Tue 13 Mar 2018


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In Portfolioticker today

read_this Hey Jarvis, how did we go today?

Today at the stock market

bull/bearWall Street’s major indexes fell on Tuesday as the dismissal of U.S. Secretary of State Rex Tillerson and the possibility of additional U.S. import tariffs against China dragged down stocks across sectors.

  • The S&P 500 index fell 17.71 points, or 0.64%, to 2,765.31
  • The Dow Jones Industrial Average fell 171.58 points, or 0.68%, to 25,007.03
  • The Nasdaq Composite index fell 77.31 points, or 1.02%, to 7,511.01
  • Declining issues outnumbered advancing ones on the NYSE by a 1.27-to-1 ratio; on Nasdaq, a 1.55-to-1 ratio favored decliners.
  • The S&P 500 posted 43 new 52-week highs and no new lows; the Nasdaq Composite recorded 180 new highs and 24 new lows.
  • Volume on U.S. exchanges was 6.89 billion shares, compared to the 7.13 billion average for the full session over the last 20 trading days.

The markets had opened higher after data showed U.S. consumer price growth slowed in Feb 2018, an indication that an anticipated pickup in inflation probably will be only gradual.

Tillerson sacking

President Donald Trump fired Tillerson after a series of public rifts over issues including North Korea and Russia. Trump has appointed CIA Director Mike Pompeo, seen as loyal to the president, to replace Tillerson. To lead the CIA, the president has tapped Gina Haspel, the agency’s deputy director.

“Any time there’s change, investors get nervous,” said John Carey, portfolio manager at Amundi Pioneer Asset Management in Boston.“They have to go back to the drawing board to figure out what the implications might be.” Still, Carey said, at least the nominees to lead the State Department and the CIA are familiar names. “I don’t think either change will be troubling to the market as people reflect on the qualifications of the people stepping into the roles,” he said.

Tariffs on Chinese Goods

U.S. stocks added to losses after Politico reported that a package of tariffs targeting $30 billion a year in Chinese imports could be rolled out as soon as next week.

“This may be upsetting the apple cart,” said Bryan Novak, senior managing director at Astor Investment Management in Chicago.“When you look at tariffs, you don’t just look in a vacuum. You look at what follows on top of (them). It’s worth watching a bit more, to see the follow-through on our side and their side, but there could be some anxiety around it.”

Tech and Financial Stocks

Tech and financial stocks were the biggest laggards among the S&P 500’s 11 major sectors.

Shares of Microsoft Corp, Facebook Inc and Alphabet Inc fell between 1.5% and 2.4%.

“Technology rallied hard yesterday and last week, and there is profit-taking, but it’s just a short-term pressure,” said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.

Financial stocks were weighed as U.S. Treasury yields fell in response to the CPI data and Tillerson’s exit.

Among individual stocks, General Electric Co fell 4.4% after J.P. Morgan cut its price target on the stock to $11 from $14, saying the industrial conglomerate was not a “safety stock” in a volatile market.Reuters

…and the Broadcom Bid for Qualcomm

The tech sector was also impacted by Trump’s executive order yesterday blocking Broadcom Ltd’s $117bn hostile acquisition of Qualcomm Inc following last month’s report that a U.S. government national security panel said it identified potential risks that warrant a full investigation of the Broadcom bid.

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) 2,765.31 -0.64% 2,673.61 +3.42%
DJIA INDU 25,007.03 -0.69% 24,719.22 +1.16%
NASDAQ IXIC 7,511.01 -1.02% 6,903.39 +8.80%

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 3.367 -1.12% 3.068 +9.76%
Valuation Rate USD/AUD 0.79025 -0.33% 0.78528 +0.63%
AUD-denominated Index AUD 4.263 -0.80% 3.909 +9.07%

Portfolio stock prices

Stock Ticker Today Change 31 Dec 17 YTD
Alphabet A GOOGL $1,139.91 -2.24% $1,053.00 +8.25%
Alphabet C GOOG $1,138.17 -2.27% $1,045.65 +8.84%
Apple AAPL $179.97 -0.97% $169.23 +6.34%
Amazon AMZN $1,588.18 -0.64% $1,169.54 +35.79%
Ebay EBAY $42.82 -2.47% $37.76 +13.40%
Facebook FB $181.88 -1.56% $176.46 +3.07%
PayPal PYPL $80.20 -0.50% $73.61 +8.95%
Twitter TWTR $34.11 -3.92% $24.01 +42.06%
Visa V $123.2 -0.84% $114.02 +8.05%
VMware VMW $124.03 -2.47% $125.32 -1.03%

FX: USD/AUD

USD

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

  • NYMEX West Texas Intermediate (WTI): $60.59/barrel -1.25% Chart
  • ICE (London) Brent North Sea Crude: $64.48/barrel -0.72% Chart
  • NYMEX Natural gas futures: $2.79/MMBTU +0.36% Chart

Selected Tech News

flag_australia AU: Housing Finance. Jan 2018

Press Release Extract [au_housing]

DWELLINGS FINANCED

Value of Dwellings Financed

The total value of dwelling commitments excluding alterations and additions (trend) was unchanged in January 2018 compared with December 2017, while the seasonally adjusted series rose 0.7% in January 2018.

The total value of owner occupied housing commitments (trend) rose (up $29m, 0.1%) in January 2018. Rises were recorded in commitments for the construction of dwellings (up $6m, 0.3%) and commitments for the purchase of established dwellings (up $35m, 0.2%) while a fall was recorded in commitments for the purchase of new dwellings (down $12m, 1.0%). The seasonally adjusted series for the total value of owner occupied housing commitments rose 0.5% in January 2018.

The total value of investment housing commitments (trend) fell (down $30m, 0.3%) in January 2018 compared with December 2017. A fall was recorded in commitments for the purchase of dwellings by individuals for rent or resale (down $128m, 1.3%), while rises were recorded in commitments for the construction of dwellings for rent or resale (up $10m, 0.9%) and commitments for the purchase of dwellings by others for rent or resale (up $87m, 7.7%). The seasonally adjusted series for the total value of investment housing commitments rose 1.1% in January 2018.

Number of Owner Occupied Dwellings Financed

The number of owner occupied housing commitments (trend) fell 0.7% in January 2018, following a fall of 0.6% in December 2017. Falls were recorded in commitments for the purchase of new dwellings (down 44, 1.4%) and commitments for the purchase of established dwellings excluding refinancing (down 407, 1.4%), while commitments for the construction of dwellings was flat. The seasonally adjusted series for the total number of owner occupied housing commitments fell 1.1% in January 2018.

Number of Owner Occupied Dwellings Financed – State

Between December 2017 and January 2018, the number of owner occupied housing commitments (trend) fell in New South Wales (down 183, 1.1%), Western Australia (down 85, 1.6%), Victoria (down 71, 0.4%), South Australia (down 22, 0.6%), Tasmania (down 3, 0.3%) and the Northern Territory (down 2, 0.7%), while a rise was recorded in Queensland (up 15, 0.1%) and the Australian Capital Territory was flat.

The seasonally adjusted estimates fell in New South Wales (down 175, 1.0%), Western Australia (down 149, 2.8%), South Australia (down 92, 2.5%), Queensland (down 67, 0.6%), the Australian Capital Territory (down 16, 1.4%) and Tasmania (down 6, 0.6%), while rises were recorded in Victoria (up 111, 0.7%) and the Northern Territory (up 15, 5.3%).

First Home Buyer Commitments

In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments rose to 18.0% in January 2018 from 17.9% in December 2017. Between December 2017 and January 2018, the average loan size for first home buyers fell $7,300 to $327,400. The average loan size for all owner occupied housing commitments fell $4,300 to $389,000 for the same period.

Number of Owner Occupied Dwellings Financed Excluding Refinancing

The number of owner occupied housing commitments excluding refinancing (trend) fell 1.2% in January 2018, following a fall of 1.1% in December 2017. The seasonally adjusted series fell 1.8% in January 2018, following a fall of 3.7% in December 2017.

PURPOSE OF FINANCE (OWNER OCCUPATION)

Construction of dwellings

The number of finance commitments for the construction of dwellings for owner occupation (trend) was unchanged in January 2018, after a fall of 0.1% in December 2017. The seasonally adjusted series rose 3.1% in January 2018, after a fall of 0.9% in December 2017.

Purchase of new dwellings

The number of finance commitments for the purchase of new dwellings for owner occupation (trend) fell 1.4% in January 2018, following a fall of 1.3% in December 2017. The seasonally adjusted series fell 4.7% in January 2018, following a fall of 5.4% in December 2017.

Purchase of established dwellings (including refinancing across lending institutions)

The number of finance commitments for the purchase of established dwellings for owner occupation (trend) fell 0.7% in January 2018, following a fall of 0.6% in December 2017. The seasonally adjusted series fell 1.5% in January 2018, following a fall of 2.3% in December 2017.

Refinancing

The number of refinancing commitments for owner occupied housing (trend) rose 0.5% in January 2018, following a rise of 0.6% in December 2017. The seasonally adjusted series rose 0.3% in January 2018, following a rise of 0.7% in December 2017.

TYPE OF LENDER (OWNER OCCUPATION)

Banks

The number of commitments for owner occupied dwellings financed by banks (trend) fell 0.7% in January 2018, following a fall of 0.6% in December 2017. The seasonally adjusted series fell 1.5% in January 2018, following a fall of 2.0% in December 2017.

Non-banks

The number of commitments for owner occupied dwellings financed by non-banks (trend) fell 0.2% in January 2018, following a fall of 0.1% in December 2017. The seasonally adjusted series rose 2.5% in January 2018, after a fall of 6.4% in December 2017. The number of commitments for owner occupied dwellings financed by permanent building societies (trend) fell 9.0% in January 2018, following a fall of 8.8% in December 2017.

HOUSING LOAN OUTSTANDINGS

At the end of January 2018, the value of outstanding housing loans financed by Authorised Deposit-taking Institutions (ADIs) was $1,642b, up $5b (0.3%) from the December 2017 closing balance. Owner occupied housing loan outstandings financed by ADIs rose $5b (0.5%) to $1,081b and investment housing loan outstandings financed by ADIs was unchanged at $561b.

Bank housing loan outstandings rose $6b (0.4%) during January 2018 to reach a closing balance of $1,606b. Owner occupied housing loan outstandings of banks rose $6b (0.6%) to $1,053b and investment housing loan outstandings of banks rose $0.4b (0.1%) to $553b.

Australian Bureau of Statistics, “5609.0 Housing Finance. Jan 2018“, 13 Mar 2018 More

flag_usa US: Trump Fires Tillerson

trump_tweet_20180313 President Donald Trump fired Secretary of State Rex Tillerson on Tuesday after a series of public rifts over policy on North Korea, Russia and Iran, replacing his chief diplomat with loyalist CIA Director Mike Pompeo More. The biggest shakeup of Trump’s Cabinet since he took office in Jan 2017 was announced by the President on Twitter as his administration works toward a meeting with the leader of North Korea.

Rex Tillerson’s dismissal capped months of friction between the Republican president and the 65-year-old former Exxon Mobil chief executive. The tensions peaked last fall amid reports Tillerson had called Trump a “moron” and considered resigning. Tillerson never denied using the word.

Some foreign policy experts expressed dismay at the decision to swap out top diplomats so soon before the unprecedented meeting and worried that Pompeo would encourage Trump to scrap the Iran nuclear deal and be hawkish on North Korea.

Critics said the move would sow more instability in the volatile Trump administration and marks the departure of another moderate who sought to emphasize the United States’ strong ties to its allies amid Trump’s criticism. Last week, top economic adviser Gary Cohn quit after Trump announced trade tariffs that would affect U.S. allies. More

Trump chose the CIA’s deputy director, Gina Haspel, to replace Pompeo at the intelligence agency. A veteran CIA clandestine officer, Haspel is backed by many in the U.S. intelligence community but regarded warily by some in Congress for her involvement in the agency’s “black site” detention facilities. More

Trump announced the changes in a morning Twitter post and later told reporters more about why he removed Tillerson. “We got along actually quite well but we disagreed on things,” Trump said. “When you look at the Iran deal: I think it’s terrible, I guess he thinks it was OK. I wanted to break it or do something and he felt a little bit differently.”

Trump said he and Pompeo have “a similar thought process.” Pompeo, a former Army officer who represented a Kansas district in Congress before taking the CIA job, is seen as a Trump loyalist who has enjoyed a less hostile relationship with career spies than Tillerson had with career diplomats.

Senior White House officials said Trump wanted his new team in place before any summit with Kim Jong un, who invited the U.S. president to meet by May after months of escalating tensions over North Korea’s nuclear and missile programs.

Tillerson’s imminent departure had been rumoured for several months and Trump said he and Tillerson had discussed the move for a long time. But Steve Goldstein, a State Department undersecretary of state for public affairs, said Tillerson did not know why he was being pushed out and had intended to stay. Goldstein was fired later on Tuesday, two U.S. officials told Reuters.

Foreign policy experts from Republican and Democratic administrations also questioned Trump’s timing and choice, noting that Pompeo was known as a political partisan who strongly opposed the 2015 Iran nuclear deal.

Evans Revere, a former senior U.S. diplomat who dealt with North Korea under President George W. Bush, said Trump’s move sends “a bad signal about the role of diplomacy. Tillerson’s replacement by … Pompeo, who is known as a political partisan and an opponent of the Iran agreement, raises the prospect of the collapse of that deal, and increases the possibility that the administration might soon face not one, but two nuclear crises.”

Senior White House officials said White House chief of staff John Kelly had asked Tillerson to step down on Friday but did not want to make it public while he was on a trip to Africa. Trump’s Twitter announcement came only a few hours after Tillerson landed in Washington.

On Monday, Tillerson blamed Russia for the poisonings in England of a former Russian double agent and his daughter. Earlier at the White House, press secretary Sarah Sanders had refrained from saying Moscow was responsible. Tillerson appeared to be caught by surprise last week when Trump announced he had accepted Kim’s invitation to meet.

Tillerson joined a long list of senior officials who have either resigned or been fired since Trump took office in Jan 2017. Others include strategist Steve Bannon, national security adviser Michael Flynn, FBI Director James Comey, White House chief of staff Reince Priebus, health secretary Tom Price, communications directors Hope Hicks and Anthony Scaramucci, economic adviser Gary Cohn and press secretary Sean Spicer.

Trump publicly undercut Tillerson’s diplomatic initiatives numerous times. In Dec 2017, Tillerson had offered to begin direct talks with North Korea without pre-conditions, backing away from a U.S. demand that Pyongyang must accept that any negotiations would be about giving up its nuclear arsenal. The White House distanced itself from those remarks, and a few days later, Tillerson himself backed off. Several months earlier in Beijing, Tillerson said the United States was directly communicating with North Korea but that Pyongyang had shown no interest in dialogue. Trump contradicted Tillerson’s efforts a day later. “I told Rex Tillerson, our wonderful Secretary of State, that he is wasting his time trying to negotiate with Little Rocket Man,” Trump wrote on Twitter, using a pejorative nickname for Kim.

Tillerson had joined Defense Secretary Jim Mattis in pressing a skeptical Trump to stick with the agreement with Iran and other world powers over Tehran’s nuclear ambitions and he has taken a more hawkish view than Trump on Russia.

If confirmed by the U.S. Senate after an Apr 2018 committee hearing, Pompeo will be taking over a State Department shaken by the departures of many senior diplomats and embittered by proposed budget cuts. Lawmakers from both major parties have criticized those cuts and the administration’s failure to fill dozens of open jobs there.

Tillerson faced a tougher confirmation than most nominees to be secretary of state last year as Democrats grilled him about his oil business ties to Russia. But over time, many lawmakers grew to appreciate Tillerson as a relatively steady hand in the chaotic Trump administration. “He represented a stable view with regard to the implementation of diplomacy in North Korea, Iran and other places in the world,” said Senator Ben Cardin, the top Democrat on the Senate Foreign Relations Committee during most of Tillerson’s tenure.Reuters Bloomberg

flag_usa US: CPI. Feb 2018

Press Release Extract [us_cpi]

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in February on a seasonally adjusted basis after rising 0.5 percent in January, the U.S. Bureau of Labor Statistics reported today.

us_cpi_month_20180313

Over the last 12 months, the all items index rose 2.2 percent before seasonal adjustment.

us_cpi_year_20180313

The indexes for shelter, apparel, and motor vehicle insurance all rose and contributed to the 1-month seasonally adjusted increase in the all items index. The food index was unchanged in February, as a decline in the index for food at home offset an increase in the food away from home index. The energy index increased slightly, with its component indexes mixed.

The index for all items less food and energy increased 0.2 percent in February following a 0.3-percent increase in January. Along with shelter, apparel, and motor vehicle insurance, the indexes for household furnishings and operations, education, personal care, and airline fares also increased in February. In contrast, the indexes for communication, new vehicles, medical care, and used cars and trucks declined over the month.

The all items index rose 2.2 percent for the 12 months ending February, a slightly larger increase than the 2.1-percent rise for the 12 months ending January. The index for all items less food and energy rose 1.8 percent over the past year, while the energy index increased 7.7 percent and the food index advanced 1.4 percent.

Food

The food index was unchanged in February, as the index for food away from home rose 0.2 percent and the food at home index declined 0.2 percent. All six major grocery store food group indexes declined in February. The index for fruits and vegetables declined 0.5 percent after rising 0.5 percent in January. The index for dairy and related products declined 0.3 percent in February after being unchanged in January.

The index for meats, poultry, fish, and eggs fell 0.2 percent in February. The index for eggs increased 2.0 percent, but the indexes for beef and pork declined. The indexes for cereals and bakery products, nonalcoholic beverages, and other food at home all declined 0.1 percent in February.

The index for food at home rose 0.5 percent over the last 12 months. Of the six major grocery store food group indexes, three increased over the last 12 months (fruits and vegetables; meats, poultry, fish, and eggs; and other food at home), while the remaining indexes (dairy and related products, nonalcoholic beverages, and cereals and bakery products) declined. The index for food away from home increased 2.6 percent over the last 12 months.

Energy

The energy index increased 0.1 percent in February following a 3.0-percent increase in January. The gasoline index declined in February, falling 0.9 percent after rising 5.7 percent the prior month. (Before seasonal adjustment, gasoline prices increased 1.6 percent in February.) The fuel oil index declined 3.6 percent after a sharp increase in January. In contrast, the index for natural gas rose 4.7 percent in February, its largest 1-month increase since March 2014. The electricity index also rose in February, increasing 0.4 percent.

The energy index rose 7.7 percent over the past year, with all the component indexes increasing. The gasoline index rose 12.6 percent and the fuel oil index increased 20.7 percent. The index for natural gas increased 3.8 percent, and the electricity index rose 2.2 percent.

All items less food and energy

The index for all items less food and energy increased 0.2 percent in February. The shelter index increased 0.2 percent, with the indexes for rent and owners’ equivalent rent both rising 0.2 percent and the index for lodging away from home unchanged. The apparel index continued to rise, increasing 1.5 percent in February following a 1.7-percent rise in January. The index for motor vehicle insurance also continued to increase sharply, rising 1.7 percent in February.

The index for household furnishings and operations rose 0.3 percent in February. The education index increased 0.2 percent, as did the index for personal care. The indexes for alcoholic beverages and tobacco also increased in February.

The medical care index declined 0.1 percent in February, with its component indexes mixed. The hospital services index fell 0.5 percent and the index for prescription drugs decreased 0.4 percent, but the physicians’ services index rose 0.2 percent. The communication index fell 0.6 percent in February. The index for new vehicles declined 0.5 percent, its largest 1-month decrease since August 2009. The index for used cars and trucks fell 0.3 percent in February after rising in each of the last 4 months. The recreation index was unchanged in February.

The index for all items less food and energy rose 1.8 percent over the past 12 months, the same figure as the prior 2 months. The shelter index rose 3.1 percent over the span, and the index for medical care advanced 1.8 percent. Indexes that declined over the past year include communication, new vehicles, airline fares, and used cars and trucks.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.2 percent over the last 12 months to an index level of 248.991 (1982-84=100). For the month, the index increased 0.5 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.3 percent over the last 12 months to an index level of 242.988 (1982-84=100). For the month, the index increased 0.4 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 increased 0.4 percent on a not seasonally adjusted basis.

Bureau of Labor Statistics, “Consumer Price Index. Feb 2018“, 13 Mar 2018 (08:30) More

flag_usa US: Real Earnings. Feb 2018

Press Release Extract [us_realer]

All employees

Real average hourly earnings for all employees were unchanged from January to February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.1-percent increase in average hourly earnings offset by a 0.2-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

us_realer_month_20180313

Real average weekly earnings increased 0.3 percent over the month due to no change in real average hourly earnings combined with a 0.3-percent increase in the average workweek.

Real average hourly earnings increased 0.4 percent, seasonally adjusted, from February 2017 to February 2018. The increase in real average hourly earnings combined with a 0.3-percent increase in the average workweek resulted in a 0.6-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 January to February, 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).

us_realer_nonsupervisory_month_20180313

Real average weekly earnings increased 0.8 percent over the month due to the increase in real average hourly earnings combined with a 0.6-percent increase in average weekly hours.

From February 2017 to February 2018, 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. Feb 2018“, 13 Mar 2018 (08:30) 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