CFD Markets News and Forecasts — 27-11-2018

Major US stock indexes rose slightly, as the rise in prices for Microsoft Corporation's shares helped win back the morning losses due to Trump's statements about the possible introduction of additional tariffs on Chinese imports, which cast doubt on the likelihood of a quick resolution of the trade conflict with China.

Recall, in an interview with the Wall Street Journal, Donald Trump stated that it is “extremely unlikely” that he will accept China’s proposal not to raise duties on Chinese imports worth $ 200 billion from the current 10% to 25%. Moreover, he announced the possible imposition of additional duties in the amount of $ 267 billion if the deal with China is not concluded during negotiations with the Chinese leader at the G20 summit, which will be held November 30 - December 1 in Buenos Aires, Argentina. "I intend to additionally introduce duties on goods worth $ 267 billion if the transaction is not concluded," at a rate of 10% or 25%, he said.

Comments by the Deputy Chairman of the Federal Reserve, Clarida also helped the stock market recover from its morning decline. Clarida said that the Central Bank is “much closer” to a neutral rate than it was in December 2015, when the Fed decided for the first time since the financial crisis to raise interest rates.

The focus of investors was also the Conference Board report on consumer confidence in the United States. According to the report, the American consumer confidence index fell in November after it registered an improvement in October. The index now stands at 135.7 (1985 = 100), compared with 137.9 in October. The current situation index rose from 171.9 to 172.7, and the expectations index fell from 115.1 last month to 111.0 this month.

Most of the components of DOW finished trading in positive territory (22 out of 30). The growth leader was Verizon Communications (VZ, + 2.55%). Outsider were United Technologies Corp. (CVX, -4.14%).

Most of the S & P sectors have shown a boost. The growth leader was the utility sector (+ 0.7%). The conglomerate sector dropped the most (-1.0%).

• Gain in Workforce Productivity and Hours Worked Could Explain Strong Growth With Modest Inflation

• While Demand Is Exceeding Long-Term Expected Growth Rate, It Is Not Currently Exceeding Growth in Supply

• Recent Developments Indicate Potential to Increase Labor-Force Participation

• Productivity Growth Rebound Is Hard to Forecast, but Cyclical and Structural Forces Likely Are at Work

• Recent Weakness in Business Investment Bears Attention if Productivity Gains Will Be Sustainable

• Robust Labor Market and Inflation at Target Requires Careful Reading of Incoming Economic Data

U.S. stock-index futures fell on Tuesday, as the latest comments of the U.S. President Donald Trump cast doubt about a deal being struck on U.S.-China trade.

Global Stocks:

• Job Gains Have Delivered Positive Economic Surprises for Two Years

• U.S. Economic Fundamentals Are Robust

• Labor Market Remains Healthy

• Expect Inflation to Hold Near Fed's 2% Target

• Nominal Wage Growth Is Ticking

• Market-Based Gauges of Future Prices Show Inflation May Be Running Below 2%

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.5% annual gain in September, down from 5.7% in the previous month. The 10- City Composite annual increase came in at 4.8%, down from 5.2% in the previous month. The 20-City Composite posted a 5.1% year-over-year gain, down from 5.5% in the previous month.

Las Vegas, San Francisco and Seattle reported the highest year-over-year gains among the 20 cities. In September, Las Vegas led the way with a 13.5% year-over-year price increase, followed by San Francisco with a 9.9% increase and Seattle with an 8.4% increase. Four of the 20 cities reported greater price increases in the year ending September 2018 versus the year ending August 2018.

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

Walt Disney (DIS) upgraded to Outperform at Imperial Capital; target raised to $129

In their 2019 outlook released Tuesday, Credit Suisse analysts said the Swiss National Bank is "likely to remain on hold until the ECB starts to raise rates," and that the ECB won't start until the second half of next year. That's a reversal from June, when Credit Suisse expected the SNB to raise rates in the first quarter of 2019, before the ECB. "We underestimated the caution of the SNB," said Credit Suisse's chief economist Oliver Adler, explaining the reason for this change. The euro last trades at 1.1314 Swiss francs, little changed from Monday. - via WSJ

The survey of 104 firms, of which 47 were retailers, showed sales volumes grew at a pace broadly in line with the long-run average in the year to November. Retailers expect sales volumes to expand at a roughly similar pace in the year to December. Orders placed on suppliers recovered in the year to November, following a fall in October, and are expected to grow at a similar pace next month. However, sales remained below average for the time of year, although to a lesser degree than last month.

Federal Reserve officials are moving into a more unpredictable phase of policy-making after two years of removing economic stimulus in regular, quarterly intervals.

They will be deciding whether and when to raise interest rates more on the basis of the latest signs of economic vigor -- such as in inflation, unemployment and growth -- and less on forecasts of how the economy is expected to perform in the months and years to come, they've indicated in interviews and public comments.

This could mean increased uncertainty for markets about the likely path of interest rates more than a few months or even weeks ahead.

• Shares to Begin Trading Tomorrow on the TSX and NYSE on a Postconsolidated Basis

• Return of Capital Transaction Includes Distribution of $4.45 in Cash Per Common Share, or About $2.3B in the Aggregate

• Return of Capital Transaction Also Includes Consolidation of Outstanding Common Shares (or Reverse Stock Split) at a Ratio of 1 Preconsolidated Share for 0.9079 Postconsolidated Share

• Following the Return of Capital Transaction, the Company Will Have Returned Approximately $9.8 Billion of Deal Proceeds

• Company Plans to Complete the Return of Proceeds Later This Year Through the Repurchase of Approximately $200 Million of Its Shares Under Its Normal Course Issuer Bid

With regard to the individual components, the economic, current and future components diminished from 137.2 to 131.7, from 112.5 to 111.5 and from 121.4 to 118.9 respectively. The personal component slightly improved, passing from 108.7 to 108.9. The balance concerning expectations on unemployment grew from 13.4 to 22.5; while both the one regarding perceptions on inflation for the last 12 months and the one regarding expectations on inflation for the next 12 months lowered from -1.3 to -4.6 the former, and from -0.8 to -2.2, the latter.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1435 (2325)

$1.1409 (2380)

$1.1385 (919)

Price at time of writing this review: $1.1321

Support levels (open interest**, contracts):

$1.1294 (2518)

$1.1262 (4185)

$1.1227 (4635)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date December, 7 is 123742 contracts (according to data from November, 26) with the maximum number of contracts with strike price $1,1200 (5657);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2941 (1370)

$1.2898 (630)

$1.2869 (288)

Price at time of writing this review: $1.2771

Support levels (open interest**, contracts):

$1.2731 (1252)

$1.2704 (1935)

$1.2674 (1117)

Comments:

- Overall open interest on the CALL options with the expiration date December, 7 is 58021 contracts, with the maximum number of contracts with strike price $1,3500 (4734);

- Overall open interest on the PUT options with the expiration date December, 7 is 46469 contracts, with the maximum number of contracts with strike price $1,2500 (4460);

- The ratio of PUT/CALL was 0.80 versus 0.81 from the previous trading day according to data from November, 26

* - 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.

A negative start to trading on the stock markets of Europe is expected, although quotes on the APR markets show mixed dynamics. European stock futures show a slightly softer tone as investors are wary before the start of the G20 summit in Argentina this week.

Bitcoin slumped 6% Monday, continuing a steep slide and bucking a modest rebound in stocks and oil.

"Bitcoin's value is always driven by the intensity of demand and supply, " says Edith Yeung, a partner at 500 Startups, an early-stage venture fund. "If the miners stop mining, bitcoin will not function...and the overall market will lose confidence. If there is no confidence, people will freak out and sell even more."

• The 10-year Treasury note yield was up 2.5 basis points to 3.070%, its biggest one-day rise since Nov. 2. The 2-year note yield, sensitive to shifting expectations for Fed interest rates, picked up 2.3 basis points to 2.837%, while the 30-year bond yield added 1.5 basis points to 3.320%. Bond prices move in the opposite direction of yields

• If no deal, U.S. will impose tariffs on all Chinese imports

• iPhones may be hit with 10% tariffs

• Messaggero Italy PM Conte Sees Eu3.6b Of Budget Cuts

October 2018 monthly values are actual and compared with October 2017.

• Goods exports rose $303 million (6.6 percent) to $4.9 billion.

• Goods imports rose $758 million (14 percent) to $6.2 billion. This is the highest imports value ever.

• The monthly trade balance was a deficit of $1.3 billion (27 percent of exports).

Fruit led the export rise, up $118 million (137 percent) to $204 million. Kiwifruit was up sharply in both value (up $112 million to reach $165 million) and quantity (190 percent) due to October typically being a low month for kiwifruit exports:

• green kiwifruit was up $71 million

• gold kiwifruit up $41 million.

Meat and edible offal rose $74 million (20 percent) to $450 million; quantity was up 12 percent.

Petroleum and products (other than crude) rose $50 million (43 percent) to $72 million; quantity was up 72 percent.

Milk powder, butter, and cheese fell $43 million (3.3 percent) to 1.2 billion. Quantity fell 6.3 percent. Milk powder led this fall (down $45 million or 6.8 percent). Quantity was down 12 percent.