Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

US Equities Rise In Quiet Session

Published 18/04/2017, 11:25 am
USD/JPY
-
AUD/USD
-
NDX
-
XAU/USD
-
US500
-
AXJO
-
GS
-
JNJ
-
GE
-
GC
-
DXY
-
CNY/CNH
-

Originally published by Rivkin Securities

US equity markets rallied on Monday in what was a light session for volume due to the Easter long weekend. Both the S&P 500 and Nasdaq 100 rose +0.86% and +0.85% with 468/505 securities on the S&P500 closing higher for the session and all sectors in positive territory. On Friday the US Dollar Index was flat before closing -0.27% lower on Monday following US CPI data that came in below expectations on Friday.

Year-on-year for March headline prices rose +2.4%, less than the +2.6% forecast and +2.7% prior. The core measure which excludes volatile items such as food and energy rose +2.0% also missing estimates for +2.3% and a previous reading of +2.2%. The bright news was that real average hourly earnings (YoY Mar) rose +0.3% from 0% previously after removing inflation. Still the data dampened expectations of a Fed rate hike in June, with the probability dropping from 54.8% to 46.5%.

US earnings will remain in focus this week with heavy weights including Goldman Sachs Group Inc (NYSE:GS), General Electric Company (NYSE:GE) and Johnson & Johnson (NYSE:JNJ) reporting. Analyst expectations are for +10.4% earnings growth year-on-year which would be the best year-on-year growth since Q1 2011.

The Chinese Offshore yuan rose just +0.05% on Monday despite stronger economic data. Year-on-year for Q1 the Chinese economy expanded at +6.9%, higher than the +6.8% forecast. Retail sales also topped forecasts, rising +10.9% vs +9.7% expected, as did fixed asset investment excluding rural rising +9.2% vs +8.8% and industrial production increased +7.6% vs +6.3% forecast. The data remains in line with the trend carried over from 2016, that the Chinese economy remains stable.

Safe-havens continue to remain relatively well supported, although the Japanese yen weakened -0.26% on Monday after touching the strongest levels in six months on geopolitical tensions. Spot gold also closed lower, down -0.07% after also touching the highest level in six months shown on the chart below. US treasury yields which are also a measure of safe haven demand were little changed, with the two-year yield flat at +1.2011% while the ten-year yield rose +2 basis points to be at +2.2481%.

Locally the Australian dollar was +0.18% higher on Monday, supported by the stronger Chinese economic data. The S&P/ASX 200 finished -0.74% lower on Thursday and we can expect a softer start to trading this morning with ASX SPI200 futures down -15 points.

Data releases:

· RBA April Meeting Minutes 11:30am AEDT

· US Housing Starts & Building Permits (MoM Mar) 10:30pm AEDT

· US industrial production (MoM Mar) 11:15pm AEDT

Chart 1 – XAUUSD (Spot Gold)

Chart

Source: Rivkin, RivkinTrader

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.