In Portfolioticker today
Today at the stock market
“The S&P 500 and the Dow industrials registered record closing highs on Tuesday with a boost from bank stocks as investors eyed a potential cut in U.S. corporate taxes and continued economic growth after strong inflation data.
U.S. producer prices rose in November as gasoline prices surged and the cost of other goods increased, leading to the largest annual gain in nearly six years.
The data, which came a day ahead of U.S. Federal Reserve’s widely-expected hike in interest rates could assuage concerns among some Fed officials over persistently low inflation.
Investors were also hoping U.S. Republicans would be able to complete final legislation for a tax overhaul that is expected to slash corporate tax rates.
“It’s mostly optimism on taxes being close to the finish line and stronger global economic data,” said RJ Grant, head of trading at Keefe, Bruyette & Woods in New York.
The financial sector was the biggest driver with a 1% gain, followed by the healthcare sector , up 0.4%. The telecom index was the biggest percentage gainer with a 2.8% jump.
“As investors become more comfortable (that) the economic recovery appears to be expanding, they’re starting to dip their toes into the value sectors like industrials, financials and energy that need earnings growth to expand,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
“People are starting to think about 2018 and they’re getting reports into their inbox. Generally they’re pretty upbeat.”
Goldman Sachs was the biggest boost for the Dow with a 3% gain, followed by Boeing, which rose 2.4% after it announced a 20% dividend hike and an $18-billion share buyback authorization.
Declines in technology heavyweights, including Apple and Facebook, dragged on the Nasdaq.
The Fed is widely expected to raise its benchmark interest rate for third time this year on Wednesday. Traders see an 87.6-percent chance of a 25-basis-point rate hike, according to the CME Group’s Fedwatch tool.
Investors will watch for the central bank’s forecast on future rate hikes and its view on the health of the economy.
“The market is anticipating 1-2 rate hikes and the Fed is looking at 3-4 (in 2018). There is going to be some reconciliation of those opinions, and so far in the last few years, the market has been more right than the Fed has,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.” Reuters
^ Market indices today (mouseover for 12 month view) Chart: Google Finance
|Index||Ticker||Today||Change||31 Dec 16||YTD|
|S&P 500||SPX (INX)||2,664.11||+0.15%||2,238.83||+18.99%|
^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting
|Index||Currency||Today||Change||31 Dec 16||YTD|
Portfolio stock prices
Visa closed on a record high of $113.46, beating its 28 Nov 2017 record of $113.36.
|Stock||Ticker||Today||Change||31 Dec 16||YTD|
^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg
“The USD rose for a fourth straight day and 10-year Treasury yields hit 2.4% after data showed signs of inflation in producer prices as the Federal Reserve starts its two-day meeting. The Fed’s expected to raise rates after its meeting on Wednesday, and it’s anticipated that the European Central Bank will reveal details of plans to taper asset purchases on Thursday. The Bank of England and Swiss National Bank will also meet. Comments on the outlook for 2018 will be the focus for investors as they weigh the impact of coming policy normalization on global asset prices.
The Bloomberg Dollar Spot Index (DXY) rose 0.2% to the highest in a month.
The EUR fell 0.2% to USD 1.1745, the weakest in 3 weeks.
Britain’s GBP fell 0.2% to USD 1.3319.
Japan’s JPY rose less than 0.1% to 113.52/USD.” Bloomberg
^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com
Oil and Gas Futures
“Brent crude jumped above $65/barrel for the first time since June 2015 after one of the most important pipelines in the world was shut because of a crack, before turning lower. WTI crude slid below $58/barrel after crossing the threshold on Monday. U.K. natural gas prices surged following a pipeline explosion in Austria that threatened to tighten flows.” Bloomberg
Prices are as at 15:48 ET
- NYMEX West Texas Intermediate (WTI): $57.21/barrel -1.35% Chart
- ICE (London) Brent North Sea Crude: $63.57/barrel -1.73% Chart
- NYMEX Natural gas futures: $2.69/MMBTU -4.88% Chart
AU: Residential Property Prices. Q3/2017
Press Release Extract [ser_au_property]
The Residential Property Price Index (RPPI) for Sydney fell 1.4 per cent in the September quarter 2017 following positive growth over the last five quarters, according to figures released today by the Australian Bureau of Statistics (ABS).
Sydney established house prices fell 1.3 per cent and attached dwellings prices fell 1.4 per cent in the September quarter 2017.
“The fall in Sydney property prices this quarter was consistent with market indicators,” Chief Economist for the ABS, Bruce Hockman said.
Falls in the RPPI were also seen in Perth (-1.0 per cent), Darwin (-2.6 per cent) and Canberra (-0.2 per cent). These were offset by rises in Melbourne (+1.1 per cent), Brisbane (+0.7 per cent), Adelaide (+0.7 per cent) and Hobart (+3.4 per cent).
For the weighted average of the eight capital cities, the RPPI fell 0.2 per cent in the September quarter 2017. This was the first fall in the RPPI since the March quarter 2016.
“Residential property prices have continued to moderate across most capital cities this quarter,” Mr Hockman said.
The total value of Australia’s 10.0 million residential dwellings increased $14.8 billion to $6.8 trillion. The mean price of dwellings in Australia fell by $1,200 over the quarter to $681,100.”
Australian Bureau of Statistics, “6416.0 – Residential Property Price Indexes: Eight Capital Cities, Sep 2017“, 12 Dec 2017 More
US: Producer Price Index. Nov 2017
Press Release Extract [ser_us_ppi]
The Producer Price Index for final demand increased 0.4 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices also moved up 0.4 percent in both October and September. On an unadjusted basis, the final demand index rose 3.1 percent for the 12 months ended in November, the largest advance since a 3.1-percent increase for the 12 months ended January 2012.
In November, three-fourths of the rise in the final demand index is attributable to a 1.0-percent increase in prices for final demand goods. The index for final demand services climbed 0.2 percent.
The index for final demand less foods, energy, and trade services rose 0.4 percent in November, the largest advance since increasing 0.6 percent in April. For the 12 months ended in November, prices for final demand less foods, energy, and trade services moved up 2.4 percent.
Final demand goods: The index for final demand goods jumped 1.0 percent in November, the largest advance since a 1.0-percent increase in January. Over three-fourths of the broad-based November rise can be traced to prices for final demand energy, which climbed 4.6 percent. The indexes for final demand goods less foods and energy and for final demand foods both advanced 0.3 percent.
Product detail: Over two-thirds of the November increase in the index for final demand goods is attributable to prices for gasoline, which jumped 15.8 percent. The indexes for light motor trucks, pharmaceutical preparations, beef and veal, residential electric power, and jet fuel also moved higher. In contrast, prices for processed young chickens fell 5.7 percent. The indexes for ethanol and commercial electric power also declined.
Final demand services: Prices for final demand services advanced 0.2 percent in November, the third consecutive rise. Leading the November increase, the index for final demand services less trade, transportation, and warehousing moved up 0.4 percent. Prices for final demand transportation and warehousing services climbed 0.6 percent. Conversely, margins for final demand trade services decreased 0.3 percent.
Product detail: About half of the November rise in the index for final demand services can be traced to prices for loan services (partial), which increased 3.1 percent. The indexes for traveler accommodation services; health, beauty, and optical goods retailing; food and alcohol retailing; chemicals and allied products wholesaling; and apparel, footwear, and accessories retailing also moved higher. In contrast, margins for machinery and equipment wholesaling declined 1.9 percent. The indexes for fuels and lubricants retailing and for bundled wired telecommunication access services also fell.
Intermediate Demand by Commodity Type
Within intermediate demand in November, prices for processed goods advanced 0.5 percent, the index for unprocessed goods rose 3.2 percent, and prices for services moved up 0.7 percent.
Processed goods for intermediate demand: The index for processed goods for intermediate demand increased 0.5 percent in November, the fourth straight advance. Over half of the rise in November can be traced to prices for processed energy goods, which moved up 1.7 percent. The indexes for processed materials less foods and energy and for processed foods and feeds both increased 0.3 percent. For the 12 months ended in November, prices for processed goods for intermediate demand jumped 5.3 percent, the largest advance since a 5.4-percent rise in April.
Product detail: A major factor in the November increase in prices for processed goods for intermediate demand was the index for diesel fuel, which rose 1.8 percent. Prices for gasoline, primary basic organic chemicals, plastic construction products, plastic resins and materials, and beef and veal also moved higher. Conversely, the index for commercial electric power fell 2.5 percent. Prices for ethanol and processed young chickens also declined.
Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand jumped 3.2 percent in November, the largest rise since climbing 3.8 percent in January. Nearly 60 percent of the November increase in prices for unprocessed goods for intermediate demand can be attributed to the index for unprocessed energy materials, which advanced 5.5 percent. Prices for unprocessed foodstuffs and feedstuffs moved up 2.7 percent, and the index for unprocessed nonfood materials less energy rose 0.8 percent. For the 12 months ended in November, prices for unprocessed goods for intermediate demand climbed 10.6 percent, the largest 12-month increase since a 12.8-percent jump in April.
Product detail: In November, over half of the rise in prices for unprocessed goods for intermediate demand can be traced to the index for crude petroleum, which increased 11.0 percent. Prices for slaughter hogs, slaughter steers and heifers, natural gas, wastepaper, and nonferrous scrap also advanced. In contrast, the index for slaughter chickens fell 5.7 percent. Prices for carbon steel scrap and for coal also moved lower.
Services for intermediate demand: The index for services for intermediate demand climbed 0.7 percent in November, the largest increase since a 1.3-percent advance in January 2016. Nearly two-thirds of the broad- based rise in November can be traced to prices for services less trade, transportation, and warehousing for intermediate demand, which moved up 0.6 percent. The indexes for trade services for intermediate demand and for transportation and warehousing services for intermediate demand climbed 1.0 percent and 0.5 percent, respectively. For the 12 months ended in November, prices for services for intermediate demand increased 3.2 percent, the largest rise since a 3.2-percent advance in November 2012.
Product detail: A major factor in the November increase in the index for services for intermediate demand was prices for securities brokerage, dealing, investment advice, and related services, which moved up 1.5 percent. The indexes for loan services (partial), business wired telecommunication services, machinery and equipment parts and supplies wholesaling, portfolio management, and legal services also moved higher. Conversely, prices for bundled wired telecommunication access services fell 3.1 percent. The indexes for deposit services (partial) and for fuels and lubricants retailing also declined.”
Bureau of Labor Statistics, “Producer Price Index. Nov 2017“, 12 Dec 2017 (08:30) More
^ JPY movements against the USD over the past month (mouseover for inverse) Chart: xe.com
^ CNY movements against the USD over the past month (mouseover for inverse) Chart: xe.com