CFD Markets News and Forecasts — 22-08-2018

Major US stock indexes ended the session mixed, as the growth in the commodity sector was offset by a fall in the industrial goods sector.

Market participants also won back data on the housing market. The National Association of Realtors (NAR) said that sales of existing homes fell 0.7 percent to a seasonally adjusted annual figure of 5.34 million units last month. The July fall marked the longest monthly decline since 2013. Economists predicted that sales in the secondary housing market will grow by 0.6% to 5.40 million units in July. Sales fell in the Northeast, South and Midwest, but grew in the West. In July, there were 1.92 million homes on the market, unchanged from the year before. This was the first month in three years, when stocks did not fall on an annual basis, said Lawrence Yun, chief economist at NAR. With the July sales pace, it takes 4.3 months to exhaust current stocks. The average price of the house increased in July by 4.5 percent per annum, to $ 269,600.

In the focus of attention of investors were also the minutes of the Fed meeting. The document said that during the August meeting, the leaders of the Fed signaled the likelihood of an increase in rates next month and discussed in detail the concerns about how long-running trade disagreements could undermine economic growth. "If the situation in the economy develops in line with current expectations, it is likely that soon it will be expedient to take another step in terms of raising rates," the protocols say. Recall, at a meeting on July 31-August 1, the Fed left rates unchanged after the June rates were raised to 1.75% -2.00%.

Most of the components of DOW finished trading in the red (22 of 30). The leader of growth was the shares of Exxon Mobil Corporation (XOM, + 1.43%). Outsider were shares United Technologies Corporation (UTX, -1.97%).

Most sectors of the S & P recorded a rise. The commodities sector grew most (+ 1.2%). The sector of industrial goods showed the greatest decrease (-0.7%).

At closing:

Dow 25,733.60 -88.69 -0.34%

S & P 500 2,861.82 -1.14 -0.04%

Nasdaq 100 7,889.10 +29.92 +0.38%

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 5.8 million barrels from the previous week. At 408.4 million barrels, U.S. crude oil inventories are at the five year average for this time of year. Total motor gasoline inventories increased by 1.2 million barrels last week and are about 6% above the five year average for this time of year. Finished gasoline and blending components inventories both increased last week. Distillate fuel inventories increased by 1.8 million barrels last week and are about 7% below the five year average for this time of year. Propane/propylene inventories decreased by 0.9 million barrels last week and are about 13% below the five year average for this time of year. Total commercial petroleum inventories decreased last week by 2.5 million barrels last week.

Existing-home sales subsided for the fourth straight month in July to their slowest pace in over two years, according to the National Association of Realtors. The West was the only major region with an increase in sales last month.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 0.7 percent to a seasonally adjusted annual rate of 5.34 million in July from 5.38 million in June. With last month's decline, sales are now 1.5 percent below a year ago and have fallen on an annual basis for five straight months.

U.S. stock-index futures edged down on Wednesday, as market participants assessed the possible impact of the criminal convictions of the U.S. president Trump's two former advisers while awaiting a new round of the U.S.-China trade talks.

Global Stocks:

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

Starbucks (SBUX) downgraded to Neutral from Overweight at Piper Jaffray

AT&T (T) downgraded to Market Perform from Outperform at Wells Fargo

Sales were down in 6 of 11 subsectors, representing 52% of total retail trade.

Lower sales at gasoline stations and motor vehicle and parts dealers more than offset higher sales at food and beverage stores and building material and garden equipment and supplies dealers. Excluding the first two subsectors, retail sales were up 0.3%.

After removing the effects of price changes, retail sales decreased 0.3%.

On a quarterly basis, retail sales were up 1.0% in the second quarter following a 0.5% decrease in the first quarter. In volume terms, retail sales increased 0.9% in the second quarte

Lowe's (LOW) reported Q2 FY 2018 earnings of $2.07 per share (versus $1.57 in Q2 FY 2017), beating analysts' consensus estimate of $2.02.

The company's quarterly revenues amounted to $20.888 bln (+7.1% y/y), generally in line with analysts' consensus estimate of $20.792 bln.

The company also issued guidance for FY 2018, projecting EPS of $4.50-4.60 (versus analysts' consensus estimate of $5.44) and revenues of $70.6 bln or ~+4.5% y/y (versus analysts' consensus estimate of $71.86 bln), down from prior guidance of ~$71.2 bln or +5% y/y.

LOW fell to $99.50 (-0.24%) in pre-market trading.

Target (TGT) reported Q2 FY 2018 earnings of $1.47 per share (versus $1.22 in Q2 FY 2017), beating analysts' consensus estimate of $1.40.

The company's quarterly revenues amounted to $17.776 bln (+6.9% y/y), beating analysts' consensus estimate of $17.332 bln.

The company also raised guidance for FY 2018, projecting EPS of $5.30-5.50 versus its prior guidance of $5.15-5.45 and analysts' consensus estimate of $5.30.

TGT rose to $88.38 (+6.14%) in pre-market trading.

Kuwait Oil Minister Bakheti Al Rashidi said that the meeting in Algiers will consider the volume of production by OPEC members and countries outside the cartel, and by the end of this year an agreement will be reached on the mechanism for controlling production in the next year.

According to his forecasts, by the end of this year the situation on the world oil market will remain "stable".

"The crisis with Turkey can end instantly if they release Pastor without conditions," Bolton said. He also noted that Turkey should act properly as an ally of NATO.

Bolton also said that, in his view, the Qatar's promise of supporting the Turkish economy would be "completely inadequate." He also touched on the Iranian issue, saying that "Europeans should make a clear choice between doing business with either Iran or the United States."

Bolton's statements did not affect the rate of the Turkish lira, as liquidity remains weak, given that the Turkish markets are closed due to the week of holidays in Turkey.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1649 (890)

$1.1632 (5821)

$1.1611 (1545)

Price at time of writing this review: $1.1568

Support levels (open interest**, contracts):

$1.1524 (4122)

$1.1496 (5357)

$1.1462 (10674)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date September, 7 is 136889 contracts (according to data from August, 21) with the maximum number of contracts with strike price $1,1500 (10674);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3018 (3416)

$1.2993 (919)

$1.2957 (621)

Price at time of writing this review: $1.2899

Support levels (open interest**, contracts):

$1.2867 (2780)

$1.2822 (3056)

$1.2792 (2589)

Comments:

- Overall open interest on the CALL options with the expiration date September, 7 is 35836 contracts, with the maximum number of contracts with strike price $1,2950 (3416);

- Overall open interest on the PUT options with the expiration date September, 7 is 32219 contracts, with the maximum number of contracts with strike price $1,2900 (3056);

- The ratio of PUT/CALL was 0.90 versus 0.91 from the previous trading day according to data from August, 21.

* - 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.

• BoJ's Efforts To Make Its Stimulus More Sustainable Were Long Overdue

• BoJ's Prolonged Easy Policy Has Pushed Forward Timing Of Banking Sector Consolidation

The dollar remains under pressure on Wednesday, as US President Donald Trump's comments on monetary policy continue to affect the US currency, and markets are awaiting the results of negotiations between the US and China and the publication of the minutes of the last meeting of the Fed.

Trump said in an interview with Reuters on Monday that he was not "delighted" with the Fed's rate hike, triggering a subsequent decline in the dollar.

Junichi Ishikawa, senior currency strategist at IG Securities in Tokyo, said that the euro "has already regrouped from its recent fall, and Trump's comments have provided an additional incentive for the short positions that will be observed in the market."

A week ago, the euro fell to 13.5 months low due to fears that the financial turmoil in Turkey, reinforced by the fall of the lira to a record low that could damage European banks.

• It is expected that rental inflation will increase, but it will take some time to affect the CPI

• There is "considerable uncertainty" regarding free labor market facilities

• Drought has a mixed effect on food prices

• I expect that most downward inflation forces will eventually weaken

• We would like to be more confident that inflation will continue at the target level

• The current accommodative position of monetary policy will help this result

• The uncertainty of the government's energy policy contributed to a significant underfunding of new supplies

• Electricity prices are now falling and can reduce inflation for several quarters

• Pricing for electricity issues "significant uncertainty" for inflation

• The growth of retail competition reduced the pressure on inflation

Asian and Pacific non-financial corporations demonstrate a stable credit trend, but increased trade tension creates risks

The further escalation of trade tensions will not only damage growth, both in China and the US, but also spill over to trade-dependent Asian economies

Trade tension creates risks for large exporters of "intermediate goods" to China, where goods are collected in finished products for shipment to the US

Waiting for China's stable credit trend, supported by Moody's expectation of stable stable global growth

Prospects for the advanced economies of the G20 remain positive - an increase of 2.3% is expected in 2018

It is expected that growth in the US will exceed the forecast of other developed G20 countries - at 2.7% in 2018

• The total volume of retail sales rose 1.1 percent.

• 11 of the 15 retail industries had higher sales volumes.

• Hardware, building, and garden supplies had the largest increase, up 4.7 percent after a subdued 0.6 percent increase in the March 2018 quarter.

• Food and beverage services rose 1.7 percent, rebounding from a 1.0 percent fall in the March 2018 quarter.

• Department stores (up 2.8 percent), and electrical and electronic goods (up 2.0 percent), were the next notable increases.

• Supermarket and grocery stores had the largest fall, down 1.1 percent after a 1.0 percent rise in the March 2018 quarter.

• The fuel industry had a 0.7 percent fall in sales volume, its fourth consecutive quarterly fall.