Fri 12 Jan 2018


watch Nightly Business Report. watch PBS NewsHour. watch Bloomberg Tech..
watch Bloomberg: Steven Ricchiuto of Mizuho Securities: inflation and retail sales in Dec 2017

In Portfolioticker today

read_this Hey Jarvis, how did we go today?

  • 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/bearWall Street continued its rally on Friday with record closing highs as the fourth-quarter earnings season kicked off with solid results from banks and robust retail sales drove investor optimism about economic growth.

    The S&P 500 and Nasdaq both registered their eight record closing highs out of the first nine trading days of 2018, while the Dow boasted its sixth closing high of the year.

    • The S&P 500 index rose 18.68 points, or 0.67%, to 2,786.24
    • The Dow Jones Industrial Average rose 228.46 points, or 0.89%, to 25,803.19
    • The Nasdaq Composite index rose 49.29 points, or 0.68%, to 7,261.06
    • For the week, the S&P rose 1.6%, compared with the Dow’s 2% rise and a 1.8% advance in the Nasdaq
    • Advancing issues outnumbered declining ones on the NYSE by a 1.17-to-1 ratio; on Nasdaq, a 1.54-to-1 ratio favored advancers.
    • The S&P 500 posted 164 new 52-week highs and 12 new lows; the Nasdaq Composite recorded 222 new highs and 14 new lows.
    • Volume so far on U.S. exchanges was 6.88 billion shares, above the 6.39 billion average for the full session over the last 20 trading days.

    Retail

    The S&P consumer discretionary index rose 1.3% after retail sales data showed households bought more goods, suggesting the economy exited 2017 with strong momentum.

    Amazon rose 2.2% to breach $1,300 for the first time. It closed at $1,305.20.

    The sector was also helped by a late-afternoon Bloomberg report that activist D.E. Shaw built a position in Lowe’s Companies, sending its shares up 5.3%.

    Finance sector

    Bank stocks were helped by a rise in Treasury yields after underlying U.S. consumer prices for December posted the biggest gain in 11 months, signaling a pickup in inflation.

    The Treasury move helped push the utilities sector down 0.6%, making it the weakest performer of the S&P 500’s 11 sectors.

    JPMorgan, the biggest U.S. lender by assets, said a U.S. tax overhaul would help future profits by reducing its tax bill and stimulating more business. The bank’s shares rose 1.7%.

    “The fact all the big money center banks beat on the bottom line is a good omen for the rest of the earnings season,” said William Lynch, director of investments at Hinsdale Associates, in Hinsdale, Illinois.

    Investors were also hopeful 2018 financial forecasts from U.S. companies would beat Wall Street estimates as many analysts may not have tax savings fully reflected in their models as the tax bill was signed into law so late in December.

    “I don’t know how much of that is priced in right now,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. “It seems like the economy is going OK, inflation is kind of nonexistent right now, wage growth is not an issue for most income statements, so what’s not to like here.”

    Earnings for S&P 500 companies are expected to increase on an average by 12.1% in the quarter, with profit for financial services companies likely to increase 13.2%, according to Thomson Reuters I/B/E/S.

    BlackRock rose 3.3%. The world’s largest asset manager reported profit that beat estimates as investors flooded into the relatively low-cost funds.

    While Wells Fargo earnings beat expectations, its shares slipped 0.7% after it set aside $3.25 billion in the fourth quarter to cover legal expenses related to probes into its mortgage and sales practices.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) 2,786.24 +0.67% 2,238.83 +4.21%
    DJIA INDU 25,803.19 +0.89% 19,762.60 +4.38%
    NASDAQ IXIC 7,261.06 +0.68% 5,383.12 +5.18%

    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

    :-) Our USD-denominated index closed on a record high of 3.239

    Index Currency Today Change 31 Dec 17 YTD
    USD-denominated Index USD 3.238 +0.86% 2.105 +5.56%
    Valuation Rate USD/AUD 0.79622 +0.28% 0.72663 +1.39%
    AUD-denominated Index AUD 4.070 +0.58% 2.895 +4.13%

    Portfolio stock prices

    :-) Alphabet Class A closed on a record high of $1,130.65, beating its 8 Jan 2018 record of $1,114.21
    :-) Alphabet Class C closed on a record high of $1,122.26, beating its 8 Jan 2018 record of $1,106.94
    :-) Apple closed on a record high of $177.09, beating its 18 Dec 2017 record of $176.42
    :-) Amazon closed on a record high of $80.54, up 2.23% on yesterday’s record of $1,276.68
    :-) PayPal closed on a record high of $1,305.20, up 0.99% on yesterday’s record of $79.75
    :-) Visa closed on a record high of $120.09, up 0.21% on yesterday’s record of $119.84

    Stock Ticker Today Change 31 Dec 17 YTD
    Alphabet A GOOGL $1,130.65 +1.67% $1,053.00 +7.37%
    Alphabet C GOOG $1,122.26 +1.51% $1,045.65 +7.32%
    Apple AAPL $177.09 +1.03% $169.23 +4.64%
    Amazon AMZN $1,305.20 +2.23% $1,169.54 +11.59%
    Ebay EBAY $38.02 +0.55% $37.76 +0.68%
    Facebook FB $179.37 -4.48% $176.46 +1.64%
    PayPal PYPL $80.54 +0.99% $73.61 +9.41%
    Twitter TWTR $25.41 +4.35% $24.01 +5.83%
    Visa V $120.09 +0.20% $114.02 +5.32%
    VMware VMW $132.53 -0.56% $125.32 +5.75%

    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 0.5% to the lowest in more than 16 weeks on the largest fall in more than a week.
    The EUR rose 1.2 %t to USD 1.2181, the strongest in about 3 years on the biggest increase in almost 3 months.
    Britain’s GBP rose 1.4 % to USD 1.373, the strongest since Jun 2016.
    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 15:48 ET

    • NYMEX West Texas Intermediate (WTI): $64.40/barrel +0.94% Chart
    • ICE (London) Brent North Sea Crude: $69.87/barrel +0.88% Chart
    • NYMEX Natural gas futures: $3.20/MMBTU +3.79% Chart

    flag_usa US: Consumer Price Index. Dec 2017

    Press Release Extract [us_cpi]

    The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in December on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.1 percent before seasonal adjustment.

    us_cpiu_20180112

    us_cpiu_20180112_year

    An increase of 0.4 percent in the shelter index accounted for almost 80 percent of the 1-month all items increase. The food index rose in December, with the indexes for food at home and food away from home both increasing. The energy index, which rose sharply in November, declined in December as the gasoline index decreased.

    The index for all items less food and energy increased 0.3 percent in December, its largest increase since January 2017. Along with the shelter index, the indexes for medical care, used cars and trucks, new vehicles, and motor vehicle insurance were among those that increased in December. The indexes for apparel, airline fares, and tobacco all declined over the month.

    The all items index rose 2.1 percent for the 12 months ending December, compared to 2.2 percent for the 12 months ending November. The index for all items less food and energy increased 1.8 percent over the last year; the 12-month change has now been either 1.7 or 1.8 percent for eight consecutive months. The food index rose 1.6 percent over the past year; the index for energy increased 6.9 percent, with all of its major component indexes rising during 2017.

    Food

    The food index increased 0.2 percent in December. The index for food at home rose 0.1 percent, largely due to a 0.9-percent increase in the index for meats, poultry, fish, and eggs, its largest increase since June 2015. The index for cereals and bakery products also rose in December, increasing 0.2 percent after a 0.2-percent decline in November.

    The remaining major grocery store food group indexes declined in December. The index for dairy and related products fell 0.4 percent in December after rising in November. The index for fruits and vegetables declined 0.2 percent, and the indexes for nonalcoholic beverages and other food at home both fell 0.1 percent.

    The index for food away from home rose 0.2 percent in December, the same increase as in November. Over the last 12 months, the food at home index rose 0.9 percent, and the index for food away from home increased 2.5 percent.

    Energy

    The energy index declined 1.2 percent in December following a 3.9-percent increase in November. The gasoline index fell 2.7 percent in December after rising 7.3 percent in November. (Before seasonal adjustment, gasoline prices decreased 3.3 percent in December.) The electricity index increased 0.1 percent in December. The index for natural gas increased 1.2 percent, its largest increase since May 2017.

    All the major energy component indexes increased over the past 12 months. The gasoline index rose 10.7 percent, the electricity index advanced 2.6 percent, and the index for natural gas increased 4.7 percent.

    All items less food and energy

    The index for all items less food and energy increased 0.3 percent in December and rose 1.8 percent over the last 12 months. The shelter index rose 0.4 percent in December following a 0.2-percent increase in November. The rent index increased 0.4 percent over the month, and the index for owners’ equivalent rent advanced 0.3 percent. The index for lodging away from home increased 0.8 percent after falling in November.

    The medical care index increased 0.3 percent in December. The index for prescription drugs rose 1.0 percent in December after increasing 0.6 percent in November. The indexes for hospital services and physicians’ services also increased, both rising 0.3 percent. The index for used cars and trucks also rose in December, increasing 1.4 percent. The new vehicles index rose 0.6 percent in December following a 0.3-percent increase in November; the index for motor vehicle insurance also increased 0.6 percent. The indexes for education, communication, and recreation all increased 0.1 percent in December.

    In contrast, the apparel index fell 0.5 percent in December, its fourth consecutive decline. The tobacco index fell 0.6 percent in December after rising in each of the prior 3 months. The index for airline fares fell 0.5 percent after a 2.4-percent decrease the prior month. The indexes for household furnishings and operations and for personal care were both unchanged in December.

    Not seasonally adjusted CPI measures

    The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.1 percent over the last 12 months to an index level of 246.524 (1982-84=100). For the month, the index declined 0.1 percent prior to seasonal adjustment.

    The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.2 percent over the last 12 months to an index level of 240.526 (1982-84=100). For the month, the index declined 0.1 percent prior to seasonal adjustment.

    The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 2.0 percent over the last 12 months. For the month, the index decreased 0.1 percent on a not seasonally adjusted basis. Please note that the indexes for the past 10 to 12 months are subject to revision.

    Year in Review (December to December)

    The all items CPI rose 2.1 percent in 2017, the same increase as in 2016, but larger than the 2014 and 2015 increases. It was also larger than the 1.6-percent average annual increase over the past 10 years.

    The food index, which declined 0.2 percent in 2016, increased 1.6 percent in 2017. The index for food at home rose 0.9 percent in 2017 after falling in 2015 and 2016.

    The six major grocery store food group indexes were mixed in 2017, with three increases, two declines, and one unchanged. The index for meats, poultry, fish, and eggs increased 2.8 percent after declining in 2015 and 2016. The beef index rose 3.5 percent in 2017, and the index for eggs increased 11.6 percent. The index for fruits and vegetables rose 1.5 percent in 2017 after falling 2.4 percent in 2016. The index for other food at home also increased in 2017, rising 0.5 percent.

    The index for cereals and bakery products fell 0.6 percent in 2017, similar to its 0.7-percent decline the prior year. The index for dairy and related products fell 0.5 percent in 2017, its third consecutive yearly decrease. The index for nonalcoholic beverages was unchanged in 2017 after falling in 2016.

    The index for food away from home rose 2.5 percent in 2017 after a 2.3-percent increase the prior year. Over the last 10 years, the food index rose at an annual rate of 2.0 percent. The food at home index rose at a 1.5-percent rate, and the index for food away from home increased at a 2.6-percent rate since December 2007.

    The energy index rose 6.9 percent in 2017 after a 5.4-percent increase in 2016. The gasoline index increased 10.7 percent in 2017 following a 9.1-percent increase in 2016. The index for natural gas also increased for the second straight year, rising 4.7 percent in 2017 after increasing 7.8 percent in 2016. The electricity index increased 2.6 percent in 2017 after rising 0.7 percent in 2016. Despite the recent increases, the energy index declined at a 0.5-percent annual rate over the past 10 years.

    The index for all items less food and energy rose 1.8 percent in 2017, a smaller increase than its 2.2- percent rise in 2016. The shelter index rose 3.2 percent in 2017 following a 3.6-percent increase in 2016. The rent index rose 3.7 percent in 2017, while the index for owners’ equivalent rent increased 3.2 percent.

    The medical care index increased 1.8 percent in 2017, a substantial deceleration from its 4.1-percent increase in 2016. The index for prescription drugs rose 2.8 percent in 2017. The index for hospital services rose 5.1 percent, while the physicians’ services index declined 1.8 percent.

    The index for motor vehicle insurance rose 7.9 percent in 2017 following a 7.0-percent increase in 2016. The index for new vehicles fell 0.5 percent in 2017 after rising modestly in previous years; the index for used cars and trucks declined 1.0 percent after a 3.5-percent decline the prior year.

    The education index increased 2.0 percent in 2017, the smallest annual increase in the history of the index, which dates to 1993. The index for communication declined 4.9 percent in 2017, its eighth consecutive yearly decline. The recreation index rose 1.5 percent, and the index for personal care increased 0.9 percent. The index for tobacco increased 6.5 percent, and the alcoholic beverages index rose 1.4 percent.

    The index for airline fares decreased 4.0 percent in 2017, its fifth consecutive yearly decline. The apparel index fell 1.6 percent, its fourth straight annual decrease. The index for household furnishings and operations also continued to fall, declining 0.8 percent in 2017 after falling 1.1 percent the prior year.

    Bureau of Labor Statistics, “Consumer Price Index. Dec 2017“, 12 Jan 2018 (08:30) More

    flag_usa US: Real Earnings. Dec 2017

    Press Release Extract [us_realer]

    All employees

    Real average hourly earnings for all employees increased 0.2 percent from November to December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.3-percent increase in average hourly earnings combined with a 0.1-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

    Real average weekly earnings increased 0.2 percent over the month due to the increase in real average hourly earnings combined with no change in the average workweek.

    us_realer1_20180112

    Real average hourly earnings increased 0.4 percent, seasonally adjusted, from December 2016 to December 2017. The increase in real average hourly earnings combined with a 0.3-percent increase in the average workweek resulted in a 0.7-percent increase in real average weekly earnings over this period.

    Production and nonsupervisory employees

    Real average hourly earnings for production and nonsupervisory employees increased 0.2 percent from November to December, seasonally adjusted. This result stems from a 0.3-percent increase in average hourly earnings combined with a 0.1-percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

    Real average weekly earnings increased 0.2 percent over the month due to the increase in real average hourly earnings combined with no change in average weekly hours.

    us_realer2_20180112

    From December 2016 to December 2017, real average hourly earnings increased 0.1 percent, seasonally adjusted. The increase in real average hourly earnings combined with a 0.6-percent increase in the average workweek resulted in a 0.7-percent increase in real average weekly earnings over this period.

    Bureau of Labor Statistics, “Real Earnings. Dec 2017“, 12 Jan 2018 (08:30) More

    flag_usa US: Advance Monthly Sales for Retail and Food Services. Dec 2017

    Press Release Extract [us_retail]

    Advance estimates of U.S. retail and food services sales for December 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $495.4 billion, an increase of 0.4 percent (±0.5 percent) from the previous month, and 5.4 percent (±0.7 percent) above December 2016.

    Total sales for the 12 months of 2017 were up 4.2 percent (±0.4 percent) from 2016. Total sales for the October 2017 through December 2017 period were up 5.5 percent (±0.5 percent) from the same period a year ago. The October 2017 to November 2017 percent change was revised from up 0.8 percent (±0.5 percent) to up 0.9 percent (±0.2 percent).

    Retail trade sales were up 0.3 percent (±0.5 percent) from November 2017, and were up 5.6 percent (±0.7 percent) from last year. Nonstore Retailers were up 12.7 percent (±1.4 percent) from December 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 9.9 percent (±2.1 percent) from last year.”

    US Census Bureau, “Advance Monthly Sales for Retail and Food Services. Dec 2017“, 12 Jan 2018 (08:30) More

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

    Press Release Extract [us_manuf]

    Sales

    The combined value of distributive trade sales and manufacturers’ shipments for November, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,420.1 billion, up 1.2 percent (±0.2 percent) from October 2017 and was up 7.9 percent (±0.3 percent) from November 2016.

    Inventories

    Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,895.4 billion, up 0.4 percent (±0.1 percent) from October 2017 and were up 3.2 percent (±0.3 percent) from November 2016.

    Inventories/Sales Ratio

    us_mtis_20180112

    The total business inventories/sales ratio based on seasonally adjusted data at the end of November was 1.33. The November 2016 ratio was 1.40.

    US Census Bureau, “Manufacturing and Trade: Inventories and Sales. Nov 2017“, 12 Jan 2018 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

    Stockmarket: Nikkei 225

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

    flag_china China update

    International Trade. 2017

    Press Release Extract [cn_trade]

    China’s foreign trade volume rose 14.2 percent year on year to 27.79 trillion yuan (4.28 trillion U.S. dollars), ending the previous continuous drop of the previous two years, official data showed Friday.

    China’s exports increased 10.8 percent to reach 15.33 trillion yuan while imports surged 18.7 percent to 12.46 trillion yuan in 2017, the General Administration of Customs (GAC) said.

    The trade surplus continued to narrow last year, shrinking 14.2 percent to 2.87 trillion yuan, compared with a 9.1-percent reduction registered in 2016 that saw 3.35 trillion yuan in trade surplus.

    GAC spokesperson Huang Songping attributed the double-digit trade volume growth to the global economic recovery, steady domestic economic expansion, rising commodity prices, emerging markets along the route of the Belt and Road Initiative and a low comparison base.

    China’s general trade has increased both in volume and proportion, expanding to 15.66 trillion yuan last year and accounting for 56.4 percent of total foreign trade.

    The European Union, the United States and ASEAN are the top three trading partners of China, with exports to the United States rising 15.2 percent year on year.

    Chinese private enterprises played a bigger role in trade last year, edging up 0.4 percentage points in its share of total trade compared with that in 2016.

    The country’s less developed regions, including central and western China and the rust belt, all outpaced the national average trade growth last year.

    Trade growth faces pressure for the first quarter of this year as surveys showed falling confidence and new orders in December, according to the customs authority.

    It will be difficult to keep double-digit trade growth this year given the many global uncertainties and a high comparison base, Huang said.

    The State Council Information Office (SCIO), “China’s foreign trade up 14.2 percent in 2017“, 12 Jan 2018 More

    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