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.

CURRENCY MARKET WRAP 

As of Thu Oct 31st, Singapore Time zone UTC+8

U.S. Dollar Index, -0.24%, 97.45
USDJPY, -0.09%, $108.79
EURUSD, +0.36%, $1.1152
GBPUSD, +0.26%, $1.2901
USDCAD, +0.58%, $1.3163
AUDUSD, +0.47%, $0.6897
NZDUSD, +0.82%, $0.6408

U.S. Advance Q3 GDP report showed output rising at an annual rate of 1.9% (consensus 1.5%) following the 2.0% growth rate seen for the second quarter. The GDP Price Deflator was up 1.7% (consensus +2.0%) following a 2.4% increase in the second quarter.

ADP Employment Change report showed an estimated 125,000 jobs (consensus 95,000) were added to private sector payrolls in October, all of which were in the services-providing sector. The better than expected October number was offset by a downward revision for September to 93,000 from 135,000.

Fed lowered the policy interest rate by 25 basis points to a target range of 1.5% – 1.75% (as expected). The decision was dissented by Kansas City Fed President George and Boston Fed President Rosengren, both of whom also voted against the prior two rate cuts. Powell said the Fed would need to see a significant rise in inflation to increase rates but noted that expectations for inflation are at the lower end of historic ranges. “We took this step to help keep the US economy strong in the face of global developments, and to provide some insurance against ongoing risks,” Powell told reporters.

In trade, Separately, Treasury Secretary Steven Mnuchin told The New York Times that the U.S. and China are still on track to sign part one of a trade agreement next month. The affirmation came after Chile said it will not host the APEC summit, where both sides were expected to sign the agreement, due to ongoing protests in the country.

Bank of Canada kept its key interest rate on hold at 1.75% (as expected) Wednesday to position the country as an exception among advanced economies that have already started responding to a fading global economy. Governor Stephen Poloz’s team says the domestic economy has held up well in many respects and inflation has been close to target. They warn, however, that Canada isn’t immune to the negative effects of slowing global growth. To guide its future decisions, the central bank said it will monitor any changes to Canada’s sources of strength, especially consumer spending and housing markets. It also plans to watch for the roll out of expected fiscal support from the federal government and its timing. The recent election campaign featured promises of multibillion-dollar income tax cuts, which could help lift the economy. Fiscal support would also provide breathing room for the central bank. Any move to lower borrowing rates would risk fuelling Canada’s already near-record levels of household debt.

The 2-yr yield declined two basis points to 1.62%, and the 10-yr yield declined four basis points to 1.80%. The U.S. Dollar Index declined 0.24% to 97.45.

South African Rand collapsed (-2.47%) after investors were presented with the stark reality of what bailouts for the embattled state power utility will cost South Africa. A combination of bailouts for government firms, declining economic growth and falling tax revenue will cause the budget deficit to widen to 5.9% of gross domestic product in the fiscal year.

STOCK MARKET WRAP 

S&P500, +0.33%, 3,046.77
Nasdaq, +0.33%, 8,303.98
Nikkei Futures, +0.02%, 22,932.5

Eight of the 11 S&P 500 sectors finished in positive territory with five sectors increasing between 0.6% (consumer discretionary) and 0.9% (utilities). Conversely, the energy sector (-2.1%) was undercut by lower oil prices ($55.08, -0.68, -1.2%) while the lower Treasury yields, and curve-flattening activity, pressured the financials sector (-0.1%).

Apple beat Wall Street’s expectations on revenue and earnings, even as iPhone sales came in lighter than expected. Total revenue was up, partially due to 18% growth in Apple’s services business and 54% growth in wearables, including the AirPods. EPS: $3.03 vs. $2.84 estimate. $64 billion vs. $62.99 billion estimate. iPhone revenue: $33.36 billion vs. $32.42 billion estimate. Services revenue: $12.51 billion vs. $12.15 billion estimate. Apple stock was up slightly in after-hours trading.

Facebook rises (+4.46%) on better-than-expected revenue and earnings. Facebook has turned to its Stories features for growth as it focuses more on new areas and less on the core News Feed. The company is under intense pressure from regulators on issues related to privacy, fact-checking political ads and its new cryptocurrency. Earnings: $2.12 vs. $1.91 estimate. Revenue: $17.65 billion vs. $17.37 billion estimate. Daily active users: 1.62 billion vs. 1.61 billion estimate. Average revenue per user: $7.26 vs. $7.09 estimate.

CURRENCY MARKET WRAP 

As of Wed Oct 30th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.07%, 97.69
USDJPY, -0.07%, $108.88
EURUSD, +0.11%, $1.1112
GBPUSD, +0.08%, $1.2866
USDCAD, +0.31%, $1.3092
AUDUSD, +0.26%, $0.6856
NZDUSD, -0.01%, $0.6351

U.S. Conference Board’s Consumer Confidence Index slipped to 125.9 in October (consensus 127.5) from an upwardly revised 126.3 (from 125.1) in September.

In trade, U.S. and China are continuing to work on an interim trade agreement, but it may not be completed in time for the U.S. and Chinese leaders to sign it in Chile next month, a U.S. administration official said on Tuesday.

U.S. Treasuries crept higher in an equally lackluster session. The 2-yr yield and the 10-yr yield both declined one basis point to 1.64% and 1.84%, respectively. The U.S. Dollar Index declined 0.07% to 97.69. WTI crude declined 0.3%, or $0.19, to $55.76/bbl.

In Brexit, MPs voted through the prime minister’s proposal for a pre-Christmas ballot and rejected an opposition move to hold it three days earlier. The UK might not get a further delay to Brexit if it cannot be sorted by 31 January 2020, Donald Tusk warned. The outgoing president of the European council again urged the UK not to waste the time it had been given.

STOCK MARKET WRAP 

S&P500, -0.08%, 3,036.89
Nasdaq, -0.59%, 8,276.85
Nikkei Futures, -0.13%, 22,927.5

S&P 500 declined 0.08% on Tuesday, although it did set a new intraday high in this lacklustre session. Earnings reports remained in focus ahead of key developments later in the week, which presumably kept buying conviction in check today.

An earnings miss from Alphabet (GOOG 1262.62, -27.38, -2.1%) contributed to some profit taking in the stock and in other strong technology stocks like Apple (AAPL 243.29, -5.76, -2.3%). In addition, the selloffs in Beyond Meat (BYND 81.99, -23.42, -22.2%) and GrubHub (GRUB 33.11, -25.28, -43.3%) following their results had some investors feeling less interested in high-beta names.

Pfizer (PFE 38.21, +0.93, +2.5%) and Merck (MRK 85.11, +2.91, +3.5%) provided the lift for the health care space after both reported positive quarterly results and upbeat guidance. Other blue-chip companies with less-demanding valuations like General Motors (GM 38.21, +1.57, +4.3%), Kellogg (K 62.87, +1.81, +3.0%), Xerox (XRX 34.40, +3.61, +11.7%), and Ingersoll-Rand (IR 127.86, +5.78, +4.7%) also pleased investors with their earnings reports.

Separately, Johnson & Johnson (JNJ 129.12, -0.06, unch) announced that “rigorous and third-party testing confirms there is no asbestos in Johnson’s Baby Powder.” Shares were halted for trading and did not resume trading before the market closed. Shares of Boeing (BA 348.93, +8.05, +2.4%) reacted favorably to CEO Dennis Muilenburg’s testimony before the Senate.

CURRENCY MARKET WRAP 

As of Tue Oct 29th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.07%, 97.76
USDJPY, +0.22%, $108.98
EURUSD, +0.14%, $1.1099
GBPUSD, +0.22%, $1.2857
USDCAD, -0.10%, $1.3051
AUDUSD, +0.24%, $0.6839
NZDUSD, -0.08%, $0.6353

Both the U.S. and China continued to work on “Phase One” of a trade agreement over the weekend, which Trump said is “ahead of schedule” for him to sign. China’s state-run media reported that technical consultations on parts of the text were “basically completed.”

U.S. Treasuries finished lower in a curve-steepening trade. The 2-yr yield increased two basis points to 1.65%, and the 10-yr yield increased five basis points to 1.85%. The U.S. Dollar Index declined 0.07% to 97.76. WTI crude lost 0.9%, or $0.49, to $55.95/bbl to end a four-session winning streak.

In Brexit, though the UK Parliament rejected Prime Minister Johnson’s request for an early election, the market was pleased that the EU offered the UK a 3 month extension that included an option to leave earlier. They also ruled out further negotiating over the withdrawal agreement, which are the terms that Johnson was hoping for.

STOCK MARKET WRAP 

S&P500, +0.56%, 3,039.42
Nasdaq, +1.01%, 8,325.99
Nikkei Futures, +0.44%, 22,952.5

S&P 500 set new record highs on Monday, increasing 0.56% as trade sentiment remained upbeat and investors reacted positively to corporate news. The Nasdaq Composite (+1.0%) and Russell 2000 (+0.9%) pulled out ahead, while the Dow Jones Industrial Average (+0.5%) trailed its peers.

Technology stocks outperformed, with Microsoft (MSFT 144.19, +3.46, +2.5%) providing influential leadership for the broader market and S&P 500 information technology sector (+1.3%) after it was awarded a $10 billion cloud contract with the Department of Defense.

Contributing to the advance in the communication services sector were solid gains in Alphabet (GOOG 1290.00, +24.87, +2.0%) and AT&T (T 38.49, +1.58, +4.3%). Alphabet set an all-time high amid heavier-than-usual volume in front of its earnings report, while AT&T announced a multi-year plan to increase shareholder value, which was viewed favorably by activist investor Elliott Management.

Monday also saw some notable M&A activity. Alphabet is reportedly in talks to acquire Fitbit (FIT 5.64, +1.33, +30.9%). Tiffany & Co. (TIF 129.72, +31.17, +31.6%) received a $14.5 billion unsolicited offer from LVMH for $120 per share in cash. Liberty Property Trust (LPT 57.50, +6.93, +13.7%) agreed to be acquired by Prologis (PLD 85.89, -4.97, -5.5%) for about $12.6 billion in an all-stock deal.

In earnings news, Spotify (SPOT 140.20, +19.51, +16.2%) reported a surprise profit and reported MAU growth above expectations. Dow component Walgreens Boots Alliance (WBA 55.80, +0.38, +0.7%) didn’t draw much attention following its mostly in-line results.

In after hours trading, Alphabet reported earnings which beat on the top line but missed on EPS, sending the stock lower, erasing almost all of its gains. Net income was $7.068BN, down from $9.192BN a year ago. EPS of $10.12, missing estimates of $12.35 and down sharply from $13.06 a year ago. Commenting on the result, CEO Sundar Pichai said that “I am extremely pleased with the progress we made across the board in the third quarter, from our recent advancements in search and quantum computing to our strong revenue growth driven by mobile search, YouTube and Cloud. We’re focused on providing the most helpful services to our users and partners, and we see many opportunities ahead.” After tumbling as low as $1,225 after hours, the stocks has stabilized around $1,265, roughly where it started the day.

CURRENCY MARKET WRAP 

As of Mon Oct 28th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.20%, 97.83
USDJPY, +0.05%, $108.66
EURUSD, -0.22%, $1.1080
GBPUSD, -0.23%, $1.2823
USDCAD, -0.10%, $1.3059
AUDUSD, +0.06%, $0.6823
NZDUSD, -0.56%, $0.6349

U.S. University of Michigan’s Index of Consumer Sentiment checked in at 95.5 with the final reading for October (consensus 95.8) versus the preliminary reading of 96.0 and the final reading of 93.2 for September. Consumer sentiment held up just fine in October, as positive feelings about income and job growth helped drown out the headline volatility involving trade/tariff issues and the impeachment inquiry.

In trade, China and the United States are making good progress on the “phase-one” trade deal they hope to sign next month, with some sections now close to being finalized, the two sides said in separate statements. According to a statement from Xinhua on Saturday, the two sides have reached consensus on U.S. imports of Chinese cooked poultry and a quality supervision system for catfish products, as well as China lifting a ban on U.S. poultry, and how to apply a public health information system for meat products.

The 2-yr yield rose five basis points to 1.63%, and the 10-yr yield rose four basis points to 1.80%. The U.S. Dollar Index increased 0.20% to 97.83. WTI crude increased 0.4%, or $0.21, to $56.44/bbl.

In the UK the Brexit mess remained unsettled as EU officials have yet to grant an extension to the UK insisting that Parliament call an election, while the majority of Parliament is looking for an extension offer before considering a snap election. The situation remains muddy and continues to weigh on Sterling.

STOCK MARKET WRAP 

S&P500, +0.41%, 3,022.55
Nasdaq, +0.70%, 8,243.12
Nikkei Futures, -0.04%, 22,770.0

Intel (INTC 56.46, +4.23, +8.1%) was among today’s most influential companies after it beat top and bottom-line estimates and issued upside guidance. Its 8% gain, the buying interest in other semiconductor stocks, and an earnings-driven gain in Visa (V 177.85, +1.69, +1.0%) all contributed to leadership of the S&P 500 information technology sector (+1.2%).

A closer look inside the utilities space showed the group was also struggling from industry-specific issues. Edison (EIX 66.05, -6.14, -8.5%) and Sempra Energy (SRE 143.94, -4.12, -2.8%) fell on concerns about more power outages in California. PG&E (PCG), meanwhile, acknowledged that one of its transmission lines fell in the area where the Kincade wildfire started, sparking investor concerns that it could face additional liabilities. Separately, Dow component Verizon (VZ 60.37, -0.21, -0.4%) reported better-than-expected earnings results, but shares ended the day lower.

CURRENCY MARKET WRAP

As of Fri Oct 25th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.20%, 97.68
USDJPY, -0.07%, $108.61
EURUSD, -0.25%, $1.1104
GBPUSD, -0.62%, $1.2838
USDCAD, -0.01%, $1.3072
AUDUSD, -0.55%, $0.6816
NZDUSD, -0.70%, $0.6377

Vice President Mike Pence delivered a relatively hawkish speech on China, saying Beijing should not underestimate the resolve of Trump. On a related note, Bloomberg News reported that China is willing to purchase at least $20 billion of agricultural products from the U.S. in the first year after a partial trade deal is signed.

In Brexit, UK Prime Minister Boris Johnson will reportedly give more time to lawmakers to consider a Brexit deal, but only if they agree to a general election on Dec. 12.

The European Central Bank kept rates unchanged, as expected, and confirmed it will resume asset purchases at a monthly pace of 20 billion euros as of Nov. 1. After serving an 8-year term, Draghi left investors with a gloomy outlook and warning that low rates are here to stay. The moderation in services and construction activity along with weak wages and employment growth means the downside risks are prominent. Yesterday’s PMI reports confirm that activity is subdued in Germany and the Eurozone. Draghi called on governments with fiscal space to act because all successful monetary unions have a fiscal capacity.

U.S. Treasuries finished the session little changed. The 2-yr yield and the 10-yr yield were unchanged at 1.58% and 1.76%, respectively. The U.S. Dollar Index increased 0.2% to 97.68. WTI crude increased 0.7%, or $0.40, to $56.23/bbl.

Sweden’s central bank held its benchmark repo rate unchanged at -0.25% as expected on Thursday but surprised many by saying it would bring an end to an almost five-year experiment with negative rates in December even though the economy is slowing. “We don’t foresee a downturn round the corner and against that background and given the extreme monetary policy of going down to minus 0.50(%) we think it is the right thing to slowly move up towards zero,” Governor Stefan Ingves told reporters. Inflation was 1.3% in September versus the central bank’s 2% target. According to the Riksbank’s forecasts, inflation will not stabilize at roughly 2% until 2022. (USDSEK traded to low of 9.5577, Closed at 9.6583, +0.20%)

Norway’s central bank kept its main interest rate unchanged at 1.5% on Thursday as expected and said the economy had developed largely in line with forecasts made in September. Norges Bank last month raised rates for the fourth time in a year amid solid domestic growth, but said further tightening was unlikely as the global economy gradually slows. (USDNOK traded to low of 9.0854, Closed at 9.1449, +0.26%)

STOCK MARKET WRAP 

S&P500, +0.19%, 3,010.29
Nasdaq, +0.81%, 8,185.80
Nikkei Futures, +0.56%, 22,777.5

Nasdaq benefited from upbeat results from a host of companies, including Microsoft (MSFT 139.94, +2.70, +2.0%), PayPal (PYPL 104.91, +8.27, +8.6%), Tesla (TSLA 299.68, +45.00, +17.7%), and Lam Research (LRCX 265.60, +32.42, +13.9%). The Philadelphia Semiconductor Index (+2.5%) rose on the back of Lam Research’s results and guidance.

It was no surprise, then, to see the S&P 500 information technology sector (+1.5%) as today’s outright leader ahead of the utilities (+0.4%) and materials (+0.4%) sectors. In terms of surprises, Tesla’s unexpected quarterly profit was one of them, but Twitter (TWTR 30.75, -8.08, -20.8%), as an S&P 500 component, woefully disappointed investors with its results and guidance.

3M (MMM 161.89, -6.87, -4.1%) and Ford Motor (F 8.60, -0.61, -6.6%) provided mixed results and attributed a cautious outlook to headwinds in China, while strong business in China helped Dow Inc. (DOW 49.47, +2.24, +4.7%) post better-than-expected results.

Amazon’s third-quarter earnings fell short of street expectations on Thursday, driving its stock down as much as 9% in after hours trading. The return to a heavy investment cycle is cutting into Amazon’s profitability. Its net income dropped to $2.1 billion, down 26% from the year-ago period’s $2.9 billion. For the fourth quarter, Amazon is forecasting operating income to fall between $1.2 billion and $2.9 billion, also below the $4.2 billion street estimate.

CURRENCY MARKET WRAP 

As of Thu Oct 24th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.07%, 97.46
USDJPY, +0.17%, $108.67
EURUSD, +0.07%, $1.1133
GBPUSD, +0.32%, $1.2915
USDCAD, -0.16%, $1.3073
AUDUSD, -0.07%, $0.6851
NZDUSD, +0.23%, $0.6421

U.S. MBA Mortgage Applications Index for the week ending October 19 was down 11.9%, as higher mortgage rates pressured interest in refinancing and purchase applications. The FHFA Housing Price Index for August increased 0.2% following an unrevised 0.4% increase in July.

U.S. Treasuries saw an uptick in demand, which pushed yields lower. The 2-yr yield declined three basis points to 1.58%, and the 10-yr yield declined one basis point to 1.76%. The U.S. Dollar Index declined 0.07% to 97.46.

STOCK MARKET WRAP 

S&P500, +0.28%, 3,004.52
Nasdaq, +0.19%, 8,119.79
Nikkei Futures, +0.45%, 22,782.5

S&P 500 increased 0.28% on Wednesday in a resilient session. Today featured disappointing quarterly results and guidance from Caterpillar (CAT 135.34, +1.65, +1.2%) and Texas Instruments (TXN 118.95, -9.62, -7.5%), but the broader market was able to withstand the news to close at session highs.

The information technology sector (+0.1%) sidestepped the weakness in the semiconductor space thanks to another noticeable gain in Apple (AAPL 243.18, +3.22, +1.3%) after Morgan Stanley raised its price target to $289 from $247. The Philadelphia Semiconductor Index fell 1.9%. The consumer discretionary sector (-0.4%) was today’s lagging S&P 500 sector.

In other corporate news, Boeing (BA 340.50, +3.50, +1.0%) missed earnings estimates, but investors were placated by a better-than-feared outlook for its 737 MAX, which is still expected to return to service in Q4. Facebook (FB 186.19, +3.85, +2.1%) CEO Mark Zuckerberg testified before Congress on Libra and, based on the stock’s price action, investors were mostly satisfied with his testimony.

Separately, Nike (NKE 92.32, -3.23, -3.4%) announced Mark Parker will step down as CEO on Jan. 13, 2020 and will be replaced by John Donahoe, who is the President and CEO of ServiceNow (NOW 220.01, -8.33, -3.7%).

CURRENCY MARKET WRAP 

As of Wed Oct 23rd, Singapore Time zone UTC+8

U.S. Dollar Index, +0.17%, 97.50
USDJPY, -0.12%, $108.49
EURUSD, -0.18%, $1.1128
GBPUSD, -0.59%, $1.2884
USDCAD, +0.06%, $1.3095
AUDUSD, -0.11%, $0.6860
NZDUSD, +0.03%, $0.6411

U.S. existing home sales decreased 2.2% month-over-month in September to a seasonally-adjusted annual rate of 5.38 million (consensus 5.52 mln) from a revised 5.50 million (from 5.49 million) in August. Total sales were 3.9% higher than the same period a year ago.

Brexit looked set to be delayed until next year at the earliest after the prime minister suffered another major Commons defeat. The European council’s president, Donald Tusk, said he would recommend the extension be signed off and it was suggested that 31 January 2020 would be set as the new deadline, though it would be superseded if there was an earlier ratification of Brexit by MPs.

Boris Johnson paused his attempt to get his deal through parliament after MPs refused to allow him to fast-track it. Despite MPs having decided to pass the legislation that would implement the deal to the next parliamentary stage, Johnson took it off the agenda because they refused to agree to accede to his demand for a three-day timetable. The news caused a knee-jerk reaction to the downside for equities, as it makes an extension request more likely and increases the uncertainty in the market.

Canadian election results show Prime Minister Justin Trudeau’s Liberal Party will return to power, but as a minority government after Monday’s general election. “From coast to coast to coast, tonight Canadians rejected division and negativity. They rejected cuts and austerity. They voted in favor of a progressive agenda and strong action on climate change,” he said. “We will make life more affordable, we will continue to fight climate change, we will get guns off our streets.”

U.S. Treasuries finished the session mixed. The 2-yr yield increased two basis points to 1.61%, and the 10-yr yield declined two basis points to 1.77%. The U.S. Dollar Index increased 0.17% to 97.50.

STOCK MARKET WRAP 

S&P500, -0.36%, 2,995.99
Nasdaq, -0.72%, 8,104.30
Nikkei Futures, -0.02%, 22,680.0

S&P 500 lost 0.36% on Tuesday in a news-heavy session. Company-specific news contributed to outsized stock moves, but overall gains in broader market had been nominal until a hiccup on the Brexit front dragged the major indices into negative territory. The benchmark index closed at session lows below the 3000 level.

The information technology sector (-1.4%) succumbed to broad-based selling and was today’s laggard. The communication services sector (-0.9%) followed suit amid sizable losses in Facebook (FB 182.34, -7.42, -3.9%) and Netflix (NFLX 266.69, -11.36, -4.1%), while the energy sector (+1.3%) was today’s leader amid a bounce in oil prices ($54.38, +$1.09, +2.4%).

Facebook was hit by news that it is now being probed by 47 attorney generals for possible antitrust violations. Netflix fell after Verizon (VZ 60.77, +0.02, unch) partnered with Walt Disney (DIS 132.40, +2.14, +1.6%) to provide its customers with free access to Disney+ for one year.

Biogen (BIIB 281.87, +58.36, +26.1%) was a notable story stock on Tuesday. Shares surged 26% after the company surprised investors by saying it will seek FDA approval for its Alzheimer’s drug in 2020 after it had renounced the treatment in March. Biogen also beat top and bottom-line estimates.

CURRENCY MARKET WRAP 

As of Tue Oct 22nd, Singapore Time zone UTC+8

U.S. Dollar Index, -0.05%, 97.30
USDJPY, +0.19%, $108.61
EURUSD, -0.03%, $1.1152
GBPUSD, +0.53%, $1.2972
USDCAD, -0.37%, $1.3084
AUDUSD, +0.31%, $0.6870
NZDUSD, +0.42%, $0.6412

There were no U.S.economic prints on monday.

In Brexit, Boris Johnson will make a final bid today to force Brexit through by the 31 October “do or die” deadline, amid growing signs he will make a renewed push for a general election whether his deal passes or not. Johnson’s plan to hold a “meaningful vote” on his deal yesterday was blocked by the Speaker, John Bercow, who said it would be “repetitive and disorderly” to go over the same ground as Saturday’s vote.

With the backing of some Labour rebels and the Tories who backed Oliver Letwin’s amendment at the weekend, Johnson is expected to win the vote on his bill known as the second reading, signalling MPs’ approval for it to proceed in principle.

The 2-yr yield increased two basis points to 1.59%, and the 10-yr yield increased five basis points to 1.79%. The U.S. Dollar Index was little changed at 97.30.

STOCK MARKET WRAP 

S&P500, +0.69%, 3,006.72
Nasdaq, +0.91%, 8,162.99
Nikkei Futures, +0.67%, 22,682.5

Boeing was downgraded to Neutral at UBS, Credit Suisse, and Robert W. Baird as the company faces heightened scrutiny, and uncertainty, for its handling of the 737 MAX situation. On the other hand, firms continued to turn even more bullish on Apple (AAPL 240.51, +4.10, +1.7%), with Raymond James increasing its AAPL price target to a Street-high of $280 from $225.

Apple hit a new 52-week high, and many of its suppliers within the Philadelphia Semiconductor Index (+1.9%) also outperformed as U.S.-China trade rhetoric remained optimistic. The S&P 500 information technology sector rose 1.1%.

The energy sector (+1.9%) was undeterred by struggling oil prices ($53.29/bbl, -$0.47, -0.9%) and a revenue miss from Halliburton (HAL 19.61, +1.18, +6.4%) to lead all sectors in gains. Halliburton said it is cutting costs. Next in line was the financials sector (+1.4%) amid strength in JPMorgan Chase (JPM 123.55, +2.99, +2.5%) and some curve-steepening activity.

CURRENCY MARKET WRAP 

As of Fri Oct 18th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.41%, 97.60
USDJPY, -0.17%, $108.58
EURUSD, +0.47%, $1.1125
GBPUSD, +0.26%, $1.2865
USDCAD, -0.50%, $1.3137
AUDUSD, +0.99%, $0.6825
NZDUSD, +0.99%, $0.6354

U.S. Total housing starts declined a disappointing 9.4% m/m in September to a seasonally adjusted annual rate of 1.256 million (consensus 1.306 million). Building permits declined 2.7% to a seasonally adjusted annual rate of 1.387 million (consensus 1.350 million). Industrial production declined 0.4% m/m in September (consensus -0.3%) on the heels of an upwardly revised 0.8% increase (from 0.6%) in August. Total capacity utilisation dropped to 77.5% (consensus 77.7%) from 77.9% in August. Philadelphia Fed Index for October checked in at 5.6 (consensus 6.0) versus 12.0 in September.

U.S. Treasuries finished the session on a lower note. The 2-yr yield increased two basis points to 1.61%, and the 10-yr yield increased one basis point to 1.76%. The U.S. Dollar Index declined 0.41% to 97.60. WTI crude rose 0.9%, or $0.47, to $53.89/bbl despite crude inventories rising more than expected in the EIA’s weekly inventory report.

In Brexit, UK finally convinced the EU to endorse their Brexit withdrawal agreement. When the announcement was made, Sterling jumped more than 1.32% in a matter of minutes. However it sold off just as quickly as investors turned their focus to the odds of Parliamentary approval. Boris Johnson insisted he is “very confident” that his Brexit deal will be approved by the House of Commons in a historic knife-edge vote on Saturday, even without the backing of the DUP. Without the DUP’s 10 MPs, Johnson is likely to need the support of some Labour MPs and the 21 Conservatives he expelled from the parliamentary party for backing the Benn act last month.

If they approve the new withdrawal agreement, there are 2 paths. Parliament fast tracks the deal into UK law and they leave the EU on October 31st as scheduled or they get a technical extension to debate the details and set a new date for departure. In the EU’s eyes, a deal is done so they’ll agree to any extension.

STOCK MARKET WRAP 

S&P500, +0.28%, 2,997.95
Nasdaq, +0.40%, 8,156.85
Nikkei Futures, +0.12%, 22,517.5

S&P 500 advanced 0.28% on Thursday, as investor sentiment remained relatively upbeat following another batch of decent earnings reports and news of a draft Brexit deal.

Gains were still registered in ten of the 11 S&P 500 sectors, though, with the lone exception being information technology (-0.2%) after IBM (IBM 134.26, -7.85, -5.5%) missed revenue estimates. The health care (+0.8%), real estate (+0.7%), and communication services (+0.6%) sectors outperformed the broader market.

In the industrials sector (+0.5%), positive reactions to results from Honeywell (HON 167.55, +3.92, +2.4%), CSX (CSX 69.78, +0.78, +1.1%), United Rentals (URI 127.92, +6.25, +5.1%), and Dover (DOV 101.38, +5.56, +5.8%) outweighed the relative weakness in the defense stocks after Textron (TXT 47.79, -2.68, -5.3%) commented about lower defense volume.

The health care space outperformed on optimism that a $50 billion package offered by five companies could settle the opioid lawsuits. Companies involved include Johnson & Johnson (JNJ 136.17, +1.00, +0.7%), Teva Pharma (TEVA 7.77, +0.82, +11.8%), McKesson (MCK 150.51, +5.67, +3.9%), Cardinal Health (CAH 51.21, +2.14, +4.4%), and AmerisourceBergen (ABC 89.50, +3.45, +4.0%).

In other earnings news, Netflix (NFLX 293.35, +7.07, +2.5%) provided results that were construed as better than feared. Shares gained 2.5% but were up as much as 7.9% intraday. Morgan Stanley (MS 43.44, +0.65, +1.5%) topped expectations.