Asia Pacific markets tumbled overnight in a follow-through response to yesterday’s selloff in the US but as morning has come to North America, indices have regained their footing somewhat. European markets are mixed with the Dax bouncing back, the FTSE
flat and the MIB continuing to decline. US indices appear to be heading for a higher open although not enough of a rebound to offset yesterday’s declines.
Focus in share trading remains on the technology sector with Yahoo potentially active after last night’s IPO filing by Alibaba gave a better indication of just how huge that company (and yahoo’s stake in it) really is. Twitter may also be active in the second day after 480 million shares came out of lockup and the subsequent 17% plunge in the stock price.
USD is also stabilizing after yesterday’s selloff as traders await congressional testimony from Fed Chair Yellen, her first public statements since last week’s huge nonfarm payrolls increase. Traders may look to the comments or answers for any indication of whether tapering could accelerate or interest rate increases could be pulled forward. Or not, she may talk dovish to support the stock market while keeping tapering going.
The big action in currency markets so far today has been the dramatic reversal and selloff in NZD. A bigger than expected increase in job creation was ignored after RBNZ Governor Wheeler threatened to intervene in currency markets again and indicated that the rising Dollar could slow the pace of future interest rate increases.
Since the RBNZ did intervene in currency markets about a year ago, this threat has been taken very seriously by traders, who have driven NZD down 1% overnight. AUD has been sinking in sympathy but at a slower pace as the RBA has discussed an intervention but has not actually done so. AUD could be more active this evening on Australian employment news.
Later today, Tesla Motors is scheduled to report earnings which may give another indication of whether the street is still prepared to pay for momentum names or if a retrenchment remains underway. EUR, GBP and NOK may also be active through the day as traders prepare for tomorrow’s ECB, Bank of England, and Norges Bank meetings.
Alilbaba announced it has filed for a $1 billion IPO and that in the year that ended in March it generated net income of $1.39B on sales of $5.5B. Yahoo owns 22.6% of the shares outstanding prior to the offer. The gross market value of transactions on its site last year was $248B (that`s huge!!!) It remains unknown if the company will list on the NYSE or NASDAQ.
Sun Life $0.74 vs street $0.67
Husky Energy $0.66 vs street $0.62
Enbridge $0.60 vs street $0.57
Tim Hortons $0.66 vs street $0.67
Molson Coors $0.55 vs street $0.35
Walt Disney $1.11 vs street $0.96
Chesapeake Energy $0.59 vs street $0.48
Economic reports released overnight and this morning include:
UK shop prices (1.4%) vs street (0.8%)
Germany factory orders 1.5% vs street 4.3%
France industrial production (0.8%) vs street 0.5%
France manufacturing production 1.5% vs street 2.1%
Germany construction PMI 49.7 vs previous 52.5
Germany retail PMI 53.1 vs previous 50.2
France retail PMI 50.3 vs previous 50.0
Italy retail PMI 49.5 vs previous 46.5
Poland interest rate decision 2.50% no change as expected
NZ Q1 unemployment rate 6.0% vs street 5.8%
NZ Q1 employment change 3.7% vs street 3.4% and previous 3.0%
NZ average hourly earnings 0.7% vs street 1.0% and previous 0.3%
Japan service PMI 46.4 vs previous 52.2
Australia construction PMI 45.9 vs previous 46.2
Australia retail sales 0.1% vs street 0.4%
China HSBC service PMI 51.4 vs previous 51.9
Brazil industrial production street (3.1%)
Economic reports due later today include:
10:00 am EDT Fed Chair Yellen testimony to Congress
10:30 am EDT US crude oil inventories street 1.2 mmbbls
10:30 am EDT US gasoline inventories street 0.5 mmbbls