17 Apr 2019

Daily Chatter – 17 April 2019

Overnight Asia

Stocks in Asia fluctuated after positive data on China’s economy raised doubts over the possibility of additional stimulus. The 10-year Treasury yield ticked higher and the Dollar retreated.

 

Japanese shares eked out modest gains, while those in Hong Kong and Shanghai swung between gains and losses. Equities in Australia fell and were little changed in Korea. European futures signaled a muted open, while US futures edged higher. China’s economic growth figures were above expectations, as was industrial production and retail sales data. The yield on China’s 10-year sovereign notes climbed to its highest level since November. Earlier, the Nasdaq 100 closed within 0.1 percent of an all-time high, while gains fizzled late in the session to leave the S&P 500 Index little changed.

 

China’s economy unexpectedly held up in the first three months as policy makers boosted stimulus measures to sustain growth, and should ease concerns about a flagging global economy. The resilience suggests that pro-growth policies are taking effect, with tax cuts and supportive monetary policy supporting sentiment. Traders are also busy digesting corporate earnings, where sentiment has been bullish, though volumes muted.

 

Elsewhere, oil climbed after a report showed a surprise drop in crude inventories. The New Zealand Dollar tumbled after inflation slowed more than forecast, while the Australian Dollar rose after the Chinese figures.

 

 

Here are some notable events coming up:

  • Earnings season rolls on this week, with reports due from Morgan Stanley, American Express, PepsiCo, Honeywell, Alcoa and Taiwan Semiconductor
  • Stock markets will be closed for the Good Friday holiday in countries including the US, UK and Germany

 

These are the main moves in markets:

 

Stocks:

  • Topix Index rose 0.3 percent at the 3pm close in Tokyo
  • Australia’s S&P/ASX 200 Index fell 0.4 percent
  • South Korea’s Kospi Index was little changed
  • Hang Seng Index rose 0.1 percent
  • Shanghai Composite Index rose 0.4 percent
  • Futures on the S&P 500 rose 0.1 percent. The index rose less than 0.1 percent Tuesday
  • The MSCI Asia Pacific Index rose 0.2 percent

 

Currencies:

  • The Yen was steady at 111.99 per Dollar
  • The offshore Yuan rose 0.3 percent to 6.6943 per Dollar
  • The Kiwi fell 0.3 percent to 67.43 US cents. The Aussie rose 0.3 percent to 71.99 US cents
  • The Euro was at $1.1309, up 0.3 percent
  • The British Pound added 0.1 percent to $1.3061
  • The Bloomberg Dollar Spot Index fell 0.1 percent

 

Bonds:

  • The yield on 10-year Treasuries rose one basis point to 2.60 percent
  • Australia’s 10-year bond yield rose 3 basis points to 1.96 percent

 

Commodities:

  • West Texas Intermediate crude climbed 0.8 percent to $64.54 a barrel
  • Gold rose 0.1 percent to $1,278.69 an ounce

 

US Market Wrap

US stocks rose as a group of high-profile earnings reports offered divergent clues on the strength of the economy. The S&P 500 eked out a small gain. Treasuries continued to slump, with rates falling to levels last seen before the Federal Reserve’s dovish tilt a month ago.

 

Markets:

  • S&P 500 up 0.05%
  • Dow Jones up 0.3%
  • Nasdaq Composite up 0.3%
  • Russell 2000 ahead 0.15%
  • 7 of 11 main S&P 500 sectors higher
  • Financials rise 1.4%
  • Real estate off 2.4%
  • 10-year Treasury yield at 2.59% vs. 2.56% Monday
  • Dollar Index up 0.10%

 

Politics

  • The White House is interviewing candidates to potentially replace Herman Cain and Stephen Moore as Donald Trump’s picks for the Federal Reserve Board, the president’s top economic adviser said
  • House Judiciary Committee leaders asked acting Homeland Security Secretary, Kevin McAleenan to provide information about President Trump’s reported offer of a pardon in case McAleenan faced criminal liability for following orders to close the border with Mexico
  • Four days after President Trump’s choice for Interior Secretary was confirmed by the Senate, the agency’s inspector general has opened an investigation into the former oil and gas lobbyist

 

Economy

  • Wednesday: Weekly MBA Mortgage Applications 7am, Feb. Trade Balance 8:30am, Feb. Wholesale Inventories 10am, Beige Book 2pm
  • Sentiment among US homebuilders climbed to a six-month high in April, another indication that the housing market is gathering momentum during the crucial spring season
  • The rising stockpiles of cars, furniture and other goods that helped the US economy boom in 2018 are now poised to cause a hangover this year
  • The grounding of Boeing Co.’s 737 Max will cause a drag of about 0.2 percentage point on US economic growth in the second quarter, Wells Fargo forecast on Tuesday

 

Source: Sanlam Private Investments UK