Новини ринків

Major US stocks rose significantly after US President Donald Trump announced that a trade agreement with China could be concluded earlier than expected. Investors also analyzed the transcript of a conversation between the US president and the president of Ukraine.

Donald Trump told reporters that a trade agreement with China could be concluded “sooner than you might think.” The two largest economies in the world have been in trade negotiations since last year. Disagreements between China and the United States have caused unrest in global financial markets, as investors worry about the negative impact of the trade war on the global economy.

However, further growth was restrained by concerns about Trump's political future. The published version of the transcript of his conversation with Ukrainian President Vladimir Zelensky showed that the head of the White House urged the latter to “study” the situation with former US vice president Joe Biden and his son Hunter. The transcript was made public after US House Democrat Nancy Palosi announced Tuesday that a formal impeachment process had been launched against the US president because of a telephone conversation with the Ukrainian president, during which he allegedly pressured his Ukrainian counterpart and demanded an investigation into Burisma, led by the son of Joe Biden, his rival in the presidential election.

The market was also supported by the August data on sales of new buildings in the United States and Nike (NKE) company reports that exceeded expectations.

A report by the Ministry of Commerce showed that new home sales rose 7.1% in August, to a seasonally adjusted annual rate of 713,000 units, helped by a surge in activity in the South and West. July sales were revised to 666,000 units from the previously announced 635,000 units. Economists predicted that sales of new homes, which account for about 11.5% of housing sales, would increase to 660,000 units in August.

Nike (NKE) shares jumped 4.24% after the company reported quarterly earnings of $ 0.86 per share, $ 0.15 higher than analysts' average forecast. The company's revenue also exceeded the average Wall Street forecast. The results of the manufacturer of sports shoes and clothing were supported by a significant jump in online sales, among other factors.

Most DOW components completed trading in positive territory (21 out of 30). The biggest gainers were NIKE Inc. (NKE; + 4.24%). Outsider were shares of UnitedHealth Group Inc. (UNH; -1.13%).

Almost all S&P sectors recorded an increase. The technological sector has grown the most (+ 1.2%). The largest decline was shown by the health sector (-0.5%).

At the time of closing:

Dow 26,970.71 +162.94 +0.61%

S&P 500 2,984.87 +18.27 +0.62%

Nasdaq 100 8,077.38 +83.76 +1.05%

The U.S. Energy Information Administration (EIA) revealed on Wednesday that crude inventories increased by 2.412 million barrels in the week ended September 20. Economists had forecast a drop of 0.600 million barrels.

At the same time, gasoline stocks rose by 0.519 million barrels, while analysts had expected a decline of 0.564 million barrels. Distillate stocks reduced by 2.978 million barrels, while analysts had forecast a decrease of 0.400 million barrels.

Meanwhile, oil production in the U.S. increased by 100,000 barrels a day to 12.500 million barrels a day.

U.S. crude oil imports averaged 6.4 million barrels per day last week, down by 672,000 barrels per day from the previous week.

The U.S. Commerce Department announced on Wednesday that the sales of new single-family homes rose 7.1 percent m-o-m to a seasonally adjusted annual rate of 713, 000 units in August.

Economists had forecast the sales pace of 660,000 last month.

July’s sales pace was revised up to 666,000 units from the originally reported 635,000 units.

According to the report, new home sales in the South, the largest area, climbed 6.0 percent in August. Sales of new homes in the West jumped 16.5 percent. But sales decreased 5.9 percent in the Northeast and dropped 3.0 percent in the Midwest.

In y-o-y terms, new home sales recorded an 18.0 percent surge in August.

James Smith, developed markets economist at ING, suggests the numbers in UK's Parliament still appear stacked against a deal - making it unlikely that the prime minister will be able to get one before the 19 October deadline.

• "Beyond then, the prime minister would be obliged to seek an Article 50 extension from the EU. And while there have been suggestions that the prime minister could ignore this obligation, the Supreme Court’s unanimous verdict this week serves a reminder that the courts would probably quickly step in.
• Our base case, therefore, remains that the UK is headed for a general election – the question remains ‘when’ and 'how'.
• Opposition leader Jeremy Corbyn has indicated that he won’t trigger a vote of no confidence in the government this week – and is unlikely to do so until an Article 50 extension has been secured. Assuming that a delay is secured some time in mid-October though, then an election could feasibly take place in early/mid-December. We’d assume there would be a desire to get it out of the way before Christmas in any case."

U.S. stock-index futures traded flat on Wednesday amid araised political uncertainty after impeachment inquiry into US President Donald Trump. However, a surge in Nike (NKE; +5.2%) shares helped cap the losses.

Global Stocks:

• Economy is quite solid, unemployment still low
• There is a lot of uncertainty due to trade

(company / ticker / price / change ($/%) / volume)

Home Depot (HD) target raised to $220 from $210 at Telsey Advisory Group

Julien Manceaux, the Senior Economist at ING, notes that French consumer confidence continued its robust 2019 catch-up in September, increasing for the ninth month in a row. 

• "At 104.1, confidence was close to its post-2008 peak. Fears of unemployment have strongly receded in recent months which – together with the fiscal boost - helped restore faith in consumers' future financial situation. In particular, they were very confident in their future ability to save in September. We think that this signals the end of an era of particularly high savings anxiety, which saw households cutting back on spending during the yellow vest crisis earlier this year. The September confidence survey also showed improvement in important purchase intentions.
• We clearly see a case for better consumer spending figures, starting this Friday when the August figures will be published. We believe this will confirm our view that private consumption will be stronger in the second half of 2019 (after only 0.2% quarter-on-quarter in the second quarter and 0.4% in the first). The rebound in the retail sector business survey published earlier this week is a sign that improvements on the consumer side are being felt across sectors. That said, the effect of the mediocre first half on private consumption growth will be significant and it is unlikely that the current improvement will push this growth above 1.2% in 2019, after only 0.9% in 2018."

Jane Foley, the senior FX strategist at Rabobank, notes that domestic political pressures in the U.S. have suddenly increased with the news that House Speaker Pelosi would proceed with an “official” impeachment inquiry into President Trump.

• “To date Pelosi has resisted calls from fellow Democrats to start such proceedings on the basis that it could increase sympathy and support for the President into next year’s election.
• Trump’s accusers are arguing that the President has used his position for his own gains and that this is an impeachable offense.
• As a rule of thumb a rocking of the political status-quo tends to be a currency negative factor. There are clear and important exceptions to this. Safe haven currencies (the JPY and the CHF) tend to perform well as the tone of the news flow deteriorates. At least since early 2018 it is clear that the USD is performing as a safe haven for a large number of investors. This is despite the fact that the US has poor budget and current account positions.
• The USD’s behaviour is likely being influenced by its dominance in the global payments system. Global demand for USDs have risen substantially in the years since the global financial crisis. Since dollars have become more necessary to an increased number of people it is not surprising that USD demand may increase with risk aversion.
• The impeachment process may distract attention away from the normal business of government in the near-term. On balance, this is likely to increase risk appetite which could leave the USD well supported.
• The USD is the best performing G10 currency on a 1 day view followed by the safe-haven CHF. The safe-haven yen is much further down the list of performers on the back of dovish comments from BoJ officials early this morning. Given the weakness of the Eurozone economy and the resultant downside pressure on the EUR, we retain our view of a soft EUR in the coming months. On the back of slowing global growth and prolonged trade wars we continue to expect safe-haven currencies to perform well and we retain our forecast of EUR/USD1.09 on a 3-month view.”

NIKE (NKE) reported Q1 FY 2020 earnings of $0.86 per share (versus $0.67 in Q1 FY 2019), beating analysts’ consensus estimate of $0.71.

The company’s quarterly revenues amounted to $10.660 bln (+7.2% y/y), beating analysts’ consensus estimate of $10.433 bln.

NKE rose to $92.08 (+5.62%) in pre-market trading.

The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. fell 10.1 percent in the week ended September 20, following a 0.1 percent drop in the previous week. That represented the biggest decrease since the week ended July 2016.

According to the report, refinance applications tumbled 15.2 percent, while applications to purchase a home fell 3.1 percent.

Meanwhile, the average fixed 30-year mortgage rate increased to 4.02 percent from 4.01 percent.

“U.S. Treasury yields trended downward over the course of last week, as the Federal Reserve meeting highlighted the elevated uncertainty in the economic outlook. However, despite falling yields, mortgage rates ticked up again and have risen 20 basis points over the past two weeks,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “The increase in rates led to fewer refinances, and activity has now dropped 17% over the last two weeks.”

Aline Schuiling, the senior economist at ABN AMRO, notes that all measures of wage growth in the Eurozone have accelerated during the past few years, from levels of around 1.0-1.5% yoy in 2015 and 2016, to levels of around 2-2.5% in 2018. 

• “The numbers for 2019Q1-Q2 indicate that wage growth has stopped rising and peaked in 2018 H2. Indeed, the definition used by the ECB in its own projections, compensation per employee, rose by 2.4% yoy in 2018Q3 and has subsequently declined to 2.1% in 2019Q1. As this definition of wage growth includes changes in social security payments by employers it can be influenced by policy changes. Indeed, changes in France’s labour market taxes and social security payments at the start of 2019 have had a sharp downward impact on compensation per employee in France.
• Nevertheless, even If we take this one-off effect into consideration the eurozone total would have been 2.2% in 2019Q2, which still is a slowdown from 2018Q3. Another definition of wage growth that is also closely watched by the ECB is negotiated wages, which excludes the impact of taxes. The rise in negotiated wages has declined from 2.3 in 2019Q1 to 2.0% in 2019Q2.
• Looking further ahead, we expect wage growth to continue to slow down gradually over the coming quarters. The decline in unemployment in the eurozone has already slowed down in recent months whereas the employment component of the composite PMI has dropped to levels consistent with stagnating employment growth and modestly rising unemployment. Combined with ongoing subdued inflation and inflation expectations, this should push wage growth down further.”

• Government  still considering implications of court judgement
• UK PM Johnson absolutely has confidence in Attorney General and Attorney General has not offered to resign
• Attorney General set out that Government acted in good faith
• PM has repeatedly said that he will not seek Brexit extension and is determined to deliver Brexit on October 31

Contraction in UK retail sales volumes eases in September - CBI

The Confederation of British Industry (CBI) reported on Wednesday its latest survey of retailers showed retail sales volume balance rose to -16 in September from -49 in August. That marked the fifth consecutive month of decline in retail sales volume.

Economist had forecast the reading to come in at -22.

The report also revealed that orders placed on suppliers (-9) also fell for the fifth straight month in September, albeit at a slower pace than in August. Meanwhile, retailers expect sales volumes to reduce at a slower pace next month (-5) and orders to be broadly flat in the year to October (+3).

Rain Newton-Smith, CBI Chief Economist, noted: “Five successive months of falling volumes tells its own story about the tough conditions retailers are having to operate in. Add to this the pressures of Sterling depreciation and the need to plan for potential tariffs and supply issues in the event of a no-deal Brexit and you get a gloomy picture for the sector. Retailers are also grappling with ongoing challenges such as digital disruption and the cumulative burden of government policies. Reforming an outdated business rates system and a more flexible apprenticeship levy which delivers better value for money could really help to alleviate the pressure on retailers during these difficult times.”  

Figures from industry body UK Finance showed that british shoppers borrowed on their credit cards at the slowest annual rate in more than four years last month, raising the prospect that previously solid consumer demand will weaken.

Credit card lending by major banks slowed to an annual growth rate of 3.3% in August from 3.8% in July, the slowest rate since February 2015.

Net mortgage approvals for house purchase dropped to 42,576 in August on a seasonally adjusted basis from 43,303 in July, though this is still 9% higher than mortgage approvals a year earlier on this measure.

Moreover, the total number of mortgages approved - which includes refinancing of existing home loans and other lending secured on property - rose to its highest since December 2016 at 83,332.

Frédérique Cerisier, analyst at BNP Paribas, points out that the current public debt ratios are much higher than before the Great Recession in Eurozone.

“A proper assessment of the risk that this entails should also take into account other changes in the economic environment, and in particular, the decline in long-term sovereign rates. This trend has accentuated recently, with long term interest rates in several eurozone countries dropping below zero. But the decline has been at work for a long time and has already produced major effects. Considering that interest rates are expected to stay low for a long time and given that maneuvering room for monetary policy is close to exhausted, some countries might turn towards fiscal policies to support activity. The ECB has already made a plea in that sense, at least for those countries with fiscal space.”

Britain’s opposition Labour Party leader Jeremy Corbyn said that it would be appropriate to trigger a vote of no confidence in Prime Minister Boris Johnson only when a no-deal Brexit has clearly been averted.

Corbyn said his priority was averting a no-deal Brexit with legislation and only when that was clear would he be ready to trigger a vote of no confidence. He said he would be happy to have an election once no-deal Brexit had been averted.

“Quite simply our first priority is to prevent a no-deal exit from the EU. At that point it would be appropriate to move a vote of no confidence to force the prime minister to resign,” Corbyn told.

He said Johnson should apologise to Queen Elizabeth and to the British people after the Supreme Court ruled he had acted unlawfully by suspending parliament for five weeks in the run-up to Brexit.

ANZ analysts suggest that the pace of deceleration in Asian exports is finally starting to ease and a meaningful turnaround that can revive investment remains elusive.

“Slowing growth in China and the US alongside a moderate improvement in the global semiconductor cycle continue to present strong headwinds. Against this backdrop, monetary easing remains in vogue. The problem, however, is in its effectiveness. Accordingly, fiscal policy is slowly but surely becoming an integral part of the counter-cyclical policy arsenal in several economies. In view of the above, Asian currencies are likely to tread on the weak side. Meanwhile, the rates environment remains favourable in the region’s high-yielding economies.”

Karen Jones, analyst at Commerzbank, suggests that USD/JPY is easing back from its 50% retracement at 108.43 (of the move down from April), while this is viewed as corrective, it is possible that is may extend slightly towards the 50% retracement at 106.47 prior to stabilisation.

“We look for the market to then recover to the July and August highs as well as the 200 day moving average at 108.99/109.22. Very near term failure to hold Fibo support at 106.47 would target the 105.74 current September low. Failure at 104.10 would target the 2016 low at 99.00. Short term trend (1-3 months): Remains above the 200 month moving average at 104.38, allow for recovery to the 110.00 region.”

Investors are at rising risk from political problems worldwide, including the U.S.-China trade dispute, conflicts with Iran and an impeachment inquiry of President Donald Trump, said Goldman Sachs Group Inc. President and Chief Operating Officer John Waldron.

“The risk premium on politics and geopolitics is elevating,” Waldron said in a Bloomberg Television interview. “For a long time, post financial crisis, we actually had a pretty modest amount of risk premium in the marketplace around the broad category of geopolitics, and that’s starting to change.”

Tensions escalated between Washington and Tehran following an attack this month on Saudi Arabian oil facilities, which the U.S. has blamed on Iran. The trade dispute between America and China, which has roiled global markets, worsened in May when negotiations broke down, with a new round of talks planned for October. And Speaker Nancy Pelosi said the U.S. House is opening a formal impeachment inquiry of Trump, saying he’s violated his oath of office and obligations under the Constitution.

Aside from a possible impeachment, next year’s U.S. presidential election “is an element of the broader risk premium that’s going to start to be injected into the marketplace,” Waldron said. “Risk in election, risk in what happens in Brexit, risk in what happens in U.S.-China trade, geopolitical risk around the Middle East, in Iran” will all affect allocation of capital, he said.

Chinese State Councilor and Foreign Minister Wang Yi said that while his country has no intention of unseating the U.S. as the world leader, China expects America to “remove all unreasonable restrictions.”

“China-U.S. relations today have once again come to a cross roads,” Wang said at a dinner co-hosted by the National Committee on U.S.-China Relations and The US-China Business Council.

“While China opens wider to the U.S. and the rest of the world, we expect the U.S. to do the same to China and remove all unreasonable restrictions,” Wang said. “In a word, China’s efforts and achievements of reform and opening up in the past several decades have been widely recognized. They should not be deliberately ignored or denied.”

Wang’s remarks come as the world’s two largest economies are locked in escalating trade tensions centered on U.S. complaints about its trade deficit with China, and lack of equal access to the local market.

Karen Jones, analyst at Commerzbank, suggests that EUR/USD is side lined, holding just above the 1.0927/26 recent lows.

“The topside remains capped by the April and May lows as well as the three month resistance line at 1.1073/1.1110. Only a daily chart close above the August 26 high at 1.1164 would confirm a bottoming formation and put the 200 day ma at 1.1247 back on the cards. For now the market is on the defensive. Support below the recent lows at 1.0927/26 comes in at the June 2016 low and the March 2017 high at 1.0912/07. Failure at 1.0927/26 would put the January 2017 low at 1.0829 and the 78.6% Fibonacci retracement of the 2017- 2018 advance at 1.0814 on the map.”

According to the report from Insee, in September 2019, households’ confidence in the economic situation has increased for the ninth consecutive month. At 104, the synthetic index remains above its long-term average (100), reaching its highest level since January 2018.

In September, households' opinion balance on their future financial situation has increased for the third consecutive month and remains above its long-term average. Households' opinion balance about their past financial situation has been virtually stable and also remains above its long-term average. Furthermore, the share of households considering it is a suitable time to make major purchases has slightly increased compared to last month and remains above its long-term average.

In September, households’ opinion on their expected saving capacity has improved markedly: the corresponding balance has increased by 3 points and continues to move away from its long-term average. The current saving capacity balance has also increased by 1 point. The share of households considering it is a suitable time to save has decreased: the corresponding balance has decreased by 2 points and remains below its long term average.

Households' fears about the unemployment trend have diminished again in September: the corresponding balance has decreased by 5 points after a 6 point decrease in August. It thus has reached its lowest level since January 2018, well below its long-term average.

Economic growth across a wide swath of Asia is moderating as global trade and investment slows, the Asian Development Bank said, trimming its forecasts for China, India and other developing countries in the region.

The ADB in a new report cut its forecast for 2019 economic growth in China by 0.1% to 6.2%, down from a 6.6% mark last year. India's growth will likely slow to 6.5% from 6.8% in 2018. The bank also trimmed its growth forecast for developing Asia by 0.3% to 5.4%. The region's gross domestic product expanded 5.9% last year. 

"The revisions reflect gloomier prospects for international trade and evidence of slowing growth in the advanced economies" and in China, India and the larger economies of East Asia and Southeast Asia, the bank said.

The ADB said inflation across the region remains relatively benign, but faces pressure from rising food prices.

The Bank of Japan is ready to take additional easing measures if the momentum towards achieving the inflation target is lost, Board Member Takako Masai said.

The bank will thoroughly examine risks to overseas economies and carefully assess how those risks affect Japan's economic activity and prices, Masai told business leaders in Mie.

The banker expressed concerns about developments in overseas economies namely, fast approaching Brexit deadline and trade issues between the United States and China.

Masai said she intends to continue to conduct monetary policy appropriately toward achieving the price stability target while considering all conceivable adverse effects and positive effects from every angle.

Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities, notes that the RBNZ kept the cash rate on hold at 1% and the Bank mirrored recent RBA commentary, offering to ease monetary policy further, "...if necessary".

“Today's statement suggests the RBNZ is content to assess the outlook following the 50bps cut last month but with the Bank highlighting no significant change in the monetary policy outlook, it implies further easing is more likely than not. Unlike the June statement where the Monetary Policy Committee (MPC) noted "...a lower OCR may be needed over time", today's statement noted "...interest rates can be expected to be low for longer". No mention of 'lower' is consistent with the conditional easing bias. Overall the MPC sees risks skewed to the downside on a number of fronts - global trade/geopolitical tensions, low business confidence, likely delay in fiscal policy and likely low inflation. We had anticipated the Bank to point to downside risks to its 2020 GDP forecasts, but the RBNZ was positive on the outlook 1 year out, so this did come as a surprise. Although the RBNZ offered a contingent easing bias and a balanced outlook 1 year out, we retain our 25bps cut to 0.75% in November".

EUR/USD

Resistance levels (open interest**, contracts)

$1.1165 (1956)

$1.1131 (2109)

$1.1096 (1429)

Price at time of writing this review: $1.0998

Support levels (open interest**, contracts):

$1.0945 (2973)

$1.0897 (2184)

$1.0849 (770)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date October, 4 is 95587 contracts (according to data from September, 24) with the maximum number of contracts with strike price $1,1050 (12953);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2617 (1432)

$1.2574 (844)

$1.2552 (509)

Price at time of writing this review: $1.2463

Support levels (open interest**, contracts):

$1.2411 (904)

$1.2374 (575)

$1.2333 (782)

Comments:

- Overall open interest on the CALL options with the expiration date October, 4 is 16749 contracts, with the maximum number of contracts with strike price $1,2500 (1795);

- Overall open interest on the PUT options with the expiration date October, 4 is 18353 contracts, with the maximum number of contracts with strike price $1,1900 (1361);

- The ratio of PUT/CALL was 1.10 versus 1.10 from the previous trading day according to data from September, 24

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.