|Day's range||23,127.74 - 23,201.18|
|52-week range||18,948.58 - 23,591.09|
(Bloomberg) -- Asian stocks saw a muted start to trading Friday as traders awaited further updates on a partial U.S.-China trade deal. Treasuries pared overnight gains.Stocks ticked higher in Japan and Australia and dipped in South Korea. Earlier, the S&P 500 eked out its third gain in a row, but continued to trade under records reached over the last week with technology stocks underperforming. U.S. economic data gave traders few reasons to change bets, with the focus now on Friday’s retail sales figures. The yen gave up some of Thursday’s gains.Investors looking for a trade resolution are still awaiting news of a signing date and location for a U.S.-China phase-one deal that’s been on the cards for weeks. White House economic adviser Larry Kudlow was reported saying the U.S. is “getting close’ to a deal. Meanwhile gloomy figures out of Asia are serving as a reminder of the impact the ongoing trade tensions are having on the global economy, and traders continue to eye the ongoing unrest in Hong Kong.Elsewhere oil fluctuated after a government report showed American inventories rose.Here are some key events coming up this week:U.S. retail sales on Friday are forecast to rebound in October after unexpectedly falling the prior month.These are the main moves in markets:StocksJapan’s Topix Index rose 0.2% as of 9:07 a.m.Korea’s Kospi fell 0.2%.The S&P/ASX 200 rose 0.4%.S&P 500 futures were little changed. The S&P 500 Index rose 0.1%.CurrenciesThe Bloomberg Dollar Spot Index was flat.The Japanese yen fell 0.1% to 108.52 per dollar after increasing 0.4% Thursday.The offshore yuan was little changed at 7.0177 per dollar.The euro gained was little changed at $1.1022.The British pound was steady at $1.2881.BondsThe yield on 10-year Treasuries rose one basis point to 1.83% after falling about seven basis points Thursday.Australia’s 10-year bond fell 0.3% to 1.14%.CommoditiesWest Texas Intermediate crude rose 0.3% to $56.95.Gold fell 0.1% to $1,469 an ounce.\--With assistance from Randall Jensen.To contact the reporter on this story: Cormac Mullen in Tokyo at email@example.comTo contact the editor responsible for this story: Christopher Anstey at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- U.S. stocks edged higher, stalling below all-time highs as investors remained skittish about whether the U.S. and China will be able to hash out a partial trade deal. The dollar and Treasuries rose.The S&P 500 eked out its second straight gain, treading just under its record reached as part of a more than 7% rally since the start of October, fueled by trade hopes, waning recession fears and rate cuts. Tech shares gyrated after a report said farm purchases have become another of several issues in negotiations between the world’s two largest economies. The Dow Jones Industrial Average reached a record as Walt Disney Co. surged following the debut of its streaming service.The 10-year Treasury yield fell the most in more than a week, while the dollar rose for the seventh time in eight sessions to the highest in a month. The yen advanced along with gold. West Texas crude rose to $57 a barrel.“There was a mild optimism in the market today fueled by hopefulness about the consumer. On the other hand, the whole trade tariff thing doesn’t seem to be any closer to a resolution,” said John Carey, portfolio manager at Pioneer Investment Management Inc. “That uncertainty is still out there, but at this point people have gotten used to that uncertainty. A continued non-resolution isn’t a new negative, it’s just part of the landscape we’ve been watching.”The prospect of a deal between the world’s two biggest economies has become key to sustaining a rally that drove American stocks to records, as it appears the Fed will be on the sidelines for a long time. The U.S. and China have yet to announce a new location or time to seal the agreement after an international gathering in Chile was canceled, and it’s unclear whether Trump’s renewed threats will move things forward.Elsewhere, emerging-market shares fell as Hong Kong’s benchmark stocks gauge slumped as the city endured a third day of unrest. Japanese shares retreated along with those in South Korea and Australia. New Zealand’s dollar jumped after the country’s central bank unexpectedly kept interest rates unchanged.Here are some key events coming up this week:Earnings season is slowing. Reports are due this week from companies including Japan Post Bank, Walmart, and Cisco.U.S. CPI and earnings data Wednesday may provide more clues on the Fed’s policy pathThursday brings China retail sales and industrial production data.U.S. retail sales on Friday are forecast to rebound in October after unexpectedly falling the prior month.These are the main moves in markets:StocksThe S&P 500 Index rose 0.1% at 4 p.m. New York time.The Stoxx Europe 600 Index declined 0.3%.The U.K.‘s FTSE 100 Index declined 0.2%.The MSCI Emerging Market Index sank 1.2%.CurrenciesThe Bloomberg Dollar Spot Index gained 0.1%.The euro was little changed at $1.1005.The British pound was little changed at $1.2838.The Japanese yen rose 0.2% to 108.84 per dollar.BondsThe yield on 10-year Treasuries sank five basis points to 1.88%.Britain’s 10-year yield dipped five basis points to 0.75%.Germany’s 10-year yield declined five basis points to -0.299%.Japan’s 10-year yield fell two basis points to -0.042%.CommoditiesWest Texas Intermediate crude rose 0.7% to $57.23 a barrel.Gold climbed 0.5% to $1,463.99 an ounce.\--With assistance from Robert Brand and Vildana Hajric.To contact the reporters on this story: Randall Jensen in New York at email@example.com;Claire Ballentine in New York at firstname.lastname@example.orgTo contact the editor responsible for this story: Jeremy Herron at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Chinese e-commerce giant Alibaba set a new sales record on Singles Day, the world’s largest 24-hour shopping event. The S&P;/ASX 200 Index posted its highest closing price since August 1, the same week it reached an all-time high closing value of 6845.
(Bloomberg) -- Japan is pursuing a 300 billion ($2.75 billion) yen project to transform disaster-struck Fukushima prefecture into a clean-energy hub, with the development’s first solar farm scheduled to start in January.Building wind and solar farms on agricultural land tainted by radiation from the 2011 Dai-Ichi plant meltdown will help rejuvenate the area, which also suffered earthquake and tsunami damage, Masashi Takeuchi, the head of the energy division at the Fukushima prefectural government, said Monday.The venture includes plans for 11 solar farms and 10 wind farms with total capacity of 600 megawatts and is scheduled for completion by March 2024. The government plans to contribute 30 billion yen of subsidies and the Nikkei reported earlier the Development Bank of Japan and Mizuho Bank are among the institutions planning to provide financing.The first solar farm will probably be a 20 megawatt project in Minamisoma city in the northern part of Fukushima prefecture, according to Takeuchi. Fukushima, which provided nuclear power to Tokyo prior to the disaster, is transforming its energy policy as Tepco scraps reactors amid public concern about their safety.\--With assistance from Isabel Reynolds.To contact the reporter on this story: Aya Takada in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Ramsey Al-Rikabi at email@example.com, Aaron ClarkFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Cambodia’s most promising oil concession — is the dream that refuses to die. Like many of its neighbours in south-east Asia, Cambodia has received billions of dollars in investments and loans linked to Beijing’s Belt and Road infrastructure push. Oil exports could go some way towards putting the country on a stronger financial footing, including chipping away at a 12 per cent current account deficit.
Investors will be watching monthly US retail sales closely this week. September saw the first stumble in seven months, fanning worries that slowing economic growth had finally caught up with the American consumer. Economists surveyed by Bloomberg expect the data for October, to be released on Friday, to show an increase of 0.2 per cent.
(Bloomberg) -- U.S. equities finished a week of dueling tariff headlines on a high note, as investors tried to anticipate the next moves in the trade war with China. Ten-year Treasury yields gained, while the dollar rose and West Texas crude held above $57 a barrel.The S&P 500 Index ticked up to a new closing high Friday, surpassing a record set the previous session and registering its fifth consecutive weekly gain, sparked by optimism that global growth troubles are dissipating. Tech shares and health-care stocks led advancers, while energy and utilities slid. The Dow Jones Industrial Average ended the session little changed, while the Nasdaq Composite also reached a record.Investors have been whipsawed the past two days amid an onslaught of contradictory headlines about progress toward an interim deal in the U.S.-China trade war. Officials from the two countries both said Thursday that a phase-one agreement would feature pledges to roll back tariffs on each others’ goods in phases, but President Donald Trump said Friday that the U.S. hasn’t agreed to a rollback, dimming hopes for a preliminary trade deal anytime soon.“Investors figure that, by and large, something will get done. Investors think that some trade deal is going to come over the coming months, very possibly by year’s end,” said Rick Bensignor, the founder of Bensignor Group and a former strategist for Morgan Stanley. “It’s a positive step towards doing something that shows two countries can come together and get some stuff done.” Insurance and financial companies weighed on the Stoxx Europe 600 Index, but the gauge still scored a weekly gain as well. China’s exports declined less than expected in October as optimism rose about an interim trade deal, though imports contracted for a sixth straight month. The offshore yuan edged lower though stayed stronger than 7 per dollar.Elsewhere, an early rally for Asian stocks fizzled, leaving most shares down in the region. Hong Kong equities were among the worst performing after the death of student protester threatened to inflame demonstrations planned for this weekend. Japanese 10-year government bond yields climbed alongside their Australian peers.Here are the main moves in markets:\--With assistance from Joanna Ossinger, Adam Haigh and Constantine Courcoulas.To contact the reporter on this story: Vildana Hajric in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Andrew DunnFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
China’s exports and imports declined in October, Reuters reported citing data from the country’s customs released on Friday. In dollar terms, exports fell 0.9% while imports fell 6.4% from a year ago in October, but beat analysts’ forecasts.
(Bloomberg) -- U.S. stocks sputtered late in the session Thursday but still managed to close at a record high as traders were whipsawed by conflicting headlines on the progress of trade talks with China. Early reports that the U.S. and China were prepared to exchange tariff rollbacks pushed the the S&P 500 Index higher throughout the day, but the rally lost some steam after Reuters said the plan was meeting resistance in the White House. White House economic adviser Larry Kudlow later told Bloomberg, “If there’s a phase one trade deal, there are going to be tariff agreements and concessions.” Before the Reuters report, haven assets from gold to sovereign bonds had been sinking -- along with defensive stocks like utilities and real estate -- as a risk-on mood gripped markets. Copper and crude jumped at least 2% before paring gains.Sovereign bonds plunged around the world on the earlier positive trade news, with the 30-year Treasury yield hitting its highest since August. Ten-year French and Belgian bond yields climbed back above 0% for the first time in months, while the German equivalent surged 10 basis points. Yields remain elevated, even after the latest trade wrinkle. Gold fell nearly $30 an ounce at one point, only recover some of that loss, but still hit a three-month low.Risk appetite had been picking up as news of progress on trade helped counter earlier reports that a preliminary accord may not happen this month as the two sides continued to wrangle over a location to sign it. But the latest headlines have left traders to wait for the next bit of news.“Until it gets signed, I think markets are going to stay cautious, which means you’re not going to price in the best-case scenario,” Chris Gaffney, president of world markets at TIAA, said by phone.West Texas crude futures traded near $57 a barrel in New York. The pound weakened after two Bank of England policy makers unexpectedly voted for an interest-rate cut.Here are some key events coming up this week:Earnings are due Thursday after the close from Walt Disney Co.The USDA World Agricultural Supply and Demand Estimates Report for November comes out Friday.These are the main moves in markets:\--With assistance from Adam Haigh, Andreea Papuc, Elena Popina, Cecile Vannucci and Todd White.To contact the reporters on this story: Vildana Hajric in New York at firstname.lastname@example.org;Claire Ballentine in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Andrew DunnFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- The yen has been the worst-performing major currency in the past month as optimism over U.S.-China trade talks and Brexit sapped demand for havens. Another reason it is declining is more curious: increased trading of Japanese stocks by overseas investors.The dynamics work like this: foreign funds have boosted trading of Japanese shares but they are unwilling to take on currency risk at the same time. For that reason they choose to hedge purchases for foreign-exchange movements, which typically involve selling yen via forward contracts that roll over periodically. As stock prices rise, they have to increase hedging, putting additional pressures on the currency.“Most foreign investors in Japan’s stock market are hedge funds and their pairing of equities trading with the yen is a significant factor,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “The Japanese stock market is a great place for short-term dealing with its deep liquidity and well-established infrastructure for high-frequency trades.”The proportion of Japanese share trading by overseas funds has climbed to the highest since at least 2005 and they now account for more than 60% of transactions, according to data from Japan Exchange Group Inc. The dominance of overseas funds is even more pronounced in derivatives, where they are responsible for almost 80% equity futures transactions.“Overseas speculators usually try to avoid taking both equity and currency risks,” said Takahiro Sekido, a former Bank of Japan official who is now a strategist at MUFG Bank Ltd. in Tokyo. “Their currency hedging supports the inverse correlation between the yen and Japanese stocks.”Hedging is typically undertaken by selling currency forwards or combining purchases of a currency in the spot market with a simultaneous sale in the forward market, known as a foreign-exchange swap. Such transactions between Tokyo-based banks and offshore market participants have more than doubled since 2006, data from the Tokyo Foreign Exchange Market Committee show.“The stock market can easily move by 10%, 20%, so currency hedging needs to be raised or reduced accordingly,” said Kengo Suzuki, chief foreign-exchange strategist at Mizuho Securities Co. in Tokyo.The increase in hedging -- along with the waning of haven demand and the Bank of Japan’s accommodative monetary policy -- has seen the yen weaken 1.9% against the dollar in the past month. The currency dropped to 109.29 per dollar last week, the lowest since Aug. 1, before trading at 109.03 on Wednesday in Tokyo.The increase in overseas trading of Japanese stocks and the related currency hedging is playing into another long-running theme: an inverse correlation between the yen and the Nikkei 225 Stock Average.The inverse correlation, which has prevailed almost continuously since 2006, is now close to the highest since November 2007, according to data compiled by Bloomberg.(Updates description in second paragraph, adds comment from analyst in seventh)\--With assistance from Toshiro Hasegawa.To contact the reporters on this story: Masaki Kondo in Tokyo at email@example.com;Shoko Oda in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Tan Hwee Ann at email@example.com, Nicholas ReynoldsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- U.S. equities hovered near record highs Tuesday before closing mostly lower as investors digested the latest earnings and economic data while awaiting more news about trade talks between America and China. Ten-year Treasury yields hit their highest since September, oil rose for a third day, and gold slipped below $1,500 an ounce.The S&P 500 Index declined from Monday’s record, with financial and energy shares leading gainers, while health-care and real estate firms lagged. The Dow Jones Industrial Average rose to a fresh record. News that U.S. service industries expanded more than forecast in October triggered a brief equity rally but dimmed hopes for a December rate cut from the Federal Reserve. The Stoxx Europe 600 Index nudged higher.Investors have been in a more bullish mood lately amid signs of progress in the trade war, which is alleviating one of the biggest headaches for markets as they approach year-end. Add in solid earnings and rebounding growth expectations, and a risk-on rotation has been taking hold. In the latest trade news, China is reviewing locations in the U.S. where President Xi Jinping would be willing to meet with President Donald Trump to sign a pact, people familiar with the plans said.“There was some enthusiasm around the trade headlines and people are just taking a step back and remembering that that story-line is very hard to predict,” said Craig Birk, chief investment officer at Personal Capital, which oversees $10 billion. “There’s just as much risk as there is cause for optimism on the so called phase one deal attempting to be hammered out.”Meanwhile, markets got further support after China’s central bank reduced the cost of one-year funds to banks for the first time since 2016, easing concerns about tightening liquidity. And Bank of Japan Governor Haruhiko Kuroda suggested his nation could issue more super-long term bonds, reflecting a desire for a steeper yield curve.Japanese shares led gains as Tokyo traders caught up after a long weekend, with more modest advances in Shanghai, Hong Kong and Seoul. Australia’s dollar rose after its central bank left interest rates unchanged and said past easing steps are offering support.Here are some key events coming up this week:Earnings are due from companies including: SoftBank and BMW on Wednesday; Walt Disney, Toyota, Deutsche Telekom on Thursday.Regional Federal Reserve presidents including Charles Evans, John Williams and Patrick Harker speak at events on Wednesday.A Bank of England monetary decision is due Thursday.The USDA World Agricultural Supply and Demand Estimates Report for November comes out Friday.These are the main moves in markets:\--With assistance from Ishika Mookerjee, Abhishek Vishnoi, Andreea Papuc and Yakob Peterseil.To contact the reporters on this story: Claire Ballentine in New York at firstname.lastname@example.org;Sarah Ponczek in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Andrew Dunn, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Japan’s Nikkei touched its 2019 highs following Wall Street’s record performance. Japan’s benchmark jumped to a 13-month high on Tuesday after a long weekend, as U.S. and Chinese trade negotiators moved closer to sealing a preliminary deal.
Huawei Technologies has drawn closer to Russia after being blacklisted by the US and several European countries, a move that has huge implications for both sides, analysts said. China is friends with Russia, so it is only logical that Huawei now plays a leading role in this friendship,” said Vladimir Rubanov, executive manager of Russian IT company Rosplatforma. Over the past year, Huawei has made major inroads in Russia.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.It’s old, but it’s not slowing down.A bull market that traces its lineage to the depths of the financial crisis is revving up again, notching its fourth straight weekly gain and pushing its advance in 2019 past 22%. After wavering at mid-year amid a U.S.-China trade war and recession anxieties, American stocks are back in melt-up mode, ending three of the past five sessions at records.While nobody knows if it’s getting late for this decade-old rally, gains like these have been common at the tail end of bull markets past. A study by Bank of America Corp. on equity peaks since 1937 shows that being uninvested in the last year of an advance meant foregoing one-fifth of the rally’s overall return.The S&P 500 powered to a fresh high Friday after an unexpectedly strong hiring report offered hope that the labor market can propel consumer spending and extend the record-long expansion despite weak business investment and trade tensions. Stocks got a brief boost and the dollar pared losses after China’s Ministry of Commerce said trade negotiators had achieved a “consensus in principle” with the U.S.The latest economic data come after the Fed lowered rates Wednesday and signaled it is unlikely to make further changes, up or down, any time soon. That sent stocks to a record, before a batch of weak economic data and renewed worries over trade weighed on the measure Thursday. The S&P 500 is up 1.5% in the week. Fed Vice Chairman Richard Clarida reiterated in Bloomberg Radio interview that monetary policy is “in a good place” and the consumer is strong.The jobs report “reinforces the thesis that the economy is hanging in there with steady growth thanks to the consumer, jobs, low rates, strong housing and that the global picture is weak,” said Alec Young, managing director of Global Markets Research at FTSE Russell.Friday’s good news on the trade front follows a tough Thursday session that saw markets rattled as Chinese officials cast doubts about reaching a comprehensive long-term trade deal with the U.S.In earnings news, Exxon Mobil and Chevron reported solid results, while Alibaba Group Holding Ltd. rose after its report. European bonds slipped. Oil edged higher though headed for its biggest weekly loss in a month on swelling American stockpiles. Earlier, risk sentiment got a boost from better-than-expected Chinese manufacturing data, even as uncertainty remains over an interim trade deal. Gold fell after a 1% rally Thursday.“Markets participants, as well as maybe even the Fed, have been very optimistic” on the trade truce, Tiffany Wilding, chief U.S. economist at Pacific Investment Management Co., told Bloomberg TV. “We can see some more deterioration there.”These are the main moves in markets:StocksThe S&P 500 Index rose 1% as of 4 p.m. New York time.Th Dow Jones Industrial Average added 1.1%.The Stoxx Europe 600 Index gained 0.8%.The MSCI Asia Pacific Index gained 0.3%.The MSCI Emerging Market Index advanced 0.7%.CurrenciesThe Bloomberg Dollar Spot Index fell 0.1%.The euro rose 0.1% to $1.1167.The British pound was flat at $1.294.The Japanese yen fell 0.1% to 108.178 per dollar.BondsThe yield on 10-year Treasuries gained two basis points to 1.71%.The two-year yield added three basis points to 1.55%Germany’s 10-year yield gained three basis points to -0.382%.CommoditiesGold futures was flat at $1,510.70 an ounce.West Texas Intermediate crude gained 3.5% to $56.10 a barrel.\--With assistance from Alexandra Harris, Constantine Courcoulas and Reade Pickert.To contact the reporters on this story: Jeremy Herron in New York at email@example.com;Claire Ballentine in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Yakob PeterseilFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
A private survey showed factory activity in China expanded in October with the Caixin/Markit PMI coming in at 51.7. Analysts polled by Reuters had expected the PMI number to come in at 51.0 from 51.4 for September.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.U.S. stocks fell as weak manufacturing data and renewed concern on trade rattled markets adjusting to the Federal Reserve’s signal that it’s done easing. Treasuries, gold and the yen rose.The S&P 500 declined after a regional manufacturing gauge missed estimates and jobless claims rose more than forecast. The index was under pressure following a Bloomberg report that Chinese officials have warned they won’t budge on the thorniest trade issues. Apple Inc. and Facebook Inc., two of the four biggest U.S. companies, rose after earnings, preventing steeper losses in the major averages.In other stock moves:Kraft Heinz surged after it beat expectations.Wayfair plunged after its forecast missed.Hanesbrandes sank on weak earnings.Twilio tumbled when its sales outlook fell short of predictions.Twitter eased following a decision to drop political ads.Facebook rose as much as 5.2% and and Apple added as much as 2.4%.10 of 11 S&P 500 sectors slumped.Treasuries extended a rally that began Wednesday after the Federal Reserve cut rates and signaled it won’t consider raising them until inflation picks up. The 10-year yield slipped below 1.75%, as the bond market remains unconvinced the central bank is done easing, pricing in another cut by July. Data showed the Fed’s preferred inflation gauge matched the slowest pace since 2016, while U.S. consumer spending trailed forecasts.While the Fed’s signal that it won’t rush to raise rates buoyed risk assets Wednesday, the weak economic data and fresh trade uncertainty reminded investors the central bank also has no intention of easing further after three straight cuts.“There was a lot of complacency building in around trade over the last several weeks and China is reasserting a posture saying we’re not anywhere close to done,” Michael Purves, chief executive officer at Tallbacken Capital Advisors LLC, said by phone. “That’s why the market is off today and Treasuries are rallying. It’s not about some reinterpretation of what Powell said and did yesterday. If Powell is less inclined to underwrite the trade war, then sure that’s a potential risk factor.”Here are some key events coming up this week:Earnings include: Exxon Mobil and Macquarie Group on Friday.Friday brings the monthly U.S. non-farm payrolls report.These are the main moves in markets:\--With assistance from Katherine Greifeld.To contact the reporters on this story: Vildana Hajric in New York at firstname.lastname@example.org;Sarah Ponczek in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
In China, factory activity contracted for the sixth straight month in October. The official Purchasing Managers’ Index (PMI) came in at 49.3 for October. In the United Kingdom, Prime Minister Boris Johnson and main opposition leader Jeremy Corbyn begin their first full day of campaigning Thursday ahead of what promises to be a historic December election.
(Bloomberg) -- Equity strategists will be keeping a close watch on the Bank of Japan this Thursday, in what may be one of its most anticipated monetary policy decisions. While the BOJ is likely to refrain from adding further stimulus at the meeting, equity strategists have varying views on whether the central bank will adjust its ETF purchase program.The BOJ has a 6 trillion yen ($55 billion) annual target for its purchases of equity exchange-traded funds, and a goal of 90 billion yen for J-REITsThe central bank first announced in April that it may introduce a lending facility for its ETF buying program, which would temporarily lend ETFs to market participantsOn Wednesday, the Nikkei reported that the BOJ will start lending ETF shares as early as next springIn a survey conducted by Bloomberg, 3 out of 45 economists said the BOJ’s ETF target may be raised on Oct. 31READ: Oct. 29, At BOJ Meeting, Bulls Eye Reasons to Shore Up on Bank StocksNomura (Yunosuke Ikeda)Increase in ETF purchases seems less likely, analysts including Ikeda wrote in a note dated Sept. 30; Nomura confirmed the view on Oct. 23There are issues such as BOJ’s impact on market cap and trading value of some stocks, and difficulty to put forward a future exit policy for non-redeemable equity ETFsOne approach to minimize perception that lower rates will hurt bank stocks could be to further decrease the weighting of ETFs that track the Nikkei 225This could keep in check the negative effects of additional easing and alleviate disadvantages for bank stocks, which are underweight in ETFs tracking Nikkei 225“Even if the BOJ doesn’t cut rates deeper into negative territory, there’s a possibility they will adjust purchases of Nikkei 225-tracking ETFs,” as purchases distort supply and demand, Ikeda said in an interviewMorgan Stanley MUFG Securities (Takeshi Yamaguchi)Central bank standing pat “would leave an impression that the BOJ is already out of ammunition, unlike other central banks,” economists including Yamaguchi wrote in an Oct. 23 noteForecasts easing package to include 10bps cut in short-term policy and side effect countermeasures, as well as increase in ETF purchasing by 1t yen to 7t yenNikko Asset Management (Koei Imai)If the BOJ were to create a lending facility for its ETF buying program, liquidity in the market would increase, said Imai, head of Nikko Asset’s ETF CenterLending program would also help liquidity in the spot and options market“Market makers that borrow and then sell the ETF will have to turn to the spot market to assemble a package to return to the lender,” he said. “This may mean that the spot market will also become more active with the lending program.”Smartkarma (Travis Lundy)“The BOJ’s idea of lending ETFs is good if it increases liquidity”Regarding the Nikkei report on a BOJ ETF lending plan, “the idea of lending decisions made once a month is less good.”“Stock lending is a continuous market and ETF lending decisions should be of higher frequency than ETF creation/redemption calendar days, or it may make less sense.”(Updates with Nikkei report and comment from Travis Lundy)To contact the reporters on this story: Shoko Oda in Tokyo at email@example.com;Toshiro Hasegawa in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Lianting Tu at email@example.com, Naoto Hosoda, Kurt SchusslerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- U.S. stocks ended a lackluster session lower as trade headlines and a spate of corporate earnings weighed on shares ahead of tomorrow’s expected rate cut by the Federal Reserve. Treasuries edged higher.The S&P 500 negative in the final half hour after earlier hitting a fresh record. Health-care shares rose on strong results from Merck and Pfizer. A report that China and the U.S. might not sign a partial deal next month, a day after President Donald Trump’s assertion that negotiations were ahead of schedule, dented stocks exposed to the battle. Lenders got a lift after Treasury Secretary Steven Mnuchin said he’d be open to looser bank rules. Alphabet and Akami earnings dropped the Nasdaq indexes.“The big thing is markets are really trying to figure out how they should feel about earnings -- earnings aren’t coming in as bad as we expected but that still doesn’t mean they’re good,” Shawn Cruz, manager of trader strategy at TD Ameritrade, said by phone. “Investors are trying to figure out where they should be moving right now in light of all the information that we’re getting.”Elsewhere yields on Japanese 10-year bonds hit the highest since June and their Australian counterparts jumped almost nine basis points, yet the sell-off cooled during European hours, with yields on German and U.S. peers halting their recent surge. The pound reversed a drop after the U.K.’s main opposition party said it will back an early election.Investors are struggling for fresh impetus to extend the record-breaking rally in U.S. stocks. Optimism on the China trade front from President Donald Trump is aiding the bull case, and an anticipated Fed rate cut on Wednesday may add further fuel. Still, recent economic data has come in mixed and while earnings are topping estimates on average, the bar was low.Here are some key events coming up this week:Earnings include: Airbus, Apple, Credit Suisse, Facebook and PetroChina on Wednesday; Mitsubishi Heavy on Thursday; Exxon Mobil and Macquarie Group on Friday.The Fed is expected to lower the main interest rate when policy makers decide on Wednesday.U.S. economic growth is forecast to have slowed to 1.6% in the third quarter. GDP data are due Wednesday. The Fed’s preferred inflation metric, the core PCE deflator, is due Thursday.The Bank of Japan sets policy on Thursday and Governor Haruhiko Kuroda will hold a news conference.Friday brings the monthly U.S. non-farm payrolls report.These are some of the main moves in markets:StocksThe S&P 500 Index slipped 0.1% at 4 p.m. New York time.The Nasdaq 100 fell 0.8% and the Dow Jones Industrial Average was little changed.The Stoxx Europe 600 lost 0.2%.Japan’s Topix index climbed 0.9%.India’s Sensex Index surged 1.5%.CurrenciesThe Bloomberg Dollar Spot Index was little changed.The yen rose 0.1% to 108.83 per dollar.Britain’s pound was little changed at $1.2862.The euro added 0.1% to $1.1112.BondsThe yield on 10-year Treasuries declined two basis points to 1.83%.The two-year rate fell one basis points to 1.64%.Germany’s 10-year yield decreased two basis points to -0.35%.CommoditiesThe Bloomberg Commodity Index advanced 0.2%.U.S. natural gas futures surged 6.2%.Gold futures fell 0.3% to $1,492.10 an ounce.West Texas Intermediate crude decreased 0.5% to $55.54 a barrel.\--With assistance from Andreea Papuc and Todd White.To contact the reporter on this story: Vildana Hajric in New York at firstname.lastname@example.orgTo contact the editor responsible for this story: Jeremy Herron at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Embattled Hong Kong leader Carrie Lam said on Tuesday she expected the Asian financial hub to record negative economic growth this year, in part as a result of the unrest, according to Reuters.
Offsetting the fresh concerns over Brexit was an improvement in investor sentiment around ongoing negotiations between the United States and China. The International Monetary Fund released new projections last week that showed growth in Asian economies could be slower than expected.
(Bloomberg) -- The S&P 500 Index briefly surpassed its closing record amid positive signs on trade talks and as investors assessed corporate earnings.Equities extended their weekly advance as the U.S. said it’s close to finalizing sections of the first phase of a trade deal with China. Technology shares led gains after Intel Corp.’s upbeat outlook and as Apple Inc. hit an all-time high. Amazon.com Inc. pared losses as its long-term prospects offset a profit decline. The risk-on sentiment helped push Treasuries down.Read: The Rumbling Sound in U.S. Stocks Is the Return of Risk AppetiteStock investors cheered signs of progress on negotiations between the world’s two largest economies, hoping they could ease a dispute that’s rattled global markets and weighed on growth. U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He spoke by phone on Friday. President Donald Trump said that “we’re doing very well with China” and “they want to make a deal very badly.”“The news about the trade war has continued to improve,” said Michael Antonelli, managing director and market strategist at Robert W. Baird & Co. “It’s not solved, but news has been getting better. Earnings have been not as bad as people think. If this pace continues, it’s very possible earnings end up on the plus side of growth.”Despite the market rally, the still uncertain scenario for a trade deal is seen by economists as a reason for the Federal Reserve to cut rates next week. Data on Friday showed that U.S. consumer sentiment pared gains from earlier in October, while remaining elevated. The U.S. budget deficit widened to almost $1 trillion in the latest fiscal year, surging to the highest level since 2012.More on corporate news:Goodyear Tire & Rubber Co. surged after analysts said that improved pricing may be a tailwind.Visa Inc. rose on forecasts that topped analysts’ projections.Juniper Networks Inc. jumped after boosting its stock buyback authorization by $1 billion as earnings beat estimates.Verizon Communications Inc. exceeded Wall Street’s expectations for profit and subscriber growth.Charter Communications Inc. climbed after the cable giant added more internet customers than expected.PG&E Corp. plunged amid concern that possible liabilities from the fire in Northern California could undermine efforts to bring the company out of bankruptcy.Elsewhere, the pound dropped as French President Emmanuel Macron blocked the European Union’s attempt to delay Brexit for three months. That’s raised the prospect the U.K. might not know whether it will get an extension until just hours before it is scheduled to be ejected on Oct. 31, even without a deal.Read: UBS Trims Pound Bet as BlackRock Sees ‘Never-Ending’ UncertaintyThese are some of the main moves in markets:StocksThe S&P 500 rose 0.4% to 3,022.55 at 4 p.m. New York time.The Dow Jones Industrial Average added 0.6%.The Nasdaq Composite Index jumped 0.7%.The Stoxx Europe 600 Index gained 0.2%.The MSCI Asia Pacific Index increased 0.1%.CurrenciesThe Bloomberg Dollar Spot Index was little changed.The euro dipped 0.2% to $1.108.The British pound decreased 0.2% to $1.2825.The Japanese yen weakened 0.1% to 108.67 per dollar.BondsThe yield on 10-year Treasuries gained three basis points to 1.80%.Germany’s 10-year yield increased four basis points to -0.36%.Britain’s 10-year yield gained six basis points to 0.682%.CommoditiesThe Bloomberg Commodity Index rose 0.2%.West Texas Intermediate crude climbed to $56.66 a barrel.Gold added 0.1% to $1,504.85 an ounce.\--With assistance from Caroline Hyde, Adam Haigh, Todd White, Samuel Potter, Yakob Peterseil and Sarah Ponczek.To contact the reporters on this story: Rita Nazareth in New York at firstname.lastname@example.org;Claire Ballentine in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Rita NazarethFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.