NOTABLE MOVES
As of Wed, Mar 6, Singapore Time zone UTC+8
USDJPY, +0.10%, $111.86
EURUSD, -0.30%, $1.1307
GBPUSD, -0.25%, $1.3156
USDCAD, +0.39%, $1.3356
AUDUSD, -0.08%, $0.7088
NZDUSD, -0.29%, $0.6801
S&P500, -0.11%, 2,789.65
Nasdaq, +0.08%, 7,156.79
Nikkei Futures, -0.32%, 21,750.0
CURRENCY MARKET WRAP
- The ISM Non-Manufacturing Index increased to 59.7 in February (consensus 57.2) from 56.7 in January. The dividing line between expansion and contraction is 50.0, so the increase in February reflects an acceleration in business activity in the non-manufacturing sector. The key takeaway from the report is that it featured a sizable increase for the New Orders component, which is a positive marker that will help push out the recession narrative for the U.S. economy since the non-manufacturing sector accounts for a much larger chunk of economic activity than the manufacturing sector does.
- New home sales increased 3.7% month-over-month to a seasonally adjusted annual rate of 621,000 (consensus 572,000).The key takeaway from the report is that the improvement in new home sales coincided with a drop in both median and average selling prices. Another important takeaway is that lower-priced homes (less than $400,000) accounted for a much smaller percentage of total homes sold than in November, underscoring the point that there are supply constraints at more affordable price points.
- The U.S. Treasury market was relatively muted on Tuesday. The 2-yr yield increased one basis point to 2.55%, and the 10-yr yield was unchanged at 2.72%. The U.S. Dollar Index increased 0.2% to 96.84. WTI crude was unchanged at $56.54/bbl.
STOCK MARKET WRAP
- The S&P 500 lost 0.11% on Tuesday in a session that saw little conviction from buyers or sellers. Encouraging economic data and solid earnings reports from Target (TGT 76.00, +3.33, +4.6%) and Kohl’s (KSS 71.33, +4.86, +7.3%) provided some support for the market. The S&P 500 industrials (-0.6%) and materials (-0.3%) sectors underperformed the broader market. Conversely, the communication services (+0.7%), real estate (+0.3%), and consumer discretionary (+0.2%) sectors were the lone groups to finish with gains.
- Stocks opened roughly flat amid lingering concerns about the U.S. striking, and enforcing, a meaningful trade deal with China. On a related note, China lowered its 2019 GDP growth forecast to 6.0%-6.5% from 6.5%, and announced some tax cuts in a bid to contend with a “tough economic battle ahead.”
- The S&P 500 dropped 0.4% in early action but selling efforts were tempered following the release of the stronger-than-expected New Home Sales report for December and the ISM Non-Manufacturing Index for February.