U.S. Core Retail Sales m/m at -0.1% vs expected 0.4%. Retail Sales m/m at 0.1% vs expected 0.7%. The 2-yr note yield ticked one basis point higher to 2.85%, and the 10-yr note yield rose two basis points to 3.16%. Risk-aversion sentiment returns on Monday with markets starting the week soft, USDJPY down -0.38%, $111.78. Euro up 0.28%, $1.1583.
In Brexit, May told the House of Commons on Monday that neither Brussels nor London could allow the disagreement to “derail the prospects of a good deal and leave us with a ‘no-deal’ outcome that no one wants”. She insisted she believed a deal was still “achievable” and that the UK and EU were “not far apart”. Sterling up 0.40%, $1.3155.
BOC survey showed strong investment intentions and a tight labor market. WTI crude prices were relatively subdued on Monday, settling 0.6% higher at $71.83/bbl. USDCAD down -0.28%, $1.2987.
S&P 500 down -0.59%, 2,750.79. Nasdaq down -1.24%, 7,068.67. Nikkei down -1.87%, 22,271.30.
Financial sector was unable to impress after an underwhelming response to Bank of America’s (BAC 27.92, -0.54, -1.9%) better-than expected earnings report. Charles Schwab (SCHW 47.64, -1.37, -2.8%) also fell after reporting earnings that were in-line with top and bottom estimates. United States-Saudi Arabia tensions brewed over the weekend following the disappearance and alleged murder of Washington Post columnist Jamal Khashoggi. In response, Trump threatened to impose sanctions on the world’s largest oil producer if it was found to be guilty; however, Trump said today that Saudi King Salman strongly denied to him any involvement in Khashoggi’s disappearance.
In other corporate news, L3 Technologies (LLL 220.91, +25.13) rose 12.8% after announcing an all-stock merger of equals with Harris Corp. (HRS 173.25, +18.38, +11.9%). The combined company, L3 Harris Technologies, will be the 6th largest defense company in the U.S. and a top 10 defense company globally. Separately, retailer Sears Holding (SHLD 0.31, -0.10, -23.8%) filed for Chapter 11 bankruptcy. That was not a surprise to the market, as it had been widely speculated, yet the news itself generated a sentimental story line given the retailer’s storied operating history.
