NOTABLE MOVES
As of Wed, Feb 27, Singapore Time zone UTC+8
USDJPY, -0.45%, $110.56
EURUSD, +0.29%, $1.1392
GBPUSD, +1.24%, $1.3260
USDCAD, -0.23%, $1.3161
AUDUSD, +0.37%, $0.7193
NZDUSD, +0.15%, $0.6895
S&P500, -0.08%, 2,793.90
Nasdaq, +0.11%, 7,123.22
Nikkei Futures, -0.31%, 21,482.5
CURRENCY MARKET WRAP
- Housing starts declined 11.2% month-over-month in December to a seasonally adjusted annual rate of 1.078 million (consensus 1.254 million). Building permits were up 0.3% month-over-month to a seasonally adjusted annual rate of 1.326 million (1.290 million).
- The Conference Board’s Consumer Confidence Index jumped to 131.4 in February (consensus 125.0) from an upwardly revised 121.7 (from 120.2) in January. The February reading broke a string of three consecutive monthly declines in the index.
- The key takeaway from the report is that consumers’ attitude about the outlook improved greatly, coinciding with the sharp improvement in the stock market, continued strength in the labor market, and the end of the partial government shutdown. That upbeat outlook should be a supportive factor for consumer spending.
- Powell delivered his semi-annual testimony on the economy to the Senate Banking Committee. The market’s response was relatively muted, as he maintained the Fed’s “patient” approach to monetary policy and balance sheet normalization and did not introduce any “new” views that could have been construed as hawkish.
- U.S. Treasuries saw increased buying interest, which drove yields lower across the curve. The 2-yr yield decreased three basis points to 2.48%, and the 10-yr yield decreased four basis points to 2.64%. WTI crude decreased 0.3% to $55.60/bbl.
- Sterling caught strong bids on renewed market confidence that a hard-Brexit exit from the EU was not going to happen. Two events yesterday helped fuel the rally. One was the formal call by Labor party leader Jeremy Corbyn for a 2nd Brexit referendum and the other were reports that PM May would consider extending the deadline if her Brexit negotiated deal could not pass Parliament.
STOCK MARKET WRAP
- The S&P 500 decreased -0.08% as it struggled for direction on Tuesday. The stock market wavered between small gains and losses while investors weighed mixed economic data, key corporate news, and comments from Powell.
- The S&P 500 materials (-0.6%), health care (-0.3%), and industrial (-0.3%) sectors underperformed the broader market. Conversely, the information technology (+0.2%), consumer discretionary (+0.2%), and communication services (+0.1%) sectors outperformed.
- Home Depot’s (HD 188.30, -1.68, -0.9%) weaker-than-expected FY20 earnings guidance, and December housing starts increasing at the slowest pace (1.078 million) since September 2016, helped stir early concerns about a slower pace of economic, and earnings, growth unfolding in the months ahead, particularly for companies with close ties to the housing market. Caterpillar (CAT 137.98, -3.43, -2.4%) was another drag on the market following a “double” downgrade to ‘Sell from ‘Buy’ at UBS. UBS also lowered its price target to $125 from $154, citing a belief that 55% of the company’s end markets will peak in 2019, pressuring revenue and margins in 2020.