Metal miners have been attracting interest in Australia and London overnight, boosting their indices
on renewed deal speculation in the sector that could follow through into North American trading today. Reports suggest that BHP Billiton has decided to focus on iron ore, copper, coal, oil and maybe potash and that it is planning to divest/spin off other businesses and operations which could be worth $12-14B or more depending on the source of the rumour.
Global indices continue to climb and US indices appear to be heading for another higher open as Empire Manufacturing dropped back into Goldilocks territory, strong enough to support corporate earnings but not too strong which could force the Fed to tighten sooner. The biggest impact of this has been seen in gold which has plunged back under $1,300 on the changing
Other than the rally in miners, however, market gains over the last two days have been led by defensive sectors like health care, consumer staples and utilities. This rotation may be problematic for indices as it suggests traders are becoming more cautious and with lower growth sectors doing the heavy lifting, indices may struggle sooner than if they were being led by sectors more sensitive to the economy.
CAD has exploded upward today, confirming yesterday’s breakout. Canada jobs were revised upward from a small drop to a 41K gain way ahead of the 20K street estimate. The upward revision came from a drop in the number of full-time jobs lost while the part time increase was steady.
Remember that markets are a crucible where everyone’s expectations are constantly measured and discounted. Trading swing
s are driven by surprises and deviations from expectations. So even though full time jobs were still soft the surprise was positive (not as bad as previously reported) sparking the rally in the loonie.
Gold has come under pressure in the last two hours falling from above $1,310 back under $1,300. There hasn’t been any news to spark this, economic data was soft, so it could be due to political tensions easing or perhaps capital rotating from metal positions into mining stocks.
JD.com (0.01) vs street (0.12) sales CNY28.6B vs street CNY$27.0B, sales up 64% over year, customer accounts up 94%, guides next quarter sales to CNY 28-29B
JC Penney ($0.75) vs street ($0.89)
Nordstrom $0.95 vs street $0.94, raises FY guidance to $3.80-$3.90 from $3.75-$3.90.
Economic reports released overnight and this morning include:
Canada jobs change 41K vs street 20K vs previous (9K)
Canada full-time (18K) vs previous 33K
Canada part-time 60K vs previous (43K)
Canada unemployment rate 7.0% vs street 7.1%
US Empire Manufacturing 14.6 vs street 20.0 vs previous 25.6
US producer prices 1.7% as expected
UK GDP update 3.2% vs street 3.1%
Norway trade balance NOK 22,6B vs previous NOK17.8B
Singapore retail sales 0.4% vs street 1.0%
Economic reports due later today include:
9:15 am EDT US industrial production street 0.3%
9:15 am EDT US manufacturing prodn street 0.4%
9:55 am EDT US consumer confidence street 82.5