NOTABLE MOVES
As of Sat, Mar 2, Singapore Time zone UTC+8
USDJPY, +0.48%, $111.92
EURUSD, +0.05%, $1.1377
GBPUSD, -0.40%, $1.3210
USDCAD, +0.88%, $1.3284
AUDUSD, -0.18%, $0.7082
NZDUSD, -0.10%, $0.6801
S&P500, +0.69%, 2,803.69
Nasdaq, +0.76%, 7,151.57
Nikkei Futures, +1.08%, 21,620.0
CURRENCY MARKET WRAP
- The PCE Price Index for December was up 0.1% while the core PCE Price Index, which excludes food and energy, increased 0.2% (consensus +0.1%). That left the those indexes up 1.7% and 1.9%, respectively, year-over-year and below the Fed’s longer-run inflation target. The key takeaway from the report is that it will encourage the Fed to stick by a wait-and-see mindset.
- The ISM Manufacturing Index weakened to 54.2 in February (consensus 56.0) from 56.6 in January. The final reading for the University of Michigan’s Index of Consumer Sentiment for February was 93.8 (consensus 95.6).
- U.S. Treasuries closed out the week on a lower note, sending yields higher across the curve. The 2-yr yield increased five basis points to 2.55%, and the 10-yr yield increased four basis points to 2.76%. The U.S. Dollar Index increased 0.3% to 96.46. WTI crude lost -2.5% to $55.81/bbl.
STOCK MARKET WRAP
- The S&P 500 increased 0.69% on Friday, led by shares of energy and health care companies; meanwhile investors remained optimistic about a U.S.-China trade deal. Friday’s gains lifted the benchmark index into positive territory for the week, advancing 0.4%. The S&P 500 energy (+1.8%), health care (+1.4%), and consumer discretionary (+0.9%) sectors outperformed. Conversely, the consumer staples (-0.2%), materials (-0.2%), and real estate (-0.1%) sectors were the lone groups to finish with losses.
- Stocks jumped out of the gate, propelled by a Bloomberg report that the U.S. and China are working on a document that lays out the provisions of a trade deal and that such a document could be ready to be signed by Trump and Xi as early as mid-March. The major averages, however, lost steam and fell to session lows following the release of the ISM Manufacturing and Consumer Sentiment reports for February. The reports came in below expectations and provided an excuse for profit taking. Selling was short-lived, though, as has been the case all year. The S&P 500 sectors staged a steady rebound during the afternoon, allowing the benchmark index to close near session highs and above the 2800 level.
- Positive earnings reports from retailers Gap (GPS 29.51, +4.11, +16.2%) and Foot Locker (FL 63.07, +3.55, +6.0%) helped spur gains in the consumer discretionary sector (+0.9%). GAP also announced it will spin off Old Navy as a separate company. Conversely, Walgreens Boots Alliance (WBA 66.61, -4.58, -6.4%) underperformed after Robert W. Baird cut its price target to $67 from $70. Baird maintained a ‘neutral’ rating on the stock.
- Tesla (TSLA 294.79, -25.09) made headlines, losing -7.8%, after CEO Elon Musk conceded that the company will not be profitable during the first quarter. The Tesla team also said it will shift sales worldwide to online only. The transition will reduce costs in order to lower the prices of its vehicles, including the Model 3.