CURRENCY MARKET WRAP 

As of Mon Nov 11th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.21%, 98.35
USDJPY, -0.04%, $109.24
EURUSD, -0.28%, $1.1019
GBPUSD, -0.32%, $1.2773
USDCAD, +0.44%, $1.3228
AUDUSD, -0.54%, $0.6861
NZDUSD, -0.58%, $0.6329

U.S. University of Michigan Consumer Sentiment Index for November crossed at 95.7 (consensus 95.0), which was slightly better than expected and roughly even with the final reading of 95.5 for October. Consumer expectations increased from October, underscoring an otherwise confident attitude that should continue to manifest itself in relatively solid consumer spending activity.

Wholesale inventories declined 0.4% m/m in September (consensus -0.1%), on top of a downwardly revised 0.1% increase (from +0.2%) in August. That was the largest decline since October 2017. Wholesale sales were flat in September after declining 0.1% in August.

Trump’s statement refuted China’s claim that an agreement was already made, but the market maintained an optimistic view on trade. It presumably continued to think that a “Phase One” deal will still get signed considering the president didn’t technically rule out the possibility to roll back tariffs and White House trade advisor Peter Navarro said the U.S. might be willing to delay the Dec. 15 tariffs.

The U.S. Treasury market finished relatively unchanged in a quiet session. The 2-yr yield declined one basis point to 1.66%, and the 10-yr yield increased one basis point to 1.93%. The U.S. Dollar Index increased 0.21% to 98.35. WTI crude increased 0.2% (+$0.10) to $57.21/bbl.

STOCK MARKET WRAP 

S&P500, +0.26%, 3,093.08
Nasdaq, +0.48%, 8,475.31
Nikkei Futures, +0.48%, 23,472.5

There still wasn’t much conviction from buyers or sellers for most of the session, though, until a wave of buyers pushed the market to session highs into the close. The S&P 500 health care (+0.8%) and information technology (+0.6%) sectors posted decent gains, while the energy (-0.8%), utilities (-0.4%), and real estate (-0.2%) sectors finished lower.

Walt Disney (DIS 137.96, +5.00, +3.8%) beat earnings estimates and shares of the Dow component rose accordingly. Its outperformance also helped the S&P 500 communication services sector (+0.4%) overcome weakness in Verizon (VZ 59.35, -1.18, -2.0%), which fell on no confirmed news catalyst.

The trade-sensitive Philadelphia Semiconductor Index (+0.5%) continued to rise amid the upbeat trade sentiment. The group also benefited from follow-through buying in shares of Qualcomm (QCOM 94.03, +4.05, +4.5%) after it reported positive earnings results earlier in the week.

In other corporate news, Southwest’s (LUV 58.18, -0.06, -0.1%) 10-Q stated it plans to remove Boeing’s (BA 351.00, -6.31, -1.8%) 737 MAX from its flight schedule through March 6, 2020. This is a one-month delay. Gap, Inc. (GPS 16.68, -1.38, -7.6%) announced the departure of its CEO and issued downside EPS guidance.

CURRENCY MARKET WRAP

As of Fri Nov 8th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.18%, 98.13
USDJPY, +0.28%, $109.28
EURUSD, -0.13%, $1.1053
GBPUSD, -0.25%, $1.282
USDCAD, -0.04%, $1.3175
AUDUSD, +0.24%, $0.6899
NZDUSD, +0.09%, $0.6374

U.S. Initial jobless claims for the week ending November 2 decreased by 8,000 to 211,000 (consensus 217,000). Continuing jobless claims for the week ending October 26 decreased by 3,000 to 1.689 million. The Consumer Credit report for September showed an increase of $9.5 billion (consensus $14.0 billion), and August credit growth was unrevised at $17.9 billion.

The stock market rallied to new highs on Thursday after China’s Commerce Ministry said it reached an agreement with the U.S. for both sides to phase out tariffs. News of internal strife within the White House about those plans, however, curbed some enthusiasm in the market.

In trade, China’s announcement was confirmed by an unnamed U.S. official to Bloomberg, but multiple sources familiar with trade talks followed up to Reuters that opposition is based on concerns that the U.S. would give away leverage to Beijing. Considering that China reportedly wants all retaliatory tariffs removed for the “Phase One” deal to get signed, the news understandably created some jitters in the market.

The 2-yr yield rose seven basis points to 1.67%, and the 10-yr yield rose 11 basis points to 1.93%. The U.S. Dollar Index increased 0.18% to 98.13.

In B0E, two officials unexpectedly voted to lower interest rates on Thursday to ward off an economic slowdown, and others including Governor Mark Carney said they would consider a cut if global and Brexit headwinds do not ease. Economists had expected the BoE to vote unanimously to keep Bank Rate at 0.75%, and the announcement of the 7-2 split pushed sterling to a two-week low as market odds on a cut next year rose as high as 80%.

STOCK MARKET WRAP 

S&P500, +0.27%, 3,085.18
Nasdaq, +0,28%, 8,434.52
Nikkei Futures, +1.04%, 23,542.5

The trade-sensitive Philadelphia Semiconductor Index increased 0.7%, although it was up as much as 1.8% in the session. The group still outperformed, though, largely due to the positive reaction to Qualcomm’s (QCOM 89.98, +5.35, +6.3%) better-than-expected quarterly results.

Separately, the online travel services industry received negative attention after Expedia Group (EXPE 98.29, -37.07, -27.4%) and TripAdvisor (TRIP 31.65, -9.14, -22.4%) provided investors disappointing quarterly results. Ensuing industry concerns undercut shares of Booking Holdings (BKNG 1849.93, -162.16, -8.1%) in front of its earnings report after the close.

CURRENCY MARKET WRAP 

As of Wed Nov 6th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.42%, 97.91
USDJPY, +0.51%, $109.14
EURUSD, -0.47%, $1.1076
GBPUSD, -0.05%, $1.2883
USDCAD, -0.01%, $1.3151
AUDUSD, +0.12%, $0.6892
NZDUSD, -0.41%, $0.6377

U.S. ISM Non-Manufacturing Index for October increased to 54.7 (consensus 53.3) from 52.6 in September. U.S trade deficit narrowed slightly in September to $52.5 billion, as expected, from a downwardly revised $55.0 billion (from -$54.9 billion) in August. It wasn’t a narrowing driven necessarily by stronger demand, imports (-$4.4 billion) and exports (-$1.8 billion) both declined month-over-month, so the narrowing was simply a function of imports falling more than exports.

In trade, reports indicated that the U.S. is considering removing the 15% tariff rate that went into effect in September and could possibly delay the tariffs in place for December. China, however, reiterated it would want the U.S. to remove all retaliatory tariffs imposed since last year and for the U.S. to be firmer in its commitments to remove them. It’s a tough ask, but the market presumably understood that negotiations are ongoing and it shouldn’t conclude that a “Phase One” deal won’t get signed based on these reports.

The 2-yr yield rose four basis points to 1.63%, and the 10-yr yield rose eight basis points to 1.87%. The U.S. Dollar Index increased 0.42% to 97.91. WTI crude rose 1.0%, or $0.55, to $57.24/bbl.

RBA held interest rates at the historic low of 0.75 per cent (as expected). The futures market forecast a less than 10 per cent chance of a cut and no longer has a full 25 basis point cut priced in over its 18-month horizon. RBA governor Philip Lowe noted in his post-decision statement the outlook for the Australian economy is little changed from three months ago.

STOCK MARKET WRAP 

S&P500, -0.12%, 3,074.62
Nasdaq, +0.02%, 8,434.68
Nikkei Futures, +0.58%, 23,337.5

S&P 500 shed 0.12% on Tuesday in a mixed session that saw more trade headlines and a further increase in Treasury yields. The Dow Jones Industrial Average (+0.1%), Nasdaq Composite (+0.01%), and Russell 2000 (+0.1%) finished just above their flat lines.

Walgreens Boots Alliance (WBA 61.21, +1.56, +2.6%) and Kroger (KR 27.83, +2.84, +11.4%) were some notable gainers in the consumer staples sector (+0.3%). Walgreens held preliminary discussions with private equity firms about a leveraged buyout, according to Reuters, while Kroger issued upbeat FY20 guidance following an encouraging update on its “Restock Kroger” initiative.

Adobe Systems (ADBE 289.29, +11.79, +4.3%) also provided shareholders with upbeat FY20 guidance. Shares rose accordingly, while shares of Uber (UBER 28.02, -3.06, -9.9%) and Peloton (PTON 22.74, -1.87, -7.6%) dropped despite better-than-expected results and decent guidance. Shake Shack (SHAK 66.83, -17.38, -20.6%) plunged 21% on disappointing guidance.

CURRENCY MARKET WRAP 

As of Tue Nov 5th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.35%, 97.56
USDJPY, +0.45%, $108.71
EURUSD, -0.34%, $1.1128
GBPUSD, -0.37%, $1.2889
USDCAD, +0.11%, $1.3153
AUDUSD, -0.38%, $0.6889
NZDUSD, -0.51%, $0.6402

In trade, Commerce Secretary Wilbur Ross said that good progress has been made in “Phase One” negotiations, companies may soon be granted licenses to work with Huawei, and auto tariffs on imported products may not be imposed. Beijing is pressing the U.S. to remove a 15% tariff that was imposed on roughly $112 billion worth of Chinese goods on Sept. 1, but no decision has been made, Politico reported citing sources.

The Financial Times later on Monday also said the White House is considering whether to roll back levies on $112 billion of Chinese imports including clothing, appliances, and flatscreen monitors, which were introduced at a 15% rate on Sept. 1. Trump had said on Friday evening that negotiations about a “phase one” agreement were going well and he hoped to sign the deal with Chinese President Xi Jinping at a U.S. location when work on the agreement was completed.

U.S. Treasuries ended the session lower, as the risk-on trading sentiment in the stock market decreased demand for the safe-haven asset class. The 2-yr yield increased three basis points to 1.59%, and the 10-yr yield increased six basis points to 1.79%. The U.S. Dollar Index advanced 0.35% to 97.56.

STOCK MARKET WRAP 

S&P500, +0.37%, 3,078.27
Nasdaq, +0.56%, 8,433.20
Nikkei Futures, +1.05%, 23,202.5

The S&P 500 energy sector (+3.2%) surged past the other sectors, rising more than 3% as the value-oriented space also benefited from higher oil prices ($56.69/bbl, +0.48, +0.9%). The sector saw volume that was below average.

The S&P 500 industrials (+1.2%), financials (+0.9%), and materials (+0.8%) sectors followed suit with gains that were also more than the benchmark index, as did the Dow Jones Transportation Average (+2.3%) and Philadelphia Semiconductor Index (+2.2%).

On the other hand, losses in the defensive-oriented utilities (-1.3%), real estate (-1.1%), consumer staples (-0.9%), and health care (-0.4%) sectors restrained further gains in the broader market.

Notable stocks from Monday included McDonald’s (MCD 188.66, -5.28, -2.7%) and Under Armour (UAA 17.13, -4.01, -19.0%). McDonald’s fired CEO Steve Easterbrook after he used “poor judgement” in having a consensual relationship with an employee. Under Armour reported lacklustre sales activity and confirmed its accounting practices are being probed by the SEC and Department of Justice.

CURRENCY MARKET WRAP 

As of Mon Nov 4th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.18%, 97.12
USDJPY, +0.15%, $108.19
EURUSD, +0.13%, $1.1167
GBPUSD, -0.05%, $1.2935
USDCAD, -0.19%, $1.3136
AUDUSD, +0.29%, $0.6914
NZDUSD, +0.23%, $0.6428

U.S. October employment report was adversely impacted by the GM strike but otherwise strong absent the effects of that strike, which led to about 42,000 job losses for the motor vehicle and parts industry. October non-farm payrolls increased by 128,000 (consensus 80,000). There were sizable upward revisions to non-farm payrolls for August and September, fewer discouraged workers, and an uptick in the labor force participation rate. ISM Manufacturing Index for October checked in at 48.3% (consensus 48.7%), up from 47.8% in September but still below the 50.0% level. This was its third straight monthly contraction, but the market’s reaction reflected a better-than-feared perspective.

In trade, China’s Ministry of Commerce said both sides reached a consensus on core issues in a phone call involving senior negotiators. The USTR office followed up, saying that they are “in the process” of resolving outstanding issues, according to CNBC.

The 2-yr yield and the 10-yr yield increased four basis points each to 1.56% and 1.73%, respectively. The U.S. Dollar Index declined 0.18% to 97.12.

STOCK MARKET WRAP 

S&P500, +0.97%, 3,066.91
Nasdaq, +1.13%, 8,386.40
Nikkei Futures, +0.47%, 22,850.0

Investors embraced risk, with cyclical sectors leading the rally. The S&P 500 energy sector (+2.5%) outpaced the market, as oil prices ($56.21, +2.03, +3.8%) rose nearly 4% and Exxon Mobil (XOM 69.60, +2.03, +3.0%) beat earnings estimates. Next in line were the industrials (+2.2%), materials (+1.5%), and financials (+1.4%) sectors.

Apple (AAPL 255.82, +7.06) rose 2.8% and the trade-sensitive Philadelphia Semiconductor Index rose 2.3%. The latter was supercharged by Qorvo (QRVO 97.22, +16.36, +20.2%), an Apple supplier, beating top and bottom-line estimates and providing encouraging guidance.

Separately, Fitbit (FIT 7.14, +0.96, +15.5%) agreed to be acquired by Alphabet (GOOG 1273.74, +13.63, +1.1%) for $7.35/share in cash, or approximately $2.1 billion. Pinterest (PINS 20.86, -4.28, -17.0%) disappointed investors with its guidance.

Alibaba blows past earnings estimates and says it expects further cloud growth. For the September quarter, Alibaba reported net income of RMB72.5 billion ($10.1 billion), or RMB27.51 a share ($3.85), up from RMB20 billion, or RMB7.62 a share, in the year-prior quarter. Excluding non-recurring items, Alibaba’s adjusted earnings per share rose to RMB13.10 ($1.83) from RMB9.60. Alibaba’s revenue rose to RMB119 billion ($16.7 billion) from RMB85.1 billion and came in ahead of estimates, which modeled RMB117 billion. The company saw RMB101.2 billion in revenue from its core commerce segment, which includes the popular Taobao and Tmall platforms. Alibaba had 693 million annual active customers on its China retail marketplaces and 785 million mobile monthly active users.

CURRENCY MARKET WRAP

As of Fri Nov 1st, Singapore Time zone UTC+8

U.S. Dollar Index, -0.12%, 97.33
USDJPY, -0.76%, $108.01
EURUSD, +0.04%, $1.1155
GBPUSD, +0.25%, $1.2936
USDCAD, +0.06%, $1.3166
AUDUSD, -0.16%, $0.6892
NZDUSD, +0.40%, $0.6414

U.S. Personal income was up 0.3% in September, as expected and personal spending was up 0.2% (consensus +0.3%). The PCE Price Index was unchanged m/m (consensus +0.1%) and up 1.3% yr/yr; the core PCE Price Index was unchanged m/m (consensus +0.1%) and up 1.7% yr/yr. The data fit reasonably well with the Fed’s working view that the U.S. economy is growing at a moderate pace with muted inflation pressures. Chicago PMI for October fell to 43.2 (consensus 48.2) from 47.1, sinking deeper into contraction territory.

In trade, Chinese officials are casting doubts about reaching a comprehensive long-term trade deal with the U.S. even as the two sides get close to signing a “phase one” agreement. In a tweet on Thursday, Trump said the search is ongoing for a new location for Xi and him to sign the deal, which he said would be “about 60% of total deal.” That first step, according to the Trump administration, is meant to lead to a more comprehensive agreement involving more substantial economic reforms than those contained in the proposed initial phase. But Chinese officials are skeptical, saying that would require the U.S. to withdraw tariffs in place on some $360 billion in imports from China -something many don’t see Trump being ready to do.

BoJ kept monetary policy steady on Thursday as expected, but offered a stronger signal it may cut interest rates in future, underscoring its concern that overseas risks could derail the country’s fragile economic recovery. The vote on keeping rates steady was 7-2, while that on changing forward guidance was 8-1.

The 2-yr yield dropped ten basis points to 1.52%, and the 10-yr yield dropped 11 basis points to 1.69%. The U.S. Dollar Index fell 0.12% to 97.33. WTI crude fell 1.6%, or $0.90%, to $54.18/bbl.

STOCK MARKET WRAP 

S&P500, -0.30%, 3,037.57
Nasdaq, -0.14%, 8,292.36
Nikkei Futures, -0.51%, 22,722.5

S&P 500 lost 0.3% on this last day of October, as concerns about a comprehensive U.S.-China trade deal outweighed the positive earnings results from Apple (AAPL 248.76, +5.50, +2.3%) and Facebook (FB 191.65, +3.40, +1.8%).

Given the resiliency of the market, it was business as usual when the stock market opened the session relatively unchanged. This was short-lived, though, with the major indices quickly giving back Wednesday’s post-FOMC gains. Coinciding with this decline was the release of the Chicago PMI for October, which fell deeper into contraction territory to 43.2 (consensus 48.2) from 47.1.