CURRENCY MARKET WRAP 

As of Wed Aug 28th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.07%, 98.01
USDJPY, -0.36%, $105.75
EURUSD, -0.11%, $1.1090
GBPUSD, +0.52%, $1.2280
USDCAD, +0.23%, $1.3285
AUDUSD, -0.30%, $0.6755
NZDUSD, -0.48%, $0.6364

U.S. Conference Board’s Consumer Confidence Index for August printed at 135.1 (consensus 129.6) versus an upwardly revised 135.8 (from 135.7) in July, which was the third highest reading since October 2000.

In Trade, China’s Foreign Ministry reiterated yesterday that it had not heard of any recent telephone call between the United States and China on trade, and said it hopes Washington can cease its wrong actions and create conditions for talks. Foreign Ministry spokesman Geng Shuang made the comment at a news briefing after US Treasury Secretary Steven Mnuchin said there had been contact between the two sides, but declined to say with whom. – Trump claimed the calls happened over the weekend, during which, he said, China had indicated it wanted to work towards a trade deal.

The 2-yr yield declined two basis points to 1.53%, and the 10-yr yield declined six basis points to 1.49%. The U.S. Dollar Index was little changed at 98.01. WTI crude rose 2.4% to $54.90/bbl.

STOCK MARKET WRAP 

S&P500, -0.32%, 2,869.16
Nasdaq, -0.34%, 7,826.95
Nikkei Futures, +0.75%, 20,453.0

The stock market finished lower on Tuesday in a shaky session. The S&P 500 jumped 0.7% out of the gate after yesterday’s advance, then declined as much 0.6% as Treasury yields took a noticeable leg lower. The broader market spent most of the afternoon wavering in negative territory, leaving the S&P 500 with a 0.32% loss.

The reaction to the persistent flattening/inversion activity in the U.S. Treasury yield curve was made more evident in the S&P 500 financials sector (-0.7%), which led all sectors in losses on Tuesday. The energy (-0.6%) and health care (-0.6%) sectors followed suit, while the utilities (+0.1%), materials (+0.1%), and communication services (+0.1%) sectors managed to finish in positive territory.

Johnson & Johnson (JNJ 129.64, +1.84, +1.4%)outperformed despite being found liable in an opioid case in Oklahoma. JNJ was ordered to pay $572 million, which was at the low end of expectations and much less than the $17 billion the state wanted. Johnson & Johnson said it plans to appeal the ruling.

Other corporate news included merger talks between Philip Morris International (PM 71.70, -6.03, -7.8%) and Altria Group (MO 45.25, -1.87, -4.0%). MO surged on the initial news but fell on a subsequent report from CNBC indicating it would own just 41% of the company at no premium. J.M. Smucker (SJM 103.69, -9.24, -8.2%)disappointed investors with its results and lower guidance.

CURRENCY MARKET WRAP 

As of Tue Aug 27th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.40%, 98.03
USDJPY, +1.06%, $105.97
EURUSD, -0.37%, $1.1101
GBPUSD, +0.22%, $1.2279
USDCAD, -0.48%, $1.3253
AUDUSD, +0.93%, $0.6769
NZDUSD, +0.38%, $0.6385

Risk assets rebounded on Monday, catalyzed by Trump’s contention that China called top U.S. negotiators to restart trade talks. China’s Foreign Ministry spokesman denied knowledge of any such calls while the Chinese press downplayed the significance of Trump’s statement. In a conciliatory move, Trump reciprocated China’s willingness to resolve their dispute through “calm” negotiations.

U.S. Treasuries finished the day lower, giving up an overnight rally following Trump’s trade comments. The 2-yr yield increased two basis points to 1.55%, and the 10-yr yield increased one basis point to 1.55%. The U.S. Dollar Index advanced 0.4% to 98.03. WTI crude lost 0.9% to $53.70/bbl on speculation that a possible U.S.-Iran meeting could lead to oversupply.

STOCK MARKET WRAP 

S&P500, +1.10%, 2,878.38
Nasdaq, +1.32%, 7,853.73
Nikkei Futures, +1.72%, 20,458.0

The S&P 500 advanced 1.1%, which was comparable to the gains in the Dow Jones Industrial Average (+1.1%), Nasdaq Composite (+1.32%), and Russell 2000 (+1.1%). Most of the price action occurred before the open, but the market was able to close near session highs.

In key corporate news, Bristol-Myers (BMY 48.11, +1.53, +3.3%)sold Celgene’s (CELG 97.00, +3.01, +3.2%)psoriasis drug Otezla to Amgen (AMGN 205.41, +6.33, +3.2%)for $13.4 billion in cash. Bristol-Myers hoped that by selling the rights to Otezla, it would appease any antitrust concerns as it tries to get its merger agreement with Celgene approved.

CURRENCY MARKET WRAP 

As of Mon Aug 26th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.54%, 97.64
USDJPY, -0.97%, $105.41
EURUSD, +0.59%, $1.1144
GBPUSD, +0.22%, $1.2279
USDCAD, -0.18%, $1.3280
AUDUSD, -0.01%, $0.6756
NZDUSD, +0.61%, $0.6404

The day started with investors looking forward to Fed Chair Powell’s speech from Jackson Hole, Wyoming. Attention quickly shifted to trade, however, after China announced tariffs on $75 billion of goods imported from the U.S on Sept. 1 and Dec. 15, which are the same dates the U.S. has planned for its tariffs on China. The tariff rate will range from 5-10%, including a separate 5-25% on autos and auto parts starting Dec. 15. Trump took to Twitter to lash out against both the Fed Chair and China. Stocks fell noticeably on the president’s declaration that companies find alternatives to China.

Powell promised on Friday to take the steps needed to maintain U.S. economic growth as fears about a potential recession grow.In his remarks to the Fed’s annual Jackson Hole symposium, the central bank chief said the economy has “continued to perform well overall” but acknowledged “trade policy uncertainty seems to be playing a role in the global slowdown.”

Amid the uncertainty and growth concerns, investors flocked to safe-haven assets like gold ($1537.25/oz, +$28.75, +1.9%), the Japanese yen, and U.S. Treasuries. In addition, expectations for further downside in equities contributed to a 17.8% spike in the CBOE Volatility Index (19.65, +2.97).

The 2-yr yield dropped seven basis points to 1.53%, and the 10-yr yield dropped eight basis points to 1.53%. The U.S. Dollar Index fell 0.54% to 97.64. WTI crude fell 2.0%, or $1.12, to $54.16/bbl.

STOCK MARKET WRAP 

S&P500, -2.59%, 2,847.11
Nasdaq, -3.00, 7,751.77
Nikkei Futures, +0.48%, 20,720.0

The stock market sold off on Friday after Trump ordered companies to find an alternative to China in response to Beijing announcing retaliatory tariffs against the U.S. The S&P 500 (-2.59%) and Dow Jones Industrial Average (-2.4%) lost around 2.5%, while the Nasdaq Composite (-3.0%) and Russell 2000 (-3.1%) lost at least 3.0%

A steady broad-based retreat transpired during the day amid worries that escalated trade tensions will exacerbate slowing global growth and, by extension, affect corporate earnings. All 11 S&P 500 sectors finished in negative territory, which saw the energy (-3.4%) and information technology (-3.3%) sectors losing over 3%. The utilities sector (-1.1%) declined the least.

Shares of Apple(AAPL 202.64, -9.82) fell 4.6% and other trade-sensitive areas like the Philadelphia Semiconductor Index (-4.4%) and Dow Jones Transportation Average (-3.3%) also posted steep losses. Shares of Foot Locker (FL 34.00, -7.93, -18.9%)plunged nearly 20% after the company missed top and bottom-line estimates.

CURRENCY MARKET WRAP 

As of Fri Aug 23, Singapore Time zone UTC+8

Dollar Index -0.11%, 98.19
USDJPY, -0.14%, $106.47
EURUSD, -0.01%, $1.1084          
GBPUSD, +1.02%, $1.2251    
USDCAD, +0.04%, $1.3297        
AUDUSD, -0.38%, $0.6755        
NZDUSD, -0.23%, $0.6389    

U.S. markets began the day solidly higher in a broad-based advance amid an uptick in U.S. Treasury yields. The early lead was short-lived, however, after the U.S. flash manufacturing PMI for August ticked down to 49.9 (50.5 Expected) from 50.4. A reading below 50.0 denotes a contraction, which was its first one since 2009, according to IHS Markit.

The pound strengthened to a three-week high as investors seized on hints from European leaders that a Brexit deal could still be reached. This uptick came about from Boris Johnson’s meeting with French President Emmanuel Macron in Paris. GBP investors seized on comments made in a joint Q&A in which Mr Macron appeared to show unexpected flexibility over the Irish backstop issue. Echoing comments made by German Chancellor Angela Merkel the day before, Mr Macron said a solution to the backstop could be found within 30 days “if there is goodwill on both sides”.

Elsewhere, the Fed kicked off its annual summit in Jackson Hole, Wyoming, where some officials took some time to speak with CNBC. Kansas City Fed President George (FOMC voter) reiterated her view against the need for a rate cut last month. Philadelphia Fed President Harker and Dallas Fed President Kaplan, both of whom will be FOMC voters in 2020, indicated a preference to not cut rates in September. 

U.S. 2-yr yield briefly rose above the 10-yr yield multiple times during the day. Both yields finished three basis points higher at 1.60% and 1.61%, respectively. WTI crude declined 0.7%, or $0.37, to $55.28/bbl.

STOCK MARKET WRAP 

S&P500, -0.05%, 2,922.95
Nasdaq, -0.36%, 7,991.39          
Nikkei Futures, +0.05%, 20,628.01

The stock market finished mixed on Thursday, as weak U.S. manufacturing data and reservations from a few Fed officials contributed to some indecisiveness. The S&P 500 (-0.1%), Nasdaq Composite (-0.4%), and Russell 2000 (-0.3%) declined modestly, while the Dow Jones Industrial Average (+0.2%) managed to finish higher.

Boeing (BA 354.41, +14.42, +4.2%) was a notable standout on Thursday. Shares were boosted following a Reuters report indicating the company is planning on ramping up 737 production to 52/month in February if regulators approve the commercial return of its 737 MAX.

CURRENCY MARKET WRAP 

As of Thu Aug 22, Singapore Time zone UTC+8

Dollar Index +0.11%, 98.30
USDJPY, +0.35%, $106.61  
EURUSD, -0.09%, $1.1091        
GBPUSD, -0.31%, $1.2132
USDCAD, -0.21%, $1.3289        
AUDUSD, +0.09%, $0.6784        
NZDUSD, -0.18%, $0.6405

Price action in markets was relatively muted leading up to the release of the FOMC Minutes, which had a noticeable effect on the U.S. Treasury market. The minutes indicated different viewpoints on where the fed funds rate should be (some called for a 50-basis points rate cut, while others favored no change). In addition, it was said in the minutes that the Fed will remain “flexible” and focused on the implications of incoming data for the outlook. 

The minutes produced some knee-jerk selling on the shorter-end of the yield curve, causing some curve-flattening. The 2-yr yield increased six basis points to 1.57%, and the 10-yr yield increased two basis points to 1.58%. At one point before the close, the 2s10s spread briefly inverted again. The U.S. Dollar Index increased 0.1% to 98.29. WTI crude declined 0.9%, or $0.53, to $55.65/bbl.

In trade, Trump on Wednesday said he was “the chosen one” to address trade imbalances with China, even as congressional researchers warned that his tariffs would reduce U.S. economic output by 0.3% in 2020.

STOCK MARKET WRAP 

S&P500, +0.82%, 2,924.43
Nasdaq, +0.90%, 8,020.21
Nikkei Futures, +0.1%, 20,717.50   

S&P 500 increased 0.8% on Wednesday in a broad-based advance. Upbeat results and reassuring guidance from Target (TGT 103.00, +17.47, +20.4%) and Lowe’s (LOW 108.00, +10.13, +10.4%) reinforced the notion that the U.S. consumer remains in good shape, while investors parsed the FOMC minutes from the July meeting. 

All 11 S&P 500 sectors finished in positive territory, with the consumer discretionary (+1.8%) and information technology (+1.2%) sectors gaining over 1.0%. The consumer staples (+0.3%) and communication services (+0.4%) sectors rose modestly.

CURRENCY MARKET WRAP 

As of Wed Aug 21, Singapore Time zone UTC+8

Dollar Index -0.16%, 98.19
USDJPY, -0.34%, $106.28   
EURUSD, +0.18%, $1.1098        
GBPUSD, +0.30%, $1.2163
USDCAD, -0.04%, $1.3319        
AUDUSD, +0.15%, $0.6774        
NZDUSD, -0.03%, $0.6409

There were no economic prints in the U.S. on Tuesday.

Trump said his administration was looking at ways to reduce various taxes to help stimulate growth despite repeated claims on how the good the economy is doing. Market reaction was muted, as it remained unclear if discussions would lead to proposals that Congress would approve.

The 2-yr yield declined two basis points to 1.51%, and the 10-yr yield declined four basis points to 1.56%. The U.S. Dollar Index declined 0.2% to 98.15. WTI crude declined 0.1% to $56.18/bbl.

STOCK MARKET WRAP 

S&P500, -0.07%, 2,900.51
Nasdaq, -0.68%, 7,948.56        
Nikkei Futures, +0.55%, 20,677.22    

The day began modestly lower following lackluster performances overseas, and stocks quickly fell to session lows on no specific news catalysts. After a brief intraday rally to the flat line, the S&P 500 and the other major averages steadily returned to those session lows by late afternoon. Selling accelerated into the close, stamping a sour note to the session.

All 11 S&P 500 sectors finished in negative territory, with the financials (-1.4%), materials (-1.2%), and consumer staples (-1.2%) sectors losing over 1.0%. The consumer discretionary sector (-0.1%) finished just below its flat line, supported by the positive reaction to Home Depot’s (HD 217.09, +9.14, +4.4%) earnings results.

In other earnings news, fellow retailers Kohl’s (KSS 44.88, -3.32, -6.9%) and TJX Companies (TJX 51.51, -0.04, -0.1%) finished mixed following their reports. Kohl’s fell despite beating top and bottom-line estimates. TJX finished little changed despite missing revenue estimates and guiding Q3 EPS below consensus.

Netflix (NFLX 298.99, -10.39, -3.4%) shares fell over 3%, likely pressured by a Bloomberg report that indicated Apple (AAPL 210.36, +0.01, unch) plans to launch its streaming service in November for $9.99/month.

CURRENCY MARKET WRAP 

As of Tue Aug 20th, Singapore Time zone UTC+8

Dollar Index +0.15%, 98.35
USDJPY, +0.18%, $106.57       
EURUSD, -0.07%, $1.1082    
GBPUSD, -0.18%, $1.2128
USDCAD, +0.41%, $1.3327    
AUDUSD, -0.38%, $0.6755    
NZDUSD, -0.38%, $0.6405    

More reports surfaced about stimulus plans in China and Germany, which helped kindle some curiosity about the Fed’s annual Jackson Hole Summit on Thursday and Friday.

China announced new loans will largely be benchmarked against rates that banks charge their best customers, promising cheaper borrowing for both households and companies, according to Bloomberg.

Germany indicated it could find $55 billion to combat recession, according to Reuters, after its economy shrunk last quarter. Germany’s Finance Minister Olaf Scholz said, on Sunday, his country has the fiscal strength to counter any future economic crisis “with full force”. He also said, however, that Berlin could potentially free up 50 billion euros ($82 billion) of extra spending — effectively ditching its balanced budget rule.

U.S. Treasuries pulled back from a lengthy advance amid the positive disposition in equities. The 2-yr yield and the 10-yr yield increased six basis points each to 1.53% and 1.60%, respectively. The U.S. Dollar Index advanced 0.3% to 98.38.

STOCK MARKET WRAP 

S&P500, +1.21%, 2,923.65
Nasdaq, +1.35%, 8,002.81
Nikkei Futures, +0.34%, 20,601.00

S&P 500 rose 1.2% on Monday in a broad-based advance that extended its rebound rally to a third day. The Nasdaq Composite (+1.4%), Dow Jones Industrial Average (+1.0%), and Russell 2000 (+1.0%) also advanced at least 1.0%.

All 11 S&P 500 sectors posted decent gains on Monday. Seven sectors rose at least 1.0%, including a 2.1% gain in the energy sector amid higher oil prices ($56.00/bbl, +$1.11, +2.0%). Noticeable gains in the mega-cap stocks provided strong support for the information technology (+1.6%), communication services (+1.4%), and consumer discretionary (+1.3%) sectors.

Apple (AAPL 210.35, +3.85, +1.9%) was one of those mega-cap outperformers following a meeting between Apple CEO Tim Cook and Trump over the weekend. Trump said Cook presented a “compelling argument” for how tariffs would make it harder for Apple to compete against foreign competitors. Apple shares rose nearly 2%.

Estee Lauder (EL 201.65, +22.43) was another standout, rising 12.5% after the company beat top and bottom-line estimates and provided upbeat guidance for fiscal 2020.

CURRENCY MARKET WRAP 

As of Mon Aug 19th, Singapore Time zone UTC+8

Dollar Index +0.06%, 98.20
USDJPY, +0.05%, $106.43
EURUSD, +0.01%, $1.1091
GBPUSD, +0.07%, $1.2158
USDCAD, -0.03%, $1.3268
AUDUSD, +0.07%, $0.6786
NZDUSD, -0.05%, $0.6426    

U.S. preliminary University of Michigan Consumer Sentiment report for August checked in at 92.1 (consensus 97.7) versus the final reading of 98.4 for July. The August number was the lowest reading since January. The takeaway from the report was the finding that apprehension about the economic outlook increased with the Fed’s rate cut, which is something that might influence consumers to curtail their discretionary spending activity.

Positive trade narrative contributed to a healthy risk appetite on Friday. Trump said he would speak to his Chinese counterpart Xi Jinping “very soon” as Beijing warned it would retaliate if Washington continued imposing tariffs on Chinese products. Asked whether he had spoken to Xi directly, Trump said: “I will speak to him. We have a call scheduled soon – [with] President Xi.” Trump added: “We’re talking by phone and we’re having very productive talks. They would like to do something, I will tell you that.”

Despite the rally in equities, demand for U.S. Treasuries held firm amid lingering growth concerns.The 2-yr yield declined two basis points to 1.47%, and the 10-yr yield increased one basis point to 1.54%. The U.S. Dollar Index was unchanged at 98.18. WTI crude increased 0.5% to $54.89/bbl.

STOCK MARKET WRAP 

S&P500, +1.44%, 2,888.68
Nasdaq, +1.67%, 7,895.99
Nikkei Futures, +0.06%, 20,418.81

A buy-the-dip mindset helped boost the S&P 500 (+1.4%), Dow Jones Industrial Average (+1.2%), and Nasdaq Composite (+1.7%) each over 1.0%. The Russell 2000 increased 2.2%.

Industrial components Deere & Company (DE 149.23, +5.52, +3.8%) and General Electric (GE 8.79, +0.78, +9.7%) greatly benefited from the risk-on mood. Deere missed earnings estimates and lowered its full-year guidance, which sent shares down nearly 4% prior to the open, but shares still finished higher. GE, meanwhile, bounced back from yesterday’s 11% drop that followed allegations of accounting fraud.

High-beta groups like the Dow Jones Transportation Average (+2.1%), the Philadelphia Semiconductor Index (+2.8%), and the iShares Nasdaq Biotechnology ETF (IBB 104.97, +2.29, +2.2%) each advanced over 2%. The semiconductor space was boosted by a positive reaction to better-than-expected earnings results from NVIDIA (NVDA 159.56, +10.79, +7.3%).