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US Futures Drift Lower As China Suffers Worst Week Of 2019
US index futures, European stocks and Asian markets all drifted lower following an ugly report from Intel which hit chip stocks, offsetting a surge in Amazon's Q1 profits as investors awaited the release of Q1 US GDP data and earnings season continued apace. Even so, global shares were on track for a fifth weekly gain in a row despite subdued trade, while the dollar retreated from 23-month highs.
Global stocks were largely flat on the day after subdued trading in Asia. MSCI’s All-Country World Index was down less than 0.1% as an unexpected tumble in Japanese industrial production underscored worries over the global expansion.
(always an "unexpectted" result when data shows a decrease in anything)
(Keep a watch on the 10 year T-note too-cap #4)
Looking at the key overnight earnings, another FAANG member showed their teeth after the Wednesday blowout number from FB, when Amazon beat EPS expectations by over $3 and didn’t sacrifice this gain in their revenue print, which came in marginally above expectations. This came as web services revenue increased by over 40% with the company reporting their most profitable quarter ever. Clouds remain on the horizon after the bright earnings, however, as the company warned of a slower Q2. In the pre-market AMZN are trading with gains of 1%.
1,925.18 +22.93 (1.21%)
Pre-Market: 8:28AM EDT
On the flipside, Intel short-circuited and reported shockingly bad earnings guidance despite top and bottom line printing inline with expectations. The hardware maker cut their FY guidance and forecast a weak Q2 as Chinese data centre sales remain soft, as the region is consuming fewer microchips than expected, and follows on from a similar warning sign eschewed from Texas Instruments. As a result of the terrible results INTC is trading with losses of 7% in the pre-market.
Intel Pre-market
53.08 -4.53 (-7.86%)
Pre-Market: 8:27AM EDT
While US stocks continue to trade at all time highs, albeit with dismal volumes suggesting there is little enthusiasm to chase prices here, sentiment in China has turned decidedly for the worse, and Chinese stocks suffered their worst week since October, showing the influence that Beijing’s economic policies still hold over the bull market.
As we previewed on Sunday, markets got a taste of how much equities are worth without the prospect of additional measures that had helped restore $2.3 trillion to share values since January. Shanghai stocks lost 5.6%, the most since October, after the Politburo signaled last Friday it will pare back support for the economy amid evidence of a recovery. China's sovereign bonds, which are rapidly turning into Asia’s worst performers, also slumped.
Market Snapshot
S&P 500 futures down 0.2% to 2,922.00
STOXX Europe 600 down 0.02% to 390.07
MXAP down 0.08% to 162.00
MXAPJ up 0.01% to 537.28
Nikkei down 0.2% to 22,258.73
Topix down 0.2% to 1,617.93
Hang Seng Index up 0.2% to 29,605.01
Shanghai Composite down 1.2% to
3,086.40
Sensex up 0.6% to 38,977.58
Australia S&P/ASX 200 up 0.05% to
6,385.65
Kospi down 0.5% to 2,179.31
German 10Y yield fell 1.3 bps to -0.022%
Euro up 0.08% to $1.1141
Italian 10Y yield rose 5.4 bps to 2.316%
Spanish 10Y yield fell 0.9 bps to 1.082%
Brent futures down 1.1% to $73.56/bbl
Gold spot up 0.4% to $1,282.33
U.S. Dollar Index down 0.1% to 98.11
US Event Calendar
8:30am: GDP Annualized QoQ, est. 2.3%,
prior 2.2%
8:30am: Personal Consumption, est. 1.0%,
prior 2.5%
8:30am: Core PCE QoQ, est. 1.4%, prior
1.8%
10am: U. of Mich. Sentiment, est. 97, prior
96.9; Current Conditions, prior 114.2;
Expectations, prior 85.8
Looking at the full day ahead, this morning the only data of note is more CBI survey data out of the UK. The focus then turns to that Q1 GDP print in the US while the final April University of Michigan consumer sentiment survey revisions follows. Away from that GDP print in the US the other potentially market sensitive event is a meeting between Japanese PM Abe and President Trump at the White House. Russian President Putin is also travelling to China to meet with President Xi Jinping while the earnings highlights include Exxon Mobil, Chevron, Total and Sanofi. Finally, S&P are due to complete their review of Italy’s BBB/Negative credit rating today.
https://www.zerohedge.com/news/2019-04-26/us-futures-drift-lower-china-suffers-worst-week-2019
https://www.bloomberg.com/markets/stocks/futures
https://www.dailyfx.com/crude-oil
https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx
Chevron posts 27 percent fall in quarterly profit, Exxon has similar results too
(how do you do this with oil/gas prices where they are at?)
Gas prices in California are around $4/gal too
(Reuters) - U.S. oil and natural gas producer Chevron Corp reported a 27 percent fall in quarterly earnings on Friday, hit by lower crude prices and weaker margins in its refining and chemicals businesses.
Net income attributable to the company fell to $2.65 billion, or $1.39 per share, for the first quarter ended March 31, from $3.64 billion, or $1.90 per share, a year earlier.
Earlier in the day, larger rival Exxon Mobil Corp reported earnings well below analysts’ estimates, as margins in its refining business were hurt by higher Canadian prices and heavy scheduled maintenance.
https://www.reuters.com/article/us-chevron-results/chevron-posts-27-percent-fall-in-quarterly-profit-idUSKCN1S21CL?il=0
Need moar refinery's that are not "down for maintenance every-time Oil/gas prices go up, big game in California with the taxes and the "winter/summer blends".
AMZN 'up' on those declining rev number's as well. Actual result's do not matter, or at least when you look at how they are achieved. Intel guides down and it's down in pre-market and AMZN did the same thing, effectively, however…….
Amazon.com, Inc. (AMZN)
NasdaqGS - NasdaqGS Real Time Price.
1,937.50 +35.25 (1.85%)
Pre-Market: 9:02AM EDT
Volatile trade, inventories boost U.S. growth to 3.2 percent in first quarter
WASHINGTON (Reuters) - U.S. economic growth accelerated in the first quarter, but the burst in growth was driven by trade and the largest accumulation of unsold goods since 2015, temporary factors that are likely to reverse in the coming quarters.
Gross domestic product increased at a 3.2 percent annualized rate in the first quarter, the Commerce Department said in its advance GDP report released on Friday.
Growth was also boosted by an increase in government investment, which offset sharp slowdowns in consumer and business spending.
Still, the mixed report could further dispel earlier fears of a recession that were stocked by a raft of weak economic data at the turn of the year. Those fears were also exacerbated by a brief inversion of the U.S. Treasury yield curve.
The economy grew at a 2.2 percent pace in the October-December period. Economists polled by Reuters had forecast GDP increasing at a 2.0 percent rate in the first three months of the year. Growth has stepped down from a peak 4.2 percent pace in the second quarter of 2018, when the White House’s $1.5 trillion tax cut package jolted consumer spending.
The economy will mark 10 years of expansion in July, the longest on record.
(I encourage you to look at a long-term chart of the markets and compare the patterns from around 1954-1964 against the time-frame of 2009 and 2019-the patterns are very similar)
of course the events of late 1963 played a part in this however……
Federal Reserve officials are likely to shrug off the surge in growth last quarter and focus on a measure of domestic demand, which increased at only a 1.3 percent rate, the slowest since the second quarter of 2013, after increasing at a 2.6 percent pace in the October-December quarter.
The Fed recently suspended its three-year monetary policy tightening campaign, dropping forecasts for any interest rate hikes this year. The U.S. central bank increased borrowing costs four times in 2018.
Exports surged and imports declined in the first quarter, leading to a small deficit that added 1.03 percentage points to GDP after being neutral in the fourth quarter. Trade tensions between the United States and China have caused wild swings in the trade deficit, with exporters and importers trying to stay ahead of the tariff fight between the two economic giants.
The standoff has also had an impact on inventories, which increased at a $128.4 billion rate in the first quarter, the strongest pace since the second quarter of 2015. Inventories increased at a $96.8 billion pace in the October-December quarter. Part of the inventory build was because of weak demand, especially in the automotive sector, which is expected to weigh on future production at factories.
Inventories contributed 0.65 percentage point to first-quarter GDP after adding one-tenth of a percentage point in the October-December period.
Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, slowed to a 1.2 percent rate from the fourth quarter’s 2.5 percent rate. The moderation in spending reflected a decline in motor vehicle purchases and other goods, likely related to a 35-day shutdown of the federal government. There was also a slowdown in spending on services.
Business spending on equipment braked sharply, rising at only at a 0.2 percent rate, the slowest since the third quarter of 2016. Spending was held down by weak outlays on agricultural machinery and office furniture.
Residential construction fell at a 2.8 percent rate, marking the fifth straight quarterly decline. Government investment rebounded at a 2.4 percent rate, driven by spending at state and local governments.
https://www.reuters.com/article/us-usa-economy/volatile-trade-inventories-boost-u-s-growth-to-3-2-percent-in-first-quarter-idUSKCN1S2091?feedType=RSS&feedName=topNews
sounds exactly like california fren. Too stupid to care and too lazy to notice. At least the censorship is moar subtle here.
for those who don't know a credit default swap is an insurance policy against "asset" failure.
They were so pervasive in the 2008 crash and used so frequently by the owner's of said assets, it was akin to taking an insurance policy out on your neighbor's house, that you owned, and setting it on fire.
See bailout of AIG etc.
remember that incident, got minimal coverage here on the normie outlet's. Have a harder time taking them here imo. I never liked them much until 2008-until it was demonstrated over and over that this was going to be what 'they' did. Also had an attempted break-in so been packing, legally of course, ever since.
Sucks to be us sometimes, wish they were not needed but glad I have.