Fri 6 Oct 2017

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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/bearThe S&P 500 eased on Friday, ending a 6-day run of record highs as the first monthly decline in U.S. nonfarm jobs in 7 years dampened sentiment and pharmacy shares fell on Amazon competition fears. The Nasdaq ended up for a 9th straight day, however, and set its 6th straight record high close, its longest such streak since 7 records in Feb 2017.

    • The S&P 500 fell 2.74 points, or 0.11%, to 2,549.33. For the week, the S&P 500 rose 1.2%.
      The benchmark’s slight decline follow a 6-day run of record closing highs, its longest since 1997.
    • The Dow Jones Industrial Average fell 1.72 points, or 0.01%, to end at 22,773.67. For the week, the Dow rose 1.6%.
    • The Nasdaq Composite added 4.82 points, or 0.07%, to 6,590.18. For the week, the Nasdaq rose 1.5%.
    • The CBOE Volatility index (VIX), Wall Street’s fear gauge, bounced sharply after setting a record low close in the previous session.
    • Declining issues outnumbered advancing ones on the NYSE by a 1.74-to-1 ratio; on Nasdaq, a 1.11-to-1 ratio favored decliners.
    • About 5.7 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.

    Walgreens Boots Alliance and CVS Health fell and were among the biggest drags on the S&P 500 after a CNBC report that Amazon was close to a decision on selling prescription drugs. Walgreens shares dropped 4.9% and CVS was down 4.9%, while Amazon shares rose 0.9%.

    Shares of Costco dropped 6% after the warehouse club retailer reported a fall in gross margins. The stock was the biggest drag on the S&P 500 and the Nasdaq.

    The Labor Department’s closely watched jobs report showed nonfarm payrolls fell by 33,000 in Sep 2017 as hurricanes Harvey and Irma left displaced workers temporarily unemployed and delayed hiring. A bright spot was a better-than-expected rise in average wages.

    “It’s been amazing how resilient our U.S. stock market has been, going up on no news or bad news, so there’s no surprise on a day where most people feel it was a mixed jobs report at best that the market actually is reacting in a way that makes sense. It’s a logical move for this illogical stock market.” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

    Adding to the day’s worries was a report that North Korea is preparing to test a long-range missile.

    The S&P energy index fell 0.8% as oil prices fell amid a bout of profit taking and the return of oversupply worries.Reuters

    Market indices

    :-) The NASDAQ Composite Index closed on a record 6,590.18, up 0.07% on yesterday’s record close of 6,585.36.

    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) 2,549.33 -0.11% 2,238.83 +13.86%
    DJIA INDU 22,773.67 -0.01% 19,762.60 +15.23%
    NASDAQ IXIC 6,590.18 +0.07% 5,383.12 +22.42%

    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 2.810 +0.19% 2.105 +33.49%
    Valuation Rate USD/AUD 0.7817 -0.30% 0.72663 +7.57%
    AUD-denominated Index AUD 3.596 +0.49% 2.895 +24.22%

    Portfolio stock prices

    :-) PayPal closed on a record high of $66.05, up 0.35% on yesterday’s record high of $39.47.
    :-) Visa closed on a record high of $106.73, up 0.35% on yesterday’s record high of $106.24.

    Stock Ticker Today Change 31 Dec 16 YTD
    Alphabet A GOOGL $993.64 +0.86% $792.45 +25.38%
    Alphabet C GOOG $978.89 +0.92% $771.82 +26.82%
    Apple AAPL $155.30 -0.06% $115.82 +34.08%
    Amazon AMZN $989.58 +0.89% $749.87 +31.96%
    Ebay EBAY $38.81 -0.46% $29.69 +30.71%
    Facebook FB $172.23 +0.58% $115.05 +49.70%
    PayPal PYPL $66.05 +0.35% $39.47 +67.34%
    Twitter TWTR $17.85 -2.19% Thumbs Down $16.30 +9.50%
    Visa V $106.73 +0.46% $78.02 +36.79%
    VMware VMW $111.53 -0.05% $78.73 +41.66%



    DXY movements
    ^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg

    The Bloomberg Dollar Spot Index (DXY) was steady after hitting the highest in more than 11 weeks.
    The EUR erased losses, rising 0.2% to USD 1.1728.
    Japan’s JPY rose 0.2% at 112.65 per USD, erasing a decline of 0.6%.


    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): $49.33/barrel -2.87% Chart
    • ICE (London) Brent North Sea Crude: $55.57/barrel -2.51% Chart
    • NYMEX Natural gas futures: $2.86/MMBTU -2.02% Chart

    North Korea’s Longer Range Missile

    Press Release Extract [dprk]

    North Korea is planning to test a missile that its officials said could be capable of reaching the U.S. West Coast, according to two Russian legislators who returned from a visit to Pyongyang this week.

    “They told us that they’re preparing to test more powerful long-range missile that, in their view, would be able to hit the West Coast of the U.S.,” Anton Morozov, a member of the International Affairs Committee in the lower house of parliament, said in a telephone interview. The North Korean officials said the missile could be tested soon, though weren’t more specific, according to Morozov.

    To reach the U.S., the missile would likely have to fly over Russian territory, he said, raising further risks for Russia if the U.S. sought to intercept it. He said the delegation, which was sent by the pro-Kremlin Liberal Democratic Party, met with top North Korean government officials, but not military officers.

    “They did everything to show they’re seriously ready for confrontation,” Morozov said. Korean officials said the missile’s range could be 12,000 kilometers, he said.

    “They’re not preparing for nuclear war, they’ve been ready for it for a long time”, Alexei Didenko, another member of the delegation, said in a telephone interview. “

    Russian President Vladimir Putin said Wednesday threats by U.S. President Donald Trump to destroy the isolated Communist state if it attacked are leading to a “very dangerous dead end.” All sides need to “lower the rhetoric,” Putin said.Bloomberg

    U.S. President Donald Trump offered cryptic remarks Thursday night while posing for photos with military leaders, saying the gathering might represent “the calm before the storm.” He made the comments among senior military leaders and their spouses in the White House State Dining Room ahead of a dinner expected to include the discussion of a range of national security issues. “You guys know what this represents?” Trump asked assembled members of the media. “Maybe it’s the calm before the storm.” Asked repeatedly by reporters to clarify his comments, Trump said, “You’ll find out.”

    During a meeting with military leaders earlier in the afternoon, Trump said his administration was focused on “challenges that we really should have taken care of a long time ago, like North Korea, Iran, Afghanistan, ISIS, and the revisionist powers that threaten our interests all around the world.” During those remarks, the president also appeared to issue a vague threat toward the regime in North Korea, which has antagonized the U.S. president with a series of nuclear and ballistic-missile tests.

    “We cannot allow this dictatorship to threaten our nation or our allies with unimaginable loss of life,” Trump said. “We will do what we must do to prevent that from happening. And it will be done, if necessary — believe me. North Korea best not make any more threats to the United States,” Trump told reporters in Bedminster, New Jersey at the time. “They will be met with fire, fury and, frankly, power the likes of which this world has never seen before.”

    Trump’s latest remarks echoed comments he made in Aug 2017, when he warned that North Korea will face a devastating military strike if it continues threatening the U.S.

    The president rebuked his Secretary of State, Rex Tillerson, on Sunday, saying he “is wasting his time trying to negotiate with Little Rocket Man,” the label he’s given to North Korean leader Kim Jong Un. A day earlier in Beijing, Tillerson told reporters that the U.S. was talking to North Korea “directly, through our own channels.”

    William Cohen, a former Republican U.S. senator from Maine who served as President Bill Clinton’s secretary of defense, said that while Trump’s comments might be entertaining, he didn’t believe it to be wise policy. “The president has sent another rabbit out on the White House lawn and asked the press to go chase it,” Cohen said on MSNBC.Bloomberg

    flag_usa US: Employment Situation. Sep 2017

    Press Release Extract [ser_us_jobs]

    The unemployment rate declined to 4.2 percent in September, and total nonfarm payroll employment changed little (-33,000), the U.S. Bureau of Labor Statistics reported today. A sharp employment decline in food services and drinking places and below-trend growth in some other industries likely reflected the impact of Hurricanes Irma and Harvey.

    Hurricanes Irma and Harvey

    Hurricane Irma made landfall in Florida on September 10–during the reference period for both the establishment and household surveys–causing severe damage in Florida and other parts of the Southeast. Hurricane Harvey made landfall in Texas on August 25–prior to the September reference periods–resulting in severe damage in Texas and other areas of the Gulf Coast.

    Our analysis suggests that the net effect of these hurricanes was to reduce the estimate of total nonfarm payroll employment for September. There was no discernible effect on the national unemployment rate. No changes were made to either the establishment or household | survey estimation procedures for the September figures. For both surveys, collection rates generally were within normal ranges, both nationally and in the affected states. In the establishment survey, employees who are not paid for the pay period that includes the 12th of the month are not counted as employed. In the household survey, persons with a job are counted as employed even if they miss work for the entire survey reference week (the week including the 12th of the month), regardless of whether or not they are paid. For both surveys, national estimates do not include Puerto Rico or the U.S. Virgin Islands.

    Unemployment: Household Survey Data


    The unemployment rate decreased by 0.2 percentage point to 4.2 percent in September, and the number of unemployed persons declined by 331,000 to 6.8 million. Both measures were down over the year.

    Among the major worker groups, the unemployment rates for adult men (3.9 percent) and Blacks (7.0 percent) declined in September. The jobless rates for adult women (3.9 percent), teenagers (12.9 percent), Whites (3.7 percent), Asians (3.7 percent), and Hispanics (5.1 percent) showed
    little change.

    The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged in September at 1.7 million and accounted for 25.5 percent of the unemployed.

    The employment-population ratio increased by 0.3 percentage point to 60.4 percent in September and has increased by 0.6 percentage point over the past 12 months. The labor force participation rate, at 63.1 percent, changed little over the month and has shown little movement over the year.

    The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 5.1 million in September. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find full-time jobs.

    In September, 1.6 million persons were marginally attached to the labor force, down by 275,000 from a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding
    the survey.

    Among the marginally attached, there were 421,000 discouraged workers in September, down by 132,000 from a year earlier. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.1 million persons marginally attached to the labor force in September had not searched for work for reasons such as school attendance or family responsibilities.

    Employment Growth: Establishment Survey Data


    Total nonfarm payroll employment was little changed in September (-33,000), after adding an average of 172,000 jobs per month over the prior 12 months. In September, a steep employment decline in food services and drinking places and below-trend growth in some other industries likely reflected the impact of Hurricanes Irma and Harvey. Employment rose in health care and in transportation and warehousing.

    Employment in food services and drinking places dropped sharply in September (-105,000), as many workers were off payrolls due to the recent hurricanes. Over the prior 12 months, food services and drinking places had added an average of 24,000 jobs per month.

    In September, health care added 23,000 jobs, in line with its average monthly gain over the prior 12 months (+27,000). The employment increase in ambulatory health care services (+25,000) was partially offset by a decline in nursing care facilities (-9,000).

    Employment in transportation and warehousing increased by 22,000 in September. Job gains occurred in warehousing and storage (+5,000), couriers and messengers (+4,000), and air transportation (+3,000).

    Employment in financial activities changed little in September (+10,000). A job gain in insurance carriers and related activities (+11,000) largely reflected hurricane-recovery efforts. The gain was partly offset by losses in activities related to credit intermediation (-4,000) and in commercial banking (-3,000). Over the year, financial activities has added 149,000 jobs.

    In September, employment in professional and business services was little changed (+13,000). Over the prior 12 months, job growth in the industry had averaged 50,000 per month.

    Manufacturing employment was essentially unchanged in September (-1,000). From a recent employment trough in November 2016 through August of this year, the industry had added an average of 14,000 jobs per month.

    Employment in other major industries, including mining, construction, wholesale trade, retail trade, information, and government, showed little change over the month.

    The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in September. In manufacturing, the workweek also was unchanged at 40.7 hours, and overtime held steady at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours.

    In September, average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents to $26.55. Over the past 12 months, average hourly earnings have increased by 74 cents, or 2.9 percent. In September, average hourly earnings of private-sector production and nonsupervisory employees increased by 9 cents to $22.23.

    The change in total nonfarm payroll employment for July was revised down from +189,000 to +138,000, and the change for August was revised up from +156,000 to +169,000. With these revisions, employment gains in July and August combined were 38,000 less than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 91,000 over the past 3 months.“

    Bureau of Labor Statistics, “Employment Situation. Sep 2017“, 6 Oct 2017 (08:30) More

    flag_usa US: Average Hourly and Weekly Earnings. Sep 2017

    Average hourly earnings increased from $26.43 in Aug 2017 to $26.55 in Sep 2017.
    Average weekly earnings increased from $909.19 in Aug 2017 to $913.32 in Sep 2017.

    Bureau of Labor Statistics, “Average hourly and weekly earnings of all employees on private nonfarm payrolls by industry sector, seasonally adjusted“, 6 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:

    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:

    Stockmarket: CSI300

    China’s share markets have been closed all week for the Golden Week holiday.