Currency Market Wrap

As of Thu, May 30, Singapore Time zone UTC+8

Dollar Index +0.18%, 98.13
USDJPY, +0.19%, $109.57
EURUSD, -0.29%, $1.1136
GBPUSD, -0.23%, $1.2629
USDCAD, +0.19%, $1.3514
AUDUSD, -0.10%, $0.6919
NZDUSD, -0.45%, $0.6514

Contributing to the day’s risk-aversion were Chinese state media suggesting that Beijing could use its dominant position in rare earth minerals to restrict exports in a trade war against the U.S. Although it was not a new claim, investors continued to seek safety in Treasuries with few signs of trade progress.

At one point during the day, the 3-month yield was 14 basis points higher than the 10-yr yield, which was its biggest difference since the financial crisis and helped feed into the persisting growth concerns. Demand for U.S. Treasuries did lose traction during the afternoon, though, bringing yields slightly higher from session lows. The 2-yr yield finished four basis points lower at 2.08%, and the 10-yr yield finished three basis points lower at 2.23%. The U.S. Dollar Index increased 0.18% to 98.13. WTI crude declined 0.5% to $58.84/bbl.

Bank of Canada held key interest rates steady at 1.75%, citing accumulating evidence the economy was showing signs of slowing down in the latter half of last year and into the start of this one, before picking up in the second quarter of 2019. The BoC saw the escalating trade war as a problem for global growth and warned that China restrictions have a direct impact on Canada’s exports.

Stock Market Wrap

S&P500, -0.69%, 2,783.02
Nasdaq, -0.85%, 7,216.86
Nikkei Futures, -1.64%, 20,882.5

S&P 500 was down as much as 1.3% on Wednesday amid trade and growth concerns, while the advance in U.S. Treasuries helped widen a key inversion within the yield curve. A rebound in the last hour of action, however, helped the benchmark index finish lower by 0.69% and reclaim its 200-day moving average (2776) after falling below the key technical level during the day.

No S&P 500 sector finished higher, but the materials (-0.1%) and financials (-0.1%) sectors did finish just below their unchanged marks. The utilities (-1.3%) and real estate (-1.2%) sectors underperformed. The SPDR S&P Retail ETF (XRT 40.50, -0.92, -2.2%) was a notable laggard in the stock market following poor results and guidance from Abercrombie & Fitch (ANF 18.39, -6.62, -26.5%) and Canada Goose (GOOS 33.89, -15.13, -30.9%). General growth concerns also helped overlook upbeat results and guidance from Dick’s Sporting Goods (DKS 33.67, -2.11, -5.9%).

CURRENCY MARKET WRAP  

As of Wed, May 29, Singapore Time zone UTC+8

Dollar Index +0.21%, 97.94
USDJPY, -0.13%, $109.36
EURUSD, -0.21%, $1.1169
GBPUSD, -0.16%, $1.2659
USDCAD, +0.39%, $1.3488
AUDUSD, +0.09%, $0.6926
NZDUSD, -0.02%, $0.6544

Trade progress remained elusive, while headlines continued to swirl. Trump said he expects a deal in the future but said the U.S. is not ready for one at this moment. Demand for U.S. Treasuries remained strong, sending yields even lower, amid the trade uncertainty and negative disposition in equities. The 2-yr yield declined four basis points to 2.12%, and the 10-yr yield declined six basis points to 2.27% — eight basis points below the yield on the 3-month bill. The U.S. Dollar Index advanced 0.21% to 97.94. WTI crude rose 0.8% to $59.11/bbl.

STOCK MARKET WRAP 

S&P500, -0.84%, 2,802.39
Nasdaq, -0.31%, 7,278.38
Nikkei Futures, -0.79%, 21,033.0

S&P 500 lost 0.84% on Tuesday, while U.S. Treasuries rallied, as investors continued to show little enthusiasm for risk assets. Tuesday’s decline wiped out an early gain for the benchmark index and sent it back near the 2800 level as losses accelerated into the close.

The S&P 500 consumer staples (-1.8%), utilities (-1.6%), and health care (-1.4%) sectors led the market lower. The Dow Jones Transportation Average (-1.3%) was another laggard, as investors remained concerned about a protracted trade war with China. The communication services sector (+0.2%) was the lone sector to finish higher.

Shares of Advanced Micro Devices (AMD 29.03, +2.59, +9.8%), Total System (TSS 118.84, +5.39, +4.8%), and Fiat-Chrysler (FCAU 13.78, +0.93, +7.2%) bucked the broader trend on Tuesday. AMD impressed investors with its new products. Total System confirmed its $21.5 billion merger of equals with Global Payments (GPN 148.87, -4.57, -3.0%). Fiat-Chrysler proposed a merger with Renault (RNSDF), which will reportedly give its preliminary approval, according to Bloomberg.

S&P500, – Closed –
Nasdaq, – Closed –
Nikkei Futures, +0.48%, 21,202.5

Currency Market Wrap

As of Sat, May 25, Singapore Time zone UTC+8

Dollar Index -0.26%, 97.61
USDJPY, -0.22, $109.31
EURUSD, +0.17%, $1.1204
GBPUSD, +0.38%, $1.2713
USDCAD, -0.27%, $1.3438
AUDUSD, +0.36%, $0.6924
NZDUSD, +0.49%, $0.6553

U.S. Treasuries finished lower, retreating modestly from a two-day advance. The 2-yr yield increased five basis points to 2.16%, and the 10-yr yield increased three basis points to 2.32%. The U.S. Dollar Index declined 0.3% to 97.58. WTI crude rebounded 1.4% to $58.62/bbl.

In UK Politics, Theresa May has announced her departure from 10 Downing Street. In a speech on Friday following a meeting with Sir Graham Brady, the chair of the 1922 Committee of Tory backbenchers, the prime minister said she would stand aside on Friday 7 June, with the process to select a new Conservative party leader starting this week. In an emotional statement, she said she had done her best to deliver Brexit and it was a matter of “deep regret” that she had been unable to do so. The Conservative party chairman, Brandon Lewis, confirmed that nominations to replace May would close in the week beginning 10 June. Then successive rounds of voting by Tory MPs will take place to decide which candidates will be put a vote of the party’s members. That process should be completed by the end of June.

Stock Market Wrap

S&P500, +0.14%, 2,826.06
Nasdaq, -0.10%, 7,300.96
Nikkei Futures, +0.44%, 21,100.0

S&P 500 increased 0.14% on Friday in a lower-volume trading session in front of the holiday weekend. Supporting Friday’s positive bias was Trump saying there is still a good possibility of a trade deal with China and that a solution to the Huawei matter could be included in that deal. The benchmark index finished the week lower by 1.2%. The S&P 500 financials (+0.8%) and materials (+0.5%) sectors outperformed. The consumer staples (-0.4%) and utilities (-0.2%) sectors were the lone groups in the red.

Shares of Foot Locker (FL 44.40, -8.43) dropped 16.0% after the company provided disappointing earnings results and guidance, while shares of Intuit (INTU 257.48, +16.17) climbed 6.7% after it provided upbeat results and guidance. In M&A news, Total System (TSS 113.45, +13.83, +13.9%), according to CNBC, said it is nearing a deal to be acquired by Global Payments (GPN 153.44, +5.48, +3.7%) for $20 billion in an all-stock transaction. 

S&P500, -1.19%, 2,822.24
Nasdaq, -1.52%, 7,420.66
Nikkei Futures, -1.75%, 20,907.5

U.S. stocks sold off on Thursday, sending the S&P 500 down 1.19%, as trade tensions and growth concerns resulted in risk-aversion. The cyclical S&P 500 energy (-3.1%), information technology (-1.7%), industrials (-1.6%), and materials (-1.5%) sectors led the retreat. The rate-sensitive utilities (+0.8%) and real estate (+0.5%) sectors were the lone sectors in the green amid steep declines in U.S. Treasury yields.

In earnings news, Best Buy (BBY 65.82, -3.35) lost 4.8% despite providing upbeat results and in-line guidance. NetApp (NTAP 61.66, -5.44) fell 8.1% after providing disappointing results and guidance. L Brands (LB 24.26, +2.76) climbed 12.8% after its positive results overshadowed its downside Q2 guidance.

S&P500, -0.28%, 2,856.27
Nasdaq, -0.41%, 7,420.66
Nikkei Futures, -0.34%, 21,178.0

The stock market wavered with modest losses on Wednesday, leaving the S&P 500 down 0.28%, amid persisting trade uncertainty. All of the S&P 500 cyclical sectors finished lower. The energy sector (-1.6%) led the decline amid lower oil prices ($61.40/bbl, -$1.67, -2.6%), which were pressured by the trade uncertainty and some bearish inventory data.

In earnings news, shares of retailers Lowe’s (LOW 97.94, -13.16, -11.9%), Nordstrom (JWN 34.35, -3.50, -9.3%), and Urban Outfitters (URBN 24.34, -2.66, -9.9%) dropped noticeably following their results and/or guidance. Target (TGT 77.56, +5.60), on the other hand, climbed 7.8% on its upbeat results and guidance.

S&P500, +0.85%, 2,864.36
Nasdaq, +1.01%, 7,451.02
Nikkei Futures, +0.39%, 21,393.0

S&P 500 rebounded 0.85% on Tuesday after the U.S. Department of Commerce granted Huawei a 90-day license to work with U.S. companies so it can service existing networks and mobile devices. The trade-sensitive S&P 500 materials (+1.5%), information technology (+1.2%), and industrials (+1.2%) sectors outperformed the broader market. The consumer staples sector (-0.3%) was the lone sector to finish lower.

Earnings reports were retail-heavy on Tuesday. Home Depot (HD 191.45, +0.50, +0.3%) beat earnings estimates and issued upside full-year revenue guidance, but same store sales came up short of estimates. TJX Companies (TJX 53.26, +0.29, +0.6%) and AutoZone (AZO 1032.25, +54.42, +5.6%) advanced following their results, while Kohl’s (KSS 55.15, -7.76) fell 12.3% after disappointing investors.

S&P500, -0.67%, 2,840.23
Nasdaq, -1.69%, 7,376.70
Nikkei Futures, -0.42%, 21,203.0

S&P 500 declined 0.67% on Monday, led lower by technology stocks. Lingering concerns about Chinese retaliation against U.S. tech companies following U.S. scrutiny of Huawei Technologies dampened general buying interest. S&P 500 real estate (-1.6%), materials (-1.5%), and communication services (-1.2%) sectors joined the tech sector (-1.8%) as the day’s worst-performers. The utilities (+0.2%), financials (+0.1%), and energy (+0.1%) sectors were the lone sectors to finish higher.

Alphabet (GOOG 1138.85, -23.45, -2.0%) and many of the semiconductor companies reportedly began suspending business activity with Huawei to comply with new regulation that requires U.S. government approval to work with the Chinese firm. Lumentum Holdings (LITE 44.42, -1.90, -4.1%) cut its fiscal Q4 guidance to reflect lost business from Huawei.

Apple (AAPL 183.09, -5.91, -3.1%) was a notable underperformer, HSBC cut its price target to $174 from $180. Tesla (TSLA 205.36, -5.67, -2.7%) finished well off its session lows (-7.5%), but it still closed at its lowest level since Dec. 2016 after Wedbush cut its price target to $230 from $275.