Tin tức thì trường

Major US stock indexes rose moderately, as the news that US President Donald Trump plans to postpone the introduction of tariffs on European cars outweighed weak economic data from the US and China.

Three sources told CNBC that the Trump administration would postpone the decision to impose a 25% duty on European-made cars for up to six months. This news, which was first reported by Bloomberg, led to an increase in car companies.

In addition, Finance Minister Stephen Mnuchin said that, most likely, he would soon go to China to continue trade negotiations.

These messages have allowed to reassure market participants, agitated by previously published weak economic data from the United States and China, which heightened concerns about the slowdown of the global economy.

A report by the Commerce Department showed that US retail sales unexpectedly fell in April, reflecting a sharp decline in car sales. According to the report, retail sales fell by 0.2% after rising 1.7% in March. Economists had expected sales to grow by 0.2%. With the exception of a sharp drop in car sales, retail sales in April rose by 0.1% after rising by 1.3% in March. It was expected that sales excluding cars will grow by 0.7%.

The Fed reported that industrial production in the United States fell by 0.5% in April after rising 0.2% in March, while economists had forecast that the figure would remain unchanged.

Almost all of the components of DOW finished trading in positive territory (27 out of 30). The growth leader was the shares of Visa Inc. (V; + 1.47%). Walmart Inc. shares turned out to be an outsider. (WMT; -0.40%).

Almost all sectors of the S & P recorded an increase. The greatest growth was shown by the technology sector (+ 1.5%). Only the utility sector decreased (-0.1%).

At the time of closing:

Dow 25,648.02 +115.97 +0.45%

S & P 500 2,850.96 +16.55 +0.58%

Nasdaq 100 7,822.15 +87.65 +1.13%

The U.S. Energy Information Administration (EIA) revealed on Wednesday that crude inventories surged by 5.431 million barrels in the week ended May 10. Economists had forecast a decrease of 1.200 million barrels.

At the same time, gasoline stocks declined by 1.123 million barrels, while analysts had expected a drop of 0.350 million barrels. Distillate stocks rose by 0.084 million barrels, while analysts had forecast a decrease of 0.719 million barrels.

Meanwhile, oil production in the U.S. decreased by 100,000 barrels a day to 12.100 million barrels a day.

U.S. crude oil imports averaged 7.6 million barrels per day last week, up by 919,000 barrels per day from the previous week.

• Says in "serious" talks with China to improve trade ties
• A lot of work to do on China trade negotiations
  
• Says he will likely go to Beijing at some point to continue talks

• Some domestic factors dampening growth may be fading
• Governing council stands ready to adjust all instruments, as appropriate
• Eurozone economy has high capacity utilization

The Commerce Department reported on Wednesday that business inventories were flat m-o-m in March, following an unrevised 0.3 percent m-o-m increase in February.

That was in line with economists’ forecast.

According to the report, inventories at manufacturers rose 0.4 percent m-o-m in March, while stocks at retailers and wholesalers dropped by a respective 0.3 percent m-o-m and 0.1 percent m-o-m.

The National Association of Homebuilders (NAHB) announced on Wednesday its housing market index (HMI) rose three points to 66 in May, the highest reading since October 2018.

Economists forecast the HMI to increase to 64.

A reading over 50 indicates more builders view conditions as good than poor.

All three HMI components were higher this month. The indicator gauging current sales conditions rose three points to 72, the component measuring traffic of prospective buyers increased two points to 49, and the measure charting sales expectations in the next six months edged one point higher to 72.

NAHB Chairman Greg Ugalde said: “Builders are busy catching up after a wet winter, and many characterize sales as solid, driven by improved demand and ongoing low overall supply. However, affordability challenges persist and remain a big impediment to stronger sales.”

Meanwhile, NAHB Chief Economist Robert Dietz noted: “Mortgage rates are hovering just above 4% following a challenging fourth quarter of 2018 when they peaked near 5%. This lower interest rate environment, along with ongoing job growth and rising wages, is contributing to a gradual improvement in the marketplace. At the same time, builders continue to deal with ongoing labor and lot shortages and rising material costs that are holding back supply and harming affordability.”

The report from the New York Federal Reserve showed on Wednesday that manufacturing activity in the New York region expanded in April at a faster pace than in recent months.

According to the survey, NY Fed Empire State manufacturing index came in at 17.80 this month compared to an unrevised 10.10 in March. That was the highest reading since November 2018.

Economists had expected the index to come in at 8.50.

Anything below zero signals contraction.

According to the report, the new orders index increased two points to 9.7, indicating an increase in orders, and the shipments index rose eight points to 16.3, pointing to good increases in shipments. Meanwhile, delivery times held steady, and inventories moved slightly lower. The index for number of employees fell seven points to 4.7, a level indicating that employment increased only to a small degree. On the price front, the prices paid index was little changed at 26.2, as was the prices received index at 12.4.

The Federal Reserve reported on Wednesday that the U.S. industrial production fell 0.5 percent m-o-m in April, following a revised 0.2 percent m-o-m increase in March (originally 0.1 percent m-o-m drop). That was the biggest decline in industrial production since May 2018.

Economists had forecast industrial production would be unchanged m-o-m in April.

According to the report, manufacturing production decreased 0.5 percent m-o-m in April after being unchanged in March. At the same time, the index for mining rose 1.6 percent m-o-m, while the index for utilities fell 3.5 percent m-o-m.

Capacity utilization for the industrial sector decreased 0.6 percentage point m-o-m in April to 77.9 percent. That was 0.8 percentage points below economists’ forecast and 1.9 percentage point below its long-run (1972–2018) average.

In y-o-y terms, the industrial output rose 0.9 percent in April, following a downwardly revised 2.3 percent surge in the prior month. That marked the slowest rate of growth in industrial production since February 2017.

U.S. stock-index futures fell on Wednesday, as disappointing economic data out of the U.S. and China data increased concerns that the global economy is slowing down.

Global Stocks:

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

The Commerce Department announced on Wednesday the sales at U.S. retailers fell 0.2 percent m-o-m in April, following a revised 1.7 percent m-o-m surge in March (originally a gain of 1.6 percent m-o-m), hurt by declines in sales of motor vehicles and a range of other goods.

Economists had expected total sales would increase by 0.2 percent m-o-m in April.

Excluding auto, retail sales edged up 0.1 percent m-o-m in April after a revised 1.3 percent m-o-m advance in the previous month (originally a gain of 1.2 percent m-o-m), missing economists’ forecast for a 0.7 percent m-o-m advance.

Meanwhile, closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, and are used in GDP calculations, was flat m-o-m in April after an upwardly revised 1.1 percent m-o-m gain in March (originally a 1.0 percent m-o-m increase). 

In y-o-y terms, the U.S. retail sales rose 3.1 percent in April, decelerating from a revised +3.8 percent in the previous month (originally +3.6 percent).

Statistics Canada reported on Wednesday the country’s consumer price index (CPI) rose 0.4 percent m-o-m in April, following a 0.7 percent m-o-m gain in the previous month.

On the y-o-y basis, Canada’s inflation rate increased 2.0 percent last month after a 1.9 percent gain in March. That was the highest inflation rate since December 2018.

Economists had predicted inflation would increase 0.4 percent m-o-m and 2.0 percent y-o-y in April.

According to the report, prices went up in seven of the eight major components in the 12 months to April. The shelter prices (+2.7 percent y-o-y) contributed the most to the April increase in the CPI, while prices for household operations, furnishings and equipment posted a decline (-0.1 percent y-o-y). Energy prices rose 0.7 percent y-o-y in April, recording the first 12-month gain since October 2018. Food prices surged 2.9 percent y-o-y last month, decelerating from a 3.6 percent y-o-y advance in March.

The closely watched the Bank of Canada's core index increased 1.5 percent y-o-y in April after gaining 1.6 percent y-o-y in the previous month. Economists had forecast an advance of 1.8 percent y-o-y.

• Significance of Brexit legislation can't and won't be underestimated
• Bill means we can leave the EU by summer
• Government wants the broadest support possible

Macy's (M) reported Q1 FY 2019 earnings of $0.44 per share (versus $0.48 in Q1 FY 2018), beating analysts’ consensus of $0.34.

The company’s quarterly revenues amounted to $5.504 bln (-0.7% y/y), generally in line with analysts’ consensus estimate of $5.524 bln.

M rose to $22.81 (+4.63%) in pre-market trading.

Alibaba (BABA) reported Q4 FY 2019 earnings of RMB 8.57 per share (versus RMB 5.73 in Q4 FY 2018), beating analysts’ consensus of RMB 6.50.

The company’s quarterly revenues amounted to RMB 93.498 bln (+51.0% y/y), beating analysts’ consensus estimate of RMB 91.685 bln.

The company also issued in-line guidance for FY 2020, projecting revenues of over RMB500 bln vs. analysts’ consensus estimate of RMB508.86 bln.

BABA rose to $177.54 (+1.54%) in pre-market trading.

• Adds the rules must be changed
• Wants to cut Italy's debt via economic growth
• Says he is not Worried about his comments pushing up the spread between the Italian and German bond yields

The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. fell 0.6 percent in the week ended May 10, following a 2.7 percent increase in the previous week.

According to the report, the refinance applications declined 0.5 percent and applications to purchase a home dropped 0.6 percent.

Meanwhile, the average fixed 30-year mortgage rate decreased to 4.40 percent from 4.41 percent.

“It’s worth watching if ongoing global trade disputes lead to increased anxiety about the economy, which could cause some potential homebuyers to put off their home search until the uncertainty is resolved,” said Joel Kan, an MBA economist.

Bloomberg reports the analysts from Fitch Ratings Inc. and IHS Markit Inc. say that Russia has indicated it would welcome a return to production growth in recent months. That’s back on the agenda after pledges by Saudi Arabia and its Persian Gulf allies to fill the supply gap created by tighter U.S. sanctions on Iran.

Moscow “sees a place for its extra barrels in the market,” said Maksim Nechaev, Russia director for IHS Markit. The country has the means to increase production by around 300,000 barrels a day within a short period of time “and this is probably the message that Russia will bring.”

Russia’s Energy Ministry did not immediately reply to a Bloomberg request seeking comment on the nation’s position at the weekend talks in Jeddah.

While it may appear that the interests of Saudi Arabia and Russia - the two most powerful members of the OPEC+ coalition - are coming into alignment, it’s by no means certain that the meeting in Jeddah on Sunday will lay the groundwork for a formal production increase.

Hélène Baudchon, the analyst at BNP Paribas, notes that the French economy private payrolls gains have been on an upward trend (+31k in Q3 2018, +54k 2018 in Q4, +66k in Q1 2019), contrasting favourably with the stability of GDP growth over the same period.

• Nearly 900,000 private payrolls were created on a net basis since the 2013 trough.
• The prospects for 2019 are encouraging judging by the latest Pole emploi study on manpower requirements, which reports another sharp rise in staffing plans of 15% after an impressive gain of 19% in 2018. These plans represent 2.69 millions of potential hiring. Their number is up in every sector and in a particularly dynamic way in the construction, industry and business services sectors.
• The large increase in recruitment projects on open-ended contracts (+24%) is also noteworthy (+8% for fixed-term contracts). This bigger number of staffing plans goes hand in hand with bigger hiring difficulties: the percentage of projects expected to be difficult reaches 50.1%.

• Cross-party talks have been "serious" and "challenging"
• Parliament will have the opportunity to vote on withdrawal bill in the 1st week of June
• We are exploring with the EU how much of the political declaration can be changed

TD Securities' analysts are expecting another firm advance in the U.S. retail sales with the control group (+0.5% m/m) the main driver behind a 0.3% gain in the headline measure for April.

• The increase in the latter would represent a mean-reversion in growth following the notable 1.6% jump in March that likely reflected, to a large extent, a normalization in tax refunds.
• We also expect a soft 0.1% m/m increase in April industrial production, on the back of a 0.2% gain in manufacturing activities. However, recent uninspiring performance and lingering external headwinds increase the risk for a downside surprise in the latter.
• Lastly, the Empire Manufacturing index is expected to give back some of its April strength, declining from 10.1 to 8.0 in May.

Arjen van Dijkhuizen, senior economist at ABN AMRO point out that on the monetary front, the Chinese authorities have taken several measures to safeguard liquidity in the banking system and stimulate lending, particularly to private firms and SMEs.

“On the fiscal front, the government opted for a broad range of tax cuts and a doubling of bond issuance quota for local governments (hit by previous financial deleveraging). All in all, Beijing has opted for what we call a piecemeal approach of monetary and fiscal easing, not for big bazooka forms of stimulus (that was not needed and would run counter to longer-term goals such as stabilising leverage). That said, Beijing still has sufficient room for further policy easing in our view, and we expect the authorities to use that room. The PBoC could opt for further RRR cuts or, if needed, even lower the benchmark policy rate (that has been kept on hold on 4.35% since 2015), while allowing overall debt levels to pick up again somewhat. In addition, a renewed weakening of the yuan would also help to offset the impact of tariffs.”

According to Iris Pang, economist at ING, if the slowdown in the activity data continues in May and June, China's GDP growth could fall below 6.0% YoY in 2Q19.

“Industrial production and retail sales slowed for different reasons. Fixed asset investments grew 6.1% year-on-year, year-to-date in April from 6.3% in March. This was probably hit by slower progress in completing investments in planned infrastructure projects and slow manufacturing investment as a result of the trade war. Industrial production slowed sharply to 5.4% YoY from 8.5% YoY. The slowdown is partly a result of the slower execution of infrastructure projects and partly the continuous disruption of ride-hailing apps on the production of automobiles. Retail sales growth dropped to 7.2% YoY from 8.7% YoY. The slower growth is broad-based. This is worrying as April was a month when China's stock market rose amid good progress in trade talks, so consumer sentiment should have been better.”

According to a flash estimate published by Eurostat, seasonally adjusted GDP rose by 0.4% in the euro area (EA19) and by 0.5% in the EU28 during the first quarter of 2019, compared with the previous quarter. In the fourth quarter of 2018, GDP had grown by 0.2% in the euro area and by 0.3% in the EU28.

Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.2% in the euro area and by 1.5% in the EU28 in the first quarter of 2019, after also +1.2% and +1.5% respectively in the fourth quarter 2018.

The number of employed persons increased by 0.3% in both the euro area and the EU28 in the first quarter of 2019, compared with the previous quarter. In the fourth quarter of 2018, employment had grown by 0.3% in the euro area and 0.2% in the EU28.

Compared with the same quarter of the previous year, employment increased by 1.3% in the euro area and by 1.1% in the EU28 in the first quarter of 2019, after +1.3% and +1.2% respectively in the fourth quarter of 2018.

The world will require very little extra oil from OPEC this year as booming U.S. output will offset falling exports from Iran and Venezuela, the International Energy Agency said.

The IEA, which coordinates the energy policies of industrial nations, said there was “scope for other producers to raise supply” to fill the gap left by lower production from Iran due to tightening U.S. sanctions.

The monthly report said higher output from producers outside the Organization of the Petroleum Exporting Countries, especially from the US in the second quarter, would keep the market well supplied.

According to the report from Istat, in March 2019 the seasonally adjusted turnover index increased by 0.3% compared to the previous month (-0.3% in domestic market and +1.5% in non-domestic market); the first quarter compared to the previous one increased by 0.9% (+0.9% in domestic market and +1.1% in non-domestic market).

The seasonally adjusted industrial new orders index increased by 2.2% compared to February (-0.5% in domestic market and +6.2% in non-domestic market); the first quarter compared to the previous one remained unchanged (+0.5% in domestic market and -0.6% in non-domestic market).

With respect to the same month of the previous year the calendar adjusted industrial turnover index increased by 1.3% (+0.2% in domestic market and +3.5% in non-domestic market). Calendar working days in March 2019 were 21, one less than March 2018.

The unadjusted industrial new orders index decreased by 3.6% with respect to the same month of the previous year (-4.4% in domestic market and -2.4% in non-domestic market).

According to analysts at TD Securities, Australian employment in the early months of 2019 has been strongly tilted towards full-time (+112k vs -41k) and so the seasonally-neutral April report may have a decent +17k lift in jobs, but the odds are tilted towards them all being part-time.

“In the 7 May Policy Statement, the RBA made clear it is firmly focused on further progress in lowering the unemployment rate. We look for a small lift to 5.1%, nothing to a central bank, but combined with a fall in full-time employment could temporarily weigh on the AUD and give July OIS rate cut odds a boost. RBA Assistant Governor Bullock speaks about financial stability at an ASIC forum in Sydney a short while afterwards.”

The United States may be feeling the pain of tariffs now, but they will hurt China in the longer term, said former Goldman Sachs CEO Lloyd Blankfein.

“Tariffs might be an effective negotiating tool,” Blankfein said. “Saying it hurts us misses the point. China relies more on trade and loses more.”

Trade tensions between the world’s two largest economies escalated in the last week. U.S. President Donald Trump’s administration raised tariffs on $200 billion worth of imported goods from China to 25% from 10%. In response, Beijing retaliated with duties of up to 25% on $60 billion worth of U.S. goods that are set to take effect on June 1.

In a separate tweet Tuesday, Blankfein said tariffs may cause U.S. buyers to switch their purchases to local or non-Chinese companies. Although that will cause the American side to pay slightly more than they do now, he pointed out that as a result, Chinese companies will lose revenues.

China's central bank said it will skip open market operations on Wednesday as liquidity levels in the banking system were "reasonable and ample".

The People's Bank of China (PBOC) said the first phase of reserve requirement ratio (RRRs) cuts came into effect on Wednesday, and the move released about 100 billion yuan worth of long term funds.

The central bank said last Monday that it would implement its cut in RRRs for some small- and medium-sized banks in three phases, as part of wider efforts to help companies weather a slowdown in the world's second largest economy.

According to the report from Insee, in April, the Consumer Prices Index (CPI) rose by 0.3% over a month, after +0.8% in March. The prices of manufactured product (+0.1% after +2.1%), energy (+0.6% after +1.1%) and tobacco (+0.1% after +7.3%) slowed down sharply in April. Contrariwise, services prices accelerated (+0.5% after 0.2%) and those of food rebounded very slightly (+0.1% after −0.2%).

Seasonally adjusted, consumer prices increased by 0.3% over a month, after +0.1% in March.

Year on year, consumer prices gathered pace in April to +1.3% after +1.1% in March 2019. This rise in inflation came from a year-on-year acceleration in services prices and, to a lesser extent, a little less marked drop in those of manufactured product. Contrariwise, energy prices slowed down. Food and tobacco prices rose, year on year, at the same pace as in March.

Year on year, core inflation rose by +0.7%, after +0.5% in March, returning at the level observed from November 2018 to February 2019. The Harmonised Index of Consumer Prices (HICP) slowed down, over a month, to +0.4% in April, after +0.9% in March; year on year, it grew by 1.5%, after +1.3% in the previous month.

Some weakness is showing up in the U.S. economy despite lofty predictions of growth, according to Jeffrey Gundlach, the chief investment officer of DoubleLine Capital.

The Atlanta Fed recently forecast real gross domestic product at 1.6%, and a Citigroup Inc. basket of economic indicators has fallen to its lowest level since the financial crisis, Gundlach said.

Gundlach also said:

• 12 months I’d give you a recession probability that’s 50-50. next six months I’d probably have it down at 30%

• The odds of a Fed rate cut in the next 12 months are about 70%.

• The economy has been growing largely because of a debt scheme as the U.S. increases spending and fuels deficits beyond expansion in output.

• The bond market is “extremely exposed” to a downturn in the U.S. dollar, because some foreign buyers have been purchasing Treasuries without currency hedges.

According to analysts at Danske Bank, trade tensions between the US and China continue to be the key driver for markets.

“On the data front, the main releases will be US retail sales for April and the US Empire business survey index for May. We expect retail sales to continue to show strength but would keep in mind the data is quite volatile on a monthly basis. Retail sales bounced back strongly in March after a weak start to the year. The Empire index will give us the first survey for May”

• growth data no reason to give all-clear, international trade disputes still unresolved

• Must do everything possible to find acceptable solutions to free trade

• government must help companies, cut red tape, lower corporate and energy taxes

EUR/USD

Resistance levels (open interest**, contracts)

$1.1333 (4504)

$1.1303 (2873)

$1.1281 (1385)

Price at time of writing this review: $1.1209

Support levels (open interest**, contracts):

$1.1186 (3098)

$1.1158 (8166)

$1.1124 (5274)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date June, 7 is 117096 contracts (according to data from May, 14) with the maximum number of contracts with strike price $1,1500 (8479);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3132 (1472)

$1.3094 (635)

$1.3060 (965)

Price at time of writing this review: $1.2913

Support levels (open interest**, contracts):

$1.2896 (1870)

$1.2868 (1329)

$1.2847 (1810)

Comments:

- Overall open interest on the CALL options with the expiration date June, 7 is 38181 contracts, with the maximum number of contracts with strike price $1,3450 (3282);

- Overall open interest on the PUT options with the expiration date June, 7 is 38174 contracts, with the maximum number of contracts with strike price $1,2700 (4202);

- The ratio of PUT/CALL was 1.00 versus 1.00 from the previous trading day according to data from May, 14

* - 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.