Sunday, 18 November 2018

Week to Nov 16th


Monday Nov 12
Monday saw two individual stocks fall hard, AAPL was down 5.04% on lower forecasts from its suppliers (implying lower iPhone sales) and GS was down 7.18% on their association with the 1MDB scandal. These stocks are heavyweights in the indices (the pair total 10.55% of DJIA), and the general sentiment, coupled with the lower volumes of Veterans Day dragged down all the indices. SPX was down 2%, NDX down 2.8%, and other indices followed suit.

As often happens when equities fade, USD rises, and it was no difference today. DXY was up 0.7%, but flat against JPY, which also rose in the risk-off mood. All other currencies were down. Oil continued down, which weighed more on the FTSE than the weaker pound helped. Gold was down in line with the stronger dollar. The bond market was closed. Bond futures are traded, but they were flat.

Tuesday November 13
Another down day for US indices, although much less than Monday with SPX giving up 0.2%, and NDX was flat. The mood was more positive outside the US, with DAX and NKY rising, although FTSE stayed red again, weighed by Oil which had its worst day for four years, dropping 6.1%, on continuing worries about both oversupply and under demand. However, the large drop was a consequence of breaking through the February support low. In the last six weeks, Oil has given up a year’s gains.

The reopening of the bond market saw a 5bp pullback, but DXY itself was relatively calm, falling 0.2%. Once again, the only currency to gain against the greenback was risk-off indicator JPY. Gold was flat at a round $1,200.

Wednesday November 14
Italian intransigence in their budget battle with the EU set a pessimistic tone for an already falling market, and SPX and NKY fell again, although it was more the financial and tech sectors which suffered, as energy stocks actually rose in line with the small bounce back in Oil, although 0.9% after a 6.1% drop is a very weak recovery. Italian yields continued to rise and DAX and FTSE were down in the cash sessions, although they recovered in futures to just about manage a green day. Markets were not helped by a string of important misses, German GDP, and UK and US CPI were all down against estimates.

DXY was down 0.4%, with slight moves up across the currency board and Gold (which actually appreciated more than expected, up 0.75% to $1,211. Yields were down in line with the dollar.

Thursday November 15
DXY was marginally (0.1%) up for the day, but this was purely due to GBP, all other currencies advanced against the dollar, as did Gold and yields were down in line. Notably CAD was up 0.48% on the day, Oil had another green day, if you can call it that, up 0.4%. NVDA reported after the bell, with an EPS beat but a miss on both earnings and guidance. One run and two strikes, and a 19% drop in price. WMT beat on all metrics, including slightly improved guidance. It didn’t help, after a gap up open, the shares faded all day to close 1.96% down. Analysts still think AMZN will crush them, keep an eye on WMT next Friday.

Friday November 16
Friday was a flatter day, with a slight recovery by SPX, up 0.2%, and a fade in NDX down 0.1%, to some extent driven by the NVDA results. DAX, NKY and FTSE were slightly down. DXY was notably down (0.67%), and the movement was even across the board, with every currency and Gold rising. 10-Year yields fell again, down 4bp to 3.07%. Oil was flat on the day.


Please note all figures and percentages given for daily movement on indices cover the entire cash and futures period in that day.


WEEKLY PRICE MOVEMENT
The dollar gave up last week’s gains, with DXY dropping 0.65%, and all currencies except Brexit-troubled GBP advancing. Shorting any GBP pair would have been good, the best was GBPNZD which dropped by over 3%. Indices had a bad week, with DAX down the most. NDX was only down 1.76%, but FANGs had a worse week, with AMZN the biggest loser. Also, after a few weeks of stability, cryptos had large losses again this week.

AUDUSD 0.7338 (+1.52%)
EURGBP 0.8895 (+1.81%)
EURUSD 1.1421 (+0.74%)
GBPUSD 1.2840 (-1.04%)
NZDUSD 0.6879 (+2.00%)
USDCAD 1.3149 (-0.48%)
USDJPY 112.83 (-0.88%)
DAX     11382 (-1.30%)
FTSE     7045 (-1.19%)
NIFTY   10682 (+0.92%)
NKY     21802 (-1.77%)
SPX    2740.0 (-1.30%)
GOLD  1221.27 (+0.99%)
OIL     56.92 (-4.74%)
BTCUSD   5655 (-11.86%)
ETHUSD 176.98 (-15.95%)
FB     139.53 (-3.75%)
AAPL   193.53 (-5.35%)
AMZN  1593.41 (-6.95%)
NFLX   286.21 (-5.69%)
GOOGL 1068.27 (-0.81%)

(Crypto prices are given as at 0000GMT Saturday, after the other markets close.)

NEXT WEEK (all times are GMT)
(Calendar High volatility items are in bold). 

Monday November 19
As we move into Thanksgiving week, there is not much news, and no significant releases in the US. FOMC Williams (voter) speaks at 1545.

00:00 EUR Eurogroup meeting (all day)
21:45 NZD NZ Producer Price Index (Sunday)
23:50 JPY Japan Imports/Exports/Trade Balance (Sunday)
03:30 JPY BoJ Governor Kuroda Speech
09:00 EUR EU Financial Stability Review
15:45 USD FOMC Member Williams speech

Tuesday November 20
We have three Bank of England speakers today, Governor Carney and also Haldane and Saunders. There are rate decisions on HUF and NGN, holds are expected.

00:00 EUR EcoFin Meeting (all day)
00:30 AUD RBA Meeting's Minutes
02:00 JPY BoJ Monetary Policy Statement 
10:35 GBP UK Autumn Forecast Statement
13:30 USD Housing Starts/Building Permits
14:00 NZD GDT Milk Auction (time approx.)
18:00 CAD BoC Wilkins Speech
21:30 WTI API Stock

Wednesday November 21
Today is the day when the EU are likely to reject Italy’s budget (as incompatible with EU deficit rules). This will ultimately lead to financial sanctions. This is probably priced in, but any last minute changes by Italy could affect EUR.

00:00 EUR EC decision on Italy budget (time unknown)
04:30 JPY Japan All Industry Activity Index (MoM)
08:00 EUR ECB non-MPC Minutes
09:30 GBP UK PSBR
13:30 USD US Durable Goods Orders
15:00 USD US Existing Home Sales (MoM)
15:30 WTI EIA Stock
23:30 JPY National CPI

Thursday November 22
Today is Thanksgiving and US markets are closed. However it is business as usual in the rest of the world, although there are no significant data releases. ECB Mersch speaks at 1700, and BuBa President Weidmann is also scheduled. There are rate decisions in Zambia and South Africa. A 25bp hike is expected for ZAR.

00:00 GBP UK Inflation Report Hearings (time unknown)
12:30 EUR ECB Monetary Policy Meeting Minutes

Friday November 23
Today is Black Friday, where retail stocks traditionally rise, as blowout selling is quickly reported (and nothing is said by those retailers which aren’t doing well). The key stock to watch for several years now has been AMZN. US markets close early at 1800 today, and Japanese markets are closed completely for Labor Thanksgiving Day. ECB De Guindos speaks at 1200.

07:00 EUR Germany GDP
08:30 EUR Germany Markit PMIs
09:00 EUR Eurozone Markit PMIs
13:30 CAD Canada Retail Sales
13:30 CAD Canada CPI
14:45 USD US Markit PMI Composite/Services PMIs
18:00 WTI Baker Hughes Rig Count

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