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In Portfolioticker today
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Japan Update
China Update
Today at the stock market
“Global stocks edged higher on Wednesday, shrugging off faltering oil prices and reports of soft iPhone X demand, as a rally in copper buoyed expectations for a strong year for the global economy in 2018.
Shares in Asia, Europe and the United States managed to advance slightly, adding to a strong calendar year of gains despite reports of lackluster demand for Apple Inc’s iPhone X, mixed U.S. economic data and a stalled recovery in oil prices. Trading during the holiday-shortened week was thin, with many traders and investors away ahead of New Year’s Day. MSCI’s index of Asia-Pacific shares closed 0.24% higher. The pan-European FTSEurofirst 300 index ended the day up 0.03%. Emerging market stocks rose 0.51%.
Technology
The S&P technology index was up 0.2% and managed to snap a five-session losing streak, its longest since Apr 2017. The sector was buoyed by gains in Facebook, up 0.9%, and Microsoft, up 0.4%.
Shares of wireless-charging technology developer Energous Corp surged 168.1% to $23.70 after it got certification for its wireless charging transmitter.
Apple ultimately rose 0.02%, one day after shares posted their worst single-day percentage fall since 10 Aug 2017. The drop came after Taiwan’s Economic Daily cited unidentified sources as saying Apple would slash its sales forecast for the iPhone X in the current quarter.
“Tech is very elevated. Tech has been down a little bit but if you look at the heart of the beast, the juicy stuff, it hasn’t really gotten hurt,” said Stephen Massocca, Senior Vice President at Wedbush Securities in San Francisco.
Energy
Oil failed to sustain a rally that sent it to multi-year highs a day earlier on supply concerns. U.S. crude fell 0.6% to $59.61 per barrel and Brent was last at $65.86, down 0.9% on the day.
ConocoPhillips, off 1.1%, and Chevron down 0.3%, were the biggest drags on the S&P energy index.
Other Sectors
Housing stocks edged up 0.1% after data showed contracts to buy previously owned homes edged higher in Nov 2017, the latest signal the housing market may have regained some momentum.
Tesla shares fell 1.8% after brokerage KeyBanc lowered its estimate for Model 3 deliveries to roughly 5,000 units from 15,000 units for Q4/2017.
U.S. economic news sent mixed signals. The Conference Board Consumer Confidence Index registered at levels below consensus for Dec 2017, while the National Association of Realtors reported pending home sales higher than economists had forecast for Nov 2017.
Though stocks inched up, there was an undercurrent of nervousness in the market that pushed some investors into government bonds, pushing their yields lower. Benchmark 10-year notes last rose 15/32 in price to yield nearly 2.413%, from 2.467% late on Tuesday.
“The buying has been strong since the early morning,” said Thomas Simons, a money market economist at Jefferies in New York, as investors rebuilt positions in bonds after they under-performed earlier this month.
Geopolitics
The United States announced sanctions on 2 North Korean officials behind their country’s ballistic missile program on Tuesday (yesterday) after the U.N. Security Council unanimously imposed new sanctions on North Korea last week.
“Geo-political risks have notched a little higher, supporting rates markets. The North Korean statement that U.N. sanctions are an act of war is, as tends to be the case, an exaggeration, but nevertheless, the market has no choice but to price it. Some safe-haven positioning is a natural reaction,” said Mizuho’s head of rates Peter Chatwell, referring in particular to a renewal in tensions around North Korea.
Copper
Copper prices rocketed to multi-year highs, pushing the MSCI world equity index, which tracks shares in 47 countries, up 0.22%. The metal, used in construction and machinery, is seen as a proxy for global growth.
“The rally in copper supports expectations that 2018 is going to be a strong year for synchronized global growth,” said Greg McKenna, chief strategist at AxiTrader.
Copper rose 1.32% to $7,219 a tonne, its highest in nearly 4 years, on expectations of robust demand from top consumer China in 2018.
The metal could also be getting a boost from expectations that U.S. lawmakers will turn their attention to infrastructure spending after signing a massive tax overhaul into law last week, said Tom Stringfellow, chief investment officer at Frost Investment Advisors.” Reuters Reuters
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) | 2,682.62 | +0.07% | 2,238.83 | +19.82% |
| DJIA | INDU | 24,774.30 | +0.11% | 19,762.60 | +25.35% |
| NASDAQ | IXIC | 6,939.34 | +0.04% | 5,383.12 | +28.90% |
Portfolio Indices
^ 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 | 3.091 | +0.06% | 2.105 | +46.87% |
| Valuation Rate | USD/AUD | 0.78243 | +0.59% | 0.72663 | +7.67% |
| AUD-denominated Index | AUD | 3.953 | -0.53% | 2.895 | +36.54% |
Portfolio stock prices
Visa closed on a record high of $114.02, beating its 15 Dec 2017 record of $113.82
| Stock | Ticker | Today | Change | 31 Dec 16 | YTD |
|---|---|---|---|---|---|
| Alphabet A | GOOGL | $1,060.20 | -0.54% | $792.45 | +33.78% |
| Alphabet C | GOOG | $1,049.37 | -0.70% | $771.82 | +35.96% |
| Apple | AAPL | $170.60 | +0.01% | $115.82 | +47.29% |
| Amazon | AMZN | $1182.26 | +0.46% | $749.87 | +57.66% |
| Ebay | EBAY | $37.61 | -0.87% | $29.69 | +26.67% |
| FB | $177.62 | +0.92% | $115.05 | +54.38% | |
| PayPal | PYPL | $74.59 | +0.43% | $39.47 | +88.97% |
| TWTR | $24.23 | -0.13% | $16.30 | +48.65% | |
| Visa | V | $114.02 | +0.91% | $78.02 | +46.14% |
| VMware | VMW | $126.96 | -0.48% | $78.73 | +61.26% |
FX: USD/AUD
USD
^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg
“The Bloomberg Dollar Spot Index (DXY) fell 0.3% near the lowest in more than 3 weeks as commodity-linked currencies gained and as traders bet improved global growth would spur major central banks to begin reducing monetary stimulus in 2018.
The EUR rose 0.3% to USD 1.1895, the strongest in almost 4 weeks on the biggest rise in more than a week.
Britain’s GBP rose 0.2% to USD 1.3404.
Japan’s JPY increased less than 0.05% to 113.28 per USD.” Bloomberg
AUD
^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com
Oil and Gas Futures
Futures prices
Prices are as at 15:49 ET
- NYMEX West Texas Intermediate (WTI): $59.58/barrel -0.65% Chart
- ICE (London) Brent North Sea Crude: $66.34/barrel -1.01% Chart
- NYMEX Natural gas futures: $2.74/MMBTU +3.59% Chart
US: Consumer Confidence. Dec 2017
Press Release Extract [us_cb_cci]
The Conference Board Consumer Confidence Index® decreased in December, following a modest improvement in November. The Index now stands at 122.1 (1985=100), down from 128.6 in November. The Present Situation Index increased from 154.9 to 156.6, while the Expectations Index declined from 111.0 last month to 99.1 this month.
“Consumer confidence retreated in December after reaching a 17-year high in November,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “The decline in confidence was fueled by a somewhat less optimistic outlook for business and job prospects in the coming months. Consumers’ assessment of current conditions, however, improved moderately. Despite the decline in confidence, consumers’ expectations remain at historically strong levels, suggesting economic growth will continue well into 2018.”
Consumers’ appraisal of present-day conditions was slightly more positive in December. The percentage saying business conditions are “good” increased marginally from 35.0 percent to 35.2 percent, while those saying business conditions are “bad” decreased marginally, from 12.3 percent to 12.1 percent. Consumers’ assessment of the labor market was mixed. Those claiming jobs are “plentiful” decreased from 37.5 percent to 35.7 percent, while those claiming jobs are “hard to get” also decreased, from 16.8 percent to 15.2 percent (a 16-year low).
Consumers’ optimism about the short-term outlook declined sharply in December. The percentage of consumers anticipating business conditions to improve over the next six months declined from 23.1 percent to 20.2 percent, while those expecting business conditions to worsen increased from 6.7 percent to 9.2 percent.
Consumers’ outlook for the job market was also less upbeat than in November. The proportion expecting more jobs in the months ahead decreased from 21.3 percent to 18.4 percent, while those anticipating fewer jobs rose from 12.1 percent to 16.3 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement increased from 20.3 percent to 22.3 percent, while the proportion expecting a decrease also rose, from 7.6 percent to 8.9 percent.”
The Conference Board, “Conference Board Consumer Confidence Index. Dec 2017“, 27 Dec 2017 (10:00) More
US: Pending Home Sales. Dec 2017
Press Release Extract [us_phs]
Pending home sales were mostly unmoved in November, but did squeak out a minor gain both on a monthly and annualized basis, according to the National Association of Realtors®. Heading into 2018, existing-home sales and price growth are forecast to slow, primarily because of the altered tax benefits of homeownership affecting some high-cost areas.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 0.2 percent to 109.5 in November from 109.3 in October. With last month’s modest increase, the index remains at its highest reading since June (110.0), and is now 0.8 percent above a year ago.
Lawrence Yun, NAR chief economist, says contract signings mustered a small gain in November and were up annually for the first time since June. “The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear,” he said. “However, new buyers coming into the market are finding out quickly that their options are limited and competition is robust. Realtors® say many would-be buyers from earlier this year, stifled by tight supply and higher prices, are still trying to buy a home.”
One of the biggest questions heading into 2018, according to Yun, is if the depressed levels of available supply can improve enough to slow price growth and make buying a home more affordable. While last month’s significant boost in existing sales was noteworthy, it did come with some concerns. Sales prices were up 5.8 percent – more than double wage growth – and the 3.4-month supply of homes on the market was the lowest since NAR began tracking in 1999.
“The strengthening economy, and expectation that more millennials will want to buy, serve as promising signs for solid homebuying demand next year, while also putting additional pressure on inventory levels and affordability,” said Yun. “Sales do have room for growth in most areas, but nationally, overall activity could be slightly negative. Markets with high home prices and property taxes will likely feel some impact from the reduced tax benefits of owning a home.”
Yun forecasts for existing-home sales to finish 2017 at around 5.54 million, which is an increase of 1.7 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 6 percent. In 2018, Yun anticipates essentially no change (a decline of 0.4 percent) in existing sales (5.52 million), and price growth to moderate to around 2 percent.
The PHSI in the Northeast jumped 4.1 percent to 98.9 in November, and is now 1.1 percent above a year ago. In the Midwest the index rose 0.4 percent to 105.8 in November, and is now 0.8 percent higher than November 2016.
Pending home sales in the South decreased 0.4 percent to an index of 123.1 in November but are still 2.5 percent higher than last November. The index in the West declined 1.8 percent in November to 100.4, and is now 2.3 percent below a year ago.”
National Association of Realtors, “Pending Home Sales. Nov 2017“, 27 Dec 2017 (10:00) More
Japan update
Currency: USD/JPY
^ 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
China update
Currency: USD/CNY
^ CNY movements against the USD over the past month (mouseover for inverse) Chart: xe.com
Stockmarket: CSI300
^ Shanghai CSI300 movements over the past week Chart: Google Finance