Wed 10 Jan 2018


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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/bearThe three major U.S. stock indexes ended lower on Wednesday after a choppy trading session as investors worried that China would slow U.S. government bond purchases and that U.S. President Donald Trump would end a key trade agreement.

    The S&P and the Nasdaq snapped a six-day rally after Bloomberg reported that China, the world’s biggest holder of U.S. Treasuries, could slow or stop buying the government bonds. The report sent Treasury yields to a 10-month high.

    • The S&P 500 index fell 3.06 points, or 0.11%, to 2,748.23
    • The Dow Jones Industrial Average fell 16.67 points, or 0.07%, to 25,369.13
    • The Nasdaq Composite index dropped 10.01 points, or 0.14%, to 7,153.57
    • Declining issues outnumbered advancing ones on the NYSE by a 1.59-to-1 ratio; on Nasdaq, a 1.09-to-1 ratio favored decliners.
    • The S&P 500 posted 74 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 98 new highs and 24 new lows.
    • Volume on U.S. exchanges was 6.93 billion shares, above the 6.38 billion average for the full session over the last 20 trading days.

    The S&P 500 pared some losses as yields backed away from their intraday peaks and investors digested the China report. But the index lost ground again in mid-afternoon trading after Reuters reported that Canada is increasingly convinced Trump will soon announce a U.S. exit from the North American Free Trade Agreement. It cited two unnamed government sources.

    “It’s a fairly light week for economic and financial data. In a week like this, political headlines can have a bigger impact than they normally would,” said Jon Mackay, investment strategist at Schroders Investment Management in New York.

    While Mackay said the selloff was overblown, he noted that a change to NAFTA could hurt corporate earnings.

    “If that news is true, you’d expect a higher dollar price and a negative impact to earnings,” said Mackay.

    Investors were particularly skittish about the China report as they worried that the market was overdue for a correction.

    “It’s a reflection of investor weariness and awareness that the market has risen for four straight months without seeing a major pullback,” said Robert Pavlik, chief investment strategist, SlateStone Wealth in New York.

    “As the day wore on, Treasury yields started to move lower on the realization the story doesn’t have any legs,” he said. “There’s no way on earth the Chinese stop buying U.S. Treasuries.”

    The S&P financial index was the best performer among the S&P 500’s 11 major sectors with a 0.9% rise, helped by gains in Berkshire Hathaway, JPMorgan and Wells Fargo.

    Berkshire Hathaway rose 1.3% after the conglomerate promoted two top executives, cementing their status as the most likely successors to Warren Buffett.

    Banks and insurance companies often rise with bond yields as investors expect a profit boost from higher interest rates.

    Rate-sensitive sectors such as utilities and real estate were the biggest losers with declines of 1.1% and 1.5%.

    Investors started 2018 with high hopes for strong U.S. earnings growth. Banks will kick off earnings season on Friday.

    Earnings for S&P 500 companies are expected to increase by 11.8% with the biggest contribution from the energy sector, according to Thomson Reuters I/B/E/S.Reuters

    Market indices

    Market indices
    ^ Market indices today (mouseover for 12 month view) Chart: Google Finance

    Index Ticker Today Change 31 Dec 17 YTD
    S&P 500 SPX (INX) 2,748.23 -0.12% 2,673.61 +2.79%
    DJIA INDU 25,369.13 -0.07% 24,719.22 +2.62%
    NASDAQ IXIC 7,153.57 -0.14% 6,903.39 +3.62%

    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 17 YTD
    USD-denominated Index USD 3.189 -0.06% 3.068 +3.96%
    Valuation Rate USD/AUD 0.78893 +0.21% 0.78528 +0.46%
    AUD-denominated Index AUD 4.045 -0.27% 3.909 +3.48%

    Portfolio stock prices

    :-) AMZN closed on a record $1,254.33, up 0.13% on yesterday’s record $1,252.70
    :-) PYPL closed on a record $79.30, up 0.23% on yesterday’s record $79.19
    :-( EBAY fell 4.63%, eliminating its gains for the year to date.

    Stock Ticker Today Change 31 Dec 17 YTD
    Alphabet A GOOGL $1,110.14 -0.24% $1,053.00 +5.42%
    Alphabet C GOOG $1,102.61 -0.33% $1,045.65 +5.44%
    Apple AAPL $174.29 -0.03% $169.23 +2.99%
    Amazon AMZN $1,254.33 +0.13% $1,169.54 +7.24%
    Ebay EBAY $37.70 -4.63% $37.76 -0.16%
    Facebook FB $187.84 -0.02% $176.46 +6.44%
    PayPal PYPL $79.37 +0.22% $73.61 +7.82%
    Twitter TWTR $24.25 +0.33% $24.01 +0.99%
    Visa V $118.98 -0.11% $114.02 +4.35%
    VMware VMW $129.22 -0.04% $125.32 +3.11%

    FX: USD/AUD

    USD

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

    The Bloomberg Dollar Spot Index (DXY) fell 0.1%.
    Canada’s CAD fell 0.8%.
    The EUR rose 0.1% to USD 1.1948.
    Japan’s JPY fell 1.1% to 111.42 per USD, the strongest in more than 6 weeks on the largest jump in 7 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 15:49 ET

    • NYMEX West Texas Intermediate (WTI): $63.41/barrel +0.71% Chart
    • ICE (London) Brent North Sea Crude: $69.04/barrel +0.32%% Chart
    • NYMEX Natural gas futures: $2.91/MMBTU -0.55% Chart

    flag_australia AU: Job Vacancies. Nov 2017

    Press Release Extract [au_jobs]

    au_jobvacancies_20180110

    Trend Estimates:

    • Total job vacancies in November 2017 were 210,800, an increase of 4.1% from August 2017.
    • The number of job vacancies in the private sector was 191,800 in November 2017, an increase of 4.6% from August 2017.
    • The number of job vacancies in the public sector was 19,000 in November 2017, a decrease of -0.7% from August 2017.

    Australian Bureau of Statistics, “6354.0 Job Vacancies. Nov 2017“, 10 Jan 2018 More

    flag_australia AU: NAB Online Retail Sales Index. Nov 2017

    Press Release Extract [au_onlineretail]

    Online sales accelerated over the year and month

    • NAB Online Retail Sales Index (NORSI) accelerated strongly in November(+4.7% mom s.a.). This is the highest monthly growth rate since December 2014. Year-on-year growth was also stronger in November, with sales up 14.4% compared to last year. Trend online retail sales is still much stronger than the early months of 2017.
    • ABS data on traditional retailers showed month on month seasonally adjusted sales grew (0.5%) in October. The revised equivalent NORSI for October was 2.0%, so NORSI outpaced traditional sales in that month.
    • We estimate that Australian consumers have spent around $24 billion over the 12 months to November 2017. This is equivalent to 7.7% of spending at traditional bricks & mortar retailers, as measured by the ABS in the 12 months to October 2017.
    • Most categories accelerated in November (yoy), with Daily Deals (35.1% yoy November vs 18.6% yoy October), and the much larger category Homeware and Appliances (24.9 % vs 3.8%) recording the most rapid growth over the past year. Although Media (21.6% vs 23.9%) was 3rd fastest, it did slow slightly. Food Catering (12.9% vs 8.6%), Games & Toys (12.1% vs 2.3%), and Grocery and Liquor (10.2% vs 9.7%) also recorded double digit growth. Department stores (9.6% vs 8.1%), Personal and Recreational slowed (6.0% vs 8.8%), and Fashion rebounded after a period of weaker sales (5.0% vs 0%).
    • SME sales represent just over a third of all online sales. Seasonally adjusted SME sales saw a slight slowing in November (3.0%,mom s.a.) with large online retailer growth much faster in the month.

    National Australia Bank, “NAB Online Retail Sales Index. November 2017“, 10 Jan 2018 More

    flag_usa US: Import and Export Price Indexes. Dec 2017

    Press Release Extract [us_eximp]

    Prices for U.S. imports ticked up 0.1 percent in December, the U.S. Bureau of Labor Statistics reported today, following a 0.8-percent rise the previous month. Higher fuel prices more than offset a decline in the price index for nonfuel prices in December. In contrast, U.S. export prices edged down 0.1 percent in December, after advancing 0.5 percent in November.

    All Imports: Import prices rose 0.1 percent in December following 0.8-percent advances in 2 of the previous 3 months. The index has not recorded a monthly decline since falling 0.2 percent in July. Prices for U.S imports increased 3.0 percent in 2017, after advancing 1.9 percent the previous year. The advance in 2017 was the largest calendar-year increase since import prices rose 8.5 percent in 2011.

    Fuel Imports: Import fuel prices increased 1.8 percent in December, after rising 8.4 percent in November. The price index for import fuel has not recorded a monthly decline since falling 1.0 percent in July. The December rise was driven by a 2.0-percent increase in petroleum prices which more than offset a 4.9- percent decline in natural gas prices. Import fuel prices rose 18.4 percent in 2017 following a 24.7-percent advance the previous year. Prior to 2016, import fuel prices had not recorded a calendar-year increase since 2011. In 2017, a 20.6-percent gain in petroleum prices more than offset a 15.7-percent drop in natural gas prices.

    All Imports Excluding Fuel: In contrast, the price index for nonfuel imports edged down 0.1 percent in December, the first monthly decline since a 0.1-percent drop in July. The decline in December was led by lower prices for foods, feeds, and beverages; consumer goods; and nonfuel industrial supplies and materials. Despite the December downturn, nonfuel import prices increased 1.4 percent in 2017, after a 0.2-percent advance the previous year. The 2017 rise was the largest calendar-year increase since the index advanced 3.4 percent in 2011. In 2017, rising prices for nonfuel industrial supplies and materials; capital goods; consumer goods; and foods, feeds, and beverages all contributed to the advance in nonfuel prices. Of the major import areas, only prices for automotive vehicles decreased in 2017.

    All Exports: Prices for U.S. exports fell 0.1 percent in December, the first monthly decline for the index since a 0.1-percent decrease in June. The December drop was led by falling agricultural prices; the price index for nonagricultural prices recorded no change. Export prices rose 2.6 percent in 2017 following a 1.3- percent rise in 2016. The 2017 advance was the largest calendar-year increase since 2011 when the index rose 3.6 percent.

    Agricultural Exports: Agricultural export prices declined 0.4 percent in December, after decreasing 0.8 percent in November. The December drop was driven by a 14.4-percent decline in vegetable prices, although lower fruit prices also contributed. Despite the December decrease, the price index for agricultural exports rose 1.8 percent in 2017, after a 0.3-percent drop the previous year. The 2017 advance was the first calendar-year rise since the index increased 13.4 percent in 2012. Higher meat prices were the largest contributor to the advance in agricultural prices in 2017.

    All Exports Excluding Agriculture: Prices for nonagricultural exports recorded no change in December following a 0.6-percent advance in November. In December, prices for capital goods and consumer goods advanced and prices for nonagricultural industrial supplies and materials and automotive vehicles decreased. The price index for nonagricultural exports rose 2.7 percent in 2017, the largest calendar-year increase since the index advanced 4.0 percent in 2011. The 2017 increase was primarily led by higher prices for nonagricultural industrial supplies and materials.

    Import Prices

    Imports by Locality of Origin: Import prices from China declined 0.1 percent in December following a 0.3-percent advance in November. Prices for imports from China fell 0.2 percent in 2017 and have not recorded a calendar-year advance since the index rose 3.6 percent in 2011. The price index for imports from Japan recorded no change in December, after falling 0.1 percent in November and 0.3 percent in October. Import prices from Japan fell 1.2 percent in 2017 following a 1.6-percent rise the previous 12 months. Prices for imports from the European Union increased 0.4 percent in December, the largest monthly advance since the index rose 0.8 percent in August. The price indexes for imports from Canada and Mexico each recorded no change in December following increases of 2.3 percent and 0.1 percent, respectively, in November. Nonfuel Industrial Supplies and Materials: Nonfuel industrial supplies and materials prices edged down 0.1 percent in December. The downturn was led by falling prices for unfinished metals and selected building materials.

    Finished Goods: Finished goods prices were mostly unchanged in December. Import consumer goods prices fell 0.1 percent and the indexes for capital goods and automotive vehicles each recorded no change. Foods, Feeds, and Beverages: Prices for foods, feeds, and beverages declined 0.7 percent following a
    decrease of 1.7 percent in November. Both drops were driven by lower prices for fruit which fell 3.4 percent in December and 11.4 percent the previous month.

    Transportation Services: Import air passenger fares increased 6.5 percent in December, after falling 2.3 percent in November. The December advance was led by higher fares from Asia and the Latin America/Caribbean region. The index for import air passenger fares rose 4.2 percent in 2017 following a 4.2-percent drop the previous year. The 2017 increase was the first calendar-year advance since the index rose 2.7 percent in 2014 and the largest since an 8.2-percent increase in 2013. Import air freight prices advanced 3.4 percent in December and 17.1 percent over the past year.

    Export Prices

    Nonagricultural Industrial Supplies and Materials: The price index for nonagricultural industrial supplies and materials fell 0.3 percent in December following a 2.1-percent increase in November. Lower prices for fuel and chemicals each contributed to the decline.

    Finished Goods: Finished goods prices were mixed in December. The price indexes for capital goods and consumer goods rose 0.1 percent and 0.2 percent, respectively. Capital goods prices increased 1.5 percent in 2017, the largest calendar-year advance since the index rose 1.8 percent in 2009. Prices for consumer goods advanced 0.5 percent over the past year, the first calendar-year rise since the index increased 3.5 percent in 2011. In contrast, automotive vehicle prices edged down 0.1 percent in December.

    Transportation Services: Export air passenger fares rose 2.9 percent in December, after rising 0.5 percent in November. The December advance was led by a 12.5-percent rise in Asian fares which more than offset declining European fares. The index for export air passenger fares decreased 6.1 percent in 2017 following a 4.7-percent increase the previous year. Export air freight prices declined 1.4 percent in December and advanced 8.2 percent over the past 12 months.

    Bureau of Labor Statistics, “U.S. Import and Export Price Indexes. Dec 2017“, 10 Jan 2018 (08:30) More

    flag_usa US: Wholesale Trade: Sales and Inventories. Nov 2017

    Press Release Extract [us_wholesale]

    Sales

    November 2017 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $492.4 billion, up 1.5 percent (±0.5 percent) from the revised October level and were up 9.8 percent (±0.9 percent) from the November 2016 level. The September 2017 to October 2017 percent change was revised from the preliminary estimate of up 0.7 percent (±0.5 percent) to up 0.8 percent (±0.5 percent).

    us_whi_20180110

    Inventories

    Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $611.0 billion at the end of November, up 0.8 percent (±0.4 percent) from the revised October level. Total inventories were up 4.0 percent (±0.7 percent) from the revised November 2016 level. The October 2017 to November 2017 percent change was revised from the advance estimate of up 0.7 percent (±0.4 percent) to up 0.8 percent (±0.4 percent).

    Inventories/Sales Ratio

    The November inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.24. The November 2016 ratio was 1.31.

    US Census Bureau, “Monthly Wholesale Trade: Sales and Inventories. Nov 2017“, 10 Jan 2018 (10:00) More

    flag_japan Japan update

    Currency: USD/JPY

    JPY movements
    ^ JPY movements against the USD over the past month (mouseover for inverse) Chart: xe.com

    Comment: TradingEconomics

    The Japanese yen hit a 6-week high of 111.4 against the USD on Wednesday, following the Bank of Japan’s decision to reduce its purchases of Japanese government bonds with 10 to 25 years left to maturity and those with 25 to 40 years to maturity by JPY 10 billion from its previous operations. The move was seen as a minor tapering of its large quantitative easing programme.

    Historically, the JPY reached an all time high of 306.84 in Dec 1975 and a record low of 75.74 in Oct 2011.TradingEconomics

    Stockmarket: Nikkei 225

    n225 movements
    ^ Nikkei 225 movements over the past week Chart: Google Finance

    flag_china China update

    Consumer Price Index (CPI). Dec 2017

    Press Release Extract [cn_cpi]

    In December 2017, the consumer price index (CPI) went up by 1.8 percent year-on-year. The prices grew by 1.9 percent in cities and 1.7 percent in rural areas. The food prices went down by 0.4 percent, and the non-food prices increased 2.4 percent. The prices of consumer goods went up by 1.1 percent and the prices of services grew by 3.0 percent.

    In December, the consumer prices went up by 0.3 percent month-on-month. Of which, prices grew by 0.3 percent in cities and 0.4 percent in rural areas. The food prices went up by 1.1 percent, and the non-food prices went up by 0.1 percent. The prices of consumer goods increased 0.5 percent, and the prices of services increased 0.1 percent.

    In 2017, the consumer prices were up by 1.6 percent over the previous year.

    cn_cpi_20180110

    I. Year-on-Year Changes of Prices of Different Categories

    In December, prices of food, tobacco and liquor, went up by 0.3 percent year-on-year, affecting nearly 0.09 percentage points increase in the CPI. Of which, the prices of eggs, went up by 11.4 percent, affecting nearly 0.07 percentage points increase in the CPI; fresh fruits, up by 6.3 percent, affecting nearly 0.10 percentage point increase in the CPI; aquatic products, up by 4.0 percent, affecting nearly 0.07 percentage points increase in the CPI; grain, up by 1.3 percent, affecting nearly 0.03 percentage points increase in the CPI; fresh vegetables, down by 8.6 percent, affecting nearly 0.23 percentage points decrease in the CPI; meat, down by 4.2 percent, affecting nearly 0.20 percentage points decrease in the CPI (price of pork was down by 8.3 percent, affecting nearly 0.23 percentage points decrease in the CPI).

    cn_cpia_20180110

    In December, the prices of all the other seven categories increased year-on-year. Of which, the prices of health care, residence, education, culture and recreation, increased 6.6, 2.8 and 2.1 percent respectively, other articles and services, household articles and services, increased 1.9 and 1.6 percent respectively, clothing, transportation and communication, increased 1.3 and 1.2 percent respectively.

    II. Month-on-Month Changes of Prices of Different Categories

    In December, prices of food, tobacco and liquor went up by 0.8 percent year-on-year, affecting nearly 0.23 percentage points increase in the CPI. Of which, prices for fresh fruits, went up by 5.5 percent, affecting nearly 0.09 percentage points increase in the CPI; eggs, up by 4.4 percent, affecting nearly 0.03 percentage points increase in the CPI; aquatic products, up by 1.1 percent, affecting nearly 0.02 percentage points increase in the CPI; fresh vegetables, up by 1.0 percent, affecting nearly 0.02 percentage points increase in the CPI; meat, up by 0.8 percent, affecting nearly 0.04 percentage points increase in the CPI (price of pork was up by 1.1 percent, affecting nearly 0.03 percentage points increase in the CPI).

    cn_cpib_20180110

    In December, among the prices of the other seven categories, five increased, one decreased and one remained unchanged month-on-month. Of which, the prices of transportation and communication increased 0.4 percent, residence, household articles and services increased 0.2 percent, education, culture and recreation, health care, increased 0.1 percent, other articles and services decreased 0.1 percent, clothing remained unchanged.

    National Bureau of Statistics of China, “Monthly Report on Consumer Price Index. Dec 2017“, 10 Jan 2018 More

    Comment: TradingEconomics

    China’s consumer prices rose 1.8% year-on-year in Dec 2017, after a 1.7 % rise in Nov 2017 but slightly below market consensus of a 1.9% gain. Cost of non-food continued to increase, while cost of food fell much less.

    China’s CPI averaged 5.29% from 1986 until 2017, reaching an all time high of 28.40% in Feb 1989 and a record low of -2.20% in Apr 1999.TradingEconomics

    Producer Price Index (PPI). Dec 2017

    Press Release Extract [cn_ppi]

    In December 2017, Producer Price Index (PPI) for manufactured goods increased 4.9 percent year-on-year, and increased 0.8 percent month-on-month.

    cn_ppi_20180110

    The purchasing price index for manufactured goods increased 5.9 percent year-on-year, and increased 0.8 percent month-on-month. In 2017, the PPI increased 6.3 percent year-on-year, the purchasing price index for manufactured goods went up by 8.1 percent year-on-year.

    cn_pupi_20180110

    1. Year-on-Year Changes of Prices of Different Categories

    The year-on-year change of producer prices for means of production increased 6.4 percent, meaning 4.78 percentage points increase in the overall price level. Of which, producer prices for mining and quarrying industry increased 9.1 percent; that of raw materials industry increased 8.1 percent; that of manufacturing and processing industry increased 5.5 percent. Producer prices for consumer goods increased 0.5 percent year-on-year, meaning 0.12 percentage points increase in the overall price level. Of which, producer prices for foodstuff increased 0.2 percent, that of clothing increased 0.6 percent, that of commodities went up by 1.6 percent, and that of durable consumer goods went down by 0.2 percent.

    cn_ppim_20180110

    The year-on-year purchaser price indices for building materials and non-metallic went up by 11.6 percent, ferrous metal materials increased 10.6 percent, non-ferrous metal materials and wires went up by 10.4 percent, fuel and power increased 7.1 percent.

    cn_pupim_20180110

    2. Month-on-Month Changes of Prices of Different Categories

    The producer prices for means of production increased 0.9 percent month-on-month, meaning 0.71 percentage points increase in the overall price level. Of the total, producer prices for mining and quarrying industry increased 1.1 percent, that of raw materials industry increased 1.2 percent, that of manufacturing and processing industry increased 0.8 percent. Producer prices for consumer goods increased 0.2 percent, month-on-month, meaning 0.04 percentage points increase in the overall price level. Of which, producer prices for foodstuff and clothing increased 0.2 percent, that of commodities increased 0.3 percent, and that of durable consumer remained at the same level.

    The month-on-month purchaser price indices for building materials and non-metallic went up by 2.4 percent, ferrous metal materials went up by 1.7 percent, fuel and power increased 1.5 percent, non-ferrous metal materials and wires decreased 0.6 percent.

    National Bureau of Statistics of China, “Monthly Report on Producer Prices for the Industrial Sector. Dec 2017“, 10 Jan 2018 More

    Comment: TradingEconomics

    The producer price index in China increased by 4.9% from a year earlier in Dec 2017, compared to a 5.8% yoy rise in Nov 2018 while markets estimated a 4.8% gain. It was the 16th straight month of rises in producer prices but the least since Nov 2016.

    Cost rose less for means of production (6.4% from 7.5% in Nov 2017, namely extraction: 9.1%, raw materials: 8.1% and processing: 5.5%). Also, prices rose at softer pace for consumer goods (0.5% from 0.6%, namely food production: 0.2%, clothing: 0.6% and daily use goods: 1.6%). At the same time, prices of consumer durable goods declined by 0.2% (after a flat reading in the prior 5 months).

    On a monthly basis, producer prices rose 0.8%, compared to a 0.5% gain in Nov 2017.

    Producer prices change in China averaged 1.21% from 1995 until 2017, reaching an all time high of 13.47% in Jul 1995 and a record low of -8.20% in Jul 2009.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