CFD Markets News and Forecasts — 17-04-2018

The main US stock indexes finished trading on the positive territory, helped by the rise in the price of shares of technology companies, as well as high incomes of Netflix (NFLX) and UnitedHealth (UNH), which raised optimism that the current season of reports will be the strongest in seven years.

In addition, as reported by the Ministry of Trade, housing starts in the US at a seasonally adjusted annual rate amounted to 1.32 million in March, which is 2% more than in February. Permissions were a seasonally adjusted annual rate of 1.35 million units. In March, builders laid the foundations for more homes, and earlier estimates were revised upward, indicating that the impetus in the housing construction industry is greater than previously noted. Housing starts for new homes exceeded forecasts of economists, who were expecting 1.323 million units.Housing starts were 10.9% higher than the same period a year ago. Also strong were the resolutions that predict future activity: 2.5% higher than in February, and 7.5% higher than a year ago.

In addition, the Fed said that industrial production rose 0.5 percent in March after rising 1.0 percent in February. Economists had expected that production would increase by 0.4 percent. The larger increase than expected in industrial production was partly due to a rebound in utility production, which rose 3.0 percent after falling by 5.0 percent in February amid higher temperatures. Meanwhile, manufacturing in manufacturing grew by 0.1 percent in March after a 1.5 percent drop in February. The report also says that capacity utilization in the industrial sector increased to 78.0 percent in March from 77.7 percent in February. It was expected that the use of capacity will reach 77.9 percent.

Most components of the DOW index finished trading in positive territory (24 out of 30). The leader of growth was UnitedHealth Group Incorporated (UNH, + 3.56%). Outsider were the shares of The Goldman Sachs Group, Inc. (GS, -1.22%).

All sectors of S & P recorded a rise. The technological sector grew most (+ 2.0%).

At closing:

Dow 24,789.35 +216.31 +0.88%

S&P 500 2,706.38 +28.54 +1.07%

Nasdaq 100 7,281.10 +124.81 +1.74%

• Leaves 2018, 2019 global growth forecasts unchanged from january at 3.9 pct for both years

• China growth forecasts unchanged from january at 6.6 pct for 2018, 6.4 pct for 2019

• Raises euro area 2018 growth forecast to 2.4 pct from 2.2 pct in jan.; 2019 forecast unchanged at 2.0 pct

Industrial production rose 0.5 percent in March after increasing 1.0 percent in February; the index advanced 4.5 percent at an annual rate for the first quarter as a whole. After having climbed 1.5 percent in February, manufacturing production edged up 0.1 percent in March. Mining output rose 1.0 percent, mostly as a result of gains in oil and gas extraction and in support activities for mining. The index for utilities jumped 3.0 percent after being suppressed in February by warmer-than-normal temperatures. At 107.2 percent of its 2012 average, total industrial production was 4.3 percent higher in March than it was a year earlier. Capacity utilization for the industrial sector moved up 0.3 percentage point in March to 78.0 percent, a rate that is 1.8 percentage points below its long-run (1972-2017) average.

U.S. stock-index futures rose on Monday, as solid quarterly results from Goldman Sachs (GS; +1.4%), Johnson & Johnson (JNJ; +1.1%), UnitedHealth (UNH; +2.8%) and Netflix (NFLX; +7.2%) boosted investors' optimism and confirmed reasonableness of their expectations that Q1 earnings season could be the strongest in seven years.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,354,000. This is 2.5 percent above the revised February rate of 1,321,000 and is 7.5 percent above the March 2017 rate of 1,260,000. Single-family authorizations in March were at a rate of 840,000; this is 5.5 percent below the revised February figure of 889,000. Authorizations of units in buildings with five units or more were at a rate of 473,000 in March.

Privately-owned housing starts in March were at a seasonally adjusted annual rate of 1,319,000. This is 1.9 percent above the revised February estimate of 1,295,000 and is 10.9 percent above the March 2017 rate of 1,189,000. Single-family housing starts in March were at a rate of 867,000; this is 3.7 percent below the revised February figure of 900,000. The March rate for units in buildings with five units or more was 439,000.

Int'l Paper (IP) downgraded to Sector Perform from Outperform at RBC Capital Mkts

Twitter (TWTR) upgraded to Equal-Weight from Underweight at Morgan Stanley

Merck (MRK) upgraded to Overweight from Equal-Weight at Morgan Stanley

Coca-Cola (KO) upgraded to Neutral from Sell at Goldman

Walt Disney (DIS) upgraded to Hold from Sell at Pivotal Research

The growth was due mainly to higher sales in the transportation equipment industry.

In constant dollars, sales rose 2.0%, slightly more than the gain in current dollar sales, reflecting a slight decrease in prices of products sold by Canadian manufacturers in February.

Sales in the transportation equipment industry grew 6.6% to $10.7 billion in February, following a 6.3% decline in January. This growth was due to advances in the motor vehicle (+8.9%) and motor vehicle parts (+4.8%) industries. These increases came on the heels of atypical assembly plant shutdowns in January. In constant dollars, sales volumes rose 9.3% in motor vehicle manufacturing and 4.8% in motor vehicle parts manufacturing in February.

Foreign investment in Canadian securities totalled $4.0 billion in February, down from $5.6 billion in January. Meanwhile, Canadian investment in foreign securities slowed to $6.3 billion, following two months of strong acquisitions.

As a result, international transactions in securities generated a net outflow of funds of $2.4 billion from the Canadian economy, a third consecutive monthly net outflow of funds.

Goldman Sachs (GS) reported Q1 FY 2018 earnings of $6.95 per share (versus $5.15 in Q1 FY 2017), beating analysts' consensus estimate of $5.57.

The company's quarterly revenues amounted to $10.036 bln (+25.0% y/y), beating analysts' consensus estimate of $8.727 bln.

The company also raised dividend 6.7% to $0.80/share.

GS rose to $260.00 (+0.82%) in pre-market trading.

Johnson & Johnson (JNJ) reported Q1 FY 2018 earnings of $2.06 per share (versus $1.83 in Q1 FY 2017), beating analysts' consensus estimate of $2.00.

The company's quarterly revenues amounted to $20.009 bln (+12.6% y/y), beating analysts' consensus estimate of $19.497 bln.

The company also issued guidance for FY 2018, projecting EPS of $8.00-8.20 (versus analysts' consensus estimate of $8.10) at revenues of $81.0-81.8 bln (versus analysts' consensus estimate of $81.18 bln and its prior guidance of $80.6-81.4 bln).

JNJ rose to $133.25 (+1.13%) in pre-market trading.

UnitedHealth (UNH) reported Q1 FY 2018 earnings of $3.04 per share (versus $2.37 in Q1 FY 2017), beating analysts' consensus estimate of $2.91.

The company's quarterly revenues amounted to $55.188 bln (+13.3% y/y), generally in-line with analysts' consensus estimate of $54.899 bln.

The company also issued in-line guidance for FY 2018, projecting EPS of $12.40-12.65 versus analysts' consensus estimate of $12.54, and above prior guidance of $12.30-12.60.

UNH fell to $230.00 (-0.14%) in pre-market trading.

• Says Europe must avoid escalation in trade dispute with the United States

The ZEW Indicator of Economic Sentiment for Germany once again experienced a sharp decline in April 2018, dropping by 13.3 points compared to March and even 26.0 points compared to February. The indicator currently stands at minus 8.2 points, falling far below the long-term average of 23.5 points. The assessment of the current economic situation in Germany decreased by 2.8 points, with the corresponding indicator currently standing at 87.9 points.

Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.8%, both excluding and including bonuses, compared with a year earlier.

Average weekly earnings increased by 0.2% excluding bonuses, and by 0.1% including bonuses, compared with a year earlier.

Estimates from the Labour Force Survey show that, between September to November 2017 and December 2017 to February 2018, the number of people in work increased, the number of unemployed people decreased and the number of people aged from 16 to 64 years not working and not seeking or available to work (economically inactive) was little changed.

There were 32.26 million people in work, 55,000 more than for September to November 2017 and 427,000 more than for a year earlier.

There were 1.42 million unemployed people (people not in work but seeking and available to work), 16,000 fewer than for September to November 2017 and 136,000 fewer than for a year earlier.

The unemployment rate (the proportion of those in work plus those unemployed, that were unemployed) was 4.2%, down from 4.7% for a year earlier and the lowest since 1975.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2472 (2114)

$1.2459 (1395)

$1.2441 (215)

Price at time of writing this review: $1.2397

Support levels (open interest**, contracts):

$1.2347 (2719)

$1.2315 (3498)

$1.2278 (3503)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date May, 4 is 76761 contracts (according to data from April, 16) with the maximum number of contracts with strike price $1,2250 (4403);

GBP/USD

Resistance levels (open interest**, contracts)

$1.4434 (2153)

$1.4404 (2095)

$1.4387 (2041)

Price at time of writing this review: $1.4363

Support levels (open interest**, contracts):

$1.4289 (206)

$1.4264 (266)

$1.4235 (430)

Comments:

- Overall open interest on the CALL options with the expiration date May, 4 is 22310 contracts, with the maximum number of contracts with strike price $1,4400 (3235);

- Overall open interest on the PUT options with the expiration date May, 4 is 23710 contracts, with the maximum number of contracts with strike price $1,3850 (2494);

- The ratio of PUT/CALL was 1.06 versus 1.05 from the previous trading day according to data from April, 16

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

China's gross domestic product expanded a seasonally adjusted 1.4 percent on quarter in the first quarter of 2018, according to rttnews.

That was shy of expectations for 1.5 percent and down from 1.6 percent in the three months prior.

On a yearly basis, GDP was up 6.8 percent - in line with expectations and down from 6.9 percent in the previous quarter.

The bureau also said that industrial production advanced an annual 6.0 percent in March - also missing forecasts for 6.3 percent and down from 6.2 percent in February.

Retail sales jumped 10.1 percent on year in March, exceeding forecasts for 9.7 percent and up from 9.4 percent in the previous month.

Fixed asset investment climbed an annual 7.5 percent, missing expectations for 7.7 percent and down from 7.9 percent a month earlier.

• Says he does not want to create an inversion in the yield curve

• He does not see inflation running away even though we will see wage pressures

• Wages expected to pick up gradually as leading indicators pointed to more job gains

• An appreciation in the AUD should slow expected acceleration in economy

• Economy "appeared likely" to grow faster this year than in 2017

• Inflation to remain low for some time given retail competition, slow wage growth

• Risk of escalation in global trade restrictions needed to be monitored closely

• progress on unemployment and inflation likely to be only gradual

Asian stock markets struggled for direction Tuesday morning, though beaten-up equities in Hong Kong and China got a lift from news of better-than-expected economic growth in the mainland.

European stocks ended lower on Monday, as traders weighed the limited strikes on the Syrian regime over the weekend and the potential for additional U.S. sanctions against Russia.

U.S. stocks closed sharply higher on Monday, with major indexes rallying in a broad advance as the first-quarter earnings season pointed to strong growth and geopolitical tensions showed signs of easing.