Wed 7 Mar 2018


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In Portfolioticker today

read_this Hey Jarvis, how did we go today?

Today at the stock market

bull/bearThe S&P 500 ended slightly lower after Wednesday’s volatile session as investors struggled to get a read on U.S. trade policy after President Donald Trump promised hefty import tariffs but then said Mexico and Canada could be exempt.

After falling as much as 0.97%, the S&P regained ground after the White House appeared to add exceptions to its stated plan to slap import tariffs of 25% on steel and 10% on aluminium.

  • The S&P 500 index fell 1.32 points, or 0.05%, to 2,726.8
  • The Dow Jones Industrial Average fell 82.76 points, or 0.33%, to 24,801.36
  • The Nasdaq Composite index rose 24.64 points, or 0.33%, to 7,396.65.
  • Advancing issues outnumbered declining ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.68-to-1 ratio favored advancers.
  • The S&P 500 posted 14 new 52-week highs and three new lows; the Nasdaq Composite recorded 147 new highs and 19 new lows.
  • Volume on U.S. exchanges was roughly 6.74 billion shares, compared to the 7.79 billion average for the last 20 sessions.

Worries about a potential trade war had intensified after free trade supporter Gary Cohn resigned from his position as Trump’s top economic advisor late Tuesday. But late on Wednesday White House spokeswoman Sarah Sanders said Trump is expected to sign something by the end of the week with “potential carve-outs for Mexico and Canada based on national security, and possibly other countries as well”

“It makes investors less worried if the tariff isn’t applied so broadly. But it’s speculation at this point. We have nothing in writing. If there’s one thing we’ve learned from this administration it’s that it could change by the time it’s in writing,” Janna Sampson, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

The Dow was dragged down partly by manufacturer stocks such as Caterpillar, which fell 1.5%, and Boeing, which ended 0.5% lower.

Both those stocks have been under pressure since the tariff plan was first announced on Thursday as they could be hurt by both higher metal prices and any retaliatory trade barriers erected by foreign countries where they sell their products.

The S&P energy sector was one of the weakest of the S&P’s 11 sectors with a 0.8% drop as it was also weighed down by a 2% drop in oil prices from data showing a rise in U.S. inventories and output.

The Russell 2000 index, which tracks U.S. small-cap stocks, outperformed the larger-cap indexes with a 0.8% gain. Its more domestically focused companies are seen as having less exposure if foreign governments retaliate by slapping tariffs on U.S. exports.

The S&P’s technology index was also a bright spot with a 0.6%increase. Its biggest boosts came from a 2.2% increase in Facebook and a 14.9% jump in shares of software supplier Autodesk after its quarterly report.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) 2,726.80 -0.05% 2,673.61 +1.98%
DJIA INDU 24,801.36 -0.34% 24,719.22 +0.33%
NASDAQ IXIC 7,396.65 +0.33% 6,903.39 +7.14%

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 3.289 -0.17% 3.068 +7.23%
Valuation Rate USD/AUD 0.78751 +0.09% 0.78528 +0.28%
AUD-denominated Index AUD 4.179 -0.26% 3.909 +6.93%

Portfolio stock prices

:-) Amazon closed on a record high of $1,544.90, up 0.47% on yesterday’s record $1,537.64.
:-) Amazon founder Jeff Bezos has increased his wealth by $582m today to $129bn, up $29.6bn since the start of 2018.

Stock Ticker Today Change 31 Dec 17 YTD
Alphabet A GOOGL $1,115.07 +1.28% $1,053.00 +5.89%
Alphabet C GOOG $1,110.01 +1.36% $1,045.65 +6.15%
Apple AAPL $175.03 -0.93% $169.23 +3.42%
Amazon AMZN $1,544.90 +0.47% $1,169.54 +32.09%
Ebay EBAY $43.94 +1.85% $37.76 +16.36%
Facebook FB $183.72 +2.19% $176.46 +4.11%
PayPal PYPL $79.52 +0.36% $73.61 +8.02%
Twitter TWTR $35.76 +3.86% $24.01 +48.93%
Visa V $121.85 +0.65% $114.02 +6.86%
VMware VMW $124.25 +3.08% $125.32 -0.86%

FX: USD/AUD

USD

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

Bloomberg Dollar Spot Index (DXY) was steady.
Japan’s JPY was flat at 106.09 per USD.
The EUR was flat at USD 1.2411.
Britain’s GBP was little changed at USD 1.3902.

The yield on 10-year Treasuries was little changed at 2.88%.
Australia’s 10-year yield rose three basis points to 2.83%.
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): $61.34/barrel -2.01% Chart
  • ICE (London) Brent North Sea Crude: $64.52/barrel -1.93% Chart
  • NYMEX Natural gas futures: $2.78/MMBTU +1.24% Chart

flag_australia AU: National Income Expenditure and Product. Dec 2017

Press Release Extract [au_gdp]

GDP Key Points

  • The Australian economy grew by 0.4% in seasonally adjusted chain volume terms in the December quarter.
  • Household final consumption expenditure increased 1.0% for the quarter.
  • Compensation of employees increased 1.1%.
  • Exports of goods and services detracted 0.4 percentage points from GDP growth

December 2017 Quarter Summary Comments

Final Consumption Expenditure

Household final consumption expenditure increased 1.0% in seasonally adjusted terms. This was driven by rises in health (3.4%), hotels, cafes and restaurants (2.9%) and recreation and culture (2.0%). There were falls in electricity, gas and other fuels (–3.1%) and food (–0.7%). Government final consumption expenditure increased 1.7% in seasonally adjusted terms. State and local government consumption grew 0.7%, while national government consumption increased by 3.1%.

Gross Fixed Capital Formation

Gross fixed capital formation decreased 1.2% in seasonally adjusted terms. Public investment increased 2.9% during the quarter driven by state and local general government (1.9%). This increase was due to an asset transfer from the private sector. Private investment decreased 2.2% and was driven by non–dwelling construction (–8.0%) and to a lesser extent dwellings, which fell 1.3%. Partially offsetting the fall was machinery and equipment, which rose 3.3%. Total gross fixed capital formation detracted 0.3 percentage points from GDP growth during the quarter.

Changes in Inventories

Total inventories increased $14m in seasonally adjusted terms following a decrease of $93m last quarter. The increase was driven by a build up in Mining inventories, the second quarterly increase in the last six quarters. Offsetting the increase was a decrease in Farm and Retail Trade inventories.

Exports and Imports of Goods and Services

Exports of goods and services fell 1.8% in seasonally adjusted terms. Seasonally adjusted exports of goods fell 1.7%, with rural exports down 9.7% and non–rural exports down 0.3%. Exports of services fell 1.9%.

Imports of goods and services rose 0.5% in seasonally adjusted terms. Seasonally adjusted imports of goods rose 1.6% driven by a rise in consumption goods (4.7%) and intermediate goods (4.4%). Imports of services fell 2.7%.

Agriculture, Forestry and Fishing

Agriculture, Forestry and Fishing fell 2.7% driven by falls in livestock, grains and other crops outpacing the falls in intermediate inputs. This was the third consecutive quarterly fall for the industry.

Mining

Mining rose 1.3% driven by Iron Ore Mining (5.5%) and Coal Mining (0.7%). Partially offsetting the rise was Oil and Gas Extraction (–1.8%), which experienced its second consecutive fall.

Manufacturing

Manufacturing gross value added fell 1.0% in the December quarter 2017 but grew 2.5% through the year with mixed results across the five sub–categories. Machinery and Equipment Manufacturing (–7.3%) in line with the sharp decline in exports of transport equipment which decreased 22.2%, Food, Beverage and Tobacco Products (–0.9%) and Other Manufacturing (–1.3%) all experienced falls. The negative result was partially offset by a rise in Petroleum, Coal, Chemical and Rubber Products (4.2%). The heavy decline in Machinery and Equipment Manufacturing aligned with the decline in transport equipment exports (–22.2%).

Electricity, Gas, Water and Waste Services

The fall of 0.8% was driven by all three subdivisons, Water Supply and Waste Services (–1.5%), Electricity Supply (–0.2%) and Gas Supply (–1.1%). The negative result aligns with the 3.1% decrease in household final consumption expenditure for electricity, gas and other fuel.

Construction

The Construction industry grew 0.3% driven by rises in Building Construction (0.9%), Heavy and Civil Engineering Construction (0.2%) and Construction Services (0.1%). Through the year Construction rose 4.9%, consistent with the strength in non–residential construction and public investment.

New building investment grew by 3.3% in the current quarter and is up 12.3% through the year. The states which contributed to growth were WA, NSW and ACT. This growth aligns with the strength observed in building approvals over the past year.

Information, Media and Telecommunications

The Information, Media and Telecommunications industry experienced a 2.9% rise this quarter. This result was driven by Telecommunications Services (3.5%) and Other Information and Media Services (2.2%).

Finance and Insurance Services

The Financial and Insurance Services industry experienced its weakest quarter since June quarter 2014, rising 0.1%. The result was driven by a flat result in Finance and a 0.2% increase in Other Financial and Insurance Services. Weak deposit growth and flat margins contributed to the modest result for Finance.

Health Care and Social Assistance

The Health Care and Social Assistance industry rose 1.9% driven by rises in both private and public health. Through the year Health Care and Social Assistance has grown 6.4%.

Compensation of Employees (COE)

Compensation of employees (COE) recorded growth of 1.1% in the December quarter 2017. Consistent with the ongoing strength in employment, COE grew 4.8% through the year, the strongest rate of growth since June quarter 2012.

Growth in average compensation per employee was flat.

The increase in COE was driven by Health Care and Social Assistance, Education and Training, Public Administration and Safety, Construction, and Financial and Insurance Services. Through the year growth in compensation of employees (COE) is now stronger in a majority of industries compared to the same time last year. Through the year Construction COE increased 8.5% in line with the strong Construction employment reported in the Labour Force survey.

Private sector COE increased 0.8%. Public sector COE increased 2.0%.

State Compensation of Employees

All states recorded growth in COE this quarter except South Australia, which decreased 0.3%. ACT and NT recorded the highest rates of growth with 6.2% and 3.4% respectively.

Through the year COE increased for all jurisdictions with ACT and NT recording the strongest growth. NSW and Victoria rose 4.0% and 6.0% respectively.

Gross Operating Surplus

Total GOS increased 0.7% for the December quarter. Private non–financial corporations was the main contributor increasing 1.0%. Offsetting this was public non–financial corporations, decreasing 5.8%.

Household Final Consumption Expenditure

Household final consumption expenditure increased 1.0% in the current quarter compared to the upwardly revised September quarter estimate of 0.5%. All components rose except for food and utilities.

Net Trade

Net trade detracted from GDP growth in the December quarter 2017. Exports detracted 0.4 percentage points and imports detracted 0.1 percentage points. The through the year decline in net trade is the weakest result since March quarter 2012.

Australian Bureau of Statistics, “5206.0 Australian National Accounts: National Income Expenditure and Product“, 7 Mar 2018 More

flag_europe EU: GDP and Main Aggregates. Q4/2017

Press Release Extract [eu_gdp]

Seasonally adjusted GDP rose by 0.6% in both the euro area (EA19) and the EU28 during the fourth quarter of 2017, compared with the previous quarter, according to an estimate published by Eurostat, the statistical office of the European Union. In the third quarter of 2017, GDP grew by 0.7% in both zones.

eu_gdp_20180307

Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 2.7% in the euro area and by 2.6% in the EU28 in the fourth quarter of 2017, after +2.7% in both zones in the previous quarter.

During the fourth quarter of 2017, GDP in the United States increased by 0.6% compared with the previous quarter (after +0.8% in the third quarter of 2017). Compared with the same quarter of the previous year, GDP grew by 2.5% (after +2.3% in the previous quarter).

Over the whole year 2017, GDP rose by 2.3% in the euro area and by 2.4% in the EU28, compared with 1.8% and 2.0% respectively in 2016.

GDP growth by Member State

Among Member States for which data are available for the fourth quarter of 2017, Estonia (+2.2%), Slovenia (+2.0%) and Lithuania (+1.4%) recorded the highest growth compared with the previous quarter, while Greece and Croatia recorded the lowest growth (both +0.1%), followed by Italy and Latvia (both +0.3%).

eu_gdp_states_20180307

GDP components and contributions to growth

During the fourth quarter of 2017, household final consumption expenditure rose by 0.2% in the euro area and by 0.3% in the EU28 (after +0.3% and +0.4% respectively in the previous quarter). Gross fixed capital formation increased by 0.9% in both zones (after -0.2% in the euro area and +0.2% in the EU28). Exports rose by 1.9% in the euro area and by 1.7% in the EU28 (after +1.6% and +1.3%). Imports increased by 1.1% in the euro area and by 1.3% in the EU28 (after +0.6% in both zones).

Household final consumption expenditure had a positive contribution to GDP growth in both the euro area and the EU28 (+0.1 and +0.2 percentage points – pp) and the contribution from gross fixed capital formation was also positive in both zones (+0.2 pp). The contribution of the external balance to GDP growth was positive for both zones, while the contribution of changes in inventories was negative for the euro area and neutral for the EU28.

Eurostat, “GDP and main aggregates estimate for the fourth quarter of 2017: GDP up by 0.6% in both euro area and EU28, +2.7% and 2.6% respectively compared with the fourth quarter of 2016“, 7 Mar 2018 More

flag_usa US: International Trade in Goods and Services. Jan 2018

US Balance of Trade Since 1950 (Source: TradingEconomics)

US Balance of Trade Since 1950 (Source: TradingEconomics)

The US trade deficit widened sharply to USD 56.6 billion in January 2018 from a revised USD 53.9 billion in the previous month and above market expectations of USD 55.1 billion. It was the biggest trade gap since October 2008.

Press Release Extract [us_trade]

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $56.6 billion in January, up $2.7 billion from $53.9 billion in December, revised.

  • January exports were $200.9 billion, $2.7 billion less than December exports.
  • January imports were $257.5 billion, down less than $0.1 billion from December imports.
  • The January increase in the goods and services deficit reflected an increase in the goods deficit of $2.8 billion to $76.5 billion and an increase in the services surplus of $0.1 billion to $19.9 billion.
  • Year-over-year, the goods and services deficit increased $7.9 billion, or 16.2 percent, from January 2017.
    Exports increased $9.7 billion or 5.1 percent.
    Imports increased $17.6 billion or 7.4 percent.

us_trade_20180307

The average goods and services deficit increased $2.5 billion to $53.8 billion for the three months ending in January.

  • Average exports increased $1.7 billion to $201.6 billion in January.
  • Average imports increased $4.2 billion to $255.4 billion in January.

Year-over-year, the average goods and services deficit increased $7.2 billion from the three months ending in January 2017.

  • Average exports increased $13.1 billion from January 2017.
  • Average imports increased $20.3 billion from January 2017.

Exports

Exports of goods decreased $3.0 billion to $134.2 billion in January.

Exports of goods on a Census basis decreased $3.3 billion.

  • Capital goods decreased $2.6 billion.
    o Civilian aircraft decreased $1.8 billion.
  • Industrial supplies and materials decreased $1.3 billion.
    o Fuel oil decreased $0.5 billion.
    o Crude oil decreased $0.2 billion.
    o Other chemicals decreased $0.2 billion.
  • Other goods decreased $1.0 billion.
  • Consumer goods increased $1.2 billion.
    o Artwork, antiques, stamps, and other collectibles increased $0.5 billion.
    o Pharmaceutical preparations increased $0.4 billion.

Net balance of payments adjustments increased $0.3 billion.

Exports of services increased $0.3 billion to $66.7 billion in January.

  • The largest increase was in charges for the use of intellectual property ($0.1 billion).
  • The only decrease was in maintenance and repair services ($0.1 billion).

Imports

Imports of goods decreased $0.2 billion to $210.7 billion in January.

Imports of goods on a Census basis decreased $0.3 billion.

  • Capital goods decreased $1.3 billion.
    o Civilian aircraft decreased $0.9billion.
    o Semiconductors decreased $0.5 billion.
  • Consumer goods decreased $0.9 billion.
    o Cell phones and other household goods decreased $1.2 billion.
  • Industrial supplies and materials increased $2.0 billion.
    o Crude oil increased $2.2 billion.

Net balance of payments adjustments increased $0.2 billion.

Imports of services increased $0.2 billion to $46.8 billion in January.

  • The largest increase was in other business services ($0.2 billion).
  • The largest decrease was in travel (for all purposes including education) ($0.2 billion).

Real Goods in 2009 Dollars – Census Basis

The real goods deficit increased $1.3 billion to $69.7 billion in January.

  • Real exports of goods decreased $4.3 billion to $126.9 billion.
  • Real imports of goods decreased $3.0 billion to $196.6 billion.

Revisions

Exports and imports of goods and services were revised for July through December 2017 to incorporate more comprehensive and updated quarterly and monthly data. In addition to these revisions, seasonally adjusted data for all months in 2017 were revised so that the totals of the seasonally adjusted months equal the annual totals.

Revisions to December exports:

  • Exports of goods were revised down $0.3 billion.
  • Exports of services were revised up $0.5 billion.

Revisions to December imports:

  • Imports of goods were revised up $0.1 billion.
  • Imports of services were revised up $0.9 billion.

Goods by Selected Countries and Areas: Monthly – Census Basis

The January figures show surpluses, in billions of dollars, with Hong Kong ($2.6), South and Central America ($2.4), Singapore ($0.9), Brazil ($0.5), and United Kingdom ($0.3).

Deficits were recorded, in billions of dollars, with China ($35.5), European Union ($15.0), Germany ($6.3), Mexico ($5.6), Japan ($5.6), Italy ($2.8), OPEC ($2.5), India ($1.8), Taiwan ($1.5), Canada ($1.5), South Korea ($1.5), France ($1.4), and Saudi Arabia ($0.6).

  • The deficit with members of OPEC increased $2.0 billion to $2.5 billion in January. Exports decreased $1.2 billion to $4.1 billion and imports increased $0.7 billion to $6.6 billion.
  • The deficit with China increased $1.5 billion to $35.5 billion in January. Exports decreased $1.3 billion to $10.5 billion and imports increased $0.2 billion to $46.0 billion.
  • The deficit with the European Union decreased $2.1 billion to $15.0 billion in January. Exports decreased $0.4 billion to $24.7 billion and imports decreased $2.5 billion to $39.7 billion.

Goods and Services by Selected Countries and Areas: Quarterly – Balance of Payments Basis

The fourth quarter figures show surpluses, in billions of dollars, with South and Central America ($20.7), Hong Kong ($8.3), Brazil ($7.7), Singapore ($5.1), United Kingdom ($3.2), Saudi Arabia ($1.1), OPEC ($0.8), and Canada ($0.6).

Deficits were recorded, in billions of dollars, with China ($89.4), European Union ($29.0), Mexico ($17.4), Germany ($16.7), Japan ($13.9), Italy ($10.0), India ($8.0), France ($4.5), Taiwan ($3.5), and South Korea ($2.6).

  • The deficit with China increased $7.4 billion to $89.4 billion in the fourth quarter. Exports increased $0.4 billion to $48.0 billion and imports increased $7.7 billion to $137.4 billion.
  • The deficit with the European Union increased $4.5 billion to $29.0 billion in the fourth quarter. Exports increased $4.7 billion to $136.0 billion and imports increased $9.2 billion to $165.0 billion.
  • The deficit with Japan decreased $0.9 billion to $13.9 billion in the fourth quarter. Exports increased $1.6 billion to $30.0 billion and imports increased $0.7 billion to $43.8 billion.

Bureau of Economic Analysis, “International Trade in Goods and Services. Jan 2018“, 7 Mar 2018 (08:30) More

flag_usa US: Productivity and Costs. Q4/2017

Press Release Extract [us_prody]

Nonfarm business sector labor productivity growth was revised to 0.0 percent in the fourth quarter of 2017, the U.S. Bureau of Labor Statistics reported today, as output increased 3.2 percent and hours worked increased 3.3 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the fourth quarter of 2016 to the fourth quarter of 2017, productivity increased 1.1 percent, reflecting a 3.2-percent increase in output and a 2.1-percent increase in hours worked. Annual average productivity increased 1.2 percent from 2016 to 2017.

us_prody_20180307

Unit labor costs in the nonfarm business sector increased 2.5 percent in the fourth quarter of 2017, and increased 1.7 percent over the last four quarters.

us_costs_20180307

Manufacturing sector labor productivity increased 6.0 percent in the fourth quarter of 2017, as output increased 6.6 percent and hours worked rose 0.5 percent. These were the largest quarterly increases in manufacturing sector productivity and output since the second quarter of 2010, when output per hour increased 7.0 percent and output jumped 10.7 percent. Productivity increased 8.1 percent in the durable goods manufacturing sector and 3.4 percent in the nondurable goods sector in the fourth quarter of 2017. Over the last four quarters, total manufacturing sector productivity increased 1.1 percent, as output increased 2.5 percent and hours worked increased 1.4 percent. Unit labor costs in manufacturing decreased 3.3 percent in the fourth quarter of 2017 and increased 1.3 percent from the same quarter a year ago.

Revised measures

In the fourth quarter of 2017, nonfarm business productivity was revised up slightly from a decline of 0.1 percent to unchanged (0.0 percent); output and hours worked indexes had small revisions although growth remained at previously reported levels. Unit labor costs were revised up from a rate of 2.0 percent to a rate of 2.5 percent.

Manufacturing productivity increased 6.0 percent rather than 5.7 percent in the fourth quarter of 2017, as a downward revision to output was smaller than a downward revision to hours. Because an upward revision to hourly compensation was larger than an upward revision to productivity, manufacturing unit labor costs were revised up to a decline of 3.3 percent—a smaller decline than the 3.7-percent decrease reported in the preliminary release.

In the third quarter of 2017, nonfarm business productivity growth was revised down slightly to an increase of 2.6 percent. Unit labor costs were revised up from a decline of 0.1 percent to an increase of 1.0 percent, reflecting both a 0.1-percentage point downward revision to productivity and a 0.9 percentage point upward revision to hourly compensation. In the manufacturing sector, productivity declined by 4.7 percent, a slightly smaller decrease than previously reported. Unit labor costs were revised up due to a 0.5-percentage point upward revision to hourly compensation, and increased 5.8 percent rather than 5.4 percent as previously reported. Nonfinancial corporate sector productivity increased 0.2 percent in the third quarter of 2017, rather than declining 0.4 percent as previously reported; an upward revision to output was larger than an upward revision to hours.

Annual averages

Nonfarm business sector productivity grew 1.2 percent in 2017, as output and hours increased 2.9 percent and 1.6 percent, respectively. In 2016, productivity was unchanged (0.0 percent). The average annual rate of nonfarm business sector productivity growth from 2007 to 2017—corresponding to the current business cycle—is 1.2 percent, which is below the long-term rate from 1947 to 2017 of 2.1 percent.

Unit labor costs in the nonfarm business sector increased 0.4 percent in 2017, reflecting increases of 1.6 percent in hourly compensation and 1.2 percent in productivity. Real hourly compensation, which takes into account changes in consumer prices, decreased 0.5 percent in 2017. Labor share, which is the percentage of output that accrues to workers in the form of compensation, was 56.6 percent in 2017, which is the lowest annual average in the series going back to 1947.

In the manufacturing sector, productivity increased 0.6 percent in 2017, as output increased 1.6 percent and hours worked increased 1.0 percent. Manufacturing sector productivity has grown less than 1.0 percent in each of the last 7 years. The average annual rate of manufacturing productivity growth from 2007 to 2017 is 0.8 percent, well below the long-term rate from 1987 to 2017 of 2.7 percent. Unit labor costs increased 1.0 percent in 2017.

Bureau of Labor Statistics, “Productivity and Costs. Fourth Quarter and Annual Averages 2017, Revised“, 7 Mar 2018 (08:30) More

flag_usa US: ADP National Employment Report. Feb 2018

Press Release Extract [us_adp]

Private sector employment increased by 235,000 jobs from January to February according to the February ADP National Employment Report®.

us_adp_20180307

“The labor market continues to experience uninterrupted growth,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “We see persistent gains across most industries with leisure and hospitality and retail leading the way as consumer spending kicked up. At this pace of job growth employers will soon become hard-pressed to find qualified workers.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The job market is red hot and threatens to overheat. With government spending increases and tax cuts, growth is set to accelerate.

ADP Research Institute, “ADP National Employment Report. Feb 2018“, 7 Mar 2018 (08:15) More

flag_usa US: Beige Book Update

Press Release Extracts [us_beige]

Overall Economic Activity

Economic activity expanded at a modest to moderate pace across the 12 Federal Reserve Districts in January and February. Consumer spending was mixed, as non-auto retail sales increased in just over half of the Districts while auto sales declined or were flat in every District. Tourism activity was broadly solid, with Atlanta and Richmond recording robust growth in this sector. On balance, Districts reported modest growth in home sales and construction, with the latter constrained by shortages of labor and materials. Conditions in the nonresidential real estate market improved moderately since the previous report, with robust construction activity noted in three Districts. Commercial rents in and around New York City were up significantly, according to contacts in the area. Increases in production were broad based across manufacturing sectors, with all but one District noting at least modest growth in activity. Loan volumes were generally flat, with a handful of Districts noting a modest decrease in delinquency rates. Among reporting Districts, agricultural sector activity was mixed but flat overall. Contacts in natural resource sectors saw modestly improving industry conditions, except in the Minneapolis District, where energy and mining activity was robust.

Employment and Wages

On balance, employment grew at a moderate pace since the previous report. Across the country, contacts observed persistent labor market tightness and brisk demand for qualified workers, as well as increased activity at staffing placement services. Several Districts reported continued worker shortages across most sectors, with contacts often mentioning shortages in the construction, information technology, and manufacturing sectors. In many Districts, wage growth picked up to a moderate pace. Most Districts saw employers raise wages and expand benefit packages in response to tight labor market conditions. Contacts in a few Districts conveyed reports of modest increases in compensation following passage of the Tax Cuts and Jobs Act.

Prices

Prices increased in all Districts, and most reports noted moderate inflation. Four Districts saw a marked increase in steel prices, due in part to a decline in foreign competition. Price growth for building materials such as lumber picked up, stemming from an uptick in construction activity. Several Districts reported moderate increases in broad transportation costs, caused primarily by higher fuel costs that boosted freight rates. Home and commercial lease prices rose across most of the country.

Highlights by Federal Reserve District

Boston: Business contacts at manufacturing and retail firms reported year-over-year revenue increases in recent weeks. These employers and staffing firms said labor markets were tight, and many cited potential wage increases. Price commentary was mixed, although no contacts planned substantial price increases. The outlook remained positive.

New York: Economic activity grew at a modest pace, while labor markets have remained tight. Input price pressures have intensified, while selling prices generally continued to rise modestly. Housing markets and commercial real estate markets have been mixed.

Philadelphia: Economic activity continued to grow at a modest pace, in particular for nonauto retail sales, manufacturing, nonfinancial services, and tourism. Nonresidential leasing improved to a modest pace, while auto sales continued a modest decline. Construction and existing home sales changed little. On balance, employment, wages, and prices continued to grow modestly.

Cleveland: The District economy expanded at a moderate pace. Labor markets tightened, with wage pressures noted broadly. The Tax Cut and Jobs Act is reportedly enabling firms to invest more and to increase worker pay. Stronger confidence in the economy supported rising demand in manufacturing, retail, and nonfinancial services. Construction activity remained buoyant.

Richmond: The regional economy expanded at moderate pace in recent weeks. Manufacturing activity picked up, but manufacturers faced longer vendor lead times due to trucking delays. Exporting activity rose more quickly and, for some ports, came more in line with imports. Labor demand increased moderately and wage pressures broadened. Prices continued to grow at a modest pace.

Atlanta: Economic conditions continued to improve modestly. The labor market remained tight and wage growth was balanced. Non-labor input costs edged up slightly. Retailers cited flat sales, while auto sales were sluggish. Home prices increased modestly. Demand for commercial real estate continued to improve. Manufacturers noted solid activity and steady production levels.

Chicago: Growth in economic activity remained at a moderate pace. Employment and manufacturing production increased moderately, business spending rose modestly, construction and real estate activity grew slightly, and consumer spending was down slightly. Wages increased modestly, prices rose slightly, and financial conditions deteriorated some. Farmers continued to face challenging conditions.

St. Louis: Economic conditions have continued to improve at a modest pace. District banking contacts reported stronger demand for new loans. Overall price pressures strengthened. The outlook among firms surveyed in mid-February was slightly more optimistic than the outlook in our mid-November survey and generally unchanged from one year ago.

Minneapolis: Ninth District economic activity grew moderately, and labor markets remained tight. Consumer spending was up modestly, while tourism got a boost from the Super Bowl in Minneapolis and good snowfall elsewhere. Energy and mining activity increased briskly. Commercial construction grew strongly, but residential construction was mixed. Home sales were generally lower across the District.

Kansas City: Economic activity continued to expand at a modest pace in late January and February, with broad-based growth across most District sectors. Consumer spending, real estate and energy activity increased modestly, while contacts in the manufacturing, transportation, wholesale trade, and professional and high-tech sectors reported moderate growth. Additional gains were expected in most sectors in the months ahead.

Dallas: Economic activity grew moderately, with sectors like manufacturing and energy continuing their solid expansions while others cooled somewhat. Growth in nonfinancial services activity slowed slightly, as did loan growth, and retail sales fell modestly. Hiring remained solid despite a tight labor market, and wage and price pressures remained elevated and in some cases strengthened.

San Francisco: Economic activity in the Twelfth District continued to expand at a moderate pace. Sales of retail goods picked up slightly, and growth in the consumer and business services sectors remained strong. Conditions in the manufacturing sector continued to pick up. Activity in residential real estate markets remained strong, and conditions in the commercial real estate sector were robust. Lending activity ticked up.

US Federal Reserve, “Beige Book: Summary of Commentary on Current Economic Conditions By Federal Reserve District“, 7 Mar 2018 (14:00) 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

Stockmarket: Nikkei 225

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

flag_china China update

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