Summary of the Past Week
US & NORTH AMERICAN Market Weekly Snapshot
Futures on major US indices closed in positive territory for the week. Nasdaq 100 and Dow Jones futures inched up 0.56% and 0.30% this week. S&P 500 futures added 0.11% for the week.
In the Cash Markets, the Nasdaq Composite and the S&P 500 edged up 0.14% and 0.06% respectively on Friday. On the other hand, the DJIA declined 0.25% to 25,106.33. The DJIA and the Nasdaq Composite posted their seventh straight week of gains.
The Wall Street Journal reported on Friday that the two countries have not yet put together a draft on the matters they agree or disagree. The report follows President Trump saying on Thursday that he will not meet with his Chinese counterpart Xi Jinping before the deadline.
According to market sources, President Trump is expected to sign an executive order next week that would ban Chinese telecommunication equipment from U.S. wireless networks.
71.5% of the S&P 500 companies that have reported beat profit estimates, according to IBES data from Refinitiv. According to market sources, earnings for the first quarter of 2019 are expected to contract by more than 1%. If earnings do fall, it will be the first profit contraction for the S&P 500 since the second quarter of 2016.
On the economic front, the Canadian Employment exchange for January released on Friday came in at 66.8K. The Employment Change was above the market expectation of 8K.
In news related to Oil Markets, the Baker Hughes Oil Rig Count also released on Friday came in at 854 for the week ended 8th Feb. The Oil Rig Count was 847 in the previous week.
On the economic front, Initial Jobless Claims for the week ended 2nd Feb released on Thursday came in at 234K. Jobless Claims were 253K in the previous week.
U.S. Treasury Secretary Steven Mnuchin told CNBC on Wednesday that he will be heading to China next week along with a delegation from Washington for more negotiations.
The EIA said in a weekly report on Wednesday that U.S. commercial crude oil inventories rose by 1.263 million barrels for the week ended 1st Feb. The markets had expected that the EIA would report a 2.179 million barrel rise in US crude inventories for the week. Previously, the EIA reported that U.S. crude inventories rose by 0.919 million barrels for the week ended Jan 25.
Tuesday & Monday
U.S. President Donald Trump vowed in his State of the Union speech on Tuesday to build a border wall that is a source of a deep partisan divide and said Democratic attempts at “ridiculous partisan investigations” could damage U.S. prosperity.
On the economic front, the ISM Non-Manufacturing PMI for January released on Tuesday came in at 56.7. The PMI reading was below the median forecast of 57.2.
The API reported on Tuesday that U.S. crude inventories rose by 2.514 million barrels for the week ended Feb 1. Previously, the API reported that U.S. crude supplies rose by 2.098 million barrel for the week ended Jan. 25.
On the economic front, Factors Orders (MoM) for November released on Monday came in at -0.6%. Orders were below the consensus estimates of a growth of 0.3%.
European & Asian-Pacific Weekly Markets Snapshot
Futures on major European indices closed in negative territory for the week. CAC 40 and DAX 30 futures fell 0.58% and 2.10% respectively for the week. On the other hand, FTSE 100 futures rose 1.31% for the week.
European stocks closed lower on Friday amid concerns over U.S.-China trade relations and slowing economic growth.
On the data front, the German Trade Balance for December released on Friday came in at 19.4B. Trade Balance was above the market expectation of 18.1B.
In its quarterly report, the European Union said that Eurozone growth is expected to slow significantly this year because of weakening global trade, the slowdown in China, and uncertainty stemming from Brexit. The EU reduced its 2019 growth forecast to 1.3% from 1.9% and said that it expects growth of 1.6% in 2020. The EU also cut Italy’s growth forecast to the lowest level in five years, citing the populist government’s fiscal policies that led to high borrowing costs and market uncertainty.
The Bank of England left interest rates unchanged at 0.75% and also cut UK growth expectations to 1.2% for the year from 1.7% because of Brexit concerns.
The EU agreed on Thursday to resume Brexit talks in an effort to break the political deadlock. However, leaders have rejected PM Theresa May’s request to reopen the previously completed withdrawal agreement.
Wednesday & Tuesday
On the data front, the German Factory Orders for December released on Wednesday came in at -1.6%. Orders were below the market expectation of a growth of 0.3%.
U.K. Services PMI for January released on Tuesday came in at 50.1. The PMI reading was below the consensus estimates of 51.1.
Futures on major Asia-Pacific indices ended in positive territory for the week. Hang Seng and SPI 200 futures advanced 0.27% and 3.25% respectively for the week. On the other hand, Nikkei 225 futures lost 2.81% for the week.
The Europe-Japan trade deal went into effect in February. The two parties reached a political agreement in July and ratified the deal in December. The deal eliminates Japanese tariffs on about 94% of all imports from the EU, including cheese, wine, beef, and pork. The EU will eliminate tariffs on about 99% of all imports from Japan over time.
On the interest rate front, the Reserve Bank of Australia kept its cash rate unchanged at 1.5% in its interest rate decision on Tuesday.
On the economic front, the Australian Retail Sales (MoM) for December released on Tuesday came in at -0.4%. Sales growth was below the market expectation.
WEEKLY FOREX UPDATE
The US dollar edged higher against a basket of currencies on Friday, ending its strongest week in six months, as investors piled into the greenback in a safe-haven move on fears about a weakening global economy.
The Australian dollar fell sharply on Wednesday after the country’s central bank opened the door to a possible rate cut as it acknowledged growing economic risks.
WEEKLY CRYPTOCURRENCY UPDATE
Bitcoin rose around 4.44% for the week ended on 8th Feb (Friday). Dash added around 9.6% for the week. Ethereum climbed 11% (approx.) for the week.
Top 5 Cryptocurrencies by Market Capitalization on 9th Feb are- Bitcoin, Ethereum, Ripple (XRP), EOS and Litecoin.
In major news within the Cryptocurrency Markets, Opera announced on Wednesday that it now let’s Android users buy ethereum’s ether cryptocurrency directly from its browser-based wallet. For the new service, it has partnered with regulated crypto brokerage Safello to provide the cash-to-crypto exchange.
In other major news, major Saudi Arabian financial news portal Argaam reported on Tuesday that six commercial banks from Saudi Arabia and the UAE have joined a digital currency project. The goal of the project is to use cryptocurrency for financing transactions between Saudi Arabia and the UAE.
WEEKLY COMMODITY MARKET UPDATE
Gold prices rose on Friday as a gloomy global economic outlook dented risk appetite, but a firm dollar stemmed bullion’s advance and kept the metal on track for its first weekly decline in three. Holdings in the world’s largest gold-backed ETF, the SPDR Gold Trust, have dropped more than 1% for the week.
Silver rose about 0.5% on Friday to end the week at $15.740 per ounce. The metal fell 0.69% for the week.
Crude Oil futures edged higher on Friday but ended the week with a loss on renewed concerns about slowing global demand and after the dollar posted its best week in six months. West Texas Intermediate crude futures settled at $52.70 a barrel but recorded a weekly slump of more than 4%, their steepest this year.
The Week Ahead (11th-15th February)
Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin would travel to Beijing for principal-level meetings in the coming week.
Funding for U.S. government is scheduled to expire on Friday.
U.K. Prime Minister Theresa May is expected to deliver update in Parliament on Brexit negotiations on Wednesday. This will be followed by debate in parliament where lawmakers can propose changes.
The German GDP (flash) data for the fourth quarter is scheduled to be released on Thursday. GDP is expected to grow 0.1% on a QoQ basis.
The Reserve Bank of New Zealand’s Interest rate decision is scheduled to come on Wednesday. No change in policy is expected and Interest rates are expected to hold at 1.75%.
The Japanese GDP (flash) data for the fourth quarter is scheduled to be released on Thursday. GDP is expected to grow 0.4% on a QoQ basis.
MAJOR COMPANIES EARNINGS CALENDAR
Monday- CNA Financial, Chegg
Tuesday– Shipify, PG&E
Wednesday– Applied Materials, Cisco Systems
Thursday– Coca-Cola, CBS
Important Economic Releases (11th-15th February)