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Wed, 22nd February 2017

Anirudh Sethi Report

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Archives of “Gain” Tag

Overnight US Market :Dow closed -43 points.

Stocks ended mixed Thursday as retailers dominated the news with Macy’s and Kohl’s both plunging following weak holiday-season reports that led the chains to cut their profit forecasts.

Still, the Nasdaq composite’s modest gain of 11 points, or 0.2%, was enough to notch a new all-time high. Settling at at 5487.94, it topped the old record by half a point.

The Dow Jones industrial average finished down 43 points, a 0.2% decline to 19,899.29. Losing 0.1% was the S&P 500, which settled at 2269 even.

nvestors were also focusing on upcoming U.S. jobs data following the publication of the minutes to the Federal Reserve’s last board meeting.

Private U.S. companies added 153,000 jobs in December, according to payroll processor ADP. That total was a bit lower than analysts expected and slightly slower than the pace of hiring for the rest of 2016. The government will issue its own hiring report on Friday.

Overnight US Market :Dow closed -57 points.Now 237 points short of 20k

Stocks sank on the last trading day of 2016, with the Dow now 237 points short of the 20,000 milestone that it came closest to hitting on Dec. 20.

It was merely a weak end to a very strong year, however, with the S&P 500 gaining 9.5% and the small-company Russell 2000 jumping 19.5% for 2016.

For the day, the Dow Jones industrial average lost 0.3%, off 57 points to 19,762.60. But for 2016, the blue chips gained 13.4%.

The S&P 500 ended 0.5% lower for the day, while the Nasdaq composite fell 0.9%

Global stocks mostly rose on the year’s last day of trading, with Britain’s index rallying to hit another all-time high. The FTSE 100, which was trading for only a half day, rose 0.3%. That leaves the index 14.4% higher over 2016. Elsewhere in Europe, Germany’s DAX rose 0.3%, while France’s CAC 40 gained 0.5%.

Overnight US Market :Dow closed +40 points.

Stocks capped off a strong week of gains with the Dow closing at a another new record high as investors’ fears about Donald Trump’s upset election win gave way to hopes the president-elect’s policies could boost the economy.

Bullishness about how expected increased government deficit spending could help boost economic growth pushed the Dow Jones industrial average up nearly 1,000 points to a record 18,848 during the week. That 5.4% one-week gain, was the best since a 7% weekly gain in November 2011. The broader Standard & Poor’s 500 gained 3.8% during the week, the best weekly showing since rising 4.1% during a week in October 2014. Tech stocks were relative laggards, as the tech-heavy Nasdaq 100 was 1.9% higher on the week, but fell 1.1% since the election.

Stocks rose for five straight days in a volatile week that saw investors initially boost stocks on the conventional wisdom that Democratic presidential nominee Hillary Clinton would win the election. But as election results came in on Tuesday and it became clear Republican nominee Donald Trump was winning, stocks plunged overnight with Dow futures tumbling almost 800 points, on fears of what an unknown Trump presidency would bring.

But investors quickly shook off fears about a Trump presidency and focused on some of the policy changes that might be beneficial to financial markets, including tax cuts, a reduction on regulation and increase in infrastructure spending.  The Dow ended up posting two straight days of 200-plus gains  and smashed through its previous record close. Friday, the Dow Jones industrial average rose 39.78 points, or 0.2%, to close at record 18,847.66. The Nasdaq composite index gained 28.32 points, or 0.5% to 5237.11. The Standard & Poor’s 500 index dipped slightly Friday as it fell 3.03 points, or 0.1%, to close at 2164.45.

Overnight US Market :Rally continue for 2nd Day.Dow closed up 73 points.

Coming off its biggest stock market rally in eight months, Wall Street added to the gains on Election Day as Americans hit voting booths and investors wait to see who will be the next president of the United States.

At the 4 p.m. ET close, the Nasdaq stood 0.5% higher on the day. The Dow closed up 73 points, a 0.4% climb. The S&P 500 also gained 0.4%.

Tuesday marked the Dow’s best two-day gain since a 520-point jump on June 28-29. The S&P 500’s two-day gain of 2.6% wipes out much of the 3.1% drop registered by its previous, nine-session losing streak.

Investors began the trading day cautiously but stocks pushed ahead at midday and jumped higher, a day after the Dow Jones industrial average closed up 371 points and the broad stock market snapped its longest losing streak in 36 years after FBI director James Comey said the agency is not recommending criminal charges against Democratic nominee Hillary Clinton over her emails. Investors interpreted the FBI decision as boosting Clinton’s chance to win the tight election race with Republican challenger Donald Trump as well as clearing a legal hurdle for Clinton in the event that she does prevail on Election Day.

What 10 major banks are expecting from the NFP data today

US Non Farm Payrolls coming out at 12.30 GMT

Goldman Sachs: The week ends with the October US employment report, which we expect to show that the US economy added 185kjobs last month, 4.9% on the unemployment rate and 0.3% on average hourly earnings.

BofA Merrill: We look for nonfarm payroll growth of 170,000 in October, in line with the recent 6- month trend and up from 156,000 in September. We expect private payroll growth to have constituted 165,000 of this gain with a modest 5,000 gain in government payrolls. Our equity analysts have only seen mixed signals related to holiday hiring so far, but there have been some news reports of stronger seasonal hiring, presenting upside risk to our forecast. The underlying rate of job growth should remain robust based on our forecast for October and especially given the possibility of an upward revision to September jobs. As we argued in Nonfarm payrolls myths and realities, there tends to be a pattern of upward revisions to September in the order of about 30,000 jobs. We expect the unemployment rate to remain unchanged at 5.0% with the labor force participation rate holding at 62.9%. The labor force participation rate will be an important indicator to watch given the 0.1pp increase last month. We expect a trend-like 0.2% mom gain in average hourly earnings, leaving the year-over-year rate to fall to 2.5% from 2.6%, and we think average weekly hours will remain unchanged at 34.4.

Barclays: we look for nonfarm payrolls to rise by 175k. We expect 165k of these gains to come from the private sector – in particular, service-providing employers – with government payrolls adding the remaining 10k. Elsewhere in the report, we expect the unemployment rate to decline by one-tenth, to 4.9%, average hourly earnings to rise by 0.3% m/m and 2.6% y/y, and the average workweek to remain unchanged at 34.4 hours. On balance, overall job growth of 175k would confirm ongoing strength in the labor market. The increase in payrolls, combined with the ongoing improvement in wages, should boost household income and keep consumption on track. We also believe at these numbers employment growth is sufficient to keep the Fed on track for a December rate hike.

Overnight US Market :Dow closed -17 points

U.S. stocks closed flat Friday, but the broad market still finished the week higher, snapping its weekly losing streak at two, with the market swinging up and down as good earnings reports from some companies were offset by others that fell short of Wall Street forecasts.

On Friday, the broad Standard & Poor’s 500 stock index fell less than 1 point, or virtually unchanged to 2141.16, but still finished the week up 0.4%. The Nasdaq composite also posted gains this week, rising 0.8% after a nearly 16-point gain to 5257.40. The Dow Jones industrial average also finished the week fractionally higher despite tumbling 16.64 points Friday to 18,145.71.

The past week on Wall Street was dominated by the first big onslaught of third-quarter profit reports, with Wall Street cheering better-than-expected reports from well-known blue chip companies like Microsoft and McDonalds, a trio of beats from financial giants American Express (AXP), Morgan Stanley (MS) and Goldman Sachs (GS), and video streaming service Netflix (NFLX).

Those earnigns “beats,” however, were dimmed by less-robust results from Verizon (VZ), which reported disappointing wireless subscription gains, chip maker Intel (INTC), which lowered its full-year profit outlook, and a “miss” from conglomerateGeneral Electric (GE).

Overnight US Market :Dow closed +75 points

The up and down U.S. stock market rose on Tuesday as investors react to earnings beats from companies in the financial and tech sector.

The Dow Jones industrial average rose 75 points, or 0.4%, to 18,162. The Standard & Poor’s 500stock index gained 13, or 0.6%, to 2140 and the Nasdaq composite jumped 44, or 0.9%, to 5244.

In the past six trading sessions, the Dow has alternated between gains and losses, including a loss Monday of 52 points. Traders have been unwilling to make big bets on stocks as the bulk of the third-quarter earnings season is still ahead, election uncertainty persists and the threat of an interest rate hike from the Federal Reserve later this year looms. Also giving investors pause is concern over the fallout of Britain’s decision to exit the European Union and persistent worries about overvaluation in both U.S. stock and bond markets.

Still, despite the fact that the S&P 500’s earnings have contracted for four straight quarters and are at risk of a fifth quarter of negative growth, profit reports have come through relatively strong early in the third-quarter reporting season, raising hopes that the so-called earnings recession is near its end.

Overnight US Market :Dow Closed up 211 points ,S&P 500 up 2%

Wall Street stocks scored a second day of gains Friday after a steep sell-off earlier in the week as oil prices bounced sharply higher and investors bank on further stimulus measures from global central banks helping to offset some of the financial pain felt early in 2016.

The Dow Jones industrial average gained 211 points, or 1.3%, to 16,094, building on Thursday’s 116-point gain. The two days of gains trimmed the Dow’s year-to-date loss to 7.6%. The Standard & Poor’s 500 index was up 2.0% and the Nasdaq composite surged 2.7%. It was the first time this year that the benchmark S&P 500 was in the green for the entire trading day, according to Bespoke Investment Group.

Powering Day 2 of the rebound was a big rally in the oil patch, where a barrel of U.S.-produced crude was up more than 8% and back above $32 a barrel. Plunging crude prices, of course, have weighed on stocks this year, as it has raised fears of a coming global slowdown and worries that bankruptcies and upheaval in the oil sector would exacerbate financial tumult.

The stock rally was jump-started Thursday when the European Central Bank strongly hinted that more stimulus would be forthcoming at its March meeting. That news raised hopes that central bankers around the world would do what they can to offset some of the massive volatility that has engulfed markets so far in 2016. Many critics, however, blame all the stimulus from the world’s central banks over the past few years for overinflating asset values and setting the market for a comeuppance, which they say we are starting to see now.

The Most Surprising Thing About Today’s Jobs Report

After several months of weak and deteriorating payrolls prints, perhaps the biggest tell today’s job number would surprise massively to the upside came yesterday from Goldman, which as we noted earlier, just yesterday hiked its forecast from 175K to 190K. And while as Brown Brothers said after the reported that it is “difficult to find the cloud in the silver lining” one clear cloud emerges when looking just a little deeper below the surface.

That cloud emerges when looking at the age breakdown of the October job gains as released by the BLS’ Household Survey. What it shows is that while total jobs soared, that was certainly not the case in the most important for wage growth purposes age group, those aged 25-54.

As the chart below shows, in October the age group that accounted for virtually all total job gains was workers aged 55 and over. They added some 378K jobs in the past month, representing virtually the entire increase in payrolls. And more troubling: workers aged 25-54 actually declined by 35,000, with males in this age group tumbling by 119,000!