Thu 5 Oct 2017


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In Portfolioticker today

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  • Today at the stock market Opinion
  • The portfolio today Opinion
  • News
  • flag_japan Japan Update
  • flag_china China Update
  • Today at the stock market

    bull/bearU.S. stocks notched record closing highs again on Thursday as investors cheered increased prospects for a tax overhaul with Congress moving closer to agreement on a budget resolution. The day’s move extended a run of records that began last week:

    • The S&P 500 gained 14.33 points, or 0.56%, to 2,552.07 – its sixth straight day of record closes and its longest such run since an eight-day streak in Jun 1997. It also rose for 8 sessions in a row, matching a winning streak from Jul 2013.
    • The Dow Jones Industrial Average rose 113.75 points, or 0.5%, to 22,775.39
    • The Nasdaq Composite added 50.73 points, or 0.78%, to 6,585.36.
    • Advancing issues outnumbered declining ones on the NYSE by a 1.55-to-1 ratio; on Nasdaq, a 1.63-to-1 ratio favored advancers.
    • About 5.9 billion shares changed hands on U.S. exchanges. That compares with the 6.2 billion daily average for the past 20 trading days, according to Thomson Reuters data.

    It was the fourth day in a row where all three major indexes had hit record closing highs.

    The U.S. House of Representatives voted to adopt a fiscal 2018 spending blueprint containing a legislative tool that would let Republicans bypass Democrats and pass a tax bill by a simple majority vote in the Senate, where they hold 52 of 100 seats.

    The S&P technology index, up 1.1%, was the day’s top-performing sector, followed by financials, with that index up 1%. The small-cap Russell 2000 rose 0.3%. Small-cap names are seen as among the biggest beneficiaries of any tax cut.

    Also helping stocks, more data pointed to underlying strength in the U.S. economy despite weather-related disruptions, with the trade deficit narrowing in August and jobless claims falling more than expected last week.

    New orders for goods made in the United States rose in Aug 2017 and orders for core capital goods were stronger than previously reported.

    Shares of Netflix jumped 5.4% after the company raised the monthly subscription fees for two of its three main U.S. plans by $1 and $2, respectively.

    Also helping banks, Randal Quarles was confirmed as vice chair of the Federal Reserve. The banking sector widely expects Quarles to play a key part in U.S. President Donald Trump’s efforts to ease regulations. The S&P bank index was up 1.3%.

    “It really started to take off after news that the House passed a portion of the president’s plan. I don’t know if that’s going to make it all the way through … but you’re seeing it in higher Treasury yields, a better financial sector and technology. Nobody likes to buy at all-time highs, but with the prospect of it going higher, you’re missing out, so you have to do some buying to stay competitive,” said Robert Pavlik, chief market strategist at Boston Private Wealth in New York.

    Bond yields rose, with the benchmark 10-year U.S. Treasury note yield US10YT=RR last at 2.349% versus 2.332% late on Wednesday.

    Friday brings the U.S. monthly jobs report, while investors are also anxious to see third-quarter corporate earnings reports.

    Analysts expect earnings of S&P 500 companies rose about 6% in the quarter from a year earlier, according to Thomson Reuters data. That would be down from double-digit growth in the first two quarters of this year.

    The S&P 500 is likely to finish this year at 2,525, about 13% higher than where it was at the end of 2016, based on the median forecast of 47 strategists polled by Reuters.Reuters

    Market indices

    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) 2552.07 +0.56% 2238.83 +13.99%
    DJIA INDU 22,775.39 +0.50% 19,762.60 +15.24%
    NASDAQ IXIC 6,585.36 +0.77% 5,383.12 +22.33%

    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 2.804 +1.36% 2.105 +33.23%
    Valuation Rate USD/AUD 0.78405 -0.90% 0.72663 +7.90%
    AUD-denominated Index AUD 3.579 +2.27% 2.895 +23.62%

    Portfolio stock prices

    :-) Ebay closed on a record high of $38.99, beating its 2 Oct 2017 record of $38.73.
    :-) PayPal closed on a record high of $65.82, beating its 22 Sep 2017 record of $65.08.
    :-) Visa closed on a record high of $106.24, 3 cents above its 12 Sep 2017 record of $106.21.

    Stock Ticker Today Change 31 Dec 16 YTD
    Apple AAPL $155.39 +1.24% $115.82 +34.16%
    Amazon AMZN $980.85 +1.60% $749.87 +30.80%
    Ebay EBAY $38.99 +0.85% $29.69 +31.32%
    Facebook FB $171.24 +1.67% $115.05 +48.83%
    PayPal PYPL $65.82 +2.83% $39.47 +66.75%
    Twitter TWTR $18.25 +2.82% $16.30 +11.96%
    Visa V $106.24 +0.88% $78.02 +36.17%
    VMware VMW $111.59 +0.90% $78.73 +41.73%

    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 0.6%, touching the highest in 11 weeks.
    Japan’s JPY fell less than 0.1%.
    Australia’s AUD fell 0.9% to USD 0.7793.
    The EUR fell 0.5% to USD 1.1705.
    Britain’s GBP fell 1% to USD 1.3114, the weakest in 4 weeks.
    Bloomberg

    AUD

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

    Oil and Gas Futures

    Futures prices

    Oil prices rose about 2% on Thursday as signs Saudi Arabia and Russia would limit production through next year pushed the U.S. benchmark back above $50/barrel.

    The news outweighed Wednesday’s U.S. data showing record U.S. exports and the return of production at a major Libyan oilfield.

    Brent futures settled at $57/barrel, up 2.2%, or $1.20, while U.S. rose 81 cents, or 1.6%, to end at $50.79.

    Russian President Vladimir Putin said this week that a pledge by the Organization of the Petroleum Exporting Countries and other producers, including Russia, to cut oil output to boost prices could be extended to the end of 2018, instead of expiring in March 2018.

    Russian Energy Minister Alexander Novak said on Thursday that Moscow would support new countries joining the agreement to restrict oil supply.

    The statement came as Saudi Arabia’s King Salman visited Moscow.

    “Putin and Salman will most likely reach, but not announce, an agreement to extend the OPEC/non-OPEC production deal, though with a commitment to taper the cuts,” said Eurasia Group.

    President Donald Trump was expected to announce soon that he will decertify the landmark international deal to curb Iran’s nuclear program, a senior administration official said on Thursday, in a step that could lead to renewed U.S. sanctions against Tehran and could limit Iranian sales of oil.

    “It would make it difficult for barrels to be transacted through U.S. dollars,” said Bernadette Johnson, vice president of market intelligence at Drillinginfo.com in Denver. “A lot would continue to flow, but that’s probably a million barrels that is at risk.”

    With the increase in prices to above $50, producers have started hedging more heavily, said Johnson.

    That would buffer drillers against losses if the price were to decline, which may spur more U.S. production – partially offsetting the OPEC-led deal to cut supply by about 1.8 million barrels per day (bpd).

    Other factors also weighed on oil prices, including the return to production of Libya’s Sharara oilfield on Wednesday after an armed brigade forced a two-day shutdown.

    U.S. crude oil exports jumped to 1.98 million bpd last week, surpassing the 1.5 million bpd record set the previous week, the Energy Information Administration said.

    The increase followed a widening of the discount for U.S. crude against Brent, making U.S. oil attractive on world markets.Reuters

    Prices are as at 15:48 EDT

    • NYMEX West Texas Intermediate (WTI): $50.75/barrel +1.54% Chart
    • ICE (London) Brent North Sea Crude: $57.00/barrel +2.15% Chart
    • NYMEX Natural gas futures: $2.90/MMBTU -1.36% Chart

    flag_australia AU: International Trade in Goods and Services, Australia. Aug 2017

    container_ship_20171203

    Press Release Extract [ser_45]

    Balance on Goods and Services

    In trend terms, the balance on goods and services was a surplus of $735m in August 2017, a decrease of $282m on the surplus in July 2017.

    In seasonally adjusted terms, the balance on goods and services was a surplus of $989m in August 2017, an increase of $181m on the surplus in July 2017.

    Credits (Exports of Goods and Services)

    In seasonally adjusted terms, goods and services credits rose $166m (1%) to $32,229m. Non-rural goods rose $398m (2%). Non-monetary gold fell $308m (19%) and rural goods fell $31m (1%). Net exports of goods under merchanting remained steady at $47m. Services credits rose $106m (1%).

    Debits (Imports of Goods and Services)

    In seasonally adjusted terms, goods and services debits fell $15m to $31,240m. Consumption goods fell $306m (4%), capital goods fell $169m (3%) and non-monetary gold fell $9m (2%). Intermediate and other merchandise goods rose $386m (4%). Services debits rose $84m (1%).

    Jun 2017 Jul 2017 Aug 2017 Change
    EXPORTS of goods and services (Credits)
    Trend estimates $32,552m $32,396m $32,226m -1%
    Seasonally adjusted $32,566m $32,063m $32,229m +1%
    IMPORTS of goods and services (Debits)
    Trend estimates $31,284m $31,379m $31,490m +0%
    Seasonally adjusted $31,564m $31,255m $31,240m +0%
    BALANCE on goods and services
    Trend estimates +$1,268m +$1,017m +$735m -28%
    Seasonally adjusted +$1,003m +$808m +$989m +22%

    Australian Bureau of Statistics, “5368.0 – International Trade in Goods and Services, Australia, Aug 2017“, 5 Oct 2017 More

    flag_australia AU: Retail Trade, Aug 2017

    Press Release Extract [ser_au_retail]

    au_retail_20171005

    Key Points:

    • The trend estimate rose 0.1% in August 2017. This follows a rise of 0.1% in July 2017 and a rise of 0.2% in June 2017.
    • The seasonally adjusted estimate fell 0.6% in August 2017. This follows a fall of 0.2% in July 2017 and a rise of 0.2% in June 2017.
    • In trend terms, Australian turnover rose 2.8% in August 2017 compared with August 2016.
    • The following industries rose in trend terms in August 2017: Other Retailing (0.5%), Clothing, Footwear and Personal Accessories Retailing (0.5%), and Cafes Restaurants and Takeaway Food Services (0.1%). Food Retailing was relatively unchanged (0.0%). Department stores (-0.6%) and Household Good Retailing (-0.1%) fell in trend terms in August 2017.
    • The following states and territories rose in trend terms in August 2017: New South Wales (0.1%), Victoria (0.1%), Western Australia (0.1%), Tasmania (0.1%), and the Northern Territory (0.1%). Queensland and the Australian Capital Territory were relatively unchanged (0.0%). South Australia (-0.1%) fell in trend terms in August 2017.

    Australian Bureau of Statistics, “8501.0 Retail Trade, Australia, August 2017“, 5 Oct 2017 More

    flag_europe EU: Household Saving Rate in the Euro Area, Q2/2017

    Press Release Extract [ser_eu_householdfinance]

    The household saving rate in the euro area was 12.1% in the second quarter of 2017, compared with 12.0% in the first quarter of 2017. The household investment rate in the euro area was 8.7% in the second quarter of 2017, compared with 8.9% in the previous quarter.

    eu_householdfinance_20171005

    These data come from a first release of seasonally adjusted quarterly European sector accounts from Eurostat, the statistical office of the European Union and the European Central Bank (ECB).

    Eurostat, “First release for the second quarter of 2017: Household saving rate nearly stable at 12.1% in the euro area, Household investment rate down to 8.7%“, 5 Oct 2017 More

    flag_europe EU: Business Investment in the Euro Area, Q2/2017

    Press Release Extract [ser_eu_businessinvest]

    In the second quarter of 2017, the business investment rate was 23.2% in the euro area, compared with 22.9% in the previous quarter. The business profit share in the euro area was 40.8% in the second quarter of 2017, compared with 40.5% in the first quarter of 2017.

    eu_businessinvest_20171005

    These data come from a first release of seasonally adjusted quarterly European sector accounts from Eurostat, the statistical office of the European Union, and the European Central Bank (ECB).

    Eurostat, “Business Investment in the Euro Area, Q2/2017“, 5 Oct 2017 More

    flag_usa US: Unemployment Insurance Weekly Claims

    Press Release Extract [ser_4]

    insurance

    In the week ending September 30, the advance figure for seasonally adjusted initial claims was 260,000, a decrease of 12,000 from the previous week’s unrevised level of 272,000. The 4-week moving average was 268,250, a decrease of 9,500 from the previous week’s unrevised average of 277,750.

    Hurricanes Harvey, Irma, and Maria impacted this week’s claims.

    unemployment

    The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending September 23, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 23 was 1,938,000, an increase of 2,000 from the previous week’s revised level. The previous week’s level was revised up 2,000 from 1,934,000 to 1,936,000. The 4-week moving average was 1,947,000, a decrease of 3,250 from the previous week’s revised average. The previous week’s average was revised up by 500 from 1,949,750 to 1,950,250.

    Employment and Training Administration, “Unemployment Insurance Weekly Claims Report“, 5 Oct 2017 (08:30) More

    flag_usa US: International Trade. Aug 2017

    Press Release Extract [ser_us_trade]

    The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $42.4 billion in August, down $1.2 billion from $43.6 billion in July, revised. August exports were $195.3 billion, $0.8 billion more than July exports. August imports were $237.7 billion, $0.4 billion less than July imports.

    The August decrease in the goods and services deficit reflected a decrease in the goods deficit of $0.9 billion to $64.4 billion and an increase in the services surplus of $0.3 billion to $22.0 billion.

    Year-to-date, the goods and services deficit increased $29.1 billion, or 8.8 percent, from the same period in 2016. Exports increased $84.9 billion or 5.8 percent. Imports increased $114.0 billion or 6.4 percent.

    Goods and Services Three-Month Moving Averages
    The average goods and services deficit decreased $1.3 billion to $43.2 billion for the three months ending in August.

    • Average exports of goods and services increased $1.0 billion to $194.9 billion in August.
    • Average imports of goods and services decreased $0.3 billion to $238.1 billion in August.

    Year-over-year, the average goods and services deficit increased $1.1 billion from the three months ending in August 2016.

    • Average exports of goods and services increased $9.4 billion from August 2016.
    • Average imports of goods and services increased $10.5 billion from August 2016.

    Exports

    Exports of goods increased $0.6 billion to $129.2 billion in August.

    Exports of goods on a Census basis increased $0.1 billion.

    • Consumer goods increased $1.0 billion.
      o Pharmaceutical preparations increased $0.6 billion.
    • Capital goods increased $0.4 billion.
      o Telecommunications equipment increased $0.4 billion.
    • Industrial supplies and materials decreased $1.0 billion.
      o Fuel oil decreased $0.7 billion.
    • Foods, feeds, and beverages decreased $0.4 billion.

    Net balance of payments adjustments increased $0.5 billion.

    Exports of services increased $0.2 billion to $66.1 billion in August.

    • Travel (for all purposes including education), other business services (which includes research and development services; professional and management services; and technical, trade-related, and other services), and financial services each increased $0.1 billion.
    • Transport, which includes freight and port services and passenger fares, decreased $0.2 billion.

    Imports

    Imports of goods decreased $0.3 billion to $193.6 billion in August.

    Imports of goods on a Census basis decreased $0.4 billion.

    • Industrial supplies and materials decreased $0.5 billion.
      o Finished metal shapes decreased $0.2 billion.
      o Copper decreased $0.2 billion.
    • Capital goods decreased $0.5 billion.
      o Computer accessories decreased $0.3 billion.
      o Civilian aircraft decreased $0.2 billion.
    • Automotive vehicles, parts, and engines increased $0.7 billion.
      o Passenger cars increased $0.5 billion.

    Net balance of payments adjustments increased $0.1 billion.

    Imports of services decreased $0.1 billion to $44.1 billion in August.

    • Transport decreased $0.2 billion.
    • Travel (for all purposes including education) increased $0.1 billion.

    Real Goods in 2009 Dollars – Census Basis

    The real goods deficit decreased less than $0.1 billion to $61.8 billion in August.

    • Real exports of goods decreased $1.1 billion to $125.2 billion.
    • Real imports of goods decreased $1.1 billion to $187.0 billion.

    Goods by Selected Countries and Areas: Monthly – Census Basis

    The August figures show surpluses, in billions of dollars, with South and Central America ($2.7), Hong Kong ($2.5), Singapore ($0.8), United Kingdom ($0.6), and Brazil ($0.4).

    Deficits were recorded, in billions of dollars, with China ($29.7), European Union ($10.9), Japan ($6.3), Mexico ($5.8), Germany ($4.8), Italy ($2.5), South Korea ($2.1), India ($1.6), Taiwan ($1.5), France ($0.8), OPEC ($0.8), Canada ($0.4), and Saudi Arabia ($0.1).

    • The deficit with China decreased $2.1 billion to $29.7 billion in August. Exports increased $0.8 billion to $11.6 billion and imports decreased $1.2 billion to $41.3 billion.
    • The deficit with the European Union decreased $1.2 billion to $10.9 billion in August. Exports increased $1.4 billion to $24.2 billion and imports increased $0.2 billion to $35.1 billion.

    Bureau of Economic Analysis, “International Trade in Goods and Services. Aug 2017“, 5 Oct 2017 (08:30) More

    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

    China’s stockmarkets are closed for the Golden Week holiday.