 2017 and the biggest since May 2009 as Hurricane Harvey, which hit the Gulf Coast of Texas in late Aug 2017, is estimated to have reduced the rate of change in total output by roughly ¾ percentage point. Industrial Production Mom in the United States averaged 0.27% from 1919 until 2017, reaching an all time high of 16.60% in May 1933 and a record low of -10.40% in Aug 1945.TradingEconomics

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