In Portfolioticker today
Today at the stock market
“A jump in shares of consumer companies Mondelez and Kellogg after their quarterly reports on Tuesday, along with further gains for tech stocks, helped Wall Street end October on a positive note. The three major indexes tallied their best monthly gains since Feb 2017.
Mondelez jumped 5.4% after the Oreo cookie maker reported better-than-expected profit and revenue, while Kellogg surged 6.2% following its first sales increase in more than 2 years. Those stocks boosted the S&P consumer staples sector, which rose 0.8% to lead all major groups.
The tech sector climbed 0.4%, building on gains following a batch of strong quarterly reports last week. Apple rose 1.4% to a record high after positive reviews of its much-anticipated iPhone X. The stock provided the biggest boost to all the three major indexes.
“You look at the earnings out of these big players and they continue to impress,” said Steve Chiavarone, portfolio manager with Federated Investors in New York. “It strikes me that that leads you to a much more bullish outlook for the fourth quarter.”
Investors are also awaiting an announcement on the next Federal Reserve chair, which could come this week. President Donald Trump is likely to pick Fed Governor Jerome Powell, who is seen as more dovish on interest rates and thus relatively stock market friendly, sources have told Reuters.
The Fed started its two-day meeting in Washington on Tuesday, although the central bank is widely expected to leave interest rates unchanged in its statement on Wednesday.
“The macro data is getting better, the market is prepared for Jerome Powell, the market is also prepared for Friday’s payrolls. I also think the market is ready for what the (Fed) says tomorrow,” said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.
“I don’t think there is anything out there that could derail the market from a point of view it doesn’t already expect.”
Market-watchers are also tracking developments of the tax-cut plan being developed by Trump and fellow Republicans.
Third-quarter earnings in general have come in modestly above expectations. With more than half the S&P 500 components reported, earnings are estimated to have climbed 7 percent in the quarter, up from an expectation of 5.9% growth at the start of Oct 2017, according to Thomson Reuters I/B/E/S.
“We continue to see better-than-expected economic numbers and corporate earnings,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois. “I think fundamentally investors are really focused on those numbers more than the political noise, if you will, in the background.”
But not all reports have earned a positive stock reaction. Pfizer shares slipped 0.3% after the drugmaker’s results.
Under Armour slumped 23.7% after the sportswear company slashed 2017 forecasts.
Qualcomm shares plunged 6.7% and were the biggest drag on the S&P and the Nasdaq on news that Apple has designed iPhones and iPads that would drop its chips, according to two people familiar with the matter. Shares of chipmaker Intel rose 2.5%.
Rockwell Automation shares jumped 7.4%. The automation equipment maker said it had rejected an unsolicited acquisition bid from rival Emerson Electric for more than $27 billion. Emerson shares fell 3.6%.” Bloomberg
^ Market indices today (mouseover for 12 month view) Chart: Google Finance
The NASDAQ Composite Index closed on a record high of 6,727.67 beating its 26 Oct 2017 record of 6,701.26
^ Market indices for the month of Oct 2017 Chart: Google Finance
|Index||Ticker||Today||Change||31 Dec 16||YTD|
|S&P 500||SPX (INX)||2,575.26||+0.09%||2,238.83||+15.02%|
^ USD and AUD denominated indices over the past 52 weeks (mouseover for max view) Chart: Bunting
Our USD Index closed on a record high of 3.035, up 0.86% on yesterday’s record of 3.009
Our AUD Index closed on a record high of 3.941, up 1.32% on yesterday’s record of 3.889
|Index||Currency||Today||Change||31 Dec 16||YTD|
Portfolio stock prices
Apple closed on a record high of $169.04, up 1.39% on yesterday’s record of $166.72.
Facebook closed on a record high of $180.06, up 0.11% on yesterday’s record of $179.87.
PayPal closed on a record high of $72.56, beating its 26 Oct 2017s record of $71.34.
|Stock||Ticker||Today||Change||31 Dec 16||YTD|
^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg
“The Bloomberg Dollar Spot Index (DXY) increased 0.1%.
The EUR dipped 0.1% to USD 1.1634.
Britain’s GBP rose less than 0.05% to USD1.3212.” Bloomberg
^ Bloomberg Dollar Spot Index (DXY) movements for the month of Oct 2017 Chart: Bloomberg
^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com
^ AUD movements against the USD for the month of Oct 2017 Chart: xe.com
Oil and Gas Futures
“Oil prices settled higher again on Tuesday, notching a monthly gain of more than 5 percent, but analysts said bullish sentiment that has driven Brent crude to its highest in more than 2 years could encourage U.S. producers to export more oil.
Brent settled up 47 cents or 0.7% to $61.37, close to its Jul 2015 highs reached earlier this week, and up around 37% from its 2017 lows hit in Jun 2017.
U.S. West Texas Intermediate crude (WTI) settled up 23 cents or 0.4% to $54.38, still near its highest since Feb 2017 and close to its highest in more than 2 years.
Traders and brokers said investors were adjusting positions after price rises of around 5% in Oct 2017.
For the month, Brent was up 6.7%, while WTI rose 5.2%. WTI’s discount to Brent has widened to nearly $7, making it attractive to exporters.
“The large differential has opened the door on regional arbitrage, driving a spike in U.S. crude exports over recent weeks,” BMI Research said in a note.
U.S. crude exports have jumped to close to 2 million barrels per day (bpd) and production has risen almost 13% since mid-2016 to 9.5 million bpd.
“The problem is as soon as prices move up it’s too easy for U.S. producers to add another rig or another completion crew,” said Stewart Glickman, energy equity analyst at CFRA Research in New York, “Then they increase production and you’re back where you started.”
U.S. crude and gasoline futures RBc1 extended gains in post-settlement trade after industry group the American Petroleum Institute said that U.S. oil inventories fell far more than expected.
Crude inventories fell 5.1 million barrels in the week to 27 Oct 2017 to 456.8 million, compared with analysts’ expectations for a decrease of 1.8 million barrels. Gasoline stocks plunged 7.7 million barrels, versus forecasts of a 1.5 million-barrel draw, the API said.” Reuters
Prices are as at 15:49 EDT
- NYMEX West Texas Intermediate (WTI): $54.43/barrel +0.52% Chart
- ICE (London) Brent North Sea Crude: $61.37/barrel +0.77% Chart
- NYMEX Natural gas futures: $2.91/MMBTU -1.99% Chart
EU: Inflation (HICP). Oct 2017 (Flash Estimate)
Press Release Extract [ser_eu_cpi]
“Euro area annual inflation is expected to be 1.4% in October 2017, down from 1.5% in September 2017, according to a flash estimate from Eurostat, the statistical office of the European Union.
Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in October (3.0%, compared with 3.9% in September), followed by food, alcohol & tobacco (2.4%, compared with 1.9% in September), services (1.2%, compared with 1.5% in September) and non-energy industrial goods (0.4%, compared with 0.5% in September).”
Eurostat, “Flash estimate – October 2017: Euro area annual inflation down to 1.4%“, 31 Oct 2017 More
EU: GDP. Q3/2017 (Preliminary Flash Estimate)
Press Release Extract [ser_eu_gdp]
“Seasonally adjusted GDP rose by 0.6% in both the euro area (EA19) and in the EU28 during the third quarter of 2017, compared with the previous quarter, according to a preliminary flash estimate published by Eurostat, the statistical office of the European Union. In the second quarter of 2017, GDP had grown by 0.7% in both zones.
Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 2.5% in both the euro area and in the EU28 in the third quarter of 2017, after +2.3% and +2.4% respectively, in the previous quarter.”
Eurostat, “Preliminary flash estimate for the third quarter of 2017: GDP up by 0.6% in both the euro area and the EU28, +2.5% in both areas compared with the third quarter of 2016“, 31 Oct 2017 More
EU: Unemployment. Sep 2017
Press Release Extract [ser_eu_ue]
“The euro area (EA19) seasonally-adjusted unemployment rate was 8.9% in September 2017, down from 9.0% in August 2017 and from 9.9% in September 2016. This is the lowest rate recorded in the euro area since January 2009. The EU28 unemployment rate was 7.5% in September 2017, stable compared to August 2017 and down from 8.4% in September 2016. This remains the lowest rate recorded in the EU28 since November 2008. These figures are published by Eurostat, the statistical office of the European Union.
Eurostat estimates that 18.446 million men and women in the EU28, of whom 14.513 million in the euro area, were unemployed in September 2017. Compared with August 2017, the number of persons unemployed decreased by 116 000 in the EU28 and by 96 000 in the euro area. Compared with September 2016, unemployment fell by 2.076 million in the EU28 and by 1.463 million in the euro area.
Among the Member States, the lowest unemployment rates in September 2017 were recorded in the Czech Republic (2.7%), Germany (3.6%) and Malta (4.1%). The highest unemployment rates were observed in Greece (21.0% in July 2017) and Spain (16.7%).
Compared with a year ago, the unemployment rate fell in all Member States for which data is comparable over time, except Finland where it remained stable and Lithuania where it increased (from 7.6% to 7.7%). The largest decreases were registered in Cyprus (from 13.0% to 10.3%), Spain (from 19.1% to 16.7%) and Greece (from 23.4% to 21.0% between July 2016 and July 2017).
In September 2017, the unemployment rate in the United States was 4.2%, down from 4.4% in August 2017 and from 4.9% in September 2016.
In September 2017, 3.735 million young persons (under 25) were unemployed in the EU28, of whom 2.656 million were in the euro area. Compared with September 2016, youth unemployment decreased by 396 000 in the EU28 and by 229 000 in the euro area. In September 2017, the youth unemployment rate was 16.6% in the EU28 and 18.7% in the euro area, compared with 18.3% and 20.4% respectively in September 2016. In September 2017, the lowest rate was observed in Germany (6.4%), while the highest were recorded in Greece (42.8% in July 2017), Spain (37.2%) and Italy (35.7%).”
Eurostat, “September 2017: Euro area unemployment at 8.9%, EU28 at 7.5%“, 31 Oct 2017 More
US: Employment Cost Index. Q3/2017
Press Release Extract [ser_us_eci]
“Compensation costs for civilian workers increased 0.7 percent, seasonally adjusted, for the 3-month period ending in September 2017, the U.S. Bureau of Labor Statistics reported today. Wages and salaries (which make up about 70 percent of compensation costs) increased 0.7 percent, and benefits (which make up the remaining 30 percent of compensation) increased 0.8 percent.
Compensation costs for civilian workers increased 2.5 percent for the 12-month period ending in September 2017. In September 2016, compensation costs increased 2.3 percent. Wages and salaries increased 2.5 percent for the 12-month period ending in September 2017 and increased 2.4 percent for the 12-month period ending in September 2016. Benefit costs increased 2.4 percent for the 12- month period ending in September 2017. In September 2016, the increase was 2.3 percent.
Private Industry Workers
Compensation costs for private industry workers increased 2.5 percent over the year. In September 2016, the increase was 2.3 percent. Wages and salaries increased 2.6 percent for the current 12- month period. In September 2016, the increase was 2.4 percent. The cost of benefits rose 2.4 percent for the 12-month period ending in September 2017, higher than the 1.8 percent increase in September 2016.
Employer costs for health benefits increased 1.1 percent for the 12-month period ending in September2017.
Among occupational groups, compensation cost increases for private industry workers for the 12- month period ending in September 2017 ranged from 2.3 percent for management, professional, and related occupations to 3.2 percent for production, transportation, and material moving occupations
Among industry supersectors, compensation cost increases for private industry workers for the 12- month period ending in September 2017 ranged from 1.9 percent for education and health services to 3.4 percent for leisure and hospitality.
State and Local Government
Compensation costs for state and local government workers increased 2.4 percent for the 12-month period ending in September 2017. In September 2016, the increase was 2.6 percent. Wages and salaries increased 2.0 percent for the 12- month period ending in September 2017, the same as the September 2016 increase. Benefit costs increased 3.0 percent for the 12-month period ending in September 2017, less than the prior year’s increase of 3.7 percent.”
Bureau of Labor Statistics, “Employment Cost Index. Q3/2017“, 31 Oct 2017 (08:30) More
US: Conference Board Consumer Confidence Index. Oct 2017
Press Release Extract
“The Conference Board Consumer Confidence Index®, which had improved marginally in September (an upward revision), increased again in October. The Index now stands at 125.9 (1985=100), up from 120.6 in September. The Present Situation Index increased from 146.9 to 151.1, while the Expectations Index rose from 103.0 last month to 109.1.
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was October 18.
“Consumer confidence increased to its highest level in almost 17 years (Dec. 2000, 128.6) in October after remaining relatively flat in September,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved, boosted by the job market which had not received such favorable ratings since the summer of 2001. Consumers were also considerably more upbeat about the short-term outlook, with the prospect of improving business conditions as the primary driver. Confidence remains high among consumers, and their expectations suggest the economy will continue expanding at a solid pace for the remainder of the year.”
Consumers’ appraisal of present-day conditions improved in October. The percentage saying business conditions are “good” increased from 33.4 percent to 34.5 percent, while those saying business conditions are “bad” rose marginally from 13.2 percent to 13.5 percent. Consumers’ assessment of the job market was more upbeat. The percentage of consumers stating jobs are “plentiful” increased from 32.7 percent to 36.3 percent, while those claiming jobs are “hard to get” decreased slightly from 18.0 percent to 17.5 percent.
Consumers’ optimism about the short-term outlook also rose in October. The percentage of consumers expecting business conditions to improve over the next six months increased from 20.9 percent to 22.2 percent, while those expecting business conditions to worsen decreased from 9.6 percent to 6.9 percent.
Consumers’ outlook for the job market, however, was somewhat less favorable than in September. The proportion expecting more jobs in the months ahead decreased marginally from 19.2 percent to 18.9 percent, however, those anticipating fewer jobs declined from 13.0 percent to 11.8 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement decreased marginally from 20.5 percent to 20.3 percent, however, the proportion expecting a decrease declined from 8.6 percent to 7.4 percent.“
The Conference Board, “The Conference Board Consumer Confidence Index Improved in October – Confidence increased to its highest level in almost 17 years“, 31 Oct 2017 More
^ JPY movements against the USD over the past month (mouseover for inverse) Chart: xe.com
Stockmarket: Nikkei 225
^ Nikkei N225 movements over the past week Chart: Google Finance
Manufacturing PMI. Oct 2017
“In October 2017, China’s manufacturing purchasing managers index (PMI) was 51.6 percent, a decrease of 0.8 percentage points from last month, having met the average level of this year. The manufacturing industry continued expansion momentum.
In view of the sizes of enterprises, the PMI of large-sized enterprises was 53.1 percent, decreased 0.7 percentage points from last month, still in the expansion range; that of medium-sized and small-sized enterprises were 49.8 and 49.0 percent respectively, decreased 1.3 and 0.4 percentage points from last month, both below the threshold.
Among the five sub-indices composing PMI, the production index and new orders index were higher than the threshold. The main raw materials inventory index, employed person index and supplier delivery time index were lower than the threshold.
Production index was 53.4 percent, a decrease of 1.3 percentage points month-on-month, and was still higher than the threshold, indicating that the manufacturing production maintained growing, while the growth rate declined.
New orders index was 52.9 percent, a decrease of 1.9 percentage points month-on-month, higher than the threshold, showing that the amount of increase of manufacturing market demand has narrowed.
Main raw materials inventory index was 48.6 percent, decreased 0.3 percentage points from last month, lower than the threshold, indicating that the main raw material inventory of manufacturing industry continued to decrease.
Employed person index was 49.0 percent, unchanged from last month, lower than the threshold, indicating that the labor employment of manufacturing enterprises declined.
Supplier delivery time index was 48.7 percent, decreased 0.6 percentage points from last month, and continued to stay below the threshold, indicating that the delivery time of manufacturing raw material suppliers slowed down.“
National Bureau of Statistics of China, “China’s PMI Was 51.6 Percent in October“, 31 Oct 2017 More
Non-Manufacturing PMI. Oct 2017
Press Release Extract
“In October 2017, China’s non-manufacturing purchasing manager index was 54.3 percent, a decrease of 1.1 percentage points from the previous month, and continued to be in the expansion range. The non-manufacturing industry kept steady and fast growth momentum.
In view of different industries, non-manufacturing purchasing manager index of service industry was 53.5 percent, a decrease of 0.9 percentage points from the previous month, but higher than the threshold. The service industry kept growing steadily. Of which, the indices of accommodation, retail trade, air transport, post and express delivery, telecommunications, broadcasting, television and satellite transmission services, Internet, software and information technology services, were positioned in the high level of the range which above 55.0 percent, and the total enterprise business kept fast growth. The indices of capital market services, real estate, resident services and repair, were lower than the threshold, and the total business decreased. Non-manufacturing purchasing manager index of construction industry achieved 58.5 percent, a decrease of 2.6 percentage points from the previous month, and still in the high level of the range. The production of construction industry maintained rapid growth generally.
New orders index was 51.1 percent, down by 1.2 percentage points from the previous month, and was still above the threshold, indicating that the growth rate of non-manufacturing market demand declined. In view of different industries, the new orders index of service industry was 50.5 percent, decreased 1.0 percentage point from the previous month, and was higher than the threshold. The new orders index of construction industry was 54.1 percent, decreased 2.8 percentage points from the previous month, and continued to be in the expansion range.
Input price index was 54.3 percent, down by 1.8 percentage points from the previous month, and was above the threshold, indicating that the input price during the process of non-manufacturing enterprises’ operating activities continued to increase, while the amount of increase narrowed. In view of different industries, the intermediate input price indices of service industry was 53.1 percent, decreased 1.1 percentage point from the previous month. The input price index of construction industry was 61.4 percent, a decrease of 5.6 percentage points from the previous month.
The sales price index was 51.6 percent, down by 0.1 percentage point from last month, and was above the threshold, indicating that the non-manufacturing sales price continued to increase. In view of different industries, the sales price index of service industry was 51.1 percent, an increase of 0.1 percentage point from the previous month.The sales price index of construction industry was 54.6 percent, a decrease of 0.6 percentage points from the previous month.
Employment index was 49.4 percent, a decrease of 0.3 percentage points from the previous month, and was still lower than the threshold, indicating that the labor employment of non-manufacturing enterprises continued to decrease. In view of different industries, the employment index of service industry was 48.6 percent, an increase of 0.1 percentage point from the previous month. The employment index of construction industry was 53.6 percent, a decrease of 2.8 percentage points from the previous month.
Business activities expectation index was 60.6 percent, a decrease of 1.1 percentage points from last month, and continued to be in the high level of the range. In view of different industries, the business activities expectation index of service industry was 60.1 percent, a decrease of 0.7 percentage points from the previous month. That of construction industry was 63.2 percent, a decrease of 3.8 percentage points from the previous month.“
National Bureau of Statistics of China, “China’s Non-manufacturing PMI was 54.3 Percent in October“, 31 Oct 2017 More
^ CNY movements against the USD over the past month (mouseover for inverse) Chart: xe.com
^ Shanghai CSI300 movements over the past week Chart: Google Finance