Asia Mid-Session Market Update: China official PMIs hit 3-month high; Japan core CPI reaches 2-year high
US Session Highlights
(US) Q1 FINAL GDP ANNUALIZED (3RD READING) Q/Q: 1.4% V 1.2%E; PERSONAL CONSUMPTION: 1.1% V 0.6%E
(US) Q1 FINAL GDP PRICE INDEX: 1.9% V 2.2%E; CORE PCE Q/Q: 2.0% V 2.1%E
(US) INITIAL JOBLESS CLAIMS: 244K V 240KE; CONTINUING CLAIMS: 1.95M V 1.94ME
(US) Nevada reports May casino gaming Rev $991.6M, +3.5% y/y; Las Vegas strip rev $546.8M, +3.0% y/y
Stocks turned yesterday’s rally around on its heels, sending prices south on strong volumes. Nasdaq was the worst hit, down -1.4%, with volumes about 36% above its 3-month average. The VIX index jumped 18%, reaching 11.9, but off its session high. Financials managed to buck the downtrend, with the S&P sector posting a 0.7% rise. Concern over Fed tapering of the balance sheet continued to play on investors, as bond prices fell further today. 10-year Note yield went as high as 2.29% before closing lower at 2.27% for a 4bps increase on the day.
US markets on close: Dow -0.8%, S&P500 -0.9%, Nasdaq -1.4%
Best Sector in S&P500: Financials
Worst Sector in S&P500: Technology
Biggest gainers: AYI +10.5%; SWN +6.0%; STZ +5.0%
Biggest losers: INCY -4.1%; LRCX -3.7%; MKC -3.6%
At the close: VIX 11.4 (+1.4pts); Treasuries: 2-yr 1.37% (+2bps), 10-yr 2.27% (+5bps), 30-yr 2.81% (+4bps)
US movers afterhours
NKE Reports Q4 $0.60 v $0.49e, Rev $8.7B v $8.61Be; Guides FY18 (FX neutral): Rev mid to high single digit range; gross margin to expand beyond high end of long term goal; double digit EBITDA expansion – earnings call; +7.8% afterhours
HAIN Engaged Capital discloses 9.9% stake; have had talks with management and will engage in further discussions; +5.7% afterhours
AOBC Reports Q4 $0.57 v $0.38e, Rev $229.2M v $210Me; Guides Q1 adj EPS $0.07-0.12 v $0.32e, R$140-150M v $178Me ; -9.4% afterhours
CARA Announces top-line results from phase 2b trial of Oral CR845 in Chronic Pain Patients with Osteoarthritis of the Hip or Knee; -28.1% afterhours
Politics
(US) GOP operative reportedly tried to obtain stolen Clinton emails during 2016 campaign; said to have implied he was working with former Nat Security Advisor Mike Flynn – WSJ
Key economic data
(CN) CHINA JUNE MANUFACTURING PMI (GOVT OFFICIAL): 51.7 (3-month high) V 51.0E; NON-MANUFACTURING PMI: 54.9 (3-month high) V 54.5 PRIOR
(JP) JAPAN MAY NATIONAL CPI Y/Y: 0.4% V 0.5%E ; CPI EX FRESH FOOD (CORE) Y/Y: 0.4% (2-year high, 5th straight month of increase) V 0.4%E
(JP) JAPAN JUNE TOKYO CPI Y/Y: 0.0% V 0.3%E; CPI EX-FRESH FOOD Y/Y: 0.0% V 0.2%E
(JP) JAPAN MAY JOBLESS RATE: 3.1% V 2.8%E (5-month high); Job to applicant: 1.49 v 1.48e (43-year high)
(JP) JAPAN MAY PRELIMINARY INDUSTRIAL PRODUCTION M/M: -3.3% V -3.0%E (biggest decline in years); Y/Y: 6.8% (3-year high) v 6.9%E
(JP) JAPAN MAY OVERALL HOUSEHOLD SPENDING Y/Y: -0.1% V -0.7%E (15th consecutive month of decline)
(NZ) NEW ZEALAND MAY BUILDING PERMITS M/M: +7.0% V -7.4% PRIOR; first increase in 3 months
Speakers and Press
China
(CN) China Premier Li: Should attach importance to decline in foreign direct investment (FDI) this year – press
(CN) China State Planner (NDRC): Energy supply is still under pressure in some areas amid peak demand summer period – press
(CN) BoA/ML cuts China 2018 GDP target to 6.4% from 6.6% – press
Japan
(JP) Japan cabinet: Increase in jobless rate due to rise in people quitting to seek better jobs and expansion of participation – press
(JP) Japan Finance Min Aso: Reiterates economy recovering from deflation; No changes to monetary or fiscal policy
Australia/New Zealand
(AU) UBS: RBA will not "join hawkish central bank club"; Wants to see Q2 CPI data before deciding on economic conditions
(AU) Mark Barnaba named to RBA Board for a 5-year term from Aug 31st
(NZ) BNZ no longer expects RBNZ to raise rates in Feb 2018 and instead sees mid-2018 for a rate hike
Korea
(KR) South Korea, Japan, and US will hold trilateral talks on trade at next week’s G20 – Korean press
(KR) South Korea President Moon and US President Trump promise to make joint efforts to denuclearize North Korea – Korean press
Asian Equity Indices/Futures (00:00ET)
Nikkei -1.1%, Hang Seng -0.8%, Shanghai Composite -0.2%, ASX200 -1.5%, Kospi -0.4%
Equity Futures: S&P500 -0.1%; Nasdaq -0.4%, Dax -0.2%, FTSE100 -0.2%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1375-1.1420; JPY 112.15-112.40; AUD 0.7580-0.7615; NZD 0.7260-0.7285
Aug Gold +0.3% at 1,253/oz; Aug Crude Oil +0.4% at $44.95/brl; Sept Copper +0.7% at $2.69/lb
(IA) Iran July Crude Oil exports may decline 7% m/m to 1.86M bpd – financial press
(CN) PBOC SETS YUAN MID POINT AT 6.7744 V 6.7940 PRIOR; 3rd straight firmer fix; Strongest Yuan fix since Nov 9th
(CN) PBOC skips open market operations (6th straight skip)
(CN) China Finance Ministry sells 3-month bills at 3.33%
Asia equities notable movers
Australia
Spotless (SPO) -0.9%; Reiterates opposition to Downer takeover; Board consistent in view the offer does not represent adequate value
Japan
Lintec (7966) -1.8%; Nikkei Q1 earnings preview
Sojitz Corp (2768) +0.4%; Nikkei Q1 earnings preview
Hong Kong
China Fortune Financia (290) +8.5; Reports FY17
Luk Fook Holdings (590) +1.9%; Reports FY17
Ju Teng International Holdings (3336) -1.2%; Guides H1 Net -60% to -50% y/y
Integrated Waste Solutions (923) -4.1%; Reports FY17
Kwoon Chung Bus Holdings (306) -5.3%;
