Sentiment toward stocks improves between big days for US and Asia Pacific economic data
US stocks have been trending increasingly higher through their trading day sending positive momentum into today’s Asia Pacific trading as recovery momentum builds.
Sentiment toward resource stocks continues to improve with base metal miners Freeport McMoRan in the US and First Quantum in Canada among the leading gainers, responding to the rebounding copper price, a positive sign for Australian miners. This improvement has also spilled over to resource currencies, supporting gains in AUD and helping NZD to bounce back from yesterday’s selloff.
Energy stocks have also been gaining again today along with energy currencies like CAD and RUB rallying. Crude oil had another big day with WTI gaining 5.0% and retaking $30.00 while Brent rose 6.2% regaining $34.00. At more meetings among producers today, Iraq and Kuwait signed on to the deal to hold production at January levels. Iran also expressed support for the deal but declined to join at this time. Iran is still in the process of ramping its production back up toward pre-sanctions levels so their reluctance is understandable and likely to be discounted as long as they don’t try to grow production beyond where it was in the past.
Stocks in other sectors have also been responding to positive news. Bombardier soared for a 20% gain after receiving a crucial order for its CSeries aircraft from Air Canada which took a 10% hit giving back yesterday’s gains and then some. In the US, Garmin soared 14% on positive earnings and guidance. This combined with an 8% gain for Tesla Motors and a 5% rally in Netflix indicates renewed interest in technology and momentum stocks, a sign traders are shifting from defensive to aggressive stances.
A much stronger than expected industrial production report helped get things going in the morning. This afternoon’s FOMC minutes were relatively neutral expressing concern about overseas economic weakness and market volatility but not panicking either. This helped US indices to hold much of their gains and kept a lid on USD.
It’s a big day for Asia Pacific economic news that could spark significant trading action in several countries. Australia’s employment report, China inflation, japan trade and New Zealand producer prices may all attract interest from traders. JPY and Japanese stocks could also be active on recent reports suggesting that PM Abe doesn’t plan to bring in any more fiscal stimulus for now.
The energy sector may also remain in focus through today’s API and tomorrow’s DOE and EIA oil, gasoline and natural gas inventory reports. Tomorrow morning also brings Wal-Mart earnings which could increase focus on retailers.
There have been no major announcements after the US close so far today.
Significant announcements released overnight include:
US housing starts 1,099K vs street 1,173K
US building permits 1,202K vs street 1,200K
US producer prices (0.2%) vs street (0.6%)
US core PPI 0.6% vs street 0.4%
US industrial production 0.9% vs street 0.4%
US manufacturing production 0.5% vs street 0.2%
UK jobless claims change (14.8K) vs street (3K)
UK 3M jobs change 205K vs street 225K vs previous 267K
UK unemployment rate 5.1% vs street 5.0%
UK average weekly earnings 2.0% vs street 1.8%
Upcoming significant economic announcements include:
(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)
7:30 pm EST FOMC Bullard speaking
8:45 am AEDT NZ producer input prices previous 1.6%
8:45 am AEDT NZ producer output prices previous 1.3%
11:00 am AEDT NZ ANZ consumer confidence previous 121.4
10:50 am AEDT Japan trade balance street (¥658B)
10:50 am AEDT Japan exports street (10.9%)
10:50 am AEDT Japan imports street (15.8%)
11:30 am AEDT Australia employment change street 13K vs previous (1K)
11:30 am AEDT Australia full-time previous 17K
11:30 am AEDT Australia part-time previous (18K)
11:30 am AEDT Australia unemployment rate street 5.8%
12:30 pm AEDT China consumer prices street 1.9%
12:30 pm AEDT China producer prices street (5.4%)
7:45 am GMT France consumer prices street 0.2%
8:30 am GMT Sweden consumer prices street 0.5%
12:30 pm GMT ECB minutes
8:30 am EST US jobless claims street 275K
8:30 am EST US Philadelphia Fed street (3.0)
10:00 am EST US leading index street (0.2%)
10:30 am EST US natural gas street (150 BCF)
11:00 am EST US DOE crude oil inventories street 5.3 mmbbls
11:00 am EST US DOE gasoline inventories street 0.4 mmbbls
11:00 am EST US Bloomberg implied oil demand previous 16,418 mmbbls
3:30 pm EST FOMC Williams speaking
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