Tue 3 Jul 2018


Shows:  watch Nightly Business Report. watch PBS NewsHour. watch Bloomberg Technology.
Indices: chart Market Today. Market (52 weeks). Portfolio (52 weeks).
FX:        chart USD Today. USD Year. AUD Today. AUD Year.


In Portfolioticker today

read_this Hey Jarvis, how did we go today?

Today at the stock market

bull/bear
Wall Street dipped on Tuesday, weighed down by Apple, Facebook and other technology stocks in a shortened trading session ahead of the July 4 holiday.

  • The S&P 500 index fell 13.49 points, or 0.49%, to 2,713.22
  • The Dow Jones Industrial Average fell 132.36 points, or 0.54%, to 24,174.82
  • The Nasdaq Composite dropped 65.01 points, or 0.86%, to 7,502.67.
  • Advancing issues outnumbered declining ones on the NYSE by a 1.74-to-1 ratio; on Nasdaq, a 1.23-to-1 ratio favored advancers.
  • The S&P 500 posted 8 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 75 new highs and 36 new lows.
  • With U.S. exchanges closing at 1 p.m. ET ahead of the July 4 holiday, volume was 3.9 billion shares, compared to the 7.1 billion average over the last 20 trading days.

Economic data was mixed. New orders for U.S.-made goods unexpectedly rose in May, pointing to a strengthening manufacturing sector, but business spending on equipment continued to show signs of slowing.

Trade tensions continued to fester, with U.S. President Donald Trump on Monday making a veiled threat against the World Trade Organization. Also looming is a 6 Jul 2018 deadline when Washington is set to impose tariffs on USD 34 billion worth of Chinese goods.

“In the short term, company fundamentals are quite solid and the economy is strong, But with the trade war looming there is a lot of uncertainty and a lot of unknowns. Until we get more clarity there it is difficult for investors to jump back into the equity market” said Brant Houston, managing director at CIBC Private Wealth Management.

Facebook fell 2.35% after the Washington Post reported a federal probe on the data breach linked to Cambridge Analytica was broadened and will include more government agencies. The dip in Facebook’s stock, along with a 1.7% slide in Apple, weighed on the S&P technology sector, which fell 1.37%.

Tesla fell 7.2%, declining for the second straight session on questions over whether it could sustain the pace of making its Model 3 sedans.

Shares of American Airlines, United Continental and Delta Air Lines fell between 1% and 2.28% after Deutsche Bank downgraded all 3 stocks saying the growing U.S.-China trade dispute could weigh on their results.

Energy stocks held onto gains even after crude oil prices reversed course shortly after the market opened as traders booked profits.

As well as a day off, traders were looking toward June unemployment data due out on Friday for a glimpse of the how much the labor market may be tightening, and for potential price pressure.

“Investors would rather take a wait-and-see attitude until we get a bit more data with those jobs numbers on Friday, and then move into earnings,” said Jeff Kravetz, a regional investment strategist at U.S. Bank Wealth Management.Reuters

Bloomberg

U.S. stocks reversed an early climb and ended lower Tuesday, as weakness in technology and financial shares weighed on benchmarks. Oil briefly rose above $75/barrel for the first time since Nov 2014 before falling to a slight loss.

All major equity benchmarks dropped, with the S&P 500 Index stumbling after a Chinese court temporarily banned Micron Technology Inc. chip sales in the country. The Nasdaq 100 Index plunged on the news, ending down more than 1%. U.S. stock markets closed at 1 p.m. in New York, while the bond market shuts at 2 p.m.

The USD retreated. In China, an earlier pledge by the governor of the Peoples Bank of China not to use the CNY as a weapon in any trade dispute assuaged some fears and helped it reverse losses. That boosted developing-nation currencies overall, though Turkey’s lira slumped after inflation data. The Swedish SEK strengthened as the Riksbank stuck to its plan to start lifting interest rates.

Meanwhile, the global trade spat between the world’s biggest economies appeared to be worsening, with President Donald Trump taking measures to prevent China Mobile Ltd. from entering the U.S. market.

“It certainly looks like there will be no deal before the tariffs take effect, at least the first round of $34 billion,” said John Vail, chief global strategist at Nikko Asset Management. “I think negotiations will start after that to perhaps prevent any further escalation, but for the first part it looks like it’s going to happen.”

Telephone companies led an advance in the Stoxx Europe 600 Index, while miner Glencore Plc headed for the biggest decline in 2 years after saying it was subpoenaed by the U.S. Department of Justice. Commodities climbed as metals recovered after losses that saw platinum drop to the lowest in 9 years.Bloomberg

Market indices

Note: Markets closed at 13:00 EDT today, and will be closed tomorrow.

Market indices
^ S&P500 Index today (mouseover for 12 month view) [Chart: Google Finance]

Index Ticker Today Change 31 Dec 17 YTD
S&P 500 SPX (INX) 2,713.22 -0.50% 2,673.61 +1.48%
DJIA INDU 24,174.82 -0.55% 24,719.22 -2.21%
NASDAQ IXIC 7,502.67 -0.86% 6,903.39 +8.68%

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 AUD 3.470 -1.68% 3.068 +13.13%
Valuation Rate USD/AUD 0.74369 +0.76% 0.78528 -5.30%
AUD-denominated Index AUD 4.666 -2.42% 3.909 +19.37%

Portfolio stock prices

Stock Ticker Today Change 31 Dec 17 YTD
Alphabet A GOOGL $1,116.28 -2.27% $1,053.00 +6.00%
Alphabet C GOOG $1,102.89 -2.18% $1,045.65 +5.47%
Apple AAPL $183.92 -1.75% $169.23 +8.68%
Amazon AMZN $1,693.96 -1.16% $1,169.54 +44.83%
Ebay EBAY $36.64 -0.09% $37.76 -2.97%
Facebook FB $192.73 -2.35% $176.46 +9.22%
PayPal PYPL $83.27 -0.74% $73.61 +13.12%
Twitter TWTR $43.89 -2.43% $24.01 +82.79%
Visa V $131.45 -0.80% $114.02 +15.28%
VMware VMW $160.37 -1.02% $125.32 +27.96%

Selected Tech News Headlines

  • Facebook shares drop on report of widened probe on data scandal: “Facebook shares were down 2% at $193.36 in Tuesday’s early trading on the Nasdaq, erasing nearly $12 billion from the company’s market valuation, after a report that a federal probe on the data breach linked to Cambridge Analytica had been broadened and would include more government agencies. The stock lost about 18% of its value in the 7 trading days after the data scandal broke, but has since gained about 27% to date. Facebook has faced intense scrutiny around the Cambridge scandal, which saw millions of users’ data improperly accessed by the political consultancy. The Federal Bureau of Investigation (FBI), the Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC) have joined the Department of Justice (DOJ) in its inquiries about the two companies and the sharing of personal information of 71 million Americans, the Washington Post reported citing 5 people.Reuters

Currencies: USD/AUD

USD/USD

audusd
^ AUD vs Bloomberg Dollar Spot Index (DXY) movements today Chart: Bloomberg

USD

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

This report is as of 13:00 EDT (early market close):

The Bloomberg Dollar Spot Index (DXY) fell 0.5%.
The EUR rose 0.1% to USD 1.1651.
Britain’s GBP rose 0.2% to USD 1.3170.

The yield on 10-year Treasuries fell 3 basis points to 2.8364%.
Germany’s 10-year yield fell 1 basis point to 0.294%.
Britain’s 10-year yield fell 1 basis points to 1.243%.
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): $74.13/barrel +0.26% Chart
  • ICE (London) Brent North Sea Crude: $77.72/barrel +0.54% Chart
  • NYMEX Natural gas futures: $2.86/MMBTU +0.00% Chart

flag_australia AU: Building Approvals. May 2018.

au_property_20161105

Press Release Extract [au_building]

The number of dwellings approved in Australia fell by 1.5 per cent in May 2018 in trend terms, according to data released by the Australian Bureau of Statistics (ABS) today.

“Dwelling approvals have weakened in May, driven by a 2.6 per cent fall in private dwellings excluding houses,” said Justin Lokhorst, Director of Construction Statistics at the ABS.

Among the states and territories, dwelling approvals in May fell in Queensland (4.2 per cent), Victoria (2.7 per cent), Tasmania (2.0 per cent) and Western Australia (0.8 per cent) in trend terms.

Dwelling approvals rose in trend terms in South Australia (4.3 per cent), Northern Territory (2.8 per cent) and Australian Capital Territory (1.5 per cent), and were flat in New South Wales.

In trend terms, approvals for private sector houses fell 0.5 per cent in May. Private sector house approvals fell in Queensland (1.7 per cent), Western Australia (0.6 per cent), South Australia (0.4 per cent) and New South Wales (0.2 per cent). Private sector house approvals were flat in Victoria.

In seasonally adjusted terms, total dwellings fell by 3.2 per cent in May, driven by a 8.6 per cent decrease in private sector houses. Private sector dwellings excluding houses rose 4.3 per cent in seasonally adjusted terms.

The value of total building approved fell 0.7 per cent in May, in trend terms, and has fallen for seven months. The value of residential building fell 0.8 per cent, while non-residential building fell 0.4 per cent.

Australian Bureau of Statistics, “8731.0 – Building Approvals, Australia, May 2018“, 3 Jul 2018 (11:30 AEST) More

flag_australia AU: RBA Monetary Policy Decision

Press Release Extract [au_rba]

At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

The global economic expansion is continuing. A number of advanced economies are growing at an above-trend rate and unemployment rates are low. The Chinese economy continues to grow solidly, with the authorities paying increased attention to the risks in the financial sector and the sustainability of growth. Globally, inflation remains low, although it has increased in some economies and further increases are expected given the tight labour markets. One uncertainty regarding the global outlook stems from the direction of international trade policy in the United States. There have also been strains in a few emerging market economies, largely for country-specific reasons.

Financial conditions remain expansionary, although they are gradually becoming less so in some countries. There has been a broad-based appreciation of the US dollar. In Australia, short-term wholesale interest rates have increased over recent months. This is partly due to developments in the United States, but there are other factors at work as well. It remains to be seen the extent to which these factors persist.

The recent data on the Australian economy continue to be consistent with the Bank’s central forecast for GDP growth to average a bit above 3 per cent in 2018 and 2019. GDP grew strongly in the March quarter, with the economy expanding by 3.1 per cent over the year. Business conditions are positive and non-mining business investment is continuing to increase. Higher levels of public infrastructure investment are also supporting the economy. One continuing source of uncertainty is the outlook for household consumption. Household income has been growing slowly and debt levels are high.

Higher commodity prices have provided a boost to national income recently. Australia’s terms of trade are, however, expected to decline over the next few years, but remain at a relatively high level. The Australian dollar has depreciated a little, but remains within the range that it has been in over the past two years.

The outlook for the labour market remains positive. Strong growth in employment has been accompanied by a significant rise in labour force participation. The vacancy rate is high and other forward-looking indicators continue to point to solid growth in employment. A gradual decline in the unemployment rate is expected, after being steady at around 5½ per cent for much of the past year. Wages growth remains low. This is likely to continue for a while yet, although the stronger economy should see some lift in wages growth over time. Consistent with this, the rate of wages growth appears to have troughed and there are increasing reports of skills shortages in some areas.

Inflation is low and is likely to remain so for some time, reflecting low growth in labour costs and strong competition in retailing. A gradual pick-up in inflation is, however, expected as the economy strengthens. The central forecast is for CPI inflation to be a bit above 2 per cent in 2018.

Nationwide measures of housing prices are little changed over the past six months. Conditions in the Sydney and Melbourne housing markets have eased, with prices declining in both markets. Housing credit growth has declined, with investor demand having slowed noticeably. Lending standards are tighter than they were a few years ago, with APRA’s supervisory measures helping to contain the build-up of risk in household balance sheets. Some further tightening of lending standards by banks is possible, although the average mortgage interest rate on outstanding loans has been declining for some time.

The low level of interest rates is continuing to support the Australian economy. Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.

Reserve Bank of Australia, “Monetary Policy Decision“, 3 Jul 2018 (14:30 AEST) More

Note: The AUD appeared unaffected by the RBA decision (04:30 UTC), remaining in a pre- and post- announcement range of USD 0.7335 to USD 0.7340. The RBA’s official cash rate has been held at its current record low level for 21 Board meetings (23 months). However it expected that banks will soon increase their lending interest rates regardless of the RBA’s static monetary policy.

flag_europe EU: Retail Trade. May 2018

Press Release Extract [eu_retail]

In May 2018 compared with April 2018, the seasonally adjusted volume of retail trade did not change in the euro area (EA19) and increased by 0.3% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In April, the retail trade volume decreased by 0.1% in the euro area and increased by 0.3% in the EU28.

eu_retail_20180703

In May 2018 compared with May 2017 the calendar adjusted retail sales index increased by 1.4% in the euro area and by 2.3% in the EU28.

Monthly comparison by retail sector and by Member State

The unchanged volume of retail trade in the euro area in May 2018, compared with April 2018, is due to a rise of 1.1% in “food, drinks and tobacco”, while non-food products fell by 1.0%, and the volume of automotive fuels did not change. In the EU28, the 0.3% increase in the volume of retail trade is due to increases in “food, drinks and tobacco” by 1.2% and automotive fuel by 0.1%, while non-food products fell by 0.5%.

Among Member States for which data are available, the highest increases in the total retail trade volume were registered in Portugal (+4.7%), Latvia (+3.4%), and Slovenia (+3.1%). Decreases were observed in Germany (-2.1%), Austria (-0.7%) as well as Spain and Poland both (-0.1%).

Annual comparison by retail sector and by Member State

The 1.4% increase in the volume of retail trade in the euro area in May 2018, compared with May 2017, is due to rises of 1.7% for “food, drinks and tobacco and of 1.6% for non-food products, while automotive fuel fell by 0.3%. In the EU28, the 2.3% increase in retail trade volume is due to rises of 2.8% for non-food products, of 2.1% for automotive fuel and of 2.0% for “food, drinks, tobacco”.

Among Member States for which data are available, the highest yearly increases in the total retail trade volume were registered in Hungary (+7.7%), Romania (+7.1%) and Latvia (+6.9%). The largest decreases were observed in Malta (-1.8%), Luxembourg (-1.2%), and Spain (-0.4%).

Eurostat, “Retail Trade. May 2018“, 3 Jul 2018 More

flag_europe EU: Industrial Producer Prices Domestic Market. May 2018

Press Release Extract [eu_ipp]

In May 2018, compared with April 2018, industrial producer prices rose by 0.8% in the euro area (EA19) and by 1.0% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In April 2018, prices remained unchanged in the euro area and increased by 0.1% in EU28.

eu_ipp_20180703

In May 2018, compared with May 2017, industrial producer prices rose by 3.0% in the euro area and by 3.6% in the EU28.

Monthly comparison by main industrial grouping and by Member State

The 0.8% increase in industrial producer prices in total industry in the euro area in May 2018, compared with April 2018, is due to rises of 2.6% in the energy sector, of 0.3% for intermediate goods and of 0.1% for durable consumer goods, while prices remained stable for capital goods and for non-durable consumer goods. Prices in total industry excluding energy rose by 0.2%.

In the EU28, the 1.0% increase is due to rises of 3.4% in the energy sector, of 0.3% for intermediate goods and durable consumer goods and of 0.1% for capital goods, while prices remained stable for non-durable consumer goods. Prices in total industry excluding energy rose by 0.2%.

The highest increases in industrial producer prices were observed in Greece (+2.4%), Portugal (+1.9%), Cyprus and Hungary (both +1.8%), while decreases were observed in Ireland (-0.5%) and Latvia (-0.3%).

Annual comparison by main industrial grouping and by Member State

The 3.0% increase in industrial producer prices in total industry in the euro area in May 2018, compared with May 2017, is due to rises of 7.6% in the energy sector, of 2.4% for intermediate goods, of 1.1% for durable consumer goods, of 0.9% for capital goods and of 0.3% for non-durable consumer goods. Prices in total industry excluding energy rose by 1.4%.

In the EU28, the 3.6% price increase is due to rises of 10.8% in the energy sector, of 2.7% for intermediate goods, of 1.3% for durable consumer goods, of 1.0% for capital goods and of 0.5% for non-durable consumer goods. Prices in total industry excluding energy rose by 1.6%.

The highest increases in industrial producer prices were recorded in the United Kingdom (+6.7%), Belgium (+6.5%), Estonia, Greece and Hungary (all +5.5%), while decreases were observed in Ireland (-2.7%) and Luxembourg (-0.5%).

Eurostat, “Industrial Producer Prices Domestic Market. May 2018More

flag_usa Full Report – Manufacturers Shipments Inventories and Orders. May 2018

Press Release Extract [us_manuf]

Summary

New orders for manufactured goods in May, up three of the last four months, increased $1.8 billion or 0.4 percent to $498.2 billion, the U.S. Census Bureau reported today. This followed a 0.4 percent April decrease. Shipments, up twelve of the last thirteen months, increased $2.8 billion or 0.6 percent to $496.1 billion. This followed a 0.1 percent April increase. Unfilled orders, up six of the last seven months, increased $6.2 billion or 0.5 percent to $1,160.8 billion. This followed a 0.6 percent April increase. The unfilled orders-to-shipments ratio was 6.68, down from 6.73 in April. Inventories, up nineteen consecutive months, increased $1.3 billion or 0.2 percent to $668.4 billion. This followed a 0.4 percent April increase. The inventories-to-shipments ratio was 1.35, unchanged from April.

us_manuf_20180703

New Orders

New orders for manufactured durable goods in May, down two consecutive months, decreased $0.9 billion or 0.4 percent to $249.2 billion, up from the previously published 0.6 percent decrease. This followed a 1.0 percent April decrease. Transportation equipment, also down two consecutive months, drove the decrease, $0.9 billion or 1.1 percent to $86.1 billion. New orders for manufactured nondurable goods increased $2.7 billion or 1.1 percent to $249.0 billion.

Shipments

Shipments of manufactured durable goods in May, up nine of the last ten months, increased $0.1 billion or virtually unchanged to $247.1 billion, up from the previously published 0.1 percent decrease. This followed a virtually unchanged April decrease. Machinery, up three of the last four months, drove the increase, $0.2 billion or 0.7 percent to $32.4 billion. Shipments of manufactured nondurable goods, up eleven of the last twelve months, increased $2.7 billion or 1.1 percent to $249.0 billion. This followed a 0.3 percent April increase. Petroleum and coal products, up ten of the last eleven months, led the increase, $1.8 billion or 3.4 percent to $55.5 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in May, up six of the last seven months, increased $6.2 billion or 0.5 percent to $1,160.8 billion, unchanged from the previously published increase. This followed a 0.6 percent April increase. Transportation equipment, also up six of the last seven months, led the increase, $3.9 billion or 0.5 percent to $800.2 billion.

Inventories

Inventories of manufactured durable goods in May, up eighteen of the last nineteen months, increased $1.3 billion or 0.3 percent to $403.3 billion, unchanged from the previously published increase. This followed a 0.4 percent April increase. Transportation equipment, up five of the last six months, led the increase, $0.5 billion or 0.4 percent to $129.0 billion. Inventories of manufactured nondurable goods, up eleven consecutive months, increased less than $0.1 billion or virtually unchanged to $265.1 billion. This followed a 0.4 percent April increase. Chemical products, up seven of the last eight months, drove the increase, $0.1 billion or 0.1 percent to $87.9 billion. By stage of fabrication, May materials and supplies increased 0.5 percent in durable goods and decreased 0.1 percent in nondurable goods. Work in process increased 0.3 percent in durable goods and was virtually unchanged in nondurable goods. Finished goods increased 0.1 percent in both durable goods and nondurable goods.

US Census Bureau, “Full Report – Manufacturers Shipments Inventories and Orders. May 2018“, 3 Jul 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
^ CSI 300 movements over the past week [Chart: Google Finance]