Thu 9 Nov 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/bearWall Street stocks dropped on Thursday, weighed down by losses in Microsoft and other technology issues as investors turned their attention to a U.S. Senate Republican plan that would delay corporate tax cuts that investors want very much.

    • The S&P 500 index fell 0.38% to 2,584.62
    • The Dow Jones Industrial Average fell 0.43% to end at 23,461.94
    • The Nasdaq Composite index fell 0.58% to 6,750.05.
    • Declining issues outnumbered advancing ones on the NYSE by a 1.67-to-1 ratio; on Nasdaq, a 1.62-to-1 ratio favored decliners.
    • About 7.4 billion shares changed hands on U.S. exchanges, above the 6.6 billion daily average over the last 20 sessions.

    The Philadelphia Semiconductor index, a top performer in 2017, slumped 2% ahead of a quarterly report by Nvidia, which fell 1.84%.

    Six of the 11 major S&P 500 sectors fell, with industrials down 1.28% and the technology index off 0.85%. Apple, Microsoft, Alphabet, Oracle and Facebook were among the stocks weighing most on the S&P 500.

    Technology has been the best-performing S&P 500 sector so far this year, with a 37% rise. The sector’s stretched valuations make it vulnerable to selling as investors worry that promised tax reductions might not emerge.

    Roku soared 55% after the video streaming device maker’s quarterly results and guidance beat expectations.

    Macy’s jumped 10.98% after the department store operator’s profit came in above expectations.

    In extended trade, Nordstrom dropped 4% after that retailer reported quarterly sales short of analysts’ expectations.

    Walt Disney Co fell 3% after the bell following its quarterly report.

    During the session, Dish Network rose 3.22% after the satellite and internet TV provider added subscribers in the United States in Q3/2017 and reduced the rate at which it lost existing customers.

    The S&P 500 has surged about 21% since the election of President Donald Trump a year ago, fueled by his promises to cut corporate taxes and other business-friendly measures.

    Senate Republicans are unveiling a tax proposal that differs markedly on corporate, business and individual tax cuts from legislation detailed by their counterparts in the House of Representatives, Republican aides said. The Senate proposal delays a corporate tax rate cut to 20% by a year and provides small-business owners with a deduction rather than a special business rate, said the aides.

    Earlier, uncertainty about the future of corporate tax rates pushed the S&P 500 down as much 1%, underscoring how much Wall Street is banking on a tax reduction. The S&P 500 is trading at 18 times expected earnings, expensive compared with its 10-year average of 14.3, according to Thomson Reuters Datastream. Cutting corporate taxes would boost earnings and make stocks relatively less expensive.

    “It’s been a year since the election. We’ve gone up 22% on hopes of what the Trump agenda would bring, and while they’re trying to work toward this thing, they haven’t really accomplished much yet,” said Michael O‘Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. “If progress is not made, the equity market should either pause or correct until meaningful progress is made.”Reuters

    More on the Tax Bills

    Rival Republican tax-cut plans were emerging in the U.S. Congress on Thursday that differed on issues such as cutting the corporate income tax, the deduction for state and local taxes and the tax on inheritances paid by the richest Americans. As the House of Representatives’ tax committee put the finishing touches on its bill, momentum behind a Republican push for the biggest U.S. tax-code overhaul in decades was shifting to the Senate, where a separate proposal was set to be unveiled.

    President Donald Trump, who took office in Jan 2017 and is still looking for a major legislative success, has made tax cuts a top objective, and congressional Republicans are aiming to pass the legislation by the end of the year.

    The Senate plan, like the House version, would cut the corporate tax rate to 20% from 35%, but would delay this by one year until 2019, said Republican Senator Bill Cassidy, a member of the tax-writing Finance Committee.

    The House bill would repeal a deduction on federal income tax that Americans can now take for state and local income and sales taxes, but preserve the deduction for business owners. It would cap the deduction for state and local property tax paid at $10,000.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) 2,584.62 -0.38% 2,238.83 +15.44%
    DJIA INDU 23,461.94 -0.44% 19,762.60 +18.71%
    NASDAQ IXIC 6,750.05 -0.58% 5,383.12 +25.39%

    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 3.127 -0.33% 2.105 +48.56%
    Valuation Rate USD/AUD 0.77302 +0.05% 0.72663 +6.38%
    AUD-denominated Index AUD 4.047 -0.38% 2.895 +39.77%

    Portfolio stock prices

    Stock Ticker Today Change 31 Dec 16 YTD
    Alphabet A GOOGL $1,047.235 -1.05% $792.45 +32.15%
    Alphabet C GOOG $1,031.16 -0.84% $771.82 +33.60%
    Apple AAPL $175.83 -0.24% $115.82 +51.81%
    Amazon AMZN $1,128.66 -0.38% $749.87 +50.51%
    Ebay EBAY $35.69 -3.57% $29.69 +20.20%
    Facebook FB $179.30 -0.15% $115.05 +55.84%
    PayPal PYPL $74.10 -0.90% $39.47 +87.73%
    Twitter TWTR $19.90 +1.58% $16.30 +22.08%
    Visa V $112.14 -0.30% $78.02 +43.73%
    VMware VMW $120.97 +0.34% $78.73 +53.65%

    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) fell 0.3%.
    The EUR rose 0.4% to USD 1.1644, the largest increase in 2 weeks.
    Britain’s GBP rose 0.2% to USD 1.3148.
    Japan’s JPY gained 0.4% to 113.37 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

    Prices are as at 15:48 ET

    • NYMEX West Texas Intermediate (WTI): $57.10/barrel +0.51% Chart
    • ICE (London) Brent North Sea Crude: $63.96/barrel +0.58% Chart
    • NYMEX Natural gas futures: $3.21/MMBTU +1.13% Chart

    flag_usa US: Unemployment Insurance Weekly Claims

    Press Release Extract [ser_4]

    insurance

    In the week ending November 4, the advance figure for seasonally adjusted initial claims was 239,000, an increase of 10,000 from the previous week’s unrevised level of 229,000. The 4-week moving average was 231,250, a decrease of 1,250 from the previous week’s unrevised average of 232,500. This is the lowest level for this average since March 31, 1973 when it was 227,750.

    Claims taking procedures continue to be severely disrupted in the Virgin Islands. The ability to take claims has improved in Puerto Rico and they are now processing backlogged claims.

    unemployment

    The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending October 28, an increase of 0.1 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 28 was 1,901,000, an increase of 17,000 from the previous week’s unrevised level of 1,884,000. The 4-week moving average was 1,895,250, a decrease of 750 from the previous week’s revised average. This is the lowest level for this average since January 12, 1974 when it was 1,881,000. The previous week’s average was revised up by 250 from 1,895,750 to 1,896,000.

    Employment and Training Administration, “Unemployment Insurance Weekly Claims Report“, 9 Nov 2017 (08:30) More

    flag_usa US: Wholesale Trade: Sales and Inventories. Sep 2017

    Press Release Extract [ser_us_wholesale]

    Sales

    September 2017 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $480.5 billion, up 1.3 percent (±0.4 percent) from the revised August level and were up 8.5 percent (±1.2 percent) from the September 2016 level. The July 2017 to August 2017 percent change was revised from the preliminary estimate of up 1.7 percent (±0.4 percent) to up 1.9 percent (±0.4 percent).

    Inventories

    Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $609.5 billion at the end of September, up 0.3 percent (±0.4 percent) from the revised August level. Total inventories were up 4.6 percent (±0.7 percent) from the revised September 2016 level. The August 2017 to September 2017 percent change was unrevised from the advance estimate of up 0.3 percent (±0.4 percent).

    Inventories/Sales Ratio

    us_wholesale_20171109

    The September inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.27. The September 2016 ratio was 1.32.

    US Census Bureau, “Wholesale Trade: Sales and Inventories. Sep 2017“, 9 Nov 2017 (10:00) More

    flag_japan Japan update

    Current Account Sep 2017

    Japan’s current account surplus increased to JPY 2.27 trillion in Sep 2017 from JPY 1.86 trillion in Sep 2016 but slightly below market estimates of a surplus of JPY 2.38 trillion. The surplus of goods account widened markedly to JPY 8.52 trillion (from JPY 6.67 trillion in Sep 2016), as exports jumped 14.4% year-on-year while imports went up at a slower 12.7%. Also, the primary income surplus widened to JPY 17.03 trillion (from JPY 15.1 trillion in Sep 2016). Meantime, the services account posted a JPY 0.76 billion deficit, smaller than a JPY 0.93 billion gap in Sep 2016. Also, the deficit of secondary income came in at JPY 2.08 trillion, slightly lower than JPY 2.2 trillion in Sep 2016. Current Account in Japan averaged JPY 1109.61 billion from 1985 until 2017, reaching an all time high of JPY 3,360.40 billion in Mar 2007 and a record low of minus JPY 1,456.10 billion in Jan 2014.TradingEconomics

    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

    Producer Price Index (PPI). Oct 2017

    In October 2017, Producer Price Index (PPI) for manufactured goods increased 6.9 percent year-on-year, and increased 0.7 percent month-on-month. The purchasing price index for manufactured goods increased 8.4 percent year-on-year, and increased 0.9 percent month-on-month. On average from January to October, the PPI increased 6.5 percent year-on-year, the purchasing price index for manufactured goods went up by 8.4 percent year-on-year.

    cn_ppi_20171109

    1. Year-on-Year Changes of Prices of Different Categories

    The year-on-year change of producer prices for means of production increased 9.0 percent, meaning 6.7 percentage points increase in the overall price level. Of which, producer prices for mining and quarrying industry increased 14.7 percent; that of raw materials industry increased 11.6 percent; that of manufacturing and processing industry increased 7.5 percent. Producer prices for consumer goods increased 0.8 percent year-on-year, meaning 0.2 percentage points increase in the overall price level. Of which, producer prices for foodstuff increased 0.6 percent, that of clothing increased 0.9 percent, that of commodities went up by 1.9 percent, and that of durable consumer goods remained at the same level (the amount of change was 0).

    The year-on-year purchaser price indices for non-ferrous metal materials and wires went up by 19.5 percent, ferrous metal materials increased 15.9 percent, fuel and power increased 10.6 percent, building materials and non-metallic went up by 10.0 percent.

    2. Month-on-Month Changes of Prices of Different Categories

    The producer prices for means of production increased 0.9 percent month-on-month, meaning 0.7 percentage points increase in the overall price level. Of the total, producer prices for mining and quarrying industry increased 2.1 percent, that of raw materials industry increased 1.4 percent, that of manufacturing and processing industry increased 0.6 percent. Producer prices for consumer goods increased 0.1 percent, month-on-month. Of which, producer prices for foodstuff decreased 0.1 percent, that of clothing and durable consumer increased 0.1 percent, that of commodities increased 0.3 percent.

    The month-on-month purchaser price indices for non-ferrous metal materials and wires went up by 2.0 percent, fuel and power, wood and pulp increased 1.5 percent, ferrous metal materials increased 0.3 percent.

    National Bureau of Statistics of China, “Producer Prices for the Industrial Sector for Oct 2017“, 9 Nov 2017 More

    CPI. Oct 2017

    In October 2017, the consumer price index (CPI) went up by 1.9 percent year-on-year. The prices grew by 1.9 percent in cities and 1.7 percent in rural areas. The food prices went down by 0.4 percent, and the non-food prices increased 2.4 percent. The prices of consumer goods went up by 1.1 percent and the prices of services grew by 3.2 percent. On average from January to October, the overall consumer prices were up by 1.5 percent from the same period of the previous year.

    In October, the consumer prices increased 0.1 percent month-on-month. Of which, prices increased 0.1 percent in cities and 0.2 percent in rural areas. The food prices remained at the same level, and the non-food prices went up by 0.1 percent. The prices of consumer goods increased 0.2 percent, and the prices of services decreased 0.1 percent.

    cn_cpi_20171109_month

    I. Year-on-Year Changes of Prices of Different Categories

    In October, prices of food, tobacco and liquor, went up by 0.3 percent year-on-year, affecting nearly 0.09 percentage points increase in the CPI. Of which, the prices of aquatic products, went up by 3.8 percent, affecting nearly 0.07 percentage points increase in the CPI; eggs, up by 3.1 percent, affecting nearly 0.02 percentage points increase in the CPI; grain, up by 1.6 percent, affecting nearly 0.03 percentage points increase in the CPI; fresh vegetables, up by 0.3 percent, affecting nearly 0.01 percentage points increase in the CPI; meat, down by 5.7 percent, affecting nearly 0.27 percentage points decrease in the CPI (price of pork was down by 10.1 percent, affecting nearly 0.28 percentage points decrease in the CPI); fresh fruits, down by 0.7 percent, affecting nearly 0.01 percentage points decrease in the CPI.

    In October, the prices of all the other seven categories increased year-on-year. Of which, the prices of health care, residence, education, culture and recreation, increased 7.2, 2.8 and 2.3 percent respectively, other articles and services, household articles and services, increased 1.8 and 1.5 percent respectively, clothing, transportation and communication increased 1.2 and 0.8 percent respectively.

    II. Month-on-Month Changes of Prices of Different Categories

    In October, prices of food, tobacco and liquor remained unchanged month-on-month. Of which, prices for fresh fruits, went up by 0.7 percent, fresh vegetables, up by 0.4 percent, meat, up by 0.3 percent, all affecting nearly 0.01 percentage points increase in the CPI; eggs, down by 4.6 percent, affecting nearly 0.03 percentage points decrease in the CPI; aquatic products, down by 0.6 percent, affecting nearly 0.01 percentage points decrease in the CPI.

    In October, among the prices of the other seven categories, five increased and two decreased month-on-month. Of which, the prices of clothing increased 0.5 percent residence, household articles and services, transportation and communication, health care, all increased 0.2 percent, education, culture and recreation, other articles and services, decreased 0.3 and 0.2 percent respectively.

    National Bureau of Statistics of China, “Consumer Prices for October 2017“, 9 Nov 2017 More

    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