CURRENCY MARKET WRAP 

As of Mon 6 Jan, Singapore Time zone UTC+8

U.S. Dollar Index, -0.01%, 96.84
USDJPY, -0.45%, $108.09
EURUSD, -0.11%, $1.1160
GBPUSD, -0.44%, $1.3088
USDCAD, +0.16%, $1.3001
AUDUSD, -0.60%, $0.6952
NZDUSD, -0.55%, $0.6665

ISM Manufacturing Index for December registered a 47.2% reading (consensus 49.0%). That was below the 48.1% reading for November, the fifth straight sub-50.0% reading, and the lowest level for the index since June 2009. Total construction spending increased 0.6% m/m in November (consensus +0.3%) on the heels of an upwardly revised 0.1% increase (from -0.8%) in October. Residential spending was up 1.8% m/m and nonresidential spending was down 0.3% m/m.

Risk Assets sold off after U.S. airstrike killed Iran’s top military commander, General Suleimani, prompting retaliatory threats from Iran.Trump said the U.S. was not trying to start a war or seek regime change in Iran, but the situation did provide an excuse for investors to reduce exposure from a market trading at record highs. In addition, the weakest reading for the ISM Manufacturing Index since June 2009, which declined to 47.2% in December (consensus 49.0%) from 48.1% in November, also helped restrain risk sentiment.

Separately, the FOMC Minutes from the Dec. 10-11 meeting went largely unnoticed, which wasn’t surprising considering that the 2019 committee viewed policy as appropriate unless the economic outlook changes.

The 2-yr yield fell six basis points to 1.51%, and the 10-yr yield fell nine basis points to 1.79%. The U.S. Dollar Index increased 0.01% to 96.84.

STOCK MARKET WRAP 

S&P500, -0.71%, 3,234.85
Nasdaq, -0.79%, 9,020.77
Nikkei Futures, -1.76%, 23,692.5

Given the geopolitical angst, investors also saw opportunities in WTI crude ($63.03, +1.88, +3.1%) on possible disruptions to production and in the iShares Dow Jones U.S. Aerospace & Defense ETF (ITA 229.98, +2.60, +1.1%) on speculation of increased government spending. Gold futures increased 1.6% to $1552.40/ozt.

Notable stocks included Tesla (TSLA 443.01, +12.75, +3.0%) after it beat fourth quarter delivery estimates, Lamb Weston (LW 93.56, +9.47, +11.3%) after it beat top and bottom-line estimates, and Incyte (INCY 77.90, 8.07, -9.4%) after providing disappointing results for a promising drug candidate.

CURRENCY MARKET WRAP 

As of Fri 3rd Jan, Singapore Time zone UTC+8

U.S. Dollar Index, +0.37%, 96.80
USDJPY, -0.14%, $108.54
EURUSD, -0.37%, $1.1171
GBPUSD, -0.81%, $1.3147
USDCAD, -0.02%, $1.2984
AUDUSD, -0.48%, $0.6984
NZDUSD, -0.39%, $0.6698

U.S. Initial claims for the week ending December 28 decreased by 2,000 to 222,000 (consensus 225,000) while continuing claims for the week ending December 21 increased by 5,000 to 1.728 million.

China started the new year by announcing it will cut the reserve requirement ratio for small and large banks by 50 basis points on Jan. 6, providing about $115 billion in additional liquidity that can be lent out.

The 2-yr yield was unchanged at 1.57%, and the 10-yr yield declined four basis points to 1.88%. The U.S. Dollar Index rose 0.37% to 96.81. WTI crude increased 0.1% (+0.05) to $61.15/bbl.

STOCK MARKET WRAP 

S&P500, +0.84%, 3,257.85
Nasdaq, +1.33%, 9,092.19
Nikkei Futures, +0.77%, 23,692.5

S&P 500 industrials sector (+1.8%) drew support from General Electric (GE 11.93, +0.77, +6.9%), and the Philadelphia Semiconductor Index (+2.1%) pushed to new highs amid strength in AMD (AMD 49.10, +3.24, +7.1%), which had its price target raised $58 from $40 at Nomura.

The mega-cap stocks in the S&P 500 information technology (+1.7%), communication services (+1.3%), and consumer discretionary (+1.3%) sectors continued to outperform, too. Apple (AAPL 300.35, +6.70, +2.3%), Amazon (AMZN 1898.01, +50.17, +2.7%), Alphabet (GOOG 1367.37, +30.35, +2.3%), and Facebook (FB 209.78, +4.53, +2.2%) each climbed more than 2.0%.

CURRENCY MARKET WRAP 

As of Thu 2nd Jan, Singapore Time zone UTC+8

U.S. Dollar Index, -0.22%, 96.53
USDJPY, -0.24%, $108.62
EURUSD, +0.12%, $1.1212
GBPUSD, +1.11%, $1.3261
USDCAD, -0.60%, $1.2988
AUDUSD, +0.39%, $0.7022
NZDUSD, +0.18%, $0.6738

U.S. Conference Board’s Consumer Confidence Index slipped to 126.5 in December (consensus 128.0) from an upwardly revised 126.8 (from 125.5) in November.

In trade news, Trump said the Phase One deal will be signed at the White House on Jan. 15 and that he will later travel to Beijing for Phase Two talks. Market reaction was muted, as the signing news was already priced in.

U.S. Treasuries finished the thinly-traded session on a lower note. The 2-yr yield increased one basis point to 1.57% (-93 bps for 2019), and the 10-yr yield increased two basis points to 1.92% (-77 bps for 2019). The U.S. Dollar Index declined 0.22% to 96.53. WTI crude declined 0.3%, or $0.16, to $61.48/bbl (+35.4% for 2019).

STOCK MARKET WRAP 

S&P500, +0.29%, 3,230.78
Nasdaq, +0.30%, 8,972.60
Nikkei Futures, +0.30%, 23,512.5

S&P 500 advanced 0.29% on this New Year’s Eve, wrapping up a phenomenal 2019 with a 28.9% gain. The Dow Jones Industrial Average, Nasdaq Composite, and Russell 2000 also increased 0.3% apiece to extend their yearly gains to 22.3%, 35.2%, and 23.7%, respectively.

Tuesday’s action was tight-ranged amid a lack of conviction for most of the session, but renewed buying interest in the last hour of trading helped stocks close at session highs. All 11 S&P 500 sectors finished in positive territory, with the materials (+0.8%), energy (+0.7%), and real estate (+0.6%) sectors advancing the most.

Corporate news was relatively light, but it’s worth noting that Apple (AAPL 293.65, +2.13, +0.7%) extended its yearly gain to an impressive 86.2%. NVIDIA (NVDA 235.30, +2.98, +1.3%) had its price target raised to $275 from $240 at The Benchmark Company. Meritor (MTOR 26.19, +2.87, +12.3%) will join the S&P SmallCap 600 on Jan. 6.

CURRENCY MARKET WRAP 

As of Tue 31st Dec, Singapore Time zone UTC+8

U.S. Dollar Index, -0.23%, 96.74
USDJPY, -0.51%, $108.88
EURUSD, +0.22%, $1.1206
GBPUSD, +0.16%, $1.3111
USDCAD, -0.11%, $1.3061
AUDUSD, +0.27%, $0.7001
NZDUSD, +0.45%, $0.6734

There was little news of consequence to generate excitement in the market, although it was reported that China’s Vice Premier Lie Hue could visit Washington this weekend to sign a Phase One trade deal. U.S. negotiators are still waiting for their agreement to be translated into English, according to Director of Trade and Manufacturing Policy Peter Navarro.

U.S. Treasuries ended the session mixed, contributing to some curve-steepening activity. The 2-yr yield declined two basis points to 1.56%, while the 10-yr yield increased two basis points to 1.90%. The U.S. Dollar Index declined 0.23% to 96.74. WTI crude declined 0.2%, or $0.10, to $61.64/bbl.

STOCK MARKET WRAP 

S&P500, -0.58%, 3,221.29
Nasdaq, -0.67%, 8,945.99
Nikkei Futures, -1.40%, 23,422.5

Having entered yesterday’s session fresh off a series of record highs, including one on Friday, the broader market appeared overdue for some selling activity before the new year. All 11 S&P 500 sectors finished in negative territory with the communication services sector (-1.0%) declining the most. Interestingly, Apple (AAPL 291.52, +1.72, +0.6%) remained resilient and finished with a solid gain.

In automotive action, shares of Tesla (TSLA 414.70, -15.68, -3.6%) pulled back from record territory amid a cautious outlook from Cowen. Chinese competitor NIO (NIO 3.72, +1.30, +53.7%) rallied 54% following its earnings results.

CURRENCY MARKET WRAP 

As of Mon 30th Dec, Singapore Time zone UTC+8

U.S. Dollar Index, -0.63%, 96.92
USDJPY, -0.20%, $109.42
EURUSD, +0.71%, $1.1177
GBPUSD, +0.65%, $1.3077
USDCAD, -0.34%, $1.3078
AUDUSD, +0.46%, $0.6978
NZDUSD, +0.43%, $0.6700

There were no notable prints on Friday.

U.S. Treasuries increased in a steady advance, leaving yields near their session lows. The 2-yr yield declined five basis points to 1.58%, and the 10-yr yield declined three basis points to 1.87%. The U.S. Dollar Index fell 0.63% to 96.92. WTI crude increased 0.1% to $61.74/bbl.

STOCK MARKET WRAP 

S&P500, +0.01%, 3,240.02
Nasdaq, -0.17%, 9,006.62
Nikkei Futures, -0.21%, 23,840.0

The day started with the large-cap indices setting new intraday highs in a momentum, and sentiment-driven, trade. Buying enthusiasm quickly subsided amid a lack new stories, though, leaving the broader market little changed the rest of the session.

A defensive-oriented mindset took fold, which contributed to the gains in the S&P 500 consumer staples (+0.4%), real estate (+0.4%), and utilities (+0.3%) sectors. On the other hand, the energy (-0.5%) and materials (-0.3%) sectors underperformed.

Nike (NKE 101.57, +0.86, +0.9%) was a notable gainer after the stock was initiated with an Overweight rating at Consumer Edge Research. Shares of The Michaels Companies (MIK 8.00, +1.98, +32.9%) surged 33% after the company appointed former Walmart (WMT 119.59, +0.07, +0.1%) executive, Ashley Buchanan, as its newest CEO.

CURRENCY MARKET WRAP 

As of Thu 27th Dec, Singapore Time zone UTC+8

U.S. Dollar Index, -0.09%, 97.56
USDJPY, +0.16%, $109.54
EURUSD, +0.09%, $1.1101
GBPUSD, +0.31%, $1.3001
USDCAD, -0.40%, $1.3108
AUDUSD, +0.38%, $0.6946
NZDUSD, +0.59%, $0.6673

The holiday sales results showcased the strength of the U.S. consumer, while reports that the U.S. and China are close to signing a Phase One trade deal kept investors at ease. Initial claims for the week ending December 21 decreased by 13,000 to 222,000, as expected. Continuing claims for the week ending December 14 decreased by 6,000 to 1.719 million.

U.S. Treasuries held steady throughout the session. The 2-yr yield was unchanged at 1.63%, and the 10-yr yield declined one basis point to 1.91%. The U.S. Dollar Index declined 0.09% to 97.56. WTI crude rose 0.9%, or $0.55, to $61.70/bbl.

STOCK MARKET WRAP 

S&P500, +0.51%, 3,239.91
Nasdaq, +0.78%, 9,022.39
Nikkei Futures, +0.88%, 23,917.5

Amazon’s (AMZN 1868.77, +79.56) 4.5% gain stood out after the company said it had another record-breaking holiday season. A separate report from MasterCard SpendingPulse indicated that total retail sales, excluding autos, increased 3.4% yr/yr from Nov. 1 through Dec. 24 while online sales rose 18.8%.

It was no surprise, then, to see the S&P 500 consumer discretionary sector (+1.4%) as today’s sector leader. The communication services (+0.8%) and information technology (+0.7%) sectors followed suit amid solid gains in Apple (AAPL 289.91, +5.64, +2.0%), Alphabet (GOOG 1360.40, +16.84, +1.3%), and Facebook (FB 207.79, +2.67, +1.3%).

CURRENCY MARKET WRAP 

As of Wed 26th Dec, Singapore Time zone UTC+8

U.S. Dollar Index, -0.02%, 97.63
USDJPY, -0.01%, $109.38
EURUSD, +0.06%, $1.1094
GBPUSD, +0.20%, $1.2972
USDCAD, -0.07%, $1.3156
AUDUSD, +0.05%, $0.6926
NZDUSD, +0.08%, $0.6643

Tuesday’s session (Christmas Eve) included no drama, unlike last year’s Christmas Eve sell-off. The thinly-traded, and shortened, session perhaps received no more than a cursory glance from investors enjoying the holidays and the huge gains already registered this year.

Prior to the U.S. Treasury market’s early closure at 2:00 p.m. ET, the 2-yr yield was down one basis point to 1.64%, and the 10-yr yield was down three basis points to 1.91%. The U.S. Dollar Index was little changed at 97.65. WTI crude gained 0.8%, or $0.49, to $61.01/bbl.

STOCK MARKET WRAP 

S&P500, -0.02%, 3,223.38
Nasdaq, +0.08%, 8,952.88
Nikkei Futures, +0.04%, 23,760.0

From a sector standpoint, all 11 S&P 500 sectors finished within 0.3% of their flat lines. The real estate sector (+0.2%) finished on top, while the industrials sector (-0.3%) underperformed.

In corporate news, Uber (UBER 30.44, +0.11, +0.4%) announced that co-founder Travis Kalanick will resign from the Board of Directors on Dec. 31. Advanced Micro Devices (AMD 46.54, +1.08, +2.4%) had its price target raised to $53 from $50 at RBC Capital Mkts.

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.