CFD Markets News and Forecasts — 16-08-2018

Major US stock indices have risen markedly, helped by the high quarterly results of Walmart (WMT) and Cisco (CSCO) and the easing of trade pressure after China and the United States said they would hold talks later this month.

Investors also attracted some attention from the US. The Ministry of Labor reported that for the week of August 11, initial applications for unemployment benefits fell by 2,000, to 212,000. Economists had expected that circulation would rise to 215,000 from 213,000 initially reported over the previous week. The four-week moving average rose to 215,500, which is 1000 more than the previous week (214,500).

Meanwhile, a report from the Ministry of Trade showed that bookings of new houses in July rose by 0.9% to an annual rate of 1.168 million after a fall of -12.9% to a revised rate of 1.158 million in June. Economists expected that the growth of bookmarks to 1,126 million from 1,173 million, originally reported in the previous month. In July, the number of start-ups for single-family houses increased by 0.9% after falling by -9.0% in June, while bookings of multi-family houses increased by 0.7% after falling by -22.3% earlier. The number of building permits rose by 1.5% in July to an annual rate of 1.311 million after a decline of -0.7% to a revised rate of 1.292 million in June. It was expected that construction permits will grow to 1.310 million from 1.273 million,

Most components of the DOW index finished trading in positive territory (26 out of 30). Leader of growth were shares of Walmart Inc. (WMT, + 9.33%). Outsider were shares of Intel Corporation (INTC, -0.61%).

All sectors of S & P recorded a rise. The industrial goods sector grew most (+ 1.2%).

At closing:

Dow 25,558.73 +396.32 +1.58%

S&P 500 2,840.69 +22.32 +0.79%

Nasdaq 100 7,806.52 +32.41 +0.42%

U.S. stock-index futures rose on Thursday, supported by a set of upbeat earnings reports and news that trade talks between China and the U.S. would be resumed later this month.

Global Stocks:

Growth in regional manufacturing activity slowed in August, according to results from this month's Manufacturing Business Outlook Survey. All the broad indicators remained positive but fell from their readings in July. The survey's respondents continued to indicate price increases for purchased inputs and their own manufactured products, but these price indexes moderated slightly this month. Expectations for the next six months remained optimistic, with most broad future indicators showing improvement.The diffusion index for current general activity decreased 14 points this month to 11.9, its lowest reading in 21 months.

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

Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,311,000. This is 1.5 percent above the revised June rate of 1,292,000 and is 4.2 percent (±1.7 percent) above the July 2017 rate of 1,258,000. Single-family authorizations in July were at a rate of 869,000; this is 1.9 percent above the revised June figure of 853,000. Authorizations of units in buildings with five units or more were at a rate of 410,000 in July.

Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,168,000. This is 0.9 percent above the revised June estimate of 1,158,000, but is 1.4 percent below the July 2017 rate of 1,185,000. Single-family housing starts in July were at a rate of 862,000; this is 0.9 percent above the revised June figure of 854,000. The July rate for units in buildings with five units or more was 303,000.

In the week ending August 11, the advance figure for seasonally adjusted initial claims was 212,000, a decrease of 2,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 213,000 to 214,000. The 4-week moving average was 215,500, an increase of 1,000 from the previous week's revised average. The previous week's average was revised up by 250 from 214,250 to 214,500.

United Technologies Corp. (UTX) initiated with Buy at UBS

Boeing (BA) upgraded to Buy from Neutral at UBS; target $515

Wal-Mart (WMT) reported Q2 FY 2019 earnings of $1.29 per share (versus $1.08 in Q2 FY 2018), beating analysts' consensus estimate of $1.22.

The company's quarterly revenues amounted to $127.059 bln (+4.2% y/y), beating analysts' consensus estimate of $124.666 bln.

The company also raised FY 2019 EPS guidance to $4.90-5.05 from prior guidance of $4.75-5.00 (versus analysts' consensus forecast of $4.80) and the U.S. comparable sales growth guidance to +~3% y/y from prior guidance of + 2% y/y.

WMT rose to $98.70 (+9.40%) in pre-market trading.

Cisco Systems (CSCO) reported Q4 FY 2018 earnings of $0.70 per share (versus $0.61 in Q4 FY 2017), beating analysts' consensus estimate of $0.69.

The company's quarterly revenues amounted to $12.844 bln (+5.9% y/y), generally in line with analysts' consensus estimate of $12.762 bln.

The company also issued upside guidance for Q1 FY 2019, projecting EPS of $0.70-0.72 (versus analysts' consensus estimate of $0.69) and revenues of ~$12.74-13.0 bln (versus analysts' consensus estimate of $12.58 bln).

CSCO rose to $46.76 (+6.61%) in pre-market trading.

The Turkish lira is enjoying a rebound after the central bank and regulators introduced measures to stabilise the currency and Qatar promised $15bn in foreign direct investment, but the calm "will likely prove temporary," says Capital Economics. "This is a good time to recapitulate what exactly is at stake for the private sector as the lira depreciates continuously, every year. It has sometimes been suggested that lira depreciation doesn't really matter in Turkey because it helps exporters and, on the other hand, the electorate have long got used to high inflation," it says. - via WSJ

The first estimate for euro area (EA19) exports of goods to the rest of the world in June 2018 was €198.6 billion, an increase of 5.7% compared with June 2017 (€187.9 bn). Imports from the rest of the world stood at €176.1 bn, a rise of 8.6% compared with June 2017 (€162.2 bn). As a result, the euro area recorded a €22.5 bn surplus in trade in goods with the rest of the world in June 2018, compared with +€25.7 bn in June 2017. Intra-euro area trade rose to €170.7 bn in June 2018, up by 7.1% compared with June 2017.

In January to June 2018, euro area exports of goods to the rest of the world rose to €1 124.6 bn (an increase of 3.1% compared with January-June 2017), while imports rose to €1 023.8 bn (an increase of 3.8% compared with January-June 2017). As a result the euro area recorded a surplus of €100.7 bn, compared with +€103.7 bn in January-June 2017. Intra-euro area trade rose to €980.6 bn in January-June 2018, up by 5.5% compared with January-June 2017.

In July 2018, the quantity bought increased by 0.7% when compared with the previous month, recovering from a decrease of 0.5% in June 2018.

When compared with the same month a year earlier, the quantity bought in July 2018 increased by 3.5% when compared with the slower growth of 1.1% in July 2017.

The quantity bought in non-store retailing showed strong growth both on the month and year-on-year at 4.9% and 16.9% respectively.

Feedback from non-store retailers suggested that online promotions further encouraged sales, while non-food stores reported a reduction in footfall in July 2018.

Spending online continued to increase to reach a new record proportion of all retailing at 18.2% in July 2018; with strong growth in department stores also reaching a record proportion at 18.2%.

Japan posted a merchandise trade deficit of 231.2 billion yen in July, according to rttnews.

That was shy of expectations for a shortfall of 41.2 billion yen following the downwardly revised 720.8 billion yen surplus in June (originally 721.4 billion yen).

Exports were up 3.9 percent on year to 6.747 trillion yen, missing expectations for a gain of 6.3 percent and down from 6.7 percent in the previous month.

Exports to all of Asia climbed 8.0 percent on year to 3.774 trillion yen, while exports to China alone jumped 11.9 percent to 1.355 trillion yen.

Exports to the United States fell 5.2 percent to 1.250 trillion yen, while exports to the European Union advanced 6.4 percent to 766.848 billion yen.

Imports surged an annual 14.6 percent to 6.978 trillion yen versus forecasts for 14.2 percent following the upwardly revised 2.6 percent gain a month earlier (originally 2.5 percent).

The trend unemployment rate was 5.4% in the month of July 2018, according to latest figures released by the Australian Bureau of Statistics (ABS) today.

"Over the year to July, the unemployment rate declined by 0.2 percentage points. This continues the gradual decrease in the trend unemployment rate from late 2014 and is the lowest it has been since 2012," said the Chief Economist for the ABS, Bruce Hockman.

Trend employment increased by around 27,000 persons in July 2018 with full-time employment increasing by over 18,000 persons.

The trend participation rate remained steady at 65.5 per cent in July 2018, after the June figure was revised down.

Over the past year, trend employment increased by around 300,000 persons or 2.4 per cent, which was above the average year-on-year growth over the past 20 years (2.0 per cent).

The trend monthly hours worked increased by 0.2 per cent in July 2018 and by 1.9 per cent over the past year.

As reported by the Federal Statistical Office, the selling prices in wholesale trade increased by 3.5% in July 2018 from the corresponding month of the preceding year. In June 2018 and in May 2018 the annual rates of change were +3.4% and +2.9%, respectively.

From June 2018 to July 2018 the index did not change.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1477 (1287)

$1.1454 (771)

$1.1435 (275)

Price at time of writing this review: $1.1384

Support levels (open interest**, contracts):

$1.1334 (10534)

$1.1317 (4591)

$1.1296 (6549)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date September, 7 is 136718 contracts (according to data from August, 15) with the maximum number of contracts with strike price $1,1500 (10534);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2929 (754)

$1.2858 (337)

$1.2804 (133)

Price at time of writing this review: $1.2727

Support levels (open interest**, contracts):

$1.2680 (3175)

$1.2651 (1292)

$1.2630 (1938)

Comments:

- Overall open interest on the CALL options with the expiration date September, 7 is 34886 contracts, with the maximum number of contracts with strike price $1,2950 (3446);

- Overall open interest on the PUT options with the expiration date September, 7 is 32683 contracts, with the maximum number of contracts with strike price $1,2900 (3175);

- The ratio of PUT/CALL was 0.94 versus 0.92 from the previous trading day according to data from August, 15.

* - 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.