CURRENCY MARKET WRAP 

As of Mon 24th Dec, Singapore Time zone UTC+8

U.S. Dollar Index, -0.01%, 97.68
USDJPY, -0.10%, $109.39
EURUSD, +0.11%, $1.1092
GBPUSD, -0.48%, $1.2944
USDCAD, -0.01%, $1.3147
AUDUSD, +0.28%, $0.6926
NZDUSD, +0.39%, $0.6633

U.S. New home sales in November increased 1.3% m/m to a seasonally adjusted annual rate of 719,000 units (consensus 735,000) from a downwardly revised 710,000 (from 733,000) in October. On a yr/yr basis, new home sales were up 16.9%. Total durable goods orders declined 2.0% m/m (consensus +1.4%) following a downwardly revised 0.2% increase (from 0.6%) in October. Excluding transportation, durable goods orders were unchanged, as expected, following a downwardly revised 0.3% increase (from 0.6%) in October.

Although not market-moving, China’s decision to lower import tariff rates on approximately 850 commodity products, effective Jan. 1, helped support positive risk sentiment. On a related note, Trump said the Phase One deal should be signed “very shortly.” The market expects the deal to be signed in early January.

U.S. Treasuries finished on a lower note, pushing yields higher across the curve. The 2-yr yield increased two basis points to 1.65%, and the 10-yr yield increased two basis points to 1.94%. The U.S. Dollar Index finished flat at 97.68. WTI crude increased 0.3%, or $0.15, to $60.53/bbl.

Canada’s economy slightly shrank in October with real gross domestic product edging down 0.1 per cent (expected +0.1%), Statistics Canada reports. October’s GDP report said manufacturing was the biggest drag on output. Factory-sector output fell 1.4% to C$197.55 billion, a two-year low. October’s decline was the fourth in five months. Part of the drop was attributed to a strike by members of the United Auto Workers union at General Motors Co. Regardless, weakness in manufacturing was widespread, with declines reported by producers of machinery, wood products and plastics.

STOCK MARKET WRAP 

S&P500, +0.09%, 3,224.01
Nasdaq, +0.23%, 8,945.65
Nikkei Futures, +0.24%, 23,777.5

Price action was muted to start the holiday-shortened trading week, as the market traded with modest gains throughout the session. Leadership from Apple, which had its price target raised to $350 from $325 at Wedbush, was an influential force in the broader market.

From a sector standpoint, the S&P 500 energy sector (+1.1%) outperformed amid strength in Apache (APA 26.53, +3.91, +17.3%), and the industrials sector (+0.6%) followed suit amid gains in Boeing (BA 337.55, +9.55, +2.9%) and 3M (MMM 178.47, +3.10, +1.8%). Conversely, the utilities (-1.0%) and real estate (-0.5%) sectors declined the most.

Boeing shareholders reacted positively to Dennis Muilenburg resigning from his positions as CEO and Board director. 3M benefited from JP Morgan upgrading the stock to Neutral from Underweight. Apache pleased investors with a 50-50 oilfield venture with France’s Total (TOT 55.04, +0.67, +1.2%).

In M&A activity, Cincinnati Bell (CBB 10.45, +2.73, +35.4%) agreed to be acquired by Brookfield Infrastructure (BIP 49.14, +0.78, +1.6%) for $2.6 billion in cash. Sports betting company DraftKings will become a public company through its combination agreement with Diamond Eagle Acquisition Corp (DEAC 10.84, +0.67, +6.6%).

CURRENCY MARKET WRAP 

As of Mon 23rd Dec, Singapore Time zone UTC+8

U.S. Dollar Index, +0.32%, 97.69
USDJPY, +0.06%, $109.44
EURUSD, -0.40%, $1.1078
GBPUSD, -0.07%, $1.3000
USDCAD, +0.16%, $1.3148
AUDUSD, +0.16%, $0.6897
NZDUSD, -0.08%, $0.6603

U.S. Personal income increased 0.5% m/m in November (consensus 0.3%) following an upwardly revised 0.1% increase (from 0.0%) in October. Personal spending rose 0.4% on the heels of an unrevised 0.3% increase in October. The PCE Price Index increased 0.2%, as expected, and the core PCE Price Index, which excludes food and energy, jumped 0.1% (consensus 0.2%). The third estimate for Q3 GDP was right in-line with the second estimate and consensus estimates, with real GDP up 2.1% and the GDP Price Deflator up 1.8%. The final reading for the University of Michigan Index of Consumer Sentiment was 99.3 (consensus 99.1) versus the preliminary reading of 99.2. The final reading for November was 96.8.

Economic data continued to depict an improving macro environment, with U.S. personal income and spending rising more than expected in November. With few negative developments to alter the market’s positive outlook, then, the bullish trend remained intact heading into the holidays. For good measure, Trump said he had a good talk with President Xi about their trade deal.

U.S. Treasuries finished the session on a lower note, pushing yields modestly higher. The 2-yr yield increased three basis points to 1.63%, and the 10-yr yield increased one basis point to 1.92%. The U.S. Dollar Index advanced 0.32% to 97.69. WTI crude declined 1.5%, or $0.92, to $60.38/bbl.

STOCK MARKET WRAP 

S&P500, +0.49%, 3,221.22
Nasdaq, +0.42%, 8,924.95
Nikkei Futures, -0.46%, 23,720.0

Boeing (BA 328.00, -5.50, -1.7%) continued to struggle amid negative news: United Airlines (UAL 89.28, +0.06, +0.1%) extended its 737 MAX cancellations through June 4, and Boeing’s Starliner spacecraft failed a NASA mission.

In pre-holiday earnings news, Nike (NKE 99.96, -1.19, -1.2%) and CarMax (KMX 92.71, -6.08, -6.2%) underwhelmed investors with results, while Carnival (CCL 50.21, +3.56, +7.6%), Blackberry (BB 6.53, +0.72, +12.4%), and Winnebago (WGO 51.91, +3.77, +7.8%) pleased investors.

U.S. Steel (X 11.92, -1.44, -10.8%) didn’t report earnings, but it did issue downside quarterly guidance and cut its dividend to $0.01/share from $0.05/share.

CURRENCY MARKET WRAP 

As of Fri 20th Dec, Singapore Time zone UTC+8

U.S. Dollar Index, +0.00%, 97.40
USDJPY, -0.13%, $109.39
EURUSD, +0.09%, $1.1123
GBPUSD, -0.46%, $1.3017
USDCAD, +0.05%, $1.3122
AUDUSD, +0.53%, $0.6890
NZDUSD, +0.33%, $0.6611

The historical impeachment vote in the House was widely discussed, but investors dismissed the news as having any consequences for the market. Staying in Washington, Treasury Secretary Mnuchin said the USMCA deal could add 0.5% to GDP, which may have supported the market’s already positive economic outlook.

U.S. Treasuries edged higher, pushing yields slightly lower across the curve. The 2-yr and 10-yr yields both declined two basis points each to 1.60% and 1.91%, respectively. The U.S. Dollar Index finished little changed at 97.39. WTI crude rose 0.6% (+0.37%) to $61.30/bbl.

The BOJ left its ultra easy monetary policy unchanged (-0.10%) Thursday despite signs of a slowdown in the country’s economy since a consumption tax hike in October. The BOJ board voted 7 to 2 to maintain its current monetary policy, with Goshi Kataoka, one of the two dissenters, demanding a further lowering of the short-term negative rate. Kuroda also said the BOJ could further lower the short-term interest rate in negative territory as a policy tool, as he said at the previous press meeting in October.

BoE kept interest rates steady (0.75%) on Thursday, saying it was too soon to gauge how much Boris Johnson’s election victory would lift the Brexit uncertainty that has hung over the economy. Two of the BoE’s nine policymakers voted for a second month in a row for a cut to borrowing costs due to fears that Britain’s jobs boom is deteriorating.

STOCK MARKET WRAP 

S&P500, +0.45%, 3,205.37
Nasdaq, +0.67%, 8,887.22
Nikkei Futures, +0.09%, 23,835.0

Micron (MU 54.53, +1.49, +2.8%), Canagra Brands (CAG 33.66, +4.61, +15.9%), and Darden Restaurants (DRI 109.05, -7.26, -6.2%) all beat profit estimates, but the latter disappointed investors with its same-restaurant sales growth.

Cisco Systems (CSCO 47.88, +1.24, +2.7%) and Johnson & Johnson (JNJ 145.35, +2.16, +1.5%), two stocks that have underperformed this year, were both upgraded to Overweight from Equal Weight at Barclays.

In corporate deals, Match Group (MTCH 77.35, +6.11, +8.6%) and InterActiveCorp (IAC 238.41, +17.20, +7.8%) agreed to separate. Live Nation (LYV 69.83, +5.88, +9.2%) reportedly reached a tentative settlement with the Department of Justice over its ticketing practices.

CURRENCY MARKET WRAP 

As of Thu 19th Dec, Singapore Time zone UTC+8

U.S. Dollar Index, +0.19%, 97.40
USDJPY, +0.08%, $109.57
EURUSD, -0.31%, $1.1115
GBPUSD, -0.34%, $1.3085
USDCAD, -0.34%, $1.3116
AUDUSD, +0.21%, $0.6870
NZDUSD, +0.11%, $0.6583

U.S. Economic data was limited to the weekly MBA Mortgage Applications Index, which declined 5.0% after increasing 3.8% in the prior week.

In the U.S. Treasury market, a decline in longer-dated bonds caused some curve-steepening activity. The 2-yr yield declined one basis point to 1.62%, while the 10-yr yield increased four basis points to 1.92%. The U.S. Dollar Index increased 0.19% to 97.40. WTI crude increased 0.1% (+$0.03) to $60.93/bbl.

Canada’s annual inflation rate rose 2.2% as expected in November on the back of higher energy prices. Analysts noted a surprise increase in core measures that could make it harder for the Bank of Canada to ease rates.

STOCK MARKET WRAP 

S&P500, -0.04%, 3,191.14
Nasdaq, +0.05%, 8,827.74
Nikkei Futures, +0.10%, 23,857.5

Buying enthusiasm was understandably absent amid a lack of new catalysts, but there remained little interest to sell a market trading at all-time highs. FedEx (FDX 146.86, -16.37, -10.0%), however, did succumb to heavy selling pressure after it issued disappointing earnings results and guidance.

Weakness in FedEx contributed to the declines in the S&P 500 industrials sector (-0.5%) and Dow Jones Transportation Average (-0.9%). Conversely, the real estate sector (+1.3%) rose more than 1% in an opportunistic trade that pared some of its monthly decline. The utilities (+0.4%), energy (+0.3%), and communication services (+0.3%) sectors followed suit.

In other earnings news, Lennox International (LII 245.37, -13.21, -5.1%) discouraged investors by lowering its FY19 guidance, while Cintas (CTAS 265.88, +5.12, +2.0%) and Steelcase (SCS 22.21, +3.13, +16.4%) pleased investors with results and/or guidance.

CURRENCY MARKET WRAP 

As of Wed 18 Dec, Singapore Time zone UTC+8

U.S. Dollar Index, -0.22%, 96.752      
USDJPY, +0.02%, 109.53       
EURUSD, +0.07%, 1.1151         
GBPUSD, -1.57%, 1.3122         
USDCAD, +0.08%, 1.3162        
AUDUSD, -0.50%, 0.6851       
NZDUSD, -0.44%, 0.6568      

U.S. Total housing starts increased 3.2% m/m to a seasonally adjusted annual rate of 1.365 million (consensus 1.340 million) while total building permits increased 1.4% m/m to a seasonally adjusted annual rate of 1.482 million (consensus 1.400 million). Industrial production increased 1.1% in November (consensus 0.8%) after declining a revised 0.9% (from -0.8%) in October. The capacity utilization rate increased to 77.3% (consensus 77.4%) from a revised 76.6% (from 76.7%) in October. U.S. Treasuries finished little changed. Both the 2-yr yield and 10-yr yield remained unchanged at 1.63% and 1.89%, respectively. The U.S. Dollar Index increased 0.2% to 97.22. WTI crude rose 1.2%, or $0.69, to $60.90/bbl. RBA minutes shows that the central bank is concerned with wage growth being too weak to revive either inflation or consumption and that they are ready to ease again if need be.

STOCK MARKET WRAP 

S&P500, +0.00%, 3,194.38        
Nasdaq, +0.32%, 8,603.38       
Nikkei Futures, +0.11%, 23,967.5     

Shares of Boeing (BA 327.00, unch,) were volatile after the company confirmed it will suspend 737 MAX production starting in January. Separately, Johnson & Johnson (JNJ 143.56, +1.77, +1.3%) was upgraded to Overweight from Equal-Weight at Morgan Stanley, and Eli Lilly (LLY 125.33, +2.48, +2.0%) provided upside FY20 guidance. In M&A activity, LogMeIn (LOGM 85.95, +3.54, +4.3%) agreed to be acquired by affiliates of Francisco Partners and Evergreen Coast Capital for $4.3 billion in cash. Tallgrass Energy (TGE 22.14, +3.85, +21.1%) agreed to be taken private by Blackstone (BX 54.58, +0.05, +0.1%) in a $6.3 billion deal. On the earnings front, Jabil (JBL 43.43, +2.79, +6.9%) topped expectations and raised its FY20 guidance, while Navistar (NAV 28.97, -3.38, -10.5%) missed revenue estimates.

CURRENCY MARKET WRAP 

As of Tue 17 Dec, Singapore Time zone UTC+8

U.S. Dollar Index, -0.56%, 96.625      
USDJPY, +0.18%, 109.58          
EURUSD, +0.10%, 1.1136      
GBPUSD, -0.63%, 1.3269                
USDCAD, -0.16%, 1.3166          
AUDUSD, -0.03%, 0.6873       
NZDUSD, -0.02%, 0.6591        

U.S. Empire State Manufacturing Survey for December increased to 3.5 (consensus 3.5) from the prior month’s reading of 2.9. China’s industrial production and retail sales figures, which grew faster than expected in November, added to the positive economic outlook also shared by the homebuilders. For instance, the NAHB Housing Market Index hit its highest level since 1999, increasing to 76 in December (consensus 69) from 69 in November.

The initial reaction to the trade deal was muted on Friday, so yesterday was less about the actual deal and more about what it means moving forward: less uncertainty, and optimism, in the economic outlook. This view contributed to Monday’s strong U.S. open, which accounted for most of the day’s gains as the S&P 500 drifted sideways for most of the session.

U.S. Treasuries finished on a lower note, driving yields higher in a curve-steepening trade. The 2-yr yield increased three basis points to 1.53%, and the 10-yr yield increased seven basis points to 1.89%. The U.S. Dollar Index declined 0.1% to 97.05. WTI crude increased 0.2%, or $0.10, to $60.21/bbl.

STOCK MARKET WRAP 

S&P500, +0.50%, 3,194.62             
Nasdaq, +0.74%, 8,598.62          
Nikkei Futures, +0.59%, 24,032.5       

The S&P 500 energy (+1.4%), utilities (+1.3%), and health care (+1.1%) sectors each rose more than 1.0%. The market also continued to draw influential support from Apple (AAPL 279.86, +4.71, +1.7%).

Conversely, the industrials sector (-0.03%) was pressured by weakness in shares of Boeing (BA 327.00, -14.67, -4.3%) and FedEx (FDX 164.10, -1.57, -1.0%) following separate reports from The Wall Street Journal.

Boeing is reportedly considering halting or cutting back production for its 737 MAX amid continued re-certification uncertainty. Amazon (AMZN 1769.21, +8.27, +0.5%) reportedly banned third-party sellers from using FedEx Ground for Prime shipments until delivery performance improves.

In M&A activity, DuPont (DD 64.89, +0.09, +0.1%) agreed to merge its Nutrition & Biosciences unit with International Flavors (IFF 120.00, -13.98, -10.4%) in a combined $45.4 billion deal. WPX Energy (WPX 11.90, +0.99, +9.1%) agreed to purchase Felix Energy for $2.5 billion.