News / Analysis
Finance Update – Jackson Hole Summit OpensAugust 26, 2020
Despite re- kindled Sino-US trade talks, Chinese indices this morning are in the red, the Shenzhen to the tune of -1.51%. The Hang Seng is up 0.13%, the Nikkei 0.02% and New Zealand’s DJ 0.33% after Statistics New Zealand showed a contraction in July’s Trade Deficit to $0.12 bn YoY.
The Yuan jumped 3 pips against the dollar after the country’s central bank injected $29bn into the system through 14-day reverse repos.
The Yen overnight completed a double bottom after the nation’s leading economic index lost half a point, landing at 84.4 in June, while the coincident index added 2/10 to 76.6.
Most European benchmarks wound up the day in the red, Tuesday, the FTSE losing 1.11%. Odd men out – the CAC40 with a 0.01% increase and Belgium’s BEL20 0.02%.
Based on IFO data yesterday, German current assessment at a pleasing 87.9 is better than their outlook for the future, which failed to hit the mark at 97.5. And yesterday’s CBI retail survey revealed job cuts at a decade-long record rate.
Following its Apple-split adjustments, the Dow yesterday ended down 0.21%, the S&P up 0.36% and the Nasdaq 0.76%.
The USD is in a triangular pattern converging on 93.15 ahead of FED Head Powell’s speech to the Jackson Hole Summit, which opens overnight. Reuters quoted sources are expecting a dovish commitment as the pre-election economy sinks further into the hole.
A discrepancy occurred in the housing market, the Federal Housing Finance Agency showing a better-than-expected 0.9% improvement in prices while the S&P Case Shiller index shows a disappointing 3.5% increase. New home sales also exceeded expectations with a 13.9% increase. And Consumer Confidence in August fell to a 6-year low at 84.8.
The WTI/Brent spread has widened further, the former losing 0.12% and the latter gaining 0.26% as US drillers closed 84% of offshore production in Mexico in anticipation of Hurricane Laura. Last night, the API reported yet another 4.5 mB drawdown.
ANT Group, Alibaba’s (+3.57%) payments and fintech division, has filed for a dual listing in Hong Kong and Shanghai in what Reuters believes could become the world’s largest IPO, so far, dwarfing Aramco at an estimated $200 bn.
American Airlines (-2.23% said it was cutting 19,000 jobs, beginning October 1st. Salesforce (+3.64%) yesterday reported a 29% increase in revenues to $5.15 bn. BestBuy (-0.43%) defeated expectations with a YoY revenues increase to $9.91 bn, and Urban Outfitters (+2.39%) lost 16% in sales YY bringing the total to $672 mn.
Meanwhile, Reuters reports that Nasdaq inc., the company that operates both the Nasdaq exchange and the index, has filed with regulators to enable companies to raise money through a direct listing – i.e. without the services of an underwriter – and prior to their initial public offering. Venture capitalists have been complaining that underwriters tend to underprice a listing in order to afford greater post-IPO profits to their clients. Today, expect earnings from Vienna Insurance, Eaton Vance and Netapp.
|09:00 AM GMT||Switzerland||ZEW expectations. GDP at 5:45 AM GMT (+1)|
|11:00 AM GMT||US||Mortgage Applications. Durable Goods at 12:30. Jackson Hole Summit opens (ND)|
|11:50 PM GMT||Japan||Foreign Investments. All industry activity at 4:30 AM (+1)|
|02:30 PM GMT||OIL||EIA Crude Oil Stock Change|