CURRENCY MARKET WRAP 

As of Wed Sep 4th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.02%, 98.94
USDJPY, -0.34%, $105.86
EURUSD, +0.05%, $1.0973
GBPUSD, +0.19%, $1.2091
USDCAD, +0.10%, $1.3340
AUDUSD, +0.71%, $0.6763
NZDUSD, +0.48%, $0.6338

U.S. market digested several global events after the long holiday weekend. Additional tariffs imposed by the U.S. and China on each other went into effect on Sunday, much to the dismay of those hoping for a reprieve. Separately, protests escalated in Hong Kong, and UK Prime Minister Boris Johnson threatened to call a snap election if rebel lawmakers vote to block a no-deal Brexit. Johnson lost his party’s parliamentary majority yesterday.

The release of the U.S. ISM Manufacturing Index for August did not help market sentiment, which declined to 49.1% (consensus 51.3%) from a 51.2% reading in July. This denoted the first contraction (a reading below 50.0%) since 2016. The broader market quickly fell to session lows and traded below its opening levels for the rest of the session.

U.S. Treasury yields fell to session lows soon after the release of the ISM Manufacturing Index but steadily came off those lows as the session progressed. The 2-yr yield finished three basis points lower at 1.47%, and the 10-yr yield finished four basis points lower at 1.47%. The U.S. Dollar Index decreased -0.02% to 98.94. WTI crude lost 2.1%, or $1.15, to $53.91/bbl.

STOCK MARKET WRAP 

S&P500, -0.69%, 2,906.27
Nasdaq, -1.11%, 7,874.16
Nikkei Futures, -0.11%, 20,573.0

The stock market finished lower on Tuesday to begin the shortened trading week and the month of September. The S&P 500 declined 0.69%, while the Dow Jones Industrial Average (-1.1%), Nasdaq Composite (-1.1%), and Russell 2000 (-1.5%) fell more than 1.0%.

In corporate news, Boeing (BA 354.42, -9.67, -2.7%)fell on a report from The Wall Street Journal indicating its 737 MAX could be grounded through the holiday season. Uber (UBER 30.70, -1.87, -5.7%)and Lyft (LYFT 45.42, -3.55, -7.3%) hit new all-time lows as California moved closer to classify drivers as employees instead of contractors.

Amazon (AMZN 1789.84, +13.55, +0.8%) outperformed after RBC Capital Mkts raised its AMZN price target to $2600 from $2250.

CURRENCY MARKET WRAP 

As of Tue Sep 3rd, Singapore Time zone UTC+8

U.S. Dollar Index, +0.12%, 99.04
USDJPY, +0.07%, $106.21
EURUSD, -0.26%, $1.0963
GBPUSD, -0.79%, $1.2063
USDCAD, +0.10%, $1.3331
AUDUSD, -0.20%, $0.6712
NZDUSD, +0.06%, $0.6304

In Chinese data, China’s manufacturing activity expanded in August after shrinking for two months as factory output grew at its fastest clip in five months. The Caixin China General Manufacturing Purchasing Managers’ Index (PMI), which gives an independent snapshot of the manufacturing sector’s operating conditions, increased to 50.4 (consensus 49.8) in August from 49.9 in the previous month.

In U.K., manufacturers have recorded the sharpest drop in factory output for seven years as mounting concerns over no-deal Brexit and the slowing global economy hit orders across the country. Manufacturing PMI came in at 47.4 (consensus 48.0). The report found that EU-based customers are shunning British manufacturers as the risk of no-deal Brexit mounts, rerouting supply chains away from the UK as the likelihood of border disruption after 31 October increases.

STOCK MARKET WRAP 

S&P500 – Closed –
Nasdaq *- Closed -*
Nikkei Futures, -0.11%, 20,573.0

U.S. markets were closed for Labour Day.

CURRENCY MARKET WRAP 

As of Mon Sep 2nd, Singapore Time zone UTC+8

U.S. Dollar Index, +0.30%, 98.81
USDJPY, -0.20%, $106.31
EURUSD, -0.60%, $1.0991
GBPUSD, -0.23%, $1.2184
USDCAD, +0.20%, $1.3312
AUDUSD, +0.16%, $0.6737
NZDUSD, -0.05%, $0.6308

U.S. Personal income increased 0.1% m/m in July (consensus +0.4%), which was weaker than expected thanks to a 1.8% decline in personal interest income, but personal spending increased a stronger-than-expected 0.6% (consensus +0.5%). The PCE Price Index and core PCE Price Index, which excludes food and energy, were both up 0.2%, which was also expected. The key takeaway from the report is that consumer spending is solid and inflation is stable, albeit at below-target levels. All in all, there isn’t a lot of ammunition in the report for the Fed to fire off a 50-basis points rate cut at its September meeting.

U.S. Treasuries finished slightly higher in a muted session. The 2-yr yield declined two basis points to 1.50%, and the 10-yr yield declined one basis point to 1.51%. The U.S. Dollar Index advanced 0.3% to 98.81.

In Canada, the economy blew past projections by expanding at an annualised pace of 3.7% in the second quarter (consensus 3.0%), giving Canada its strongest three-month stretch of growth in two years.

STOCK MARKET WRAP 

S&P500, +0.06%, 2,926.46
Nasdaq, -0.13%, 7,962.88
Nikkei Futures, +1.12%, 20,690.0

The stock market finished little changed on Friday in a lackluster session before the holiday weekend. The S&P 500 (+0.06%) and Dow Jones Industrial Average (+0.2%) finished just above their flat lines, while the Nasdaq Composite (-0.13%) and Russell 2000 (-0.1%) finished slightly lower.

The market struggled to find direction amid missing leadership from some of its biggest technology names within the S&P 500 consumer discretionary (-0.6%), communication services (-0.1%), and information technology (unch) sectors. The materials (+0.7%), industrials (+0.4%), and financials (+0.4%) sectors did provide some support for the broader market.

In earnings news, shares of Ulta Beauty (ULTA 237.73, -99.72, -29.6%) tanked 30% after the company missed revenue estimates and lowered its full-year guidance. Workday (WDAY 177.28, -10.37, -5.5%)led the cloud software stocks lower despite positive results and upbeat guidance.

Notable standouts included Dell (DELL 51.53, +4.76, +10.2%)and Campbell Soup (CPB 45.00, +1.69, +3.9%) after both beat earnings expectations.

CURRENCY MARKET WRAP 

As of Fri Aug 30th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.22%, 98.42
USDJPY, +0.31%, $106.44
EURUSD, -0.17%, $1.1059
GBPUSD, -0.23%, $1.2184
USDCAD, -0.18%, $1.3283
AUDUSD, +0.02%, $0.6736
NZDUSD, -0.35%, $0.6317

U.S. consumer spending growth was revised up to 4.7% from 4.3%, which was the strongest growth since the fourth quarter of 2014. Granted it’s a backward-looking data point, yet it offers a nice reminder that the U.S. consumer, supported by a tight labor market, has remained in good shape.

In trade, China’s Commerce Minister Gao repeated his country’s willingness to proceed with negotiations in a “calm” manner, adding Beijing wasn’t planning on immediately retaliating on the latest U.S. tariff increases. Gao hoped discussions could help remove the new tariffs imposed by the U.S., although he refrained from answering if retaliatory measures were entirely off the table.

The 2-yr yield increased one basis point to 1.52%, and the 10-yr yield increased five basis points to 1.52%. The U.S. Dollar Index advanced 0.3% to 98.45.

STOCK MARKET WRAP 

S&P500, +1.27%, 2,924.58
Nasdaq, +1.48%, 7,973.39
Nikkei Futures, +0.85%, 20,655.0

Each of the major U.S. indices rose more than 1.0% on Thursday, lifted by China indicating it wants to prevent trade tensions from further escalating. The S&P 500 (+1.3%) and Dow Jones Industrial Average (+1.3%) both increased 1.3%. The Nasdaq Composite (+1.5%) and Russell 2000 (+1.6%) pulled out ahead.

Ten of the 11 S&P 500 sectors finished in positive territory. The industrials (+1.8%) and information technology (+1.7%) sectors outperformed amid solid gains in the trade-sensitive transportation and semiconductor spaces. The Dow Jones Transportation Average increased 2.0%, and the Philadelphia Semiconductor Index increased 2.3%. The consumer staples sector (unch) was unchanged.

CURRENCY MARKET WRAP 

As of Thu Aug 29th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.19%, 98.19
USDJPY, +0.34%, $106.08
EURUSD, -0.05%, $1.1085
GBPUSD, -0.58%, $1.2218
USDCAD, +0.19%, $1.3307
AUDUSD, -0.19%, $0.6740
NZDUSD, -0.38%, $0.6337

Wednesday’s session didn’t include any market-moving news or notable economic data, and it was mostly quiet on the U.S.-China trade front. In turn, there was an early fixation on the Treasury market, where the continued decline in yields fed into concerns about economic and corporate earnings growth. The 2-yr and 10-yr yields declined two basis points each to 1.51% and 1.47%, respectively. The U.S. Dollar Index increased 0.19% to 98.19.

Treasury Secretary Steven Mnuchin said on Wednesday the possibility of issuing ultra-long U.S. bonds is “under very serious consideration” by the Trump administration, Bloomberg News reported. “If the conditions are right, then I would anticipate we’ll take advantage of long-term borrowing and execute on that,” Mnuchin told Bloomberg in an interview. Mnuchin said his renewed interest in 50- or 100-year bonds was unrelated to the drop in yields on shorter-term U.S. debt.

Elsewhere, Queen Elizabeth II approved UK Prime Minister Boris Johnson’s plan to suspend Parliament until Oct. 14, increasing the likelihood of a no-deal Brexit on Oct. 31.

STOCK MARKET WRAP 

S&P500, +0.65%, 2,887.94
Nasdaq, +0.38%, 7,856.88
Nikkei Futures, +0.29%, 20,480.0

U.S. stocks finished higher on Wednesday in a broad-based advance. The S&P 500 increased 0.65%, quickly overcoming a negative start that was attributed to declining Treasury yields and finished near session highs.

Ten of the 11 S&P 500 sectors finished the day in positive territory. Energy (+1.4%), consumer discretionary (+1.1%), and industrials (+1.1%) set the pace, while the utilities sector (-0.3%) was the lone holdout. The energy sector entered today’s session down over 10% in August, but it found some reprieve amid higher oil prices ($55.76/bbl, +$0.86, +1.6%) following bullish inventory data.

Coty (COTY 9.33, +0.53, +6.0%)and Tiffany & Co. (TIF 85.16, +2.49, +3.0%)outperformed following their earnings reports. Autodesk (ADSK 140.08, -10.13, -6.7%) fell after it provided some disappointing guidance that put some pressure on other software stocks within the information technology sector (+0.1%).

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.