Friday, April 15, 2016

Transcription

1 On Tap 8:30 a.m. Apr Empire State Manufacturing Survey Mfg Idx (expected 2), Employment Idx (previous -1.98), New Orders Idx (previous 9.57), Prices Received (previous -5.94) 9:15 a.m. Mar Industrial Production & Capacity Utilization Industrial Production, M/M% (expected - 0.1%), Capacity Utilization % (expected 75.3%), Net Chg (Pts) (previous -0.4) 10:00 a.m. Mar Regional & State Employment & Unemployment 10:00 a.m. Apr University of Michigan Survey of Consumers - preliminary Mid-Mo Sentiment (expected 92.0), Mid-Mo Expectations (previous 80.0), Mid- Mo Current Idx (previous 105.6) 11:00 a.m. World Bank 'Forced Displacement: A Global Development Challenge' event 12:50 p.m. Federal Reserve Bank of Chicago President Charles Evans speaks at the J.P. Morgan Investor Seminar 4:00 p.m. Feb Treasury International Capital Data 5:15 p.m. Bank of Canada Governor Stephen Poloz and Canadian Finance Minister Bill Morneau press conference U.S: Emancipation Day observed in Washington, DC European Commission President Jean-Claude Juncker attends IMF- World Bank Spring Meetings SNAPSHOT U.S. stock futures nudge lower; dollar gains; 10-year Treasury yield 1.777%; Nymex $41.01; gold $ Watch for: Empire State Manufacturing Survey; Industrial Production; Fed s Charles Evans speaks; G20 finance ministers meeting continues; Citigroup earnings OPENING CALL U.S. stock futures pointed to a small opening loss for the S&P 500 after official figures showed China s growth slowed in the first quarter to 6.7%, roughly in line with expectations. The reading marked the country s slowest period since 2009, but figures on Chinese industrial production, retail sales and home sales were more upbeat, painting a mixed picture for investors. We don t see a further slowdown in China-we see some stabilization and some improvement in the manufacturing industry, said Robert Bergqvist, chief economist SEB. Investors continued to focus on corporate results. Equity performance in 2016 has been varied, volatile and remarkably resilient, said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. Earnings, in our view, are likely to be the near-term swing factor, he said. Citigroup will report first-quarter results later Friday before the market opens. EQUITIES Yahoo moved to ensure that Chief Executive Marissa Mayer and other top executives get payouts in the event of a sale. The company, which is currently soliciting bids from potential buyers, on Thursday amended its policies to specify that senior executives will be paid severance if Yahoo sells all or substantially all its operating business. The policy change relates to Yahoo s unusual structure. Its core Web business makes up only a small portion of the company s overall value, the bulk of which comprises large stakes in Alibaba and Yahoo Japan. So a sale of the operating business alone might not have been enough to trigger Yahoo s change-in-control severance awards under its former policy. Cybersecurity researchers at IBM said Thursday they have discovered a new type of malicious software that has been used to attack customers of 22 U.S. banks and two in Canada. The attacks have resulted in the theft of roughly $4 million dollars in the first few days of April, the researchers said. The malware is targeting bank customers with business accounts, mostly at banks in the U.S., according to a blog posting on IBM X-Force, which is part of IBM s security business. The malware also focuses on credit unions and popular e-commerce platforms.

2 G20 Finance Ministers and Central Bank Governors Meeting continues IMF and World Bank Spring meetings open Recent Analyst Ratings Actions Baxter International Raised to Overweight From Neutral by Piper Jaffray Breitburn Energy Partners Cut to Neutral From Buy by Hilliard Lyons - Briefing.com CF Industries Holdings Cut to Underperform From Mkt Perform by Cowen Coca-Cola Enterprises Raised to Buy From Hold by Stifel Nicolaus Intrepid Potash Cut to Underperform From Mkt Perform by Cowen Mosaic Cut to Underperform From Mkt Perform by Cowen Williams Cos. said the Delaware Chancery Court will expedite its suit against Energy Transfer Equity over private shares issued to help finance the pending $32.6 billion merger of the two pipeline giants. Williams in its regulatory filing Thursday reiterated it remains committed to completing the deal, which is set to close in the current quarter. Anheuser-Busch InBev said Thursday it reached an agreement with the South African government to create a $69 million investment fund and other commitments designed to help it secure regulatory approval of its acquisition of rival SABMiller. AB InBev s commitment appears to address potential unemployment concerns. The company said it has agreed that no employees in South Africa would lose their jobs as a result of the merger. It also committed to maintain the same number of employees SABMiller has in South Africa for the five years after the deal closes. FOREX The dollar was little changed against the yen and euro, even after data showed the eurozone s trade surplus shrank in February, a sign that rising domestic demand continued to drive a modest recovery. Despite comments from Japan s Finance Minister Taro Aso on the yen in Washington and relatively steady economic data from China, investors were largely sitting on the sidelines ahead of the G-20 communique later today and the Sunday meeting of major oil producers in Qatar. Mr. Aso said that he conveyed Tokyo s strong concerns over the one-sided rise in the yen to U.S. Treasury Secretary Jack Lew. Mr. Aso also said Japan and the U.S. had confirmed that there was no secret deal among leading economies to weaken the dollar. I could have expected investors sensitive reaction to the G-20 statement, if the dollar were around Y107 before the meeting, said Osao Iizuka, head of FX trading at Sumitomo Mitsui Trust Bank. But with the dollar bouncing back to where it is now, investors will likely pay more attention to remarks about fiscal stimulus of each member at the meeting, said Mr. Iizuka. BONDS The yield on the benchmark 10-year U.S. Treasury note nudged down to 1.777% in European trading from Thursday s close at 1.78%. A 30-year bond auction saw demand from foreign buyers hit the highest level since September and the third-highest on record for a 30-year bond auction. That is the latest sign that U.S. bonds continue to attract investors in Japan and Europe amid the struggle to obtain income as the number of negative-yielding government bonds increases globally.

3 Thomas Simons, vice president and money-market economist in the fixed-income group at Jefferies LLC, said a $1 billion reduction of the auction size also helped spark an aggressive buy-side bid for the auction. Despite the uptick, government bond yields from both sides of the Atlantic remain near historically low levels amid sluggish growth and low interest rates. COMMODITIES Oil prices wavered in volatile European trade as investors brace for a meeting between major producers, who are scheduled to discuss a potential production freeze this weekend. Brent crude, the global oil benchmark, fell 0.3% to $43.70 a barrel on London s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down at $41.02 a barrel. Both benchmarks switched between gains in losses in earlier trading. More than a dozen major producers, including heavyweights Saudi Arabia and Russia, are scheduled to meet on Sunday in Doha, Qatar, to discuss measures to limit production in a bid to support prices. Any production freeze is ultimately a decision for Saudi Arabia, but momentum is building behind an agreement that likely excludes Iran and potentially Libya, said Jason Gammel, an analyst at Jefferies. An agreement would represent an important psychological shift in setting oil prices. However, Mr. Gammel said that if there is no agreement in Doha, there could be a snap back in prices given the high expectations ahead of the talks among investors. Gold was 0.42% higher at $1, Other Top Stories Of The Day China Growth Slows; Revival Policies Appear to Gain Traction China s economy slowed further in the first quarter, though policies aimed at reviving it appeared to have positive effects. Economists questioned whether the recent improvement was sustainable. Japan Finance Minister: No Secret G-20 Accord to Weaken Dollar Japanese Finance Minister Taro Aso on Thursday shot down market speculation that there was a secret accord among the world s leading economies to weaken the dollar by coordinating monetary policies.

4 Bank of Japan s Kuroda Calls Yen s Recent Rise Excessive Bank of Japan Gov. Haruhiko Kuroda said the yen s recent rise has been excessive, using his strongest language yet to warn traders against driving up the currency. Chinese Central Bank Official Highlights Benefits of Stable Yuan Yi Gang, the People s Bank of China s deputy governor, emphasized the need to keep the yuan stable even as he upheld the role of market forces in deciding the exchange rate. Eurozone Trade Surplus Narrows in February The eurozone s trade surplus shrank in February as imports rose more rapidly than exports, an indication that rising domestic demand continued to drive the currency area s modest recovery. North Korea Missile Test Fails, South Korea and U.S. Say A North Korean missile launch failed early Friday, South Korean and U.S. military officials said, which is likely the first test of a road-mobile weapon that might threaten Japan and U.S. bases in the region. Proposal to Rein In Wall Street Bonuses Coming April 21 U.S. regulators are set to release a long-awaited update of proposed crisis-era Wall Street compensation rules at a public meeting April 21. Regulators have been working for more than five years on updating the proposed rules.

5 Today In Canada Earnings scheduled none scheduled Economic Indicators (all times ET) February manufacturing sales at 8:30 a.m. Canada existing home sales for March at 9 a.m. Stocks to watch Dominion Diamond (DDC) shares fell after disappointing fourth-quarter results Calendar items (all times ET) National Bank of Canada (NA.T) annual meeting in Montreal at 10 a.m. Finance Minister Bill Morneau participates in G20 Finance Ministers and Central Bank Governors meeting in Washington at 8:30 a.m