Thu 28 Dec 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/bearU.S. stocks edged higher in light trading on Thursday, buoyed by gains in financial stocks and as technology stocks continued to slowly recover from a losing skid.

    Volumes remained thin due to the holiday week between Christmas and New Year’s Day. The prior two sessions showed the lowest full-day trading volumes of the year. “Clearly light volume, low volatility has been the flavor of the week, post holiday, and don’t expect that to change going into the close tomorrow,” said Bill Northey, senior vice president, U.S. Bank Wealth Management, in Helena, Montana.

    The benchmark S&P 500 has climbed nearly 20% this year, on track to record its biggest annual gains since 2013, boosted by robust economic growth and solid corporate earnings. The rally is widely expected to extend into 2018, boosted by gains from a new law that lowers the tax burden on U.S. corporations.

    • The S&P 500 index rose 4.92 points, or 0.18%, to 2,687.54
    • The Dow Jones Industrial Average rose 63.21 points, or 0.26%, to 24,837.51
    • The Nasdaq Composite rose 10.82 points, or 0.16%, to 6,950.16.
    • Advancing issues outnumbered declining ones on the NYSE by a 1.92-to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favored advancers.
    • The S&P 500 posted 25 new 52-week highs and two new lows; the Nasdaq Composite recorded 71 new highs and 21 new lows.
    • Volume on U.S. exchanges was 4.26 billion shares, compared to the 6.6 billion average for the full session over the last 20 trading days.

    Technology

    Tech stocks added 0.1% and notched their second straight gain on the heels of a five-session losing skid. The technology index has struggled somewhat to close out the year but remains the best-performing sector in 2017, up more than 37%.

    “This needs to be, and has been, an earnings-driven market and that is where you’ve seen a tremendous amount of the earnings momentum and visibility, we would expect that to continue into next year,” said Bill Northey.

    Apple shares closed 0.28% higher after relinquishing earlier gains and Amazon edged up 0.32% after Reuters reported the companies are in licensing discussions with Riyadh on investing in Saudi Arabia.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) 2,687.54 +0.18% 2,238.83 +20.04%
    DJIA INDU 24,837.51 +0.25% 19,762.60 +25.67%
    NASDAQ IXIC 6,950.16 +0.15% 5,383.12 +29.11%

    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 3.097 +0.20% 2.105 +47.16%
    Valuation Rate USD/AUD 0.78444 +0.25% 0.72663 +7.95%
    AUD-denominated Index AUD 3.951 -0.06% 2.895 +36.47%

    Portfolio stock prices

    :-) Visa closed on a record high of $114.35, up 0.28% on yesterday’s record $114.02.

    Stock Ticker Today Change 31 Dec 16 YTD
    Alphabet A GOOGL $1,055.95 -0.41% $792.45 +33.25%
    Alphabet C GOOG $1,048.14 -0.12% $771.82 +35.8%
    Apple AAPL $171.08 +0.28% $115.82 +47.71%
    Amazon AMZN $1,186.10 +0.32% $749.87 +58.17%
    Ebay EBAY $37.92 +0.82% $29.69 +27.71%
    Facebook FB $177.92 +0.16% $115.05 +54.64%
    PayPal PYPL $74.17 -0.57% $39.47 +87.91%
    Twitter TWTR $24.31 +0.33% $16.30 +49.14%
    Visa V $114.35 +0.28% $78.02 +46.56%
    VMware VMW $126.61 -0.28% $78.73 +60.81%

    FX: USD/AUD

    USD

    DXY movements
    ^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg

    https://www.reuters.com/article/us-global-forex/dollar-index-holds-near-one-month-low-after-jobless-claims-data-idUSKBN1EL02Y

    The Bloomberg Dollar Spot Index (DXY) fell 0.4%, touching the lowest in more than 3 weeks.
    The EUR rose 0.5% to USD 1.1943, the strongest in almost 14 weeks.
    Britain’s GBP rose 0.3% to USD 1.3440.
    japan’s JPY rose 0.4% to 112.88 per USD, the strongest in more than a week on the biggest increase in more than 2 weeks.
    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 15:47 ET

    • NYMEX West Texas Intermediate (WTI): $59.92/barrel +0.47% Chart
    • ICE (London) Brent North Sea Crude: $66.72/barrel +0.42% (14:30) Chart
    • NYMEX Natural gas futures: $2.92/MMBTU +6.81% Chart

    flag_usa US: Unemployment Insurance Weekly Claims

    Press Release Extract [ser_4]

    Seasonally Adjusted Data

    In the week ending December 23, the advance figure for seasonally adjusted initial claims was 245,000, unchanged from the previous week’s unrevised level of 245,000. The 4-week moving average was 237,750, an increase of 1,750 from the previous week’s unrevised average of 236,000.

    Claims taking procedures continue to be disrupted in the Virgin Islands. The claims taking process in Puerto Rico has still not returned to normal.

    insurance

    The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending December 16, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 16 was 1,943,000, an increase of 7,000 from the previous week’s revised level. The previous week’s level was revised up 4,000 from 1,932,000 to 1,936,000. The 4-week moving average was 1,919,750, a decrease of 4,250 from the previous week’s revised average. The previous week’s average was revised up by 1,000 from 1,923,000 to 1,924,000.

    unemployment

    Unadjusted Data

    The advance number of actual initial claims under state programs, unadjusted, totaled 321,945 in the week ending December 23, an increase of 34,472 (or 12.0 percent) from the previous week. The seasonal factors had expected an increase of 34,036 (or 11.8 percent) from the previous week. There were 343,213 initial claims in the comparable week in 2016.

    The advance unadjusted insured unemployment rate was 1.4 percent during the week ending December 16, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 1,978,197, an increase of 13,146 (or 0.7 percent) from the preceding week. The seasonal factors had expected an increase of 5,808 (or 0.3 percent) from the previous week. A year earlier the rate was 1.5 percent and the volume was 2,117,870.

    The total number of people claiming benefits in all programs for the week ending December 9 was 2,004,231, an increase of 102,056 from the previous week. There were 2,140,465 persons claiming benefits in all programs in the comparable week in 2016.

    Extended Benefits were available in Alaska during the week ending December 9.

    Initial claims for UI benefits filed by former Federal civilian employees totaled 1,316 in the week ending December 16, an increase of 142 from the prior week. There were 721 initial claims filed by newly discharged veterans, a decrease of 28 from the preceding week.

    There were 16,431 former Federal civilian employees claiming UI benefits for the week ending December 9, an increase of 2,988 from the previous week. Newly discharged veterans claiming benefits totaled 8,888, an increase of 410 from the prior week.

    The highest insured unemployment rates in the week ending December 9 were in Puerto Rico (5.9), Alaska (4.1), the Virgin Islands (3.6), New Jersey (2.3), California (2.2), Montana (2.2), Connecticut (2.1), Pennsylvania (2.1), Illinois (1.9), and Massachusetts (1.9).

    The largest increases in initial claims for the week ending December 16 were in New York (+2,168), Ohio (+2,062), Massachusetts (+1,928), Indiana (+927), and New Jersey (+894), while the largest decreases were in Puerto Rico (- 1,225), South Carolina (-708), West Virginia (-611), Michigan (-518), and Illinois (-492).

    Employment and Training Administration, “Unemployment Insurance Weekly Claims Report“, 28 Dec 2017 (08:30) More

    flag_usa US: International Investment Position. Q3/2017

    Press Release Extract [us_iip]

    The U.S. net international investment position increased to −$7,768.7 billion (preliminary) at the end of the third quarter of 2017 from −$8,004.1 billion (revised) at the end of the second quarter, according to statistics released today by the Bureau of Economic Analysis (BEA). The $235.4 billion increase reflected a $1,001.2 billion increase in U.S. assets and a $765.8 billion increase in U.S. liabilities.

    us_iip1_20171228

    The $235.4 billion increase in the net investment position reflected net financial transactions of –$87.4 billion and net other changes in position, such as price and exchange-rate changes, of $322.8 billion.

    The net investment position increased 2.9 percent in the third quarter, compared with an increase of 1.1 percent in the second quarter, and an average quarterly decrease of 5.3 percent from the first quarter of 2011 through the first quarter of 2017.

    U.S. assets increased $1,001.2 billion to $26,854.9 billion at the end of the third quarter, mostly reflecting increases in portfolio investment and direct investment assets that were partly offset by a decrease in financial derivatives.

    • Assets excluding financial derivatives increased $1,227.5 billion to $25,149.7 billion. The increase resulted from other changes in position of $869.2 billion and financial transactions of $358.2 billion. Other changes in position mostly reflected foreign equity price increases that raised the equity value of portfolio investment and direct investment assets, and the appreciation of major foreign currencies against the U.S. dollar that raised the value of foreign- currency-denominated assets in dollar terms. Financial transactions mostly reflected net acquisition of portfolio investment assets.
    • Financial derivatives decreased $226.2 billion to $1,705.1 billion, mostly in single-currency interest rate contracts.

    U.S. liabilities increased $765.8 billion to $34,623.6 billion at the end of the third quarter, mostly reflecting increases in portfolio investment and direct investment liabilities that were partly offset by a decrease in financial derivatives.

    • Liabilities excluding financial derivatives increased $988.8 billion to $32,952.3 billion. The increase resulted from other changes in position of $524.6 billion and financial transactions of $464.2 billion. Other changes in position mostly reflected U.S. equity price increases that raised the equity value of portfolio investment and direct investment liabilities. Financial transactions mostly reflected net incurrence of portfolio investment liabilities.
    • Financial derivatives decreased $223.0 billion to $1,671.3 billion, mostly in single-currency interest rate contracts.

    us_iip2_20171228

    Bureau of Economic Analysis, “US International Investment Position. Q3/2017“, 28 Dec 2017 (08:30) More

    flag_usa US: International Trade, Retail and Wholesale. Nov 2017

    Press Release Extract [us_trade]

    Advance International Trade in Goods

    The international trade deficit was $69.7 billion in November, up $1.6 billion from $68.1 billion in October. Exports of goods for November were $133.7 billion, $3.8 billion more than October exports. Imports of goods for November were $203.4 billion, $5.4 billion more than October imports.

    Advance Wholesale Inventories

    Wholesale inventories for November, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $610.2 billion, up 0.7 percent (±0.4 percent) from October 2017, and were up 3.8 percent (±0.7 percent) from November 2016. The September 2017 to October 2017 percentage change was revised from down 0.5 percent (±0.4 percent) to down 0.4 percent (±0.4 percent).

    Advance Retail Inventories

    Retail inventories for November, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $619.1 billion, up 0.1 percent (±0.2 percent)* from October 2017, and were up 1.9 percent (±0.5 percent) from November 2016. The September 2017 to October 2017 percentage change was unrevised at virtually unchanged (±0.2 percent)

    US Census Bureau, “Monthly Advance Economic Indicators Report. Nov 2017“, 28 Dec 2017 (08:30) More

    flag_usa US: Consumer Comfort Index. Dec 2017

    Press Release Extract [us_cci]

    Americans’ sentiment last week climbed to the strongest level since early September on more upbeat views about the economy and personal finances after passage of tax cut legislation, according to the Bloomberg Consumer Comfort Index released Thursday.

    Key Points (week ended 23 Dec 2017):

    • Weekly index rose to 52.4 from 50.8
    • Measure tracking current views of economy jumped to 54.1, the highest since the week ended 27 Aug 2017, from 51.3
    • Index of buying climate was little changed at 43.3 after 43.1
    • Personal finances gauge increased to 59.6 from 58, led by Republicans

    The gain in confidence, the first in three weeks, shows Americans are upbeat about the economy as stocks rally, unemployment lingers near a 17-year low and property values increase. The gauge of sentiment about the economy is now at its second-highest level since 2001. What’s more, Republican households were particularly optimistic about their financial situation following passage of the tax cut package.

    Other Details:

    • Sentiment among Republicans increased to the highest reading since May 2007; gap between GOP and Democrats favors Republicans by the widest margin in almost a decade
    • Comfort among men climbed to a six-week high; women’s gauge recouped some of previous week’s slide
    • Comfort gauge of consumers in the South advanced to the highest since April 2007; West at five-week high
    • Those surveyed who had less than a high-school education were the most optimistic since April 2007Bloomberg

    Bitcoin

    Press report: Bloomberg [btc]

    Bitcoin resumed its slide Thursday, dipping below $14,000 as the cryptocurrency’s dizzying drop from a record set 10 days ago intensified.

    The latest blow to the world’s biggest cryptocurrency came from South Korea, where the government said it was eyeing options for stamping out a frenzy of speculation, including a potential shutdown of at least some exchanges.

    Bitcoin fell as much as 11% to as low as $13,500 as of 2:02 p.m. in New York, erasing modest gains after the South Korean release, composite Bloomberg pricing shows. It’s now down 30% from the record $19,511 it reached on 18 Dec 2017.

    Bitcoin’s plunge comes after futures contracts started trading on CME Group’s exchange, giving investors new ways to bet on the digital coin’s price moves. The news from South Korea unnerved traders because the country has been ground zero for a global surge in interest in bitcoin as its rally this year reached 1,600 percent, prompting the nation’s prime minister to worry over the impact on Korean youth.

    While there’s no indication Asia’s No. 4 economy will shutter exchanges that have accounted by some measures for more than a fifth of global trading, the news is a warning as regulators express concerns about private digital currencies. South Korea will require real-name cryptocurrency transactions and impose a ban on the offering of virtual accounts by banks to crypto-exchanges, according to a statement from the Office for Government Policy Coordination.

    Bitcoin was trading at about a 30% premium over prevailing international rates on Thursday in Seoul, according to price data from local exchanges, a continuing sign of the country’s obsession, and the difficulty in arbitraging between markets.

    “Cryptocurrency speculation has been irrationally overheated in Korea,” the government said in the statement, which comes little more than a week after the bankruptcy filing of one South Korean exchange. “The government can’t leave the abnormal situation of speculation any longer.”

    Singapore’s monetary authority warned last week that digital currency buyers should be aware they could lose all their money, joining counterparts who’ve warned about speculative mania surrounding bitcoin, which has surged more than 1,300% this year even after today’s selloff.

    “Regulators are getting so concerned that this is primarily and predominantly a retail phenomenon. Regulators not only in Asia but globally are going to start addressing this fact because I don’t think they’ve actually come to terms with what the absolute downside of a complete drop in crypto means for the economy,” said Stephen Innes, head of trading for Asia Pacific at Oanda.Bloomberg

    flag_japan Japan update

    Retail Sales. Nov 2017

    Retail sales in Japan increased 2.2 percent year-on-year in November of 2017, after a 0.2 percent drop in the previous month. The figure surpassed consensus expectations of a 1.2 percent gain. Sales grew at a faster pace for: fabrics apparel & accessories (4.4 percent vs 0.8 percent in October), motor vehicles (4.6 percent vs 3.4 percent), and fuel (11.4 percent vs 6.0 percent). Sales rebounded for: general merchandise (0.3 percent vs -2.0 percent), food & beverage (0.2 percent vs -1.7 percent), machinery & equipment (8.2 percent vs -0.9 percent), and non-store retail (0.3 percent vs -1.9 percent). Meantime, medicine & toiletry expanded at a softer pace of 2.5 percent after expanding 3.2 percent. On a monthly basis, retail sales grew 1.9 percent after edging down 0.1 percent in the previous month. Retail Sales YoY in Japan averaged 4.63 percent from 1971 until 2017, reaching an all time high of 36.50 percent in January of 1979 and a record low of -14.30 percent in March of 1998.TradingEconomics

    Industrial Output. Nov 2017

    Industrial production in Japan rose 0.6 percent month-on-month in November of 2017, after a 0.5 percent increase in a month earlier and slightly above market consensus of a 0.5 percent gain, preliminary estimate showed. It was the second straight month of increase in industrial output, as production went up at a faster pace for general-purpose, production and business oriented machinery (3.1 pct vs 0.7 pct in October), while rebounded for iron & steel (0.8 pct vs -0.4 pct); information and communication equipment (3.8 pct vs -1.2 percent) and petroleum products (6.1 pct vs -6.4 pct). Meantime, production rose at a softer rate for: non-ferrous metals (0.3 pct vs 1.7 pct); electrical machinery (0.7 pct vs 2.7 pct) and transport equipment (0.3 pct vs 1.1 pct). On the other hand, output fell for: chemical products (-1.7 pct vs -2.7 pct) and plastics (-1.0 pct vs -0.1 pct). On a yearly basis, output increased by 3.7 percent, below expectations of a 6 percent growth. Industrial Production Mom in Japan averaged 0.41 percent from 1953 until 2017, reaching an all time high of 6.80 percent in May of 2011 and a record low of -16.50 percent in March of 2011.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

    Current Account. Q3/2017

    China’s current account surplus stood at USD 40.5 billion in the third quarter of 2017, revised from the preliminary estimate of USD 37.1 billion and compared to USD 74.2 billion in the same period of the previous year. The goods trade surplus was recorded at USD 120.4 billion, while the service deficit came in at USD 62.9 billion, the primary income deficit at USD 14.4 billion, and the secondary income gap at USD 2.7 billion. In January to September of 2017, the current account surplus narrowed sharply to USD 109.8 billion from USD 178.7 billion in the same period of 2016. Current Account in China averaged 413.28 USD HML from 1998 until 2017, reaching an all time high of 1330.85 USD HML in the fourth quarter of 2008 and a record low of -8.96 USD HML in the second quarter of 2001.TradingEconomics

    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