US Session Highlights
(US) Apr Labor Market Conditions Index Change: 3.5 v 1.0e
(US) April Conference Board Employment Trends: 132.64 v 131.58 in March
(US) Fed’s Bullard (non-voter, dovish): Fed’s current policy rate setting is appropriate; US economy looks like it’s in a low growth state
(US) Fed’s Mester (hawkish, non-voter): actions must be taken before Fed policy goals are fully met; reiterates calls for further rate hikes and trimming balance
(US) New York Fed Consumer Expectations Apr survey: households expecting finances to improve rises to 44%; April inflation expectations 3 years ahead to 2.9% v 2.7% prior
The S&P touched new all-time highs before retreating and closing flat on the day. The VIX reached lows not seen since 1993, dropping 8% to 9.7. The outperforming S&P sector was energy, thanks to higher oil prices, rising 0.8%.
US markets on close: Dow flat, S&P500 flat, Nasdaq flat
Best Sector in S&P500: Energy
Worst Sector in S&P500: Materials
Biggest gainers: NWL +11.9%; CTL +5.1%; COH +4.8%
Biggest losers: TSN -6.1%; LYB -4.0%; INCY -3.8%
At the close: VIX 9.8 (-0.8pts); Treasuries: 2-yr 1.33% (flat), 10-yr 2.38% (+2bps), 30-yr 3.01% (+3bps)
US movers afterhours
MAR Reports Q1 $1.01 v $0.90e, R$5.56B v $4.91Be; +4.9% afterhours
BLDR Reports Q1 $0.11 v $0.05e, R$1.53B v $1.49Be; Adjusted EBITDA $76.1M v $61.8M y/y; gross margin 24.5% v 25.0% y/y; +4.8% afterhours
P Reports Q1 -$0.24 v -$0.34e, R$316M v $318Me; Announces $150M investment by KKR; Confirms ongoing strategic review; +3.2% afterhours
BKD Reports Q1 -$0.68 (GAAP*) v $0.48e, R$1.22B v $1.21Be; +2.9% afterhours
OTEX Reports Q3 $0.45 v $0.53e, R$593M v $608Me; raises dividend 15% to $0.132 from $0.115 (indicated yield 1.52%); Operating margin 29.1% v 31.4% y/y; -9.7% afterhours
NVRO Reports Q1 -$0.50 v -$0.26e, R$68.4M v $68.1Me- Affirms FY17 R$31-320M v $318Me (prior $310-320M); -14.5% afterhours
HTZ Reports Q1 -$1.61 v -$1.00e, R$1.92B v $1.89Be; International car rental rev $411M, -5% y/y; US car rental rev $1.35B, -4% y/y; -17.7% afterhours
Key economic data
(JP) JAPAN MAR LABOR CASH EARNINGS Y/Y: -0.4% (biggest decline in 21 months) V 0.5%E ; REAL EARNINGS (EX-INFLATION) Y/Y: -0.8% V 0.0% PRIOR
(AU) AUSTRALIA MAR RETAIL SALES M/M: -0.1% (2nd straight decline) V +0.3%E; Q/Q ex-inflation: +0.1% V 0.5%E
(NZ) ANZ: New Zealand Apr non-tradable inflation m/m 0.0% v 0.2% prior, y/y: 2.2% v 2.2% prior
Asia Session Notable Observations, Speakers and Press
Asia indices mixed after a flat day on Wall St where S&P500 hit record intraday high and Vix saw a multi-year low. Australia underperforming ahead of the release of its FY17/18 budget, with retailers slumping on much weaker than expected Aussie Retail Sales. CBA shares also trading lower following Q3 results. AUD/USD fell nearly 40pips toward 0.7350 on the release.
Japan wage inflation posted its biggest y/y decline in nearly 2 years, and BOJ Gov Kuroda noted central bank is prepared to do more policy adjustment if needed, sending USD/JPY pair to session highs near 113.40.
China press speculated Terms of Trade could turn to deficit this year on rising imports following overnight Apr Trade data. CASS researchers also warned new home prices may decline amid property curbs.
China
(CN) China’s NDRC said to plan a meeting with power companies about coal quality – press
(CN) China Passenger Car Association (PCA): Jan-Apr vehicle sales 7.27M units, -1.7% y/y
(CN) China Academy of Social Sciences (CASS): New home prices may fall in 2017 – press
(CN) China may see Terms of Trade at a deficit this year amid growth in Imports – Chinese press
Japan
(JP) Moody’s: Japan to become more sensitive to BOJ recalibrations
(JP) BOJ Gov Kuroda: Reiterates Japan’s virtuous economic cycle is strengthening
Australia/New Zealand
(AU) Australia Foreign Investment Review Board (FIRB): Investment gains mainly driven by real estate
(AU) Australia Govt considering a levy on big four banks under new budget – Australian press
(NZ) NZIER’s Shadow Board: RBNZ should adopt tightening bias
Asian Equity Indices/Futures (01:00ET)
Nikkei -0.1%, Hang Seng +0.3%, Shanghai Composite flat, ASX200 -0.6%, Kospi closed
Equity Futures: S&P500 flat; Nasdaq flat, Dax -0.1%, FTSE100 -0.1%
FX ranges/Commodities/Fixed Income (01:00ET)
EUR 1.0920-1.0935; JPY 113.15-113.40; AUD 0.7352-0.7398; NZD 0.6900-0.6925
June Gold +0.1% at 1,228/oz; June Crude Oil +0.1% at $46.47/brl; July Copper -0.4% at $2.48/lb
SPDR Gold Trust ETF daily holdings fall 1.2 tonnes to 851.9 tonnes; 4th straight decline
(CN) PBOC SETS YUAN MID POINT AT 6.9037 V 6.8947 PRIOR
(CN) PBOC skips open market operations (3rd straight skip)
(JP) Japan MoF sells ¥2.08T v ¥2.3T offered in 10-year 0.1% JGBs; Avg yield: 0.030% v 0.064% prior; bid to cover: 3.76x v 3.96x prior
(AU) Australia MOF sells A$150M in 2030 bonds; avg yield 0.8288%; bid-to-cover 3.10x
Asia equities notable movers
Australia
Incitec Pivot (IPL) +2.9%; H1 result
Commonweath Bank (CBA) -3.6%: Q3 resut
Beach Energy (BPT) -0.7%; interest in AWE (AWE +5.6%)
JB Hi Fi (JBH) -4.8%, Harvey Norman (HVN) -3.7%; Australia retail sales
Japan
IHI (7013) +3.8%, FY16/17 result
Mitsubihi Heavy (7011) +0.5%, FY16/17 result
TEPCO (9501) +3.3%; To set retail gas prices as much as ~8% cheaper than Tokyo Gas f
Subaru (7270) -3.8%; FY16/17 result
United Arrows (7606) -5.8%; FY16/17 result
Hong Kong
Longfor Properties (960) +0.2%; Apr result
Great Wall Motor (2333) -0.1%; Apr sales
International Entertainment (1009) +0.6%; FY guidance
