Daily Market Update 31st October 2016
ECONOMIC DATA OF THE DAY
|21:45||US||Chicago Purchasing Manager||54||--||54.2|
- 23:30 – EUR – ECB president Draghi speaks in Berlin
OVERNIGHT NEWSUS ELECTIONS:
- Hillary Clinton's substantial lead evaporated after the FBI discovered a fresh trove of e-mails that may pertain to its investigation of the candidate. An ABC/Washington Post poll found Clinton ahead of Donald Trump by just one point, 46% to 45%. Last week, the gap was 12. With just eight days before the election, the pressure's on FBI head James Comey to give more information on the probe. (Bloomberg)
- GDP grew much better than expected at 2.9% QoQ from 1.4% (Exp. 2.6%). Exports spiked at a 10% rate, the best in nearly three years, driven by agricultural product shipments - especially soybeans. Imports rose at a 2.3% rate. Overall, trade contributed +0.83 percentage points to GDP.
- Wages and salaries increased 0.5%. Benefits jumped 0.7%. YoY total compensation costs rose 2.3%, steady from Q2
- University of Michigan Sentiment index dropped to 87.2 from 88.2 in September.
- OPEC failed to finalize a proposal to implement supply cuts. Discussions will continue in late November, but Iraq wants the group to accept it pumped more than 4.7 million barrels a day last month, higher than industry watchers recognize. While producers blamed Iran and Iraq for the impasse, Oman and Russia said they'll only commit once OPEC has an agreement and Brazil stated it won't restrict production.
FOREIGN EXCHANGE (INDICATIVE RATES)
|Currency||Last||% Change||Overnight Range|
|DXY||98.34||-0.55||98.24 - 98.94|
|EURUSD||1.0986||0.81||1.0893 - 1.0992|
|USDJPY||104.59||-0.52||104.47 - 105.53|
|AUDUSD||0.7598||0.13||0.7558 - 0.7608|
|GBPUSD||1.2211||0.17||.12114 - 1.2212|
COMMODITIES (INDICATIVE RATES)
|Currency||Price USD||% Change||Overnight Range|
|Gold||1275.47||0.56||1262.02 - 1284.20|
|Silver||17.76||0.73||17.55 - 17.92|
|Oil (BRENT)||49.71||-1.51||49.31 - 50.58|
|Oil (WTI)||48.70||-2.05||48.42 - 49.81|
Precious Metals: Gold rallied to three-week high as dollar weakened and Clinton’s probe brought renewed concerns of US elections to the markets. COT report ending 25 Oct, revealed that gold was back in demand for the first time in four weeks as prices are building a base at $1,250 and treading closely to 200DMA.
Oil: Oil headed for first weekly drop in five weeks as OPEC’s disagreement over how to implement oil-supply cuts agreed to last month prevented a deal to secure the cooperation of other major suppliers.. The 8% reduction was primarily driven by a long-liquidation with the gross-short staying near a two-year low.
- U.S. stocks lost ground on fresh FBI probe on Hillary Clinton overshadowed news that the U.S. economy grew at its fastest pace in two years.
- The S&P 500 dropped and healthcare (-2.2%) took the heaviest hit after drug distributor McKesson reported a Q3 revenue miss and cut FY guidance to raise alarm bells that the steady march higher in drug prices is slowing.
- Mastercard Inc. gained 3.2% reported a forecast-beating Q3 earnings of $1.08 per share, (Mkt est: $0.98), up from $0.86 per share, a year ago. Transactions leapt 18% as cross-border volumes rose 12%. CEO Ajay Banga said the global economy remains mixed, although the company has seen double-digit volume and transaction growth in most of its markets
- Exxon Mobil Corp. slumped -2.5% after reporting its eighth successive quarter of YoY earnings declines as the company was hurt by sharply lower profits in the downstream division.
- Baker Hughes Inc. (+8.4%) confirmed that it is in discussions with General Electric Co. (+2.1%). CEO Martin Craighead wrote a letter to staff that said: “I want to clarify that while we have been in discussions with GE, nothing is concluded and there is no guarantee anything will be concluded.” He wasn’t more specific about the discussions.
- Anheuser-Busch InBev dropped 4.3% as the Budweiser and Stella Artois maker cut its growth guidance for the year as it grapples in part with weak consumer spending in Brazil
- Consumer Companies Raise Doubts on Economy as U.S. Stocks Slide
- Retreat a sign of ‘fragile’ sentiment before election
- Chevron surges on earnings, health-care shares tumble
U.S. stocks declined, with the S&P 500 Index falling to a six-week low, after the Federal Bureau of Investigation reopened a probe into Hillary Clinton’s use of an unauthorized e-mail server.
Word of the FBI’s renewed investigation rattled investors, wiping out gains as equities careened down from the day’s highs. An earlier advance came as data bolstered speculation a stronger economy may lift corporate earnings, while rallies in Alphabet Inc. and Chevron Corp. overshadowed a selloff among drugmakers.
Read the full article at bloomberg.com