Wednesday, May 29, 2013
Quote of the Day - 05.29.2013
"Always have rules in these markets, unless you want these markets to have rules for you - Allamby"
Daily Market Color 05/29/2013
Daily
Market Color
05/29/2013
Economic
Reports & Headlines
Germany kicked off today’s
economic calendar at 3:55am New York time. Their jobless rate in May stood the
same at 6.9%. Although the jobless rate remained the same, joblessness still
rose 21,000 in May.
UK’s retail and wholesale sector was
in peril for the month of May according to CBI’s Distributive Trade Report. The
headline figure missed consensus by a wide margin, -11 Vs 6.
Consumer prices in Germany rose slightly
higher than consensus in May on a month over month basis, 40bps Vs 30bps.
IMF cut China’s growth forecast
for the remainder of the year from 8.00% to 7.75%
Future
Reports
Tomorrow we have a busy day on
the global economic calendar. On the domestic front, the US will release first
quarter GDP and jobless claims.
Japan will be releasing the
following reports: Consumer Price Index, Household Spending, Jobless Rate and
Industrial Production.
Trade
Tomorrow should be a volatile day
for risk assets. US first quarter GDP is expected to come in at 2.5% on a
quarterly basis. In light of the strong rise in stocks and the overly buoyant housing
market, I’m forecasting a good GDP report for tomorrow. Over in Japan, the
consumer price report is the report everyone will be watching, well everyone
who trades Japanese markets will be watching this report. In light of the
decline in energy prices, I’m expecting consumer prices to match consensus and decline
40bps. According to headlines in financial publications, markets participants
are becoming increasingly cautious of risk assets because of potential fed tapering
within the near future. At the moment, the FOMC do not have enough members in
favor of voting for tapering to even make the threat of tapering a reality, at
least for the moment.
Daily Market Color 05/28/2013
Daily
Market Color
05/28/2013
Economic
Reports & Headlines
Today turned out to be a positive
day for the economic calendar according to an increase in the value of risk
assets. The majority of the reports were released in the US. March’s SP
Case-Shiller 20-City Home Price Index beat economists’ expectations on a year
over year basis, 10.9% Vs 10.2%. This is the first double digit gain since May
2006.
The Conference Board released
their Consumer Confidence report for May. The consumer survey beat analysts’
estimate, 76.2 Vs 71.5.
The Dallas Fed released their
Manufacturing survey for May, which contracted more than expected, -10.5 Vs
-8.0.
Heading over to the increasingly
popular island nation of Japan, last night their government released April’s
Retail Sales report. The report came in better than expected, but still
contracted on a year over year basis, -10bps Vs -30bps.
Future
Reports
Tomorrow will be a relatively
light day for the economic calendar. Markets will get an updated read on unemployment
and consumer prices in Germany.
The Bank of Canada will make
their monetary policy announcement.
Trade
Once
again, the sharp sell-off in the Nikkei, the rise in the Yen and the decline in
the SP 500 will be short lived in my opinion. The fundamentals warranted to
reverse the trend in these assets are absent. China’s Flash PMI was bad;
however, when you take a look at China’s economic data collectively, you could
easily conclude that last week’s global asset moves were overdone.
Nevertheless, a temporary trend reversal is possible this week. Japan will
release their Consumer Price Index report and the US will release their first quarter
GDP report on Thursday. I will continue to stay long US stocks and short the
Yen against the US dollar.
Saturday, May 25, 2013
What is a PMI Report?
After this week disastrous decline in Japan’s equity markets,
I decided it would be appropriate to write an article about PMI reports and
what they’re about. Apparently, a PMI report could have considerable influence on
risk assets. On Wednesday evening, China’s Flash manufacturing PMI report unexpectedly
contracted. This was the first contraction in seven months. The news sent
Japanese stocks tanking at a pace unseen since March 2011. Although the PMI
report was poor, I felt the decline in risk assets was unwarranted. Let’s delve
into the core of the article which is to define what a PMI report is.
What is a PMI Report?
PMI stands for purchasing managers index. According to
investopedia.com, a PMI report is a monthly questionnaire survey taken by
select companies. The survey results should give an indication of whether private
sector performance is improving, deteriorating or staying the same relative to
the previous PMI reading. They are three types of PMI reports: manufacturing,
services and construction. The reports are typically released on the first three
business days of the month. PMI reports are usually nationally, however, they
are some regional PMI reports.
Components of a PMI Report
The report is rather simple and calls for rudimentary math to
derive the headline PMI number. The headline PMI number is the aggregate of the
following components: New Orders, Employment, Suppliers Delivery Times and Stocks
of Purchases. Survey participants are asked if conditions in the aforementioned
components improved, stood the same or deteriorated relative to the previous PMI
reading. Headline PMI readings above 50 indicates an expansion. Readings below
50 indicates a contraction.
Who Issues the Report?
Markit Group and the Institute of Supply management are the
two main producers of PMI reports. Markit Group is a London based financial
information firm that was founded in 2003. Initially the firm was created to
provide daily credit default swap pricing, but it eventually began to offer a
wide array of services as time went by. Markit Group provides PMI reports for
30 countries. The Institute of Supply Management (ISM) is based in Arizona and it
produced its first PMI report for the US in 1948. ISM US PMI reports are followed
more than Markit’s US PMI reports.
Conclusion
The reason why PMI reports merit attention from
market participants is because the survey is factual and virtually free of
opinions. Survey participants are asked if a particular component of their
business went up, down or stayed the same since the previous report. The
companies that are selected to participate in the survey are supposed to reflect
the performance of the overall economy. In light of this article, I guess we
could see why Japanese stocks took a nosedive on China’s disappointing flash manufacturing
PMI report.
Weekly Round-Up: 05/20/13 – 05/24/13
Weekly
Round-Up: 05/20/13 – 05/24/13:
Some FOMC members
felt that their asset purchase program should be tapered
China’s PMI flash
unexpectedly contracted
Jobless claims were
better than expected
Flash manufacturing
PMI in the US was better than expected
New home sales beat
consensus by a wide margin
Durable goods
orders were better than expected
Commentary
This week was uneventful until China’s flash PMI
reading on manufacturing disappointed and contracted for the first time in
seven months. This sent Japanese equities down 10% within the last two trading
sessions. Stocks in the US declined as well but not as severe as Japanese
stocks. Poor Chinese data coupled with Fed commentary of tapering bond
purchases sent the SP 500 down for three consecutive trading sessions this
week. The number of FOMC members that are calling for a slowdown in bond purchases
is small. The hawks do not have enough support within the committee to actually
taper bond purchases, according to the minutes. So in essence, the hawks’ calls
for bond tapering are only rhetoric at the moment. Japanese equities
overreacted in my opinion. We received Chinese data within the past few weeks
that disappointed, however, Japanese stocks hardly reacted to the disappointing
Chinese reports. I see US stocks continuing their ascent this week if GDP
estimates exceeds economists’ consensus on Thursday. I also see the Yen
resuming its decline if Japan’s household spending report and consumer price
report beat analysts’ estimates this Thursday.
Friday, May 24, 2013
Quote of the Day - 05.24.2013
"In the markets you either have correction sell-offs or the End-of-the-World sell-offs - Allamby"
Daily Market Color 05/24/2013
Daily
Market Color
05/24/2013
Economic
Reports & Headlines
Germany’s first quarter GDP was
in line with economists’ consensus on a quarter over quarter basis by rising
10bps.
On the domestic front Durable goods
orders in the US increased more than expected, 3.3% Vs 1.1%.
The Nikkei 225 fell over 10% in
the last two trading sessions.
Future
Reports
Over the weekend the BOJ will
release minutes for Aprils monetary policy meeting.
Monday markets will be closed for
Memorial day.
Trade
US stocks and Japanese stocks are
falling in light of a poor flash PMI reading in China. I see the sell-off as a
correction. Economic reports from the US continue to beat consensus. Over in
Japan, financial publications are paying more attention to the volatility in
Japanese government bond prices. The decline in JGB prices is concerning many
market participants according to a report from Bloomberg.
Daily Market Color 05/23/2013
Daily
Market Color
05/23/2013
Economic
Reports & Headlines
The global economic calendar for
today was rather lengthy. There were a slew of flash PMI reports. Let’s begin with
France. France’s flash PMI reading for May was mixed but better than last month’s
reading. The manufacturing component beat consensus but still contracted, 45.5 Vs
44.4. Services missed estimates and contracted 44.3 vs 44.4.
Germany’s flash PMI composite
reading was mixed as well. Manufacturing beat consensus and it beat last month’s
reading but it still contracted, 49.0 Vs 48.4. Services contracted as well and
missed estimates by a slight margin.
The Eurozone flash PMI composite
beat economists’ estimates but still gave a sub-50 reading which indicates contraction.
On the manufacturing front the flash PMI reading was, 47.8 Vs 47.1. On the
services front the flash PMI reading was, 47.5 vs 47.2
First quarter GDP in the UK was
in line with consensus on a quarter over quarter basis, rising 30bps.
On the domestic front, jobless
claims in the US fell more than expected for the week ending on 5/18, 340k Vs
345k.
The Flash manufacturing reading in the US came
in higher than expected, 51.9 Vs 50.8. any reading above 50 indicates an expansion.
New home sales in the US
surpassed analysts’ estimates by a wide margin, 454k Vs 425k.
Future
Reports
Tonight we will look forward to
New Zealand’s merchandise trade report. Markets are expecting a surplus of $157m.
Tomorrow we will get a GDP reading
from the Germans.
On the domestic front we will get
a read on durable goods for April.
Trade
It appears
that a correction is taking place in Japan’s equity markets. Many market participants
are wondering when a correction will occur in the US. They are many reports
that are forthcoming that could serve as the catalysts.
Wednesday, May 22, 2013
Daily Market Color 05/22/2013
Daily
Market Color
05/22/2013
Economic
Reports & Headlines
The Bank of England released
minutes for its most recent meeting. The Monetary Policy Committee had a split
vote once again on a move to increase their asset purchase program by 25bn
pounds.
April’s retail sales report in
the UK contracted unexpectedly on a month over month basis. The reading was
lower than consensus, -130bps Vs 0bps
CBI released its Industrial
Trends survey for May. The report came in below consensus, -20 Vs -17.
On the domestic front, the
National Association of Realtors released their existing home sales report for
April which came in slightly below economists’ forecast, 4.97m Vs 5.00m. Existing
homes sales are at a three year high.
Ben Bernanke’s testimony to
congress was dovish. It appears that the Federal Reserve Chairman believe tighten
monetary policy within the near future would be premature.
Future
Reports
Tonight we will get a flash manufacturing
PMI reading from China.
Tomorrow we will get flash PMI
composite readings from France, Germany and the Eurozone.
The UK will release GDP data and
Italy will give a read on retail sales.
On the domestic front, market participants
will last week’s jobless claims report. Economists’ are calling for claims to
come in at 345k.
US’s Flash PMI manufacturing
report is expected to come in at 50.8. Any reading above 50 indicates an expansion.
We will get a read on new homes
sales in the US for April. Consensus is calling for 425k new home sales.
Trade
The
housing market and accommodative Fed policy is propelling US equities to new heights.
In two weeks we will get an updated read on employment in the US. The Banks of
Japan plan to meet with JGB market participants on May 29th to discuss
the turbulence in Japanese Government bond yields. This meeting is expected to assist
the Bank of Japan to schedule their bond purchases for June. I suppose they
expect that this will cause decrease rapid swings and create a gradual move JGB
yields. But I doubt that the scenario will come to fruition. I will continue to
short the Yen.
Daily Market Color 05/21/2013
Daily
Market Color
05/21/2013
Economic
Reports & Headlines
Japan started the economic
calendar for today at 12:30am New York time with their All industry index,
which came in lower than last month’s reading, -30bps Vs 60bps.
April’s producer prices in
Germany were in line with consensus, on a month over month basis, declining
20bps. This is the weakest reading since March of 2010. A decline in energy
costs contributed to the decline.
April’s reading of consumer
prices in the UK was lower than expected on a monthly basis, 20bps Vs 40bps.
Producer prices in the UK
unexpectedly contracted on a monthly basis in April, -10bps Vs 20bps.
Japans trade deficit was larger
than expected in April, -879bn Yen Vs -594bn Yen.
The Bank of Japan monetary policy
announcement was uneventful. The monetary policy board voted unanimously to
keep its asset purchase program unchanged.
Future
Reports
Tomorrow we will get a further
insight into the Bank of England’s most recent monetary policy meeting.
We will also get a read on retail
sales and industrial trends in the UK as well.
On the domestic front, the
National Association of Realtors will release their existing home sales report.
Federal Reserve Chairman, Ben
Bernanke, will be addressing congress’s Joint Economic Committee.
FOMC minutes for their most
recent meeting will be released.
Trade
There is nothing on the immediate
horizon that should derail this equity rally. However, nonfarm payrolls for May
are expected to be released within two weeks. An upset in that report could be
grounds for a correction.
Monday, May 20, 2013
Weekly Round-Up: 05/13/13 – 05/17/13
Weekly
Round-Up: 05/13/13 – 05/17/13:
Industrial production
in China came in slightly lower than expected
Retail Sales in
China came in slightly lower than expected
US retails sales
beat consensus, sales increased instead of decreased as expected
Business inventories
missed consensus
Import prices
decreased more than expected, export prices were in line with consensus
Producer prices declined
and which was in line with consensus
The Empire State
Manufacturing Survey missed estimates and unexpectedly contracted
Industrial production
declined more than expected
The housing market
report was in line with consensus and higher than the previous reading
Japanese GDP came
in higher than expected
Consumer prices
declined more than expected
Housing starts took
an unexpected month over month dip; housing permits came in higher than
expected
Jobless claims
missed consensus by a large margin
The Philly Fed
Survey took an unexpected dip and missed consensus
Consumer sentiment
was better than expected
Commentary
This week was
mixed. The reports that did miss consensus were regionally and didn't merit significant
attention. The housing starts report was mixed. Although housing starts took an
unexpected dip in April, relative to last month’s reading, housing permits
still beat consensus and the previous reading by a large margin. Industrial production
and retail sales in china missed, but they only missed by a slight margin.
Japan’s GDP was a win for prime minster Shinzo Abe. The report came in higher
than expected and it was led by consumption.
Daily Market Color 05/20/2013
Daily
Market Color
05/20/2013
Economic
Reports &Headlines
Today is a relatively light day
for the global economic calendar. Over the weekend Federal Reserve Chairman,
Ben Bernanke, gave a graduation speech at Bard College. The speech was inspirational
and not focused on current monetary policy.
April’s Chicago Fed National
Activity report came in below trend at a larger pace than the previous reading,
-0.53 Vs -0.23.
North Korea fires six missiles in
three days, according to Reuters report.
Future
Reports
Late on this evening, the Reserve
Bank of Australia will issue minutes from its most recent meeting.
Tomorrow the Bank of Japan will
make its monetary policy announcement. Markets are expecting the bank to leave
monetary policy unchanged.
Over in Germany, we will get a
read on producer prices for April. Consensus is calling for a -20bps month over
month decline.
Consumer prices for April in the
UK are expected to increase 40bps on a monthly basis.
During the evening, right before Japan’s
trading session begins, we will get read on trade in Japan. Markets are
expecting the Japan’s trade deficit to come in at 594bn Yen.
Trade
Stocks
are rising and there appears to be nothing on the horizon this week to reverse
the trend. The Yen is declining, however, we have Japan’s merchandise trade
report and the Bank of Japan monetary policy announcement that could temporarily
halt the decline in the Yen.
Friday, May 17, 2013
Daily Market Color 05/17/2013
Daily
Market Color
05/17/2013
Economic
Reports &Headlines
March’s machine orders in Japan
last night blew past analysts’ estimates on a month over month basis, 14.2% Vs
3.0%.
On the domestic front, The
University of Michigan Consumer Sentiment report came in higher than expected,
83.7 Vs 78.0.
According to a Reuters report,
Shinzo Abe plans to spend $687 billion dollars annually on domestic
private-sector investment. He also stated that he plans to double farm exports
and triple infrastructure exports.
Future
Reports
On Monday we have one report that
merits attention which is the Reserve Bank of Australia minutes from its most
recent meeting. The minutes have a two week lag.
Trade
Once again, stocks are rallying
and the Yen is falling. Economic reports should have a greater affect risk
assets moving forward.
Daily Market Color 05/16/2013
Daily
Market Color
05/16/2013
Economic
Reports &Headlines
Last night Japan released first
quarter GDP figures which beat economists’ estimates on both a quarterly and
yearly basis. Quarterly: 90bps Vs 70bps. Yearly: 350bps Vs 280bps.
Today was a busy day for economic
reports across the world. Let’s start off in Europe. The Eurozone on consumer
process for April came in line with consensus at -10bps on a month over month
basis.
Europe merchandise trade report
gave a surplus reading that surged past analysts’ expectations in March, 18.7bn
Vs 11.7bn.
On the domestic front, consumer
prices in the US contracted more than expected in April on a month over month
basis, -40bps Vs -30bps
April’s Housing starts plunged
and missed analysts’ estimates by a wide margin, 853m Vs 969m.
Jobless claims missed economists’
estimates by a wide margin as well, 360k Vs 330k
May’s Philly Fed survey missed
analysts’ estimates, -5.2 Vs 2.2.
Future
Reports
Tomorrow we will get the
University of Michigan consumer sentiment report.
Trade
Stocks
continue their upward slope and the Yen continues to slide. I expect the
markets to become increasingly sensitive to forthcoming economic reports.Wednesday, May 15, 2013
Quote of the Day - 05.15.2013
"Abnormal people do abnormal things and have
abnormal bank account balances – Allamby"
Daily Market Color 05/15/2013
Daily
Market Color
05/15/2013
Economic
Reports &Headlines
We are going to start this report
off in Europe. First quarter GDP in France contracted more than expected on a
quarterly basis, -20bps Vs -10bps. This is the second consecutive decline thus
putting the country in a recession
German first quarter GDP grew
less than expected on a quarterly basis, 10bps Vs 30bps.
First quarter GDP in Italy
contracted more than expected, -50bps Vs -40bps.
Eurozone first quarter GDP
declined more than expected, -20bps Vs -10bps
Heading over to the UK, the labor
market report came in slightly better than expected. Claimant count: -7.3k Vs
-7k. Jobless rate: 7.8% Vs 7.9%.
On the domestic front, producer
prices in the US for April came in line with consensus by declining 70bps on a
month over month basis.
The Empire State Manufacturing
Survey missed analysts’ estimates for May, -1.43 Vs 3.75.
Industrial production in April declined
more than expected on a monthly basis, -50bps Vs -20bps.
The National Association of Home
Builders, Housing Market Report, was in line with consensus at 44.
Future
Reports
This evening at 7:50pm, Japan
will issue first quarter GDP. The report is expected to show a 70bps quarterly increase.
Tomorrow we will get trade
reports from Italy and the EU.
We will get a read on consumer
prices in the US and the EU.
Additional reports to be released
on the domestic front includes jobless claims, the Philly fed survey and
housing starts.
Trade
Stocks need fundamentals going
forward to support this rallying. Nevertheless I am still long stocks and short
the Yen.
Tuesday, May 14, 2013
Daily Market Color 05/14//2013
Daily
Market Color
05/14//2013
Economic
Reports &Headlines
Last night, first quarter retail trade in New
Zealand came in lower than consensus on a quarter over quarter basis, 90bps Vs
110bps.
Producer prices in Japan came in
higher than expected in April, on a month over month basis, 30bps Vs 10bps.
At 2:00am this morning Germany
released April’s consumer prices which came in line with consensus on a month
over month basis, -50bps.
At 4:00am, Italy’s consumer price
index report was released. Consumer prices in the country were unchanged on a
monthly basis. Economists’ were expecting month over month increase of 10bs.
Industrial production in the Eurozone
beat economists’ estimates on a month over month basis, 100bps Vs 60bps.
ZEW’s survey of economic
conditions missed analyst forecast on both fronts. Current conditions: 8.9 Vs
10.9. Business Expectations: 36.4 Vs 40.0.
On the domestic front, export
prices declined more than expected in April on a monthly basis, -70bps Vs
-10bps. Import prices were in line with economists’ forecast at -50bps on a
monthly basis.
Fitch raised Greece’s credit to
B- from CCC with a stable outlook.
Future
Reports
Ten minutes before the Japanese
markets open, we will get a read on 13 major industries in Japan via the Tertiary
index. Consensus is calling for a 70bps month over month decline in the report
for March.
Wednesday will be a busy day for
the global economic calendar. France, Germany, Italy, the European Monetary Union
and Japan will be releasing GDP reports.
The UK will be releasing their
labor market report. The jobless rate is expected to remain the same. The
claimant count is expected to decline by 7k in April.
On the domestic front, we will
get a read on producer prices at 8:30am. Consensus is calling for a month over
month drop of -70bps in April.
The New York Fed will release
their Empire State Manufacturing survey at 8:30am as well. Markets are expecting
the report to give a reading of 3.75.
The US treasury will release a
repot on international capital flows at 9:00am.
Industrial production will be
released at 9:15am. Consensus is calling for a month over month decrease of -20bps
in April.
At 10:00am, the National
Association of Home Builders will release their housing market report for May. Consensus
is calling for the index to come in at 44.
Trade
Stocks
are rallying and the Yen is declining; however I am nervous about how long this
could last. I need strong fundamentals to support this trend. I will continue
to look for potential risk that could derail this rally in US equities and temporally
reverse the decline in the Yen.
Monday, May 13, 2013
Quote of the Day - 05/13/13
“In my mind, everyone is simply voting with their dollars in the market. – Allamby”
Daily Market Color 05/13/2013
Daily
Market Color
05/13/2013
Economic
Reports &Headlines
China started off the economic
calendar today by giving a read on industrial production and retail sales.
Industrial production, in the second largest economy in the world, missed
economists’ estimates, 9.3% Vs 9.6%
Retail sales in China for April
also missed consensus by a small margin on a year over year basis, 12.8% Vs
12.9%
On the domestic front, retail
sales in April surprised analysts with a gain. Economists were forecasting a
drop, on a month over month basis, 10bps Vs -30bps
Business inventories missed
analysts’ forecast by coming in flat on a month over month basis in March, 0bps
Vs 30bps
According to the European
Stability Mechanism, Cyprus received its first Euro-aid payment of 2 billion Euros.
IPOs on track for biggest year
since 2007, According to a report from the Wall Street Journal
Future
Reports
Later on this evening, when the
Asian pacific markets open, New Zealand will issue first quarter retail trade
figures. Economists’ are expecting a quarter over quarter increase of 1.1%
Over in Japan, we will get a read
on corporate goods prices. This report is the equivalent to US’s producer price
index. April’s report is expected to show a 10bps rise in corporate good prices
on a monthly basis and along with a 20bps drop on a yearly basis.
Tomorrow morning we will get a
read on consumer prices in Germany and Italy.
The European Monetary Union will
give a read on industrial production in the country.
On the domestic front, market
participants will get read on import/export prices in the US for the month of
April.
Over in Japan, speculators and
investors will get a read on activity in 13 industries in Japan via the Tertiary
Index.
Trade
The bulls are constantly referencing company's low
valuations as a reason for this rally to continue. However, I believe
the valuation metric holds little to no merit as an indicator to
further fuel this rally in US equities. I recommend looking at earnings and
revenue growth. If the top and bottom line cease to increase at an increasing
rate or at a rate in excess of analysts’ expectations, then I expect stocks to
decline. A prime example of this would be Apple. The company had
low valuations going all the way up to $700. But the stock fell
nearly 50% from $700. And the fall was most definitely not due to the
stocks’ valuation. The fall was primarily attributed to the top and
bottom line.
Another obstacle that warrants attention as a catalyst to
derail or subdue this rally is Europe and China. China is cooling down slightly
and Europe has been in the doldrums for quite some time now. Europe
economic reports are horrid. And when you couple Europe's poor economic
condition with China's self inflicted slow down, that could translate into to
poor economic in the US, since the global economy is
increasingly interrelated.
Nevertheless I am long stocks and
short Yen. I will continue to keep an eye on the hazards cited above.
Saturday, May 11, 2013
Weekly Round-Up: 05/06/13 – 05/10/13:
Weekly
Round-Up: 05/06/13 – 05/10/13:
Jobless claims beat
consensus by a wide margin
US Treasury Budget
surplus came in higher than economists estimates
Commentary
This week they were
hardly any economic reports in the US. The two reports that merited attention
beat economists’ estimates. The Yen finally broke through 100.
Daily Market Color 05/10//2013
Daily
Market Color
05/10//2013
Economic
Reports &Headlines
Today was a relatively light day
for economic reports. Germany released their Merchandise trade report, which showed
a surplus that was slightly better than expected, 17.5bn Vs 17.6bn.
Industrial production in Italy
missed consensus by a wide margin in March on a month over month basis, -80bps
Vs -10bps.
Merchandise trade in the UK showed
a deficit that was vaguely below consensus in March, -9.0bn Vs -9.0bn
Heading over the Atlantic into
Canada, US’s northern neighbor gave a read on employment in the country. The jobless
rate in April remained unchanged, which was in line with consensus at 7.2%.
Jobs in April increased 12,500. Economists’ were expecting employers to add
12,000 jobs to the Canadian economy in April.
US treasury budget surplus came
in higher than expected in April, 112.9bn Vs 107.5bn. The significant rise could
be attributed mainly to individual income taxes.
Future
Reports
Over the weekend we will get a reading on Home
Loans in Australia.
On Monday, early in the morning
at 1:30am, we will get a read on industrial production and retail sales from
China.
On the domestic front, here in
the US, we will get a read on retail sales as well, along with a read on
business inventories.
Monday evening in New Zealand, we
will get a read on retail sales.
Japan will release producer price
figures Monday evening.
Trade
US
equities rallied while the Yen resumed its decline and continue to hit new
lows. Next week is looking like a dull week for economic reports in the US. The
only report that merits undivided attention next week on the global economic
calendar is Japan’s forthcoming GDP report. That report should move the Yen.
Thursday, May 9, 2013
Quote of the Day - 05.09.2013
“In my mind the market is simply a collection of
people’s thoughts. – Allamby"
Daily Market Color 05/09/2013
Daily
Market Color
05/09/2013
Economic
Reports &Headlines
Last night the economic reports
were positive and hardly had any effect on capital markets. Chinese consumer
prices were slightly higher than expected in April, 2.4% Vs 2.2%.
April’s Producer prices in China came
in lower than expected, -260bps Vs 220bps.
Over in Australia, the labor
force survey came in better than expected on both fronts. The jobless rate was
lower than economists’ estimates, 5.5% Vs 5.6%. The number of jobs added to
Australia’s economy surpassed estimates as well, 50k Vs 11k
The Bank of Korea cut their
interest rate 25bps to 250bps. The move surprised markets.
Heading over to Great Britain,
Industrial Production in March beat economists’ aggregate forecast on a month
over month basis, 70bps Vs 20bps.
The Bank of England issued their
monetary policy announcement which was in line with consensus. Economists
forecasted that the BoE will leave their key rates and the level of their asset
purchases unchanged.
On the domestic front, jobless
claims in the US dropped more than expected and exceeded analysts’ most
optimistic estimates from Econoday’s consensus range, 323k Vs 335. This is a
five year low according to Bloomberg.
According Realty Trac, US
foreclosures hit a six year low. One in 905 housing units received a foreclosure
notice.
Future
Reports
Tomorrow we will get Germany’s
trade report, economists’ are expecting a 17.5bn surplus in Europe’s strongest
economy.
Great Britain will release their
trade report as well. Their deficit is expected to come in at 9.0bn.
On the domestic front, Ben
Bernanke is expected to speak at a Chicago Fed Banking Conference.
Trade
According to a report from
Reuters, 440 S&P 500 companies reported earnings, so earnings season is
practically over. A significant amount of S&P 500 constituents either missed
Wall Street’s revenue estimates or came in line with them. This may lead analysts
to lower their revenue expectations for the forthcoming earnings season. Lower
revenue expectations may allow S&P 500 companies to beat estimates on the top
line. However, since a proportionate amount of S&P 500 companies beat earnings
expectations, analyst may now increase their earnings estimates and make it
harder for companies to beat on the bottom line. The lag between the end of
this earnings seasons and the beginning of the next earnings season should
shift markets attention economic reports and media headlines. Nonetheless, I
will remain long S&P 500 futures.
Wednesday, May 8, 2013
Daily Market Color 05/08/2013
Daily
Market Color
05/08/2013
Economic
Reports &Headlines
The global economic calendar is
relatively light for today. Last night Chinese trade blew past expectations on
all three fronts. The surplus surpassed estimates, 18.2bn Vs 14.0bn. Exports on
a year over year basis grew 14.7%, markets expected 11.0%. Imports on a year
over year basis grew 16.8% Vs 14.0%.
Great Britain started the day off
with a read on home prices via the Halifax House Price Index. The report blew
past expectations on a month over month basis, 110bps Vs 20bps.
Switzerland, the landlocked country
with approximately 8 million people in it, gave a read on consumer prices and
they were flat on a monthly basis.
Industrial production in Germany
surprised market participants for March on a month over month basis, 120bps Vs
-10bps.
According to the Washington Post,
the US federal debt limit may not need an increase until October due to the
less spending and increased revenue collection
According to a report from
Reuters, China’s central bank intends to curb speculative capital inflows.
According to the Fed, $716bn of
credit flowed into households in 2012 Vs $336bn in 2011.
Future
Reports
This evening we will get a read
on inflation in China. The consumer price index is expected to grow 220bps
since last year in April.
Australia will release its read
on employment conditions in its resource-rich country. The labor force survey
is expected to show that 11k jobs were added to the economy
Tomorrow morning we will get a
read on industrial production in Great Britain in addition to a monetary policy
announcement from the Bank of England.
On the domestic front, jobless
claims for last week are expected to come in at 335k.
Trades
US
stocks are climbing in light of better than expected Chinese data and positive corporate
earnings. I am will remain long stocks while looking for additional opportunities
to get back into the Yen trade, or to just simply capitalize on a brand new trading
idea.
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