In Portfolioticker today
Today at the stock market
“The three main U.S. stock indexes rose on Thursday, boosted by bank and energy stocks as investors bet on more economically sensitive sectors. Energy and financial stocks led gains among the 11 major S&P sectors.
Financials have gained 21% this year, compared with a 20% gain for the S&P 500. Energy, by contrast, has underperformed this year, with a 4.2% loss year-to-date, and some analysts suggested that Thursday’s gains reflected a rotation to stocks particularly responsive to economic growth.
“Today of late, (energy has) picked up significantly,” said John Stoltzfus, chief investment strategist at Oppenheimer Asset Management in New York. “In particular, it reflects the effect of growth outside the U.S. and the demand for imports of oil…There’s an opportunity to see oil run further.”
Chevron shares rose 3.3%. The shares earlier touched a record high of $125.35, after broker Cowen & Co raised its price target on the stock by nearly a third to $160.
The U.S. Congress approved a $1.5-trillion tax bill this week that will slash corporate income tax rates to 21% from 35%. Investors are hopeful that the lower rates will prompt companies to spend more on dividends and share buybacks. “There’s still the after-effects of tax reform being passed. I get the sense that the market is very optimistic about next year,” said Michael Antonelli, managing director at Robert W. Baird in Milwaukee.
Adding to the upbeat sentiment, Q3/2017 data showed that the U.S. economy grew at its fastest pace in more than 2 years, powered by robust business spending.
A separate report showed a jump in the number of Americans filing for unemployment benefits last week, but the underlying trend in jobless claims remained consistent with a tightening labor market.
The utilities sector, among sectors likely to benefit the least from tax cuts, fell 1.2%, in a 4th consecutive day of declines.
Shares of Accenture PLC rose 1.6% after the consulting and outsourcing services provider reported a quarterly profit that topped Wall Street forecasts, driven by digital and cloud services business. The shares earlier hit a record high of $158.44.” 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)||2,684.57||+0.19%||2,238.83||+19.90%|
^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting
|Index||Currency||Today||Change||31 Dec 16||YTD|
Portfolio stock prices
|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) was unchanged.
The EUR rose less than 0.05% to USD 1.1876.
Britain’s GBP rose 0.1% to USD 1.3387.
Japan’s JPY rose 0.1% to 113.29 per USD.” Bloomberg
^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com
Oil and Gas Futures
“When oil prices rocketed towards $60/barrel this fall, U.S. shale producers hedged more barrels of oil during the quarter than in at least three years, which could help propel the country to record crude production by next year.
More than 144 million barrels were added to hedges, after global oil markets LCOc1 rallied by as much as $13 in the quarter. Higher prices help producers lock in profits for future sales.
That should guarantee that total production exceeds 10 million bpd in 2018, which would be an all-time record for U.S. drilling. Traders say growth next year will likely exceed government forecasts, heralding a record year that could pressure prices in the near term.
For oil traders, hedging data from shale companies serves as a leading indicator of future supplies.
“After a slow start in the first half of 2017, U.S. oil producers sped up hedging activities for their 2018 production in third quarter amid the rebound in crude oil prices,” Citigroup analysts said in a note last week.
According to a Reuters analysis of hedging disclosures by the 30 largest U.S. shale firms, most rushed back into hedging in the three months to Sept. 30.
In total, 17 companies increased outstanding oil options, swaps or other derivatives positions by 144 million barrels between the second and third quarter. Another 10 companies decreased their hedging positions by 31 million barrels; three others did not hedge at all.
Together, the companies have nearly one-third more barrels hedged, or the equivalent of 129 million barrels, compared to the previous quarter.
Reuters compiled the data through information publicly available in quarterly regulatory filings.
Citigroup analysts said the third-quarter hedge ratio – the percentage of production where shale companies have locked in future sales – for 2018 jumped from 12 percent to 27 percent. For the same period in 2015 and 2016, producers had locked in 15 and 18 percent of the coming year, they said.
Several firms, including Hess Corp (HES.N), Newfield Exploration Co (NFX.N) and Marathon Oil Corp (MRO.N) loaded up their hedges, and more than doubled volumes last quarter. Together, they added 74 million barrels.
Among the companies that rolled off the most include Anadarko Petroleum Corp (APC.N) and EP Energy (EPE.N).
All 30 firms contacted by Reuters either did not respond to a request for comment or referred to questions about strategy to recent earnings calls.
Shale firms are said to have continued adding to hedges in the fourth quarter. Swap dealer gross shorts data from the Commodity Futures Trading Commission [3067651SSHT], an indicator of producer hedging activity, touched a record in the most recent week.
Last week, a Texas-based producer was said to have hedged some 30,000 barrels per day (bpd) for 2018 in U.S. crude futures, according to two sources familiar with money flows.” Reuters
Prices are as at 15:49 ET
- NYMEX West Texas Intermediate (WTI): $58.26/barrel +0.29% Chart
- ICE (London) Brent North Sea Crude: $64.77/barrel +0.33% Chart
- NYMEX Natural gas futures: $2.61/MMBTU -0.87% Chart
US: Unemployment Insurance Weekly Claims
Press Release Extract [ser_4]
“Seasonally Adjusted Data
In the week ending December 16, the advance figure for seasonally adjusted initial claims was 245,000, an increase of 20,000 from the previous week’s unrevised level of 225,000. The 4-week moving average was 236,000, an increase of 1,250 from the previous week’s unrevised average of 234,750.
Claims taking procedures continue to be disrupted in the Virgin Islands. The claims taking process in Puerto Rico has still not returned to normal.
The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending December 9, 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 December 9 was 1,932,000, an increase of 43,000 from the previous week’s revised level. The previous week’s level was revised up 3,000 from 1,886,000 to 1,889,000. The 4-week moving average was 1,923,000, an increase of 4,250 from the previous week’s revised average. The previous week’s average was revised up by 250 from 1,918,500 to 1,918,750.
The advance number of actual initial claims under state programs, unadjusted, totaled 287,103 in the week ending December 16, an increase of 4,339 (or 1.5 percent) from the previous week. The seasonal factors had expected a decrease of 18,039 (or -6.4 percent) from the previous week. There were 315,068 initial claims in the comparable week in 2016.
The advance unadjusted insured unemployment rate was 1.4 percent during the week ending December 9, an increase of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 1,961,454, an increase of 95,487 (or 5.1 percent) from the preceding week. The seasonal factors had expected an increase of 50,993 (or 2.7 percent) from the previous week. A year earlier the rate was 1.5 percent and the volume was 2,097,013.
The total number of people claiming benefits in all programs for the week ending December 2 was 1,901,773, a decrease of 89,915 from the previous week. There were 2,038,035 persons claiming benefits in all programs in the comparable week in 2016.
Initial claims for UI benefits filed by former Federal civilian employees totaled 1,173 in the week ending December 9, a decrease of 449 from the prior week. There were 756 initial claims filed by newly discharged veterans, a decrease of 79 from the preceding week.
There were 13,433 former Federal civilian employees claiming UI benefits for the week ending December 2, a decrease of 2,428 from the previous week. Newly discharged veterans claiming benefits totaled 8,482, a decrease of 700 from the prior week.
The highest insured unemployment rates in the week ending December 2 were in Puerto Rico (6.1), Alaska (3.7), the Virgin Islands (3.0), New Jersey (2.3), Connecticut (2.1), Montana (2.1), Pennsylvania (2.1), California (2.0), Massachusetts (1.8), Washington (1.8), and West Virginia (1.8).
The largest increases in initial claims for the week ending December 9 were in Illinois (+1,411), Michigan (+1,170), Iowa (+488), Massachusetts (+484), and Colorado (+379), while the largest decreases were in New York (-10,265), California (-6,475), Pennsylvania (-5,907), Texas (-5,224), and Georgia (-4,054).“
Employment and Training Administration, “Unemployment Insurance Weekly Claims Report“, 21 Dec 2017 (08:30) More
US: GDP (Third Estimate). Q3/2017
Press Release Extract [us_gdp]
Real gross domestic product (GDP) increased at an annual rate of 3.2 percent in the third quarter of 2017, according to the “third” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.1 percent.
The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 3.3 percent. With this third estimate for the third quarter, personal consumption expenditures increased less than previously estimated, but the general picture of economic growth remains the sam.
Real gross domestic income (GDI) increased 2.0 percent in the third quarter, compared with an increase of 2.3 percent in the second. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 2.6 percent in the third quarter, compared with an increase of 2.7 percent in the second quarter.
The increase in real GDP in the third quarter reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, nonresidential fixed investment, exports, federal government spending, and state and local government spending that were partly offset by a negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.
The slight acceleration in real GDP in the third quarter primarily reflected an acceleration in private inventory investment and an upturn in state and local government spending that were partly offset by decelerations in PCE, nonresidential fixed investment, and exports.
Current-dollar GDP increased 5.3 percent, or $250.6 billion, in the third quarter to a level of $19,500.6 billion. In the second quarter, current-dollar GDP increased 4.1 percent, or $192.3 billion.
The price index for gross domestic purchases increased 1.7 percent in the third quarter, compared with an increase of 0.9 percent in the second quarter. The PCE price index increased 1.5 percent, compared with an increase of 0.3 percent. Excluding food and energy prices, the PCE price index increased 1.3 percent, compared with an increase of 0.9 percent.
Profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment) increased $90.2 billion in the third quarter, compared with an increase of $14.4 billion in the second quarter.
Profits of domestic financial corporations increased $47.8 billion in the third quarter, in contrast to a decrease of $33.8 billion in the second. Profits of domestic nonfinancial corporations increased $10.4 billion, compared with an increase of $59.1 billion. Rest-of-the-world profits increased $32.0 billion, in contrast to a decrease of $10.8 billion. In the third quarter, receipts increased $26.9 billion, and payments decreased $5.2 billion. ”
Bureau of Economic Analysis, “Gross Domestic Product: Third Quarter 2017 (Third Estimate) and Corporate Profits: Third Quarter 2017 (Revised Estimate) “, 21 Dec 2017 (08:30) More
BOJ Monetary Policy
“The Bank of Japan left its key short-term interest rate unchanged at -0.1 percent at its December 2017 meeting, as expected. Policymakers also kept its 10-year government bond yield target around zero percent and offered a more upbeat view on private consumption and capital expenditure. Interest Rate in Japan averaged 2.87 percent from 1972 until 2017, reaching an all time high of 9 percent in December of 1973 and a record low of -0.10 percent in January of 2016.” TradingEconomics
^ 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