t appears that the France election rally and the longer term Trump trade may be running out of gas. US indices spent the day trading flat through another whirlwind day of earnings announcements and dealing with disappointing durable goods orders, jobless claims and KC Fed data.
Meanwhile, over in Europe, the Euro held steady but indices started to fall back in earnest following central bank meetings. The ECB maintained interest rates and QE while President Draghi took a balanced tone in his press conference. Draghi indicated he plans to maintain current QE levels (post one and done taper) through December at least. Although downside risks have diminished, inflation remains subdued and he plans to keep QE going until inflation gets back up above 2.0% on a sustained bases with interest rates to remain at current or lower levels until after the end of QE.
Part of the big rally in the Euro and European indices was related to speculation that a Macron win in France would ease political uncertainty in the Eurozone enabling the ECB to move up its time table for tapering. The street appears so far to be viewing the comments as balanced even though they were not as hawkish as some had been hoping. Meanwhile in Sweden, a surprise increase in QE from the Riksbank reminded that street that many economies in Europe are still struggling.
Since US exchanges closed, Nasdaq 100 futures have been soaring, gaining over 1% on the back of strong earnings out of the technology sector. It’s like the Super bowl for tech traders with massive numbers out form Amazon.com and Google and positive reports from Microsoft and Intel.
We’re now heading into the last day of the month and there is a ton of news on the way that could potentially move the markets. Despite dovish talk from Governor Kuroda yesterday, JPY has been stabilizing and could be volatile around today’s flurry of key Japanese economic announcements. NZD could be active around New Zealand trade and survey numbers.
Friday brings a flurry of GDP reports highlighted by the US, UK and Canada. This is the first quarter under President Trump and traders will be looking to see if his impact on the economy has been as positive as his impact on the stock market. It also may indicate if economic conditions are strong enough to support further gains in employment and corporate earnings. The UK report also could be significant with a UK election campaign underway. We also could see traders position ahead of potential weekend developments including Chinese PMI, the EU Brexit strategy summit and a possible US House vote on health care reform.
Amazon.com $1.48 vs street $1.08
Google (Alphabet) $7.73 vs street $7.38, sales $20.12B vs street $19.76B
Microsoft $0.73 vs street $0.70, Sales $23.5B below street $23.6B
Intel $0.66 vs street $0.65, raised 2017 EPS guidance to $2.85 from $2.80
Western Digital $2.39 vs street $2.14
Significant announcements released overnight include:
ECB decision no changes to interest rates or QE as expected
Sweden Riksbank decision (0.50%) interest rate unchanged as expected, surprise SEK 15B increase to QE
US jobless claims 257K vs street 245K
US durable goods orders 0.7% vs street 1.3%, previous rev up to 2.3% from 1.8%
US durables ex transport (0.2%) vs street 0.4%
US cap orders nondef ex air 0.4% vs street 0.1%
US advance goods trade bal ($64.8B) vs street ($65.2B)
US pending home sales (0.8%) vs street (1.0%)
US natural gas 74 BCF vs street 73 BCF
US Kansas City Fed 7 vs street 17
Germany consumer prices 2.0% vs street 1.9% vs previous 1.6%
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)
8:45 am AEDT NZ trade balance street $370M
11:00 am AEDT NZ ANZ activity outlook previous 38.8
11:00 am AEDT NZ ANZ business confidence previous 11.3
9:30 am AEDT Japan unemployment rate street 2.9%
9:30 am AEDT Japan consumer prices street 0.3%
9:50 am AEDT Japan retail sales street 1.5%
9:50 am AEDT Japan industrial production street 3.9% vs previous 4.7%
11:30 am AEDT Australia producer prices previous 0.7%
3:00 pm AEDT Japan housing starts street (2.6%)
3:00 pm AEDT Japan construction orders previous 5.7%
6:30 am BST France GDP street 0.9% vs previous 1.1%
7:00 am BST Germany retail sales street 2.2% vs previous (2.1%)
7:00 am BST UK Nationwide house prices street 3.3%
8:00 am BST Spain GDP street 2.9%
9:30 am BST UK GDP street 2.2% vs previous 1.9%
8:30 am EDT Canada Feb GDP street 2.6%
8:30 am EDT Canada industrial prices street 0.3%
8:30 am EDT Canada raw material prices street (0.5%)
8:30 am EDT US Q1 GDP street 1.0% vs previous 2.1%
8:30 am EDT US Q1 Personal consumption street 0.9% vs previous 3.5%
8:30 am EDT US Q1 Core PCE inflation street 2.0% vs previous 1.3%
9:45 am EDT US Chicago PMI street 56.3
10:00 am EDT US consumer sentiment street 98.0
9:00 pm EDT Sat China manufacturing PMI street 51.7
9:00 pm EDT Sat China non-manufacturing PMI previous 55.1
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