Random Market News, 06 June
"U.S. Stocks Fall With Dollar as Treasuries Rise: Markets Wrap.
U.S. stocks fell a second day, the dollar weakened to an eight-month low and Treasuries advanced as caution prevailed before testimony Thursday from former FBI Director James Comey, the ECB’s policy decision and the U.K. election."
"Despite strength in consumer confidence, U.S. economic data, as measured by the Citi Surprise Index, has continued to come in below expectations. While slow real GDP growth for the first quarter (recently revised to 1.2% annualized) was thought to be a transitory event, it has since been followed by weaker-than-expected economic data early in the second quarter. Weaker data, combined with high U.S. equity valuations, suggest that a more thoughtful approach for equity investing may be warranted. While it is true that when compared to fixed income, U.S. equities are still relatively attractive, it is worth noting that there are still compelling equity stories away from home."
"Smallest Cuts to S&P 500 EPS Estimates for Q2 since 2014.
During the first two months of the second quarter, analysts lowered earnings estimates for companies in the S&P 500 for the quarter. The Q2 bottom-up EPS estimate (which is an aggregation of the EPS estimates for all the companies in the index) dropped by 1.7% (to $31.58 from $32.13) during this period."
"Investor Optimism in Eurozone Jumps to Highest Level Since Crisis.
Better-than-expected economic data and the election of French President Emmanuel Macron has created a renewed sense of optimism for European integration, fund managers say."
"Canadian Province Strikes Deal to Protect Paper Mill Pension.
Company uses hydroelectricity plant assets to guarantee letter of credit."
"Texas Teachers plans $10.3 billion in private market commitments this year.
$17.2 billion real assets portfolio will receive $2 billion in commitments in 2017, down 52.4% from $4.2 billion the previous year;
$17 billion private equity portfolio will get a $4.2 billion infusion, up 10.5% from $3.8 billion;
about $1.6 billion is earmarked for commitment to the $8 billion strategic partnership network - private markets strategic portfolio, up 23.1%;
$2 billion strategic partnership network-private markets tactical portfolio will receive the same $1 billion commitment it did in the prior year; and
the commitment to the $5.3 billion energy, natural resources and infrastructure portfolio will total $1.5 billion, up 25%."
"EU agrees new venture capital rules in CMU regulation spree.
The European Union has agreed new rules aimed at stimulating venture capital investments in the EU and reviving the region’s securitisation market.
The agreements on both sets of regulations are part of the European Commission’s action plan to create a Capital Markets Union (CMU) in the EU.
In November last year the Commission and the European Investment Fund – a branch of the European Investment Bank – launched a pan-European venture capital fund of funds in a bid to attract capital from major institutional investors."
Implied June 14th rate hike probability ~95.8%.
VIX ~10.45. 10-yr treasury vol (TYVIX) ~4.53.
"Swiss Franc Hits 29-week High
USDCHF decreased to a 29-week low of 0.96195.
Dollar Index Hits 8-Month Low
The dollar touched the lowest since October last year on Tuesday as investors' worries over President Trump's ability to boost growth increased. Concerns mounted ahead of former FBI director Comey testimony before a Senate panel over allegations of Russian interference in US elections on Thursday. The DXY was down near 0.3% to 96.56 around.
Gold Hits 7-Month High
Gold prices increased to the highest level since November 4th, 2016 on Tuesday, amid rising concerns ahead of general elections in the UK, ECB monetary policy meeting and former FBI Director James Comey’s testimony before a Senate. Spot gold prices rose 1.1% to $1292.5 an ounce around 12:20 PM New York time.
Australia Construction PMI Highest In Almost 3-Years
The AIG/Housing Industry Association Performance of Construction Index in Australia increased to 56.7 in May of 2017 from 51.9 in the previous month, indicating a fourth straight month of expansion. Growth in construction activity rose to the highest level since September 2014, driven by work in apartments and engineering. Engineering construction had its sharpest growth in 9-1/2 years underpinned by increased levels of non-mining infrastructure work. By sector: improvements were recorded for new orders (59.8 from 51.9), capacity utilization (78.8 from 77.7) and employment (54.6 from 49.6); while decreases were recorded for deliveries (54.7 from 58), wages (62.5 from 64.4), input prices (73.5 from 76) and selling prices (54.9 from 78.5). Survey respondents attributed May's expansion to improved demand conditions due to stronger new orders and an increase in tendering opportunities.
US Job Openings Jump To Record High In April
The number of job openings in the United States rose by 259,000 to an all-time high of 6.044 million in April 2017 from an upwardly revised 5.785 million in the previous month and beating market expectations of 5.650 million. The number of job openings increased for total private (220,000), mainly in accommodation and food services (118,000), and for government (39,000). Job openings rose in the Midwest and Northeast regions.
South Africa GDP Expands 1% YoY in Q1, Most in 2 Years
The South African economy advanced 1
percent year-on-year in the first three months of 2017, higher than 0.7 percent
in the previous two quarters and matching market expectations. It is the
highest growth rate since the second quarter of 2015 as mining rebounded and
agriculture grew the most in 2 years."
"Biogenic non-crystalline U(IV) [Uranium] revealed as major component in uranium ore deposits.
The uranium deposit exhibited mostly 238U-enriched isotope signatures, consistent with largely biotic reduction of U(VI) to U(IV). This finding implies that biogenic processes are more important to uranium ore genesis than previously understood. The predominance of a relatively labile form of U(IV) also provides an opportunity for a more economical and environmentally benign mining process, as well as the design of more effective post-mining restoration strategies and human health-risk assessment."
"WSJ Ends Google Users' Free Ride, Then Fades in Search Results.
After blocking Google users from reading free articles in February, the Wall Street Journal’s subscription business soared, with a fourfold increase in the rate of visitors converting into paying customers. But there was a trade-off: Traffic from Google plummeted 44 percent.
The reason: Google search results are based on an algorithm that scans the internet for free content."
"British Airways canceled nearly 60 percent of its flights on May 27 when an IT outage knocked out the airline's systems and stranded 75,000 people over a holiday weekend."
"The biggest British Airways IT meltdown WTF: 200 systems in the critical path?"
"Early Baidu backer Draper weary of China investments amid capital controls."
"The Road Ahead: 6 Trends Shaping The Future of Auto Tech.
Autonomous vehicles reaching mainstream consciousness.
Financing data shows increasing maturity.
Models for building an electric robotaxi service.
Waymo-Uber and the LiDAR debate.
The shifting landscape of suppliers, manufacturing, and retail.
The road ahead: New form factors and rethinking vehicle design."
Random Place of the day – "Cloaca Maxima. The "Greatest Sewer" of ancient Rome is one of the oldest sewer systems in the world, and is still in use."
Germany DE: Manufacturers' Orders, 2:00 AM ET
Great Britain GB: Halifax HPI, 3:30 AM ET (down, -0.2% M/M, down 2.9% Y/Y)
Italy IT: Retail Sales, 4:00 AM ET
India IN: Reserve Bank of India, 5:00 AM ET (flat, 6.25%)
USA US: MBA Mortgage Applications, 7:00 AM ET
USA US: Gallup U.S. Job Creation Index, 8:30 AM ET
USA US: EIA Petroleum Status Report, 10:30 AM ET
USA US: Consumer Credit, 3:00 PM ET (up, $17.0bn)
Japan JP: GDP, 7:50 PM ET (up, 0.6% Q/Q)
Australia AU: Merchandise Trade, 9:30 PM ET (down, A$1.9bn)
China CN: Merchandise Trade Balance, 10:00 PM ET (down, 7% Y/Y exports, down, 9.0% Y/Y imports)