In Portfolioticker today
Today at the stock market
“U.S. stocks sold off late to end sharply lower on Wednesday, dragged down by continued worries over rising interest rates, and the Dow and S&P 500 capped their worst months since January 2016. The S&P 500 also snapped a 10-month straight run of gains, which had been its longest monthly winning streak since an 11-month run from March 1958 to January 1959. The month included a confirmation of a 10% correction for the stock market but that was followed by a rebound that made the monthly losses less steep. The S&P 500 is now down about 5.6% from its 26 Jan 2018 record high.
Wednesday’s declines closed a month marked by spikes in volatility and fears that rising inflation could prompt the Federal Reserve to pick up the pace of interest rate hikes.
On Tuesday, new Federal Reserve Chairman Jerome Powell gave an upbeat view on the U.S. economy and said data had strengthened his confidence on inflation. Traders boosted bets the U.S. central bank would squeeze in a fourth rate hike this year following the remarks.
“Investors are still trying to digest where the Fed is going to be between now and year end, and Powell has given it a hawkish tilt,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
The late-day weakness underscored lingering skittishness amongst investors. “We’d rather see strength coming in in the last hour,” Hellwig said.
Energy shares dropped with oil prices and the sector had the biggest daily decline in the S&P 500, but a break below the 50-day moving average on the S&P 500 triggered further selling in afternoon trading. “You get the algorithms responding to the technical break and initiating sell programs,” said Ken Polcari, director of the NYSE floor division at O‘Neil Securities in New York.
Booking Holdings Inc, formerly known as Priceline, rose 6.8% after reporting upbeat quarterly profit, helped by higher hotel bookings, while off-price apparel seller TJX jumped 6.9% after posting upbeat same-store sales.
About 76% of the S&P 500 companies that have reported so far have topped profit estimates, according to Thomson Reuters I/B/E/S. That is above the average 72% recorded in the past 4 quarters.
Celgene Corp’s 9% drop was a drag on the healthcare sector after U.S. health regulators rejected the company’s application seeking approval of a multiple sclerosis drug.” Reuters
^ Market indices today (mouseover for 12 month view) Chart: Google Finance
|Index||Ticker||Today||Change||31 Dec 17||YTD|
|S&P 500||SPX (INX)||2,713.83||-1.11%||2,238.83||+1.50%|
^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting
|Index||Currency||Today||Change||31 Dec 17||YTD|
Portfolio stock prices
|Stock||Ticker||Today||Change||31 Dec 17||YTD|
^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg
“The Bloomberg Dollar Spot Index rose 0.2%.
Japan’s JPY was flat at 106.67 per USD.
The EUR was little changed at USD 1.2196.
The yield on US 10-year Treasuries fell 3 basis points to 2.86%.
Australia’s 10-year yield fell 3 basis points to 2.78%.” Bloomberg
^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com
Oil and Gas Futures
Prices are as at 15:49 ET
- NYMEX West Texas Intermediate (WTI): $61.49/barrel -2.41% Chart
- ICE (London) Brent North Sea Crude: $65.78/barrel -1.28% Chart
- NYMEX Natural gas futures: $2.67/MMBTU -0.41% Chart
AU: Venture Capital and Private Equity. 2016-17
Press Release Extract [au_vcpe]
The value of capital committed to Venture Capital and Later Stage Private Equity (VC&LSPE) increased in 2016-17. As at 30 June 2017, investors had $22,564m committed, an increase of 15% on the $19,550m committed as at 30 June 2016. Non-Residents: Other (including foundations, endowments, trading enterprises, individuals, etc.) contributed $8,193m to total committed capital (36% of total funds committed), an increase of $2,296m compared with 2015-16. Resident Pension Funds contributed $7,564m to total committed capital (34% of total funds committed).
SOURCE OF CAPITAL OF VC&LSPE VEHICLES, 2011-12 TO 2016-17
The value of Commitments is the capital pledged by investors, representing the maximum amount that the fund (vehicle) may draw down from investors. A quantity of this commitment will have been paid-in by investors (Drawdowns) with the remaining quantity yet to be paid-in (Unused commitment).
VC LSPE Total 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 New investments
Deals no. 118 164 27 47 145 211 Value $m 124 277 1 083 1 603 1 207 1 881 Follow-on investments Deals no. 108 124 42 37 150 161 Value $m 99 186 239 180 338 366 New and Follow-on investments Deals no. 226 288 69 84 295 372 Value $m 223 463 1 322 1784 1 544 2 247
Drawdowns from investors totalled $17,370m as at 30 June 2017, an increase of 11% on the $15,708m committed funds drawn down as at 30 June 2016.
Unused commitments of $5,193m were yet to be called as at 30 June 2017. These Unused commitments can be classified by preferred entry stage of investment, with $3,607m unused by funds (vehicles) that prefer to invest in companies in the LSPE stages and $1,586m unused by funds (vehicles) that prefer to invest in companies in the VC stages.
Total Value of investments by VC&LSPE funds (vehicles) as at 30 June 2017 ($10,575m) rose 15% on the $9,213m reported as at 30 June 2016.
The Value of investments as at the end of the financial year as a proportion of Australia’s Gross Domestic Product (GDP) was 0.60%, an increase from 0.56% from 30 June 2016.
VC&LSPE funds (vehicles) made 211 New investments totalling $1,881m in value during the 2016-17 financial year. In addition to this, 161 Follow-on investments were made to existing investment deals to a total value of $366m. ”
Australian Bureau of Statistics, “5678.0 Venture Capital and Later Stage Private Equity: 2016-17“, 28 Feb 2018 More
EU: Flash Estimate Euro Area Inflation. Feb 2018
Press Release Extract [eu_cpi]
Euro area annual inflation is expected to be 1.2% in February 2018, down from 1.3% in January 2018, according to a flash estimate from Eurostat, the statistical office of the European Union.
Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in February (2.1%, compared with 2.2% in January), followed by services (1.3%, compared with 1.2% in January), food, alcohol & tobacco (1.1%, compared with 1.9% in January) and non-energy industrial goods (0.7%, compared with 0.6% in January).”
Eurostat, “Flash Estimate Euro Area Inflation. Feb 2018“, 28 Feb 2018 More
US: Gross Domestic Product 4th Quarter and Annual. 2017
Press Release Extract [us_gdp]
Real gross domestic product (GDP) increased at an annual rate of 2.5 percent in the fourth quarter of 2017, according to the “second” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.2 percent.
The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 2.6 percent. With this second estimate for the fourth quarter, the general picture of economic growth remains the same.
The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, residential fixed investment, state and local government spending, and federal government spending that were partly offset by a negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP growth in the fourth quarter reflected a downturn in private inventory investment that was partly offset by accelerations in PCE, exports, state and local government spending, nonresidential fixed investment, and federal government spending, and an upturn in residential fixed investment. Imports, which are a subtraction in the calculation of GDP, turned up.
Current-dollar GDP increased 4.9 percent, or $235.9 billion, in the fourth quarter to a level of $19,736.5 billion. In the third quarter, current-dollar GDP increased 5.3 percent, or $250.6 billion.
The price index for gross domestic purchases increased 2.5 percent in the fourth quarter, compared with an increase of 1.7 percent in the third quarter. The PCE price index increased 2.7 percent, compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index increased 1.9 percent, compared with an increase of 1.3 percent.
Updates to GDP
The percent change in real GDP was revised down 0.1 percentage point from the advance estimate, primarily reflecting a slight downward revision to private inventory investment.
Real GDP increased 2.3 percent in 2017 (that is, from the 2016 annual level to the 2017 annual level), compared with an increase of 1.5 percent in 2016.
The increase in real GDP in 2017 primarily reflected positive contributions from PCE, nonresidential fixed investment, and exports. These contributions were partly offset by a decline in private inventory investment. Imports, which are a subtraction in the calculation of GDP.
The acceleration in real GDP from 2016 to 2017 reflected upturns in nonresidential fixed investment and in exports and a smaller decrease in private inventory investment. These movements were partly offset by decelerations in residential fixed investment and in state and local government spending. Imports, which are a subtraction in the calculation of GDP, accelerated.
Current-dollar GDP increased 4.1 percent, or $761.7 billion, in 2017 to a level of $19,386.2 billion, compared with an increase of 2.8 percent, or $503.8 billion, in 2016.
The price index for gross domestic purchases increased 1.8 percent in 2017, compared with an increase of 1.0 percent in 2016. The PCE price index increased 1.7 percent, compared with an increase of 1.2 percent. Excluding food and energy prices, the PCE price index increased 1.5 percent, compared with an increase of 1.8 percent.
During 2017 (measured from the fourth quarter of 2016 to the fourth quarter of 2017), real GDP increased 2.5 percent, compared with an increase of 1.8 percent during 2016. The price index for gross domestic purchases increased 1.9 percent during 2017, compared with an increase of 1.4 percent during 2016.”
Bureau of Economic Analysis, “National Income and Product Accounts – Gross Domestic Product: Fourth Quarter and Annual 2017 (Second Estimate)“, 28 Feb 2018 (08:30) More
US: Pending Home Sales Index. Jan 2018
Press Release Extract [us_phs]
After seeing a modest three-month rise in activity, pending home sales cooled considerably in January to their lowest level in over three years, according to the National Association of Realtors®. All major regions experienced monthly and annual declines in contract signings last month.
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, fell 4.7 percent to 104.6 in January from a downwardly revised 109.8 in December 2017. After last month’s retreat, the index is now 3.8 percent below a year ago and at its lowest level since October 2014 (104.1).
Lawrence Yun, NAR chief economist, says pending sales took a noticeable step back to start 2018. “The economy is in great shape, most local job markets are very strong and incomes are slowly rising, but there’s little doubt last month’s retreat in contract signings occurred because of woefully low supply levels and the sudden increase in mortgage rates,” said Yun. “The lower end of the market continues to feel the brunt of these supply and affordability impediments. With the cost of buying a home getting more expensive and not enough inventory, some prospective buyers are either waiting until listings increase come spring or now having to delay their search entirely to save up for a larger down payment.”
Added Yun, “Even though contract signings were down, Realtors® indicated that buyer traffic in most areas was up January compared to a year ago. The exception was likely in the Northeast, where the frigid cold snap the first two weeks of the month may have contributed some to the region’s large decline.”
The number of available listings at the end of January was at an all-time low for the month and a startling 9.5 percent below a year ago. In addition to new home construction making progress closer to its historical annual average of 1.5 million starts, Yun believes that two other factors must start occurring to alleviate the excruciatingly low supply levels that are slowing sales: institutional investors beginning to unload their portfolio of single-family properties back onto the market, and more hesitant homeowners deciding to sell.
“As new multi-family supply catches up with demand and slows rents, some large investors may begin putting their holdings of affordable single-family homes up for sale, which would be great news, particularly for first-time buyers,” said Yun. “Furthermore, sellers last year typically stayed in their home for 10 years before selling (an all-time high); although higher mortgage rates will likely discourage some homeowners from wanting a new home with a higher rate, there are possibly many pent-up sellers who may look to finally trade-up or move down this year.”
In 2018, Yun forecasts for existing-home sales to be around 5.50 million – roughly unchanged from 2017 (5.51 million). The national median existing-home price this year is expected to increase around 2.7 percent. In 2017, existing sales increased 1.1 percent and prices rose 5.8 percent.
The PHSI in the Northeast dropped 9.0 percent to 87.0 in January, and is now 12.1 percent below a year ago. In the Midwest the index fell 6.6 percent to 98.2 in January, and is now 4.1 percent lower than January 2017.
Pending home sales in the South declined 3.9 percent to an index of 121.9 in January, and are now 1.1 percent lower than last January. The index in the West decreased 1.2 percent in January to 97.9, and is 2.5 percent below a year ago.”
National Association of Realtors, “Pending Home Sales Index. Jan 2018“, 28 Feb 2018 (10:00) More
^ JPY movements against the USD over the past month (mouseover for inverse) Chart: xe.com
Stockmarket: Nikkei 225
^ Nikkei 225 movements over the past week Chart: Google Finance
Manufacturing PMI. Feb 2018
“Manufacturing purchasing managers index
In February 2018, China’s manufacturing purchasing managers index (PMI) was 50.3 percent, a decrease of 1.0 percentage point from last month. The manufacturing industry generally continued its steady expansion, and the growth rate has slowed down.
In view of the sizes of enterprises, the PMI of large-sized enterprises was 52.2 percent, decreased 0.4 percentage points from last month, and continue stay in the expansion range; that of medium-sized and small-sized enterprises were 49.0 and 44.8 percent, decreased 1.1 and 3.7 percentage points from last month respectively.
Among the five sub-indices composing PMI, the production index and new orders index were higher than the threshold. The main raw materials inventory index, employed person index and supplier delivery time index were lower than the threshold.
Production index was 50.7 percent, a decrease of 2.8 percentage points month-on-month, but still in the expansion range, indicating that the growth rate of manufacturing production has slowed down, affected by the Spring Festival holiday.
New orders index was 51.0 percent, a decrease of 1.6 percentage points month-on-month, higher than the threshold, showing that the the expansion of manufacturing market demand has slowed down.
Main raw materials inventory index was 49.3 percent, increased 0.5 percentage points from last month, lower than the threshold, indicating that pace of declined of the main raw material inventory of manufacturing industry continued to be narrowed.
Employed person index was 48.1 percent, decreased 0.2 percentage points from last month, lower than the threshold, indicating that the labor employment of manufacturing enterprises declined.
Supplier delivery time index was 48.4 percent, decreased 0.8 percentage points from last month, and was below the threshold, indicating that the delivery time of manufacturing raw material suppliers slowed down.“
National Bureau of Statistics, “Manufacturing PMI. Feb 2018“, 28 Feb 2018 (released 2 Mar 2018) More
Non-Manufacturing and Composite PMI. Feb 2018
“Non-manufacturing purchasing managers index
In February 2018, China’s non-manufacturing purchasing managers index was 54.4 percent, a decrease of 0.9 percentage points from the previous month, and 0.2 percentage points higher than the same period of last year. The non-manufacturing industry still maintained a high level of prosperity as a whole.
In view of different industries, non-manufacturing purchasing managers index of service industry was 53.8 percent, a decrease of 0.6 percentage points from the previous month, but higher than that of the same period of last year, and the service industry maintained its rapid growth. Of which, the indices of industries related to Spring Festival holiday consumption such as retail trade, restaurants, transport via railway, air transport, telecommunications, broadcasting, television and satellite transmission services, Internet, software and information technology services, ecological protection and environmental control, were positioned in the high level of the range which above 56.0 percent, and the total business grew significantly. The indices of capital market services, insurance, real estate, resident services and repair, were lower than the threshold, and the total business decreased. Non-manufacturing purchasing manager index of construction industry achieved 57.5 percent, a decrease of 3.0 percentage points from the previous month. The growth of construction industry has slowed down.
New orders index was 50.5 percent, down by 1.4 percentage point from the previous month, and continued to stay above the threshold, indicating that the market demand of non-manufacturing industry still kept increasing, while the amount of increase has narrowed. In view of different industries, the new orders index of service industry was 50.7 percent, decreased 1.1 percentage points from the previous month, still higher than the threshold. The new orders index of construction industry was 49.5 percent, decreased 3.3 percentage points from the previous month, and dropped below the threshold.
Input price index was 53.2 percent, down by 0.7 percentage points from the previous month, and continued to stay above the threshold, indicating that the amount of increase of the input price during the process of non-manufacturing enterprises’ operating activities continued to decline. In view of different industries, the intermediate input price indices of service industry was 52.4 percent, decreased 1.1 percentage points from the previous month. The input price index of construction industry was 57.9 percent, an increase of 1.7 percentage points from the previous month.
The sales price index was 49.9 percent, down by 2.7 percentage points from the previous month, lower than the threshold, indicating that the overall level of non-manufacturing sales prices decreased slightly. In view of different industries, the sales price index of service industry was 49.6 percent, a decrease of 2.9 percentage points from the previous month, and lower than the threshold.The sales price index of construction industry was 51.7 percent, a decrease of 1.6 percentage points from the previous month.
Employment index was 49.6 percent, an increase of 0.2 percentage points from the previous month, and continued to be lower than the threshold, indicating that the pace of decline of non-manufacturing labor employment has narrowed slightly. In view of different industries, the employment index of service industry was 48.9 percent, an increase of 0.5 percentage points from the previous month. The employment index of construction industry was 53.5 percent, a decrease of 1.9 percentage points from the previous month.
Business activities expectation index was 61.2 percent, a decrease of 0.5 percentage points from last month, and kept staying in the high level of the range which above 60.0 percent for ten consecutive months. In view of different industries, the business activities expectation index of service industry was 60.4 percent, a decrease of 0.8 percentage points from the previous month. That of construction industry was 65.7 percent, an increase of 1.0 percentage point from the previous month.
Composite PMI Output Index
In February 2018, China’s Composite PMI Output Index was 52.9 percent, a decrease of 1.7 percentage points from last month, but still higher than the threshold, indicating that the overall production and operation activities of Chinese enterprises continued to maintain their expansion.“
National Bureau of Statistics, “Non-Manufacturing PMI. Feb 2018“, 28 Feb 2018 (released 2 Mar 2018) More
^ 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