Stocks and MXN drop as Trump gains election momentum and Amazon posts poor earnings
It’s been another tough day for US stocks that saw early promise fade over the course of the trading day indicating continued distribution from stronger to weaker hands. Positive earnings reports failed to do much for shares of Tesla Motors or Twitter, although Qualcomm gained 4% on a big acquisition.
Crude oil tried to rebound but didn’t get very far leaving WTI stuck below $50.00 and in a vulnerable position.
Overall, it appears traders continue to view the current earnings season as an opportunity to take profits. Growing uncertainty about the US election may be providing a headwind with Donald Trump gaining in the polls. The Mexican Peso broke down today confirming recognition that the election may be closer than polls suggest and growing fears US political uncertainty may be on the rise.
After the close, the NASDAQ accelerated downward after Amazon.com put out earnings that were way below expectations and so sales guidance which could drag on the markets through to the morning, particularly momentum stocks. Google beat the street on earnings but not enough to offset Amazon’s big disappointment.
Despite losing ground to gold and oil, USD performed well against paper currencies in the day with JPY, CNH, AUD and NZD doing particularly poorly. Asia Pacific currencies may be active today around inflation, housing and employment data for Australia and Japan particularly if the data gives any reason to change expectations that the Bank of Japan and RBA will remain neutral to dovish in the coming months.
It looks like Belgium has relented and the CETA trade agreement between Canada and the EU may go through after all. This news didn’t have an impact on trading in EUR or CAD but the deal is being seen as a bellweather as to whether the EU can get its act together on anything heading into Brexit negotiations next year.
Markets may remain active Friday around the US GDP report which could have a significant impact on Fed speculation and currency trading driven through the USD crucible. Inflation reports in Europe and more earnings reports may also attract attention from traders.
Google $9.06 vs street $8.62, sales $18.07B above street $17.99B
Amazon.com $0.52 vs street $0.77 ouch! Sales $32.7B in line, guides next Q sales to $42.0-$45.5B mainly below street $44.6B
Amgen $3.02 vs street $2.79
Significant announcements released overnight include:
US durable goods orders (0.1%) vs street 0.0%
US durables ex transport 0.2% as expected
US capital goods nondef ex air (1.2%) vs street (0.1%)
US jobless claims 258K vs street 255K
US pending home sales 2.0% vs street 4.0%
US natural gas storage 73 BCF as expected
US KC Fed 6 vs street 3
UK Q3 GDP over year 2.3% vs street 2.1%
UK Q3 GDP over quarter 0.5% vs street 0.3% and previous 0.7%
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)
10:30 am AEDT Japan unemployment rate street 3.1%
10:30 am AEDT Japan consumer prices street (0.4%)
11:00 am AEDT Australia new home sales previous 6.1%
11:30 am AEDT Australia Q3 producer prices previous 1.0%
6:30 am BST France Q3 GDP street 1.2%
8:00 am BST Spain Q3 GDP street 3.1%
7:45 am BST France consumer prices street 0.5%
8:00 am BST Spain consumer prices street 0.3%
7:00 am BST Norway retail sales street 0.3%
8:30 am BST Sweden retail sales street 2.7%
9:00 am BST Norway unemployment rate street 2.8%
1:00 pm BST Germany consumer prices street 0.8%
8:30 am EDT US Q3 GDP street 2.5% vs previous 1.4%
8:30 am EDT US Q3 personal consumption street 2.6% vs previous 4.3%
8:30 am EDT US Q3 core PCE inflation street 1.6% vs previous 1.8%
8:30 am EDT US Q3 employment cost index street 0.6%
10:00 am EDT US consumer sentiment street 88.2
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