In Portfolioticker today
Today at the stock market
“Technology stocks led the S&P 500 and Nasdaq to record high closes on Black Friday, while Amazon and retail stocks got a boost from signs of a strong start to the holiday shopping season.
The stock markets closed early on Black Friday, a day after Thanksgiving, the start of the holiday shopping season that accounts for as much as 40% of retailers’ annual sales. Turnout at U.S. retailers was relatively subdued on Black Friday, with many shoppers flocking to stores to eye items in person while waiting to do their actual bargain hunting online.
On Thanksgiving, U.S. shoppers spent more than $2.87 billion online, according to Adobe Analytics. Adobe said Black Friday online sales were up 18.4 percent at $640 million as of 10 a.m. ET and would rise to a record of $5 billion. Story
The S&P retail index rose 0.63% and had hit a record high, led by Amazon’s 2.61% gain. The online retail giant touted its sales for Cyber Monday, one of the biggest days for online shopping, and said shoppers using its digital assistant Alexa could score deals as early as Sunday.
“In the retail environment, Amazon is extremely important – the fact that Amazon continued to soar bodes well for the fourth-quarter holiday shopping season and it bodes well for Wall Street,” said Adam Sarhan, chief executive of 50 Park Investments.
Brick-and-mortar stores, which have been boosting their online presence, also fared well Story:
The S&P500 Index closed above 2,600 for the first time. It finished the session on a record 2,602.42.
The NASDAQ Composite Index closed on a record 6,889.16.
^ Market indices today (mouseover for 12 month view) Chart: Google Finance
|Index||Ticker||Today||Change||31 Dec 16||YTD|
|S&P 500||SPX (INX)||2,602.42||+0.20%||2,238.83||+16.24%|
Our USD-denominated index closed on a record high 3.145 beating its 8 Nov 2017 record of 3.131.
Our AUD-denominated index closed on a record high 4.105 beatings its 22 Nov 2017 record of 4.084.
^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting
|Index||Currency||Today||Change||31 Dec 16||YTD|
Portfolio stock prices
Alphabet Class C closed on a record high of $1,040.61 beating its 8 Nov 2017 record of $1,039.85.
Amazon closed on a record high of $1,186.41 beating its 22 Nov 2017 record of $1,156.16.
Amazon’s rise has lifted Jeff Bezos’ net worth to more than USD 100 billion. Bloomberg Article
Facebook closed on a record high of $182.78 beating its 1 Nov 2017 record of $182.66.
At AUD 240.05 Facebook’s close price is now 12x our AUD 19.987 buy in price.
PayPal closed on a record high of $78.57 beating its 21 Nov 2017 record of $77.78.
|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) fell 0.2% to the lowest in 8 weeks.
The EUR rose 0.6% to USD 1.1925, the strongest in 2 months.
Britain’s GBP rose 0.1% to USD 1.3326, the strongest in 8 weeks.
Japan’s JPY fell 0.3% to 111.54 per USD.” Bloomberg
^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com
Oil and Gas Futures
OPEC and Russian Discussions on Extension of Oil Production Cuts
“The Organisation of Petroleum Exporting Countries (OPEC) and Russia have crafted the outline of a deal to extend their oil production cuts to the end of next year, although both sides are still hammering out crucial details, according to people involved in the conversations.
OPEC and several non-OPEC nations led by Russia will meet next week in Vienna to discuss prolonging their output curbs. Moscow had been hesitating over the need for an extension now because the current deal doesn’t expire until the end of Mar 2018.
After days of talks, Moscow and Riyadh now agree they should announce an additional period of cuts at the 30 Nov 2017 meeting, the people said, asking not to be named because the conversations are private. Russia wants the extension deal to include new language that would link the size of the curbs to the health of the oil market, they said.
“The goal to re-balance the market hasn’t been met in full yet, so everyone is in favor of extensions to reach final goals, Russia also supports these proposals,” Energy Minister Alexander Novak said in an interview with RBC television on Friday. “Different options are considered now, we will discuss details at the 30 Nov 2017 meeting.”
Russian President Vladimir Putin talked on the phone with Saudi King Salman bin Abdulaziz on 21 Nov 2017, during which they “emphasized importance of further coordination between Russia and Saudi Arabia in the global hydrocarbon markets,” according to a Kremlin statement.
The deal isn’t finalized as Russia and Saudi Arabia haven’t yet agreed on the new language, the people said. Oil ministers are due to start arriving in Vienna for the talks early next week.
OPEC and non-OPEC countries are discussing several formulas to accommodate the Russian demands, including linking the cuts to the supply-demand balance on the global oil market, or the level of fuel inventories in industrialized countries, the people said. Another option is making a clear reference to the fact that the deal could be reviewed again early next year, including the possibility of calling another meeting.
Whatever OPEC and Russia agree, the countries will have an opportunity to review their deal again in mid-2018, as OPEC will probably hold a regular ministerial gathering then. OPEC is organizing its international seminar in Vienna on 20-21 Jun 2017. That conference assembles a who’s who of the oil world and traditionally coincides with a ministerial meeting.” Bloomberg
Keystone Oil Spill and Pipeline Shutdown
“U.S. oil prices hit their highest levels in more than two years on Friday after the continued shutdown of a pipeline running from Canada to the United States was expected to reduce supply into a major storage facility.
TransCanada Corp (TRP.TO)’s 590,000 barrel-per-day Keystone pipeline, linking Alberta’s oil sands to U.S. refineries, shut on Nov. 16 after a spill was found in South Dakota.
It is not clear when the pipeline would return to operation, but it carries a large portion of crude into Cushing, Oklahoma, the delivery point for WTI futures, so its shutdown means fewer barrels going into storage.
The spread between the prompt and second month WTI futures CLc1-CLc2, an indicator of supply-demand balances at Cushing, also traded up to 10 cents in backwardation where prompt barrels are more expensive.
“We’re expecting to continue seeing draws out of Cushing, which turned the WTI market into backwardation,” said Tariq Zahir at Tyche Capital Advisors, referring to a market structure where prompt prices are higher than those in the future.
“But all of these gains could go right down into the tubs a week from today if Russia says they don’t want to go along with any OPEC deal. Or, if we get grumblings from Iraq or Iran,” he added.
Markets have also tightened globally due to output cuts since January by the Organization of the Petroleum Exporting Countries, Russia and several other producers.
OPEC meets on Nov. 30 and is expected to extend the pact to curb supplies beyond its expiry in March, although Russia has sent mixed signals about its support for an extension.
“With the majority of OPEC members endorsing an extension, Russian support is the key risk,” Jon Rigby, head of oil research at UBS, wrote in a note.
President Vladimir Putin indicated in October that Russia backed extending the deal to the end of 2018, but comments by officials and in the Russian media have created uncertainty since then, he said.
J.P. Morgan said a decision on any extension could be delayed until next year if Brent stayed above $60.” Reuters
“TransCanada Corp said on Friday it has recovered 44,400 gallons, or 1,057 barrels, of oil from the Keystone pipeline spill site at Amherst, South Dakota.
The company had shut down its 590,000 barrel-per-day Keystone pipeline, which links Alberta’s oil sands to U.S. refineries, on Nov. 16 after a 5,000-barrel spill. It has not yet set an expected restart date for the pipeline, which is one of Canada’s main crude export pipelines.
Additional excavation will be conducted beyond Sunday for soil remediation purposes, the Calgary-based company said, adding, it has about 170 personnel round-the-clock on the site engaged in clean-up activities.
Preliminary inspections of the damaged section will be completed on site by both TransCanada and U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) staff, then sent to Washington, D.C., for an investigation by the National Transportation Safety Board’s Metallurgical Laboratory, the company said.
“As a safety precaution, TransCanada sampled one residential water well yesterday at a location about 1.5 miles from the site to alleviate any concerns — all test results were normal,” TransCanada added.” Reuters
“U.S. oil prices jumped to a more than two-year high as North American markets tightened on the partial closure of a key pipeline linking Canada and the United States.” Reuters
Prices are as at 13:44 ET
- NYMEX West Texas Intermediate (WTI): $58.95/barrel +1.60% Chart
- ICE (London) Brent North Sea Crude: $63.85/barrel +0.47%% Chart
- NYMEX Natural gas futures: $2.83/MMBTU -4.75% Chart
Flash US Composite PMI. Nov 2017
Press Release Extract [ser_us_compositepmi]
- Flash U.S. Composite Output Index at 54.6 (55.2 in October). 4-month low.
- Flash U.S. Services Business Activity Index at 54.7 (55.3 in October). 4-month low.
- Flash U.S. Manufacturing PMI at 53.8 (54.6 in October). 2-month low.
- Flash U.S. Manufacturing Output Index at 54.3 (54.6 in October). 2-month low.
November data pointed to another solid increase in U.S. private sector output, supported by sustained growth in both manufacturing and services activity. At 54.6, the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index was above the 50.0 no-change threshold, but eased from 55.2 in October. As a result, the latest reading signalled the slowest expansion of private sector output since July.
Despite a softer upturn in business activity, survey respondents indicated a robust and accelerated rise in new order volumes during November. The rate of new business expansion was also comfortably above the average seen in the first half of 2017.
Signs of stronger demand helped to underpin another solid rise in payroll numbers across the private sector economy. Anecdotal evidence linked sustained job creation to improved sales volumes, greater efforts to boost operating capacity and long-term business development plans. Manufacturers are particularly confident about the year ahead growth outlook, with the degree of positive sentiment reaching its highest since January 2016.
Meanwhile, latest data revealed that cost pressures intensified at private sector companies. This was driven by the second-fastest rise in manufacturing input price inflation since December 2012. A number of firms cited higher prices for chemicals and energy following supply chain disruption linked to hurricanes Harvey and Irma.
Strong input cost pressures resulted in the sharpest rise in prices charged by manufacturers for just over three years. Prices charged also picked up at a faster pace in the service sector.
IHS Markit U.S. Services PMI™
The seasonally adjusted IHS Markit Flash U.S. Services PMI™ Business Activity Index posted 54.7 in November, down from 55.3 in October, to signal the slowest expansion of service sector output since July. However, the latest rise in business activity remained stronger than seen in the first half of the year. Robust service sector growth was attributed to improving domestic economic conditions, alongside resilient business and consumer confidence.
The upturn in service sector output was supported by a marked increase in incoming new work and the fastest pace of job creation for three months in November. Service providers also remain optimistic overall about their growth prospects for the next 12 months, although the degree of confidence eased slightly since October.
Input cost inflation accelerated from the seven-month low seen during October, which survey respondents linked to higher fuel and raw material prices (particularly food). As a result, prices charged inflation also picked up in November, but remained softer than September’s three-year peak.
IHS Markit U.S. Manufacturing PMI™
November data indicated a positive month for the manufacturing sector, with output, new orders and employment all rising at solid rates.
However, at 53.8 in November, the seasonally adjusted IHS Markit Flash U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) pointed to a slightly slower improvement in business conditions than the nine-month peak seen in October (54.6).
Manufacturers anticipate a continued recovery in production volumes over the months ahead, with business optimism picking up to its strongest since the start of 2016. Moreover, input buying expanded at the fastest rate since July and backlogs of work were accumulated for the fourth month running.
Sustained pressures on capacity also contributed to a drop in stocks of finished goods for the first time since March. Pre-production inventories rose marginally, but some survey respondents noted that efforts to boost their warehouse stocks had been constrained by longer delivery times from vendors.
Latest data pointed to a sharp and accelerated rise in input prices across the manufacturing sector, which was linked to higher raw material costs and strong demand for inputs. The overall rate of cost inflation was one of the fastest seen in the past five years, which contributed to the sharpest increase in factory gate prices since September 2014.
Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: ‘US businesses reported another month of solid growth in November, putting the economy on course for a reasonable, though by no means stellar, fourth quarter. Current PMI readings are broadly consistent with GDP growing at an annualised rate of just over 2%.
‘There was also good news on hiring, with a slight uptick in employment growth meaning the surveys are indicating non-farm payroll growth of just over 200,000 in November.
‘Both input costs and selling price inflation picked up, suggesting the upturn is feeding though to higher price pressures, though some of the manufacturing price hikes were attributable to the short-term effects of the hurricane-related supply chain disruptions.
‘An upturn in new order inflows means we can expect a strong end to the year, though prospects for 2018 remain more mixed. Although expectations about the year ahead slipped lower in the service sector, future optimism hit a two-year high in manufacturing, suggesting the goods-producing sector may start to make a stronger contribution to the economy in coming months.’”
IHS Markit, “Flash US Composite PMI. Nov 2017“, 24 Nov 2017 (09:45) More
Nikkei Flash Japan Manufacturing PMI. Nov 2017
Press Release Extract [ser_us_compositepmi]
- Flash Japan Manufacturing PMI® rises to 53.8 in November (52.8 in October).
- Flash Manufacturing Output Index at 54.2, signalling the joint-strongest rate of expansion for 45 months, on a par with March 2014.
- Rising exports underpin growth in new orders.
Commenting on the Japanese Manufacturing PMI survey data, Joe Hayes, Economist at IHS Markit, which compiles the survey, said: ‘Following the softer Q3 GDP figure last week, November flash PMI data signalled the strongest improvement in the manufacturing sector for 44 months.New orders increased strongly, underpinned by business from abroad amid recent yen weakness. New export orders expanded at the fastest pace in almost four years. That said, a cheaper yen and higher material prices have intensified cost pressures, as input price inflation increased to a 35-month high in November.’ ”
IHS Markit, “Nikkei Flash Japan Manufacturing PMI. Nov 2017“, 24 Nov 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
^ 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
“The CSI300 index fell as much as 0.9% to a three-month low in choppy trade after a 3.0% fall – its biggest in almost a year-and-a-half – on Thursday, as a sell-off in domestic bonds that has been under way since last month gnawed away at investor sentiment.
Investors were also reacting to new policies aimed at curbing micro-lending and tightening regulation of asset management businesses.
The start-up board Chinext Index hit its lowest level since mid-August and last stood down 0.3%, ahead of a potential swell in sales of small shares in the next couple of months from institutional investors after their IPO (Initial Public Offering) lock-up period ends.
Earlier this month Chinese stocks had risen almost 15% from their lows hit in May 2017, and analysts said some investors were selling to lock in profits.” Reuters