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TradeTheNews.com US Market Update: Equity Consolidation Continues
Thu, 12 Jun 2014 11:21 AM EST
***Economic Data***
- (ZA) South Africa Apr Mining Production M/M: +7.9%-4.9%e; Y/Y: +0.2% v
-7.0%e; Gold Production Y/Y: -4.5% v -2.7% prior
- (PT) Portugal May CPI M/M: -0.1% v +0.1%e; Y/Y: -0.4% v -0.2%e
- (PT) Portugal May CPI EU Harmonized M/M:0.1% v 0.1%e; Y/Y: -0.3% v -0.3%e
- (IE) Ireland May CPI M/M: 0.0% v 0.1% prior; Y/Y: 0.4% v 0.3% prior
- (IE) Ireland May CPI EU Harmonized M/M: 0.0% v 0.3% prior; Y/Y: +0.4% v -0.1%
prior
- (IL) Israel May Trade Balance: -$1.6B v -$1.5B prior
- (IN) India May CPI Y/Y: 8.3% v 8.4%e
- (IN) India Apr Industrial Production Y/Y: 3.4% v 1.9%e
- (BR) Brazil Apr Retail Sales M/M: -0.4% v -0.1%e; Y/Y: 6.7% v 6.2%e; Broad
Retail Sales Y/Y: 0.0% v +1.1%e
- (US) May Advance Retail Sales M/M:
0.3% v 0.6%e; Retail Sales Ex Auto M/M: 0.1% v 0.4%e; Retail Sales Ex Auto and
Gas: 0.0% v 0.4%e; Retail Sales Control Group: 0.0% v 0.4%e
- (US) May Import Price Index M/M: 0.2% v 0.2%e; Y/Y: 0.4% v 0.5%e
- (US) Initial Jobless Claims: 317K v
309Ke; Continuing Claims: 2.614M v 2.63Me
- (CA) Canada Q1 Capacity Utilization Rate: 82.5% v 82.4%e
- (CA) Canada Apr New Housing Price Index M/M: 0.2% v 0.2%e; Y/Y: 1.6% v 1.6%
prior
- (CA) Canada May Teranet/National Bank HPI M/M: 0.8% v 0.5% prior; Y/Y: 4.6% v
4.9% prior; House Price Index: 162.50 v 161.28 prior
- (US) Apr Business Inventories: 0.6% v 0.4%e
- (US) Weekly EIA Natural Gas Inventories: +107 bcf v +109-113 bcf expected
range
- The Dow Transports are leading US markets lower this morning as crude jumps
two bucks and investors eye the situation in Iraq with growing concern. As of
writing, the DJIA id down 0.29%, the S&P500 is down 0.36% and the Nasdaq is
off 0.30%.
- The May retail sales numbers were
soft, with m/m sequential growth much weaker than expected even as the
annualized figure slightly topped expectations. Ex autos and the control
figure (which is used to calculate GDP) were flat, disappointing expectations
for a modest gain. Note however that the
April figures were revised much higher.
- The security situation is decaying rapidly in Iraq. In the north, the Kurds moved to seize Kirkuk and its oil
fields after the city was abandoned by Iraqi armed forces. Reportedly
the Kurds have long coveted the city and its crude resources. Tikrit has
changed hands several times, and Iraqi government forces manage to start
putting up some resistance as ISIS gets closer to Bagdad. Fighting seems to be
ongoing around the refinery town of Baiji. The US State Department indicated that it was prepared to begin providing
assistance to Iraq, however reports in the New York Times also suggested that
the Obama Administration has over recent months rejected requests by Iraq to
bomb ISIS camps. Finally, there have also been reports that Iran is
beginning to send small units to Iraq to bolster the government's defenses. WTI crude is very close to breaking above
$106, two bucks above yesterday's level. Trading volume is nearly twice
average levels. Spot gold is up 1%, at two-week highs.
- Airlines have seen very turbulent
trading yesterday and today, thanks to several negative factors. Late on
June 10th, the World Bank cut global growth forecasts, warning that while the
developed world recovery is on track, the BRICs nations are a source of
weakness. On June 11th, Germany's Lufthansa cuts its FY14 profit forecast to
€1.0B from the €1.3-1.5B outlook offered at the beginning of May. The worsening
situation in Iraq meanwhile continues to drive up crude prices. United fell ~5%
on yesterday's session while the other majors fell 2-3% a piece. This morning
American was down as much as 7%, Delta fell 5% while other majors were down 4%.
- Shares of hot exercise apparel name
Lululemon are out of breath this morning, down more than 15% on weak guidance
with first quarter results. The firm modestly topped expectations in its
Q1, but Q2 earnings and revenue forecasts missed and the company said comps
would remain in negative territory. It also cut its FY14 forecast. Multiple
analysts cut ratings on the firm.
- Another couple of hot, small-cap biotechs are up big this morning. Onconova Therapeutics is up nearly 15% as
investors await feedback for the company from the FDA on its rigosertib MDS
treatment. Competitor and fellow MDS drug developer Sunesis Pharma is up more
than 10%.
***Looking Ahead***
- FIFA World Cup begins in Brazil
- (UK) Chancellor George Osborne annual Mansion House speech
- 13:00 (US) Treasury to sell $13B in 30-Year Bonds Reopening
- 14:00 (UK) BOE gov Carney with Chancellor Osborne at Mansion House dinner
- 18:00 (CL) Chile Central Bank Interest Rate Decision: Expected to leave
Overnight Rate Target unchanged at 4.00%
- 19:00 (PE) Peru Central Bank Interest Rate Decision: Expected to leave
Reference Rate unchanged at 4.00%
- (CO) Colombia Central Bank's Economists Survey
- (JP) Bank of Japan (BOJ) Interest
Rate Decision
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