Updated: 01-23-2018

The Market at 08:54AM ET

Moving the Market

Federal government reopens following three-day shutdown

Netflix (NFLX) soars after adding more subscriptions than expected

Sector Watch
Strong:
Weak:

08:54AM ET
[BRIEFING.COM] S&P futures vs fair value: -1.30. Nasdaq futures vs fair value: +15.50.

The S&P 500 futures trade one point below fair value.

Equity indices in the Asia-Pacific region posted strong gains across the board with markets catching fire in tandem with the move higher on Wall Street on Monday following the ending of the US Gov't shutdown. This clearly set the tone, however the BOJ's status quo stance seemed to entice investors as well.  Japan also released a solid set of economic data that did nothing to impede the strong sentiment.

  • In economic data:
    • Japan
      • BOJ left monetary policy unchanged
      • Dec Nationwide Department Store Sales: -0.6% vs +2.2% in Dec 2016
      • All Industry Activity Index: +1.0% vs +0.8%e
      • Dec Final Machine Tool Orders: +48.3% vs +48.3% prelim

---Equity Markets---

  • Japan's Nikkei finished up +1.3%. The uncertainty that brewed in the US on Monday was lifted and Japanese equities responded in kind. Not to be outdone, the BOJ's unwavering stance in monetary policy plus a more upbeat tone on inflation also supported stocks. As such, the Nikkei marked a 26-year high with its 307 point gain on Tuesday. 
  • Hong Kong's Hang Seng rose 1.5%, securing its 8th consecutive advance. Gaming stocks saw hefty gains once again with both Sands China and Galaxy Entertainment posting gains of close to 2%. Tencent Holdings was among the best performing stocks, outpacing the benchmark with a gain of more than 3% by day's end.
  • China's Shanghai Composite gained 1.3%, marking another 2-year high. Banks and Property stocks were among the best performers with China Land gaining 3.8%, Sino Land up 1.5% and Industrial and Commercial Bank of China posting a 3.4% gain.
  • India's Sensex rallied another 1%, setting a new record high. Among the leaders were steel stocks, with the likes of Tata Steel and Vedanta gaining over 4% each. Also, GAIL extended recent gains with an advance of 4.5%

Major European indices are higher, but held larger gains earlier in today's trading.  Those gains were a continuation of the positive moves made by the U.S. market on Monday and the bullish bias seen in Asian markets overnight.  A better than expected ZEW Economic Sentiment report out of Germany has acted as a supportive factor. Separately, the pound  pushed briefly above the $1.40 level overnight, hitting its best level since 2016 before running into some selling activity.  All eyes on Davos today where the World Economic Forum kicks off. 

  • In economic data:
    • Germany January ZEW Economic Sentiment 20.4 (expected 17.8; last 17.4); ZEW Current Conditions 95.2 (expected 89.8; last 89.3)
    • Eurozone ZEW Economic Sentiment 31.8 (expected 29.7; last 29.0)
    • UK January CBI Industrial Trends Orders 14 (expected 13; last 17)

---Equity Markets---

  • UK's FTSE is up 0.3%, led by gains in EasyJet (+5.3%), which provided a pleasing revenue update, Provident Financial (+3.0%), and Sky Plc (+2.2%).  Those gains, however, have been offset somewhat by losses in miners Anglo American (-2.7%), Glencore (-2.0%), and Rio Tinto (-0.5%).
  • France's CAC is higher by 0.1% after being up 0.5% earlier. ArcelorMittal (-1.3%), Credit Agricole (-1.1%), and Peugeot (-0.8%) are pacing the pullback.  Winning standouts include Carrefour (+4.7%), which announced its 2022 transformation plan, and Veolia Environnment (+0.7%).
  • Germany's DAX has climbed 0.8%, supported by the upbeat ZEW report.  Most components are trading higher, with Bayer (+2.7%), Fresenius (+2.8%), and Lufthansa (+1.0%) making the biggest percentage moves.  Vonovia (-0.2%) is the worst-performing component.

08:29AM ET
[BRIEFING.COM] S&P futures vs fair value: -1.30. Nasdaq futures vs fair value: +16.00.

The S&P 500 futures trade one point below fair value.

This morning's batch of earnings came in mostly better than expected with Johnson & Johnson (JNJ 149.50, +1.36, +0.9%), Procter & Gamble (PG 90.57, -1.32, -1.4%), and Travelers (TRV 142.90, +3.55, +2.6%) all reporting above-consensus profits. Verizon (VZ 53.98, +0.52, +1.0%) missed profit estimates, but reported upbeat revenues.

Meanwhile, Netflix (NFLX 250.70, +23.12), which reported fourth quarter results last night, has soared 10.2% in pre-market trading after adding more subscriptions than expected and issuing upbeat guidance for the first quarter. NFLX shares are set to open at a new all-time high.


07:56AM ET
[BRIEFING.COM] S&P futures vs fair value: +0.80. Nasdaq futures vs fair value: +19.00.

Wall Street has dialed back its bullish tone this morning following Monday's charge to new records, which extended the S&P 500's 2018 gain to 6.0%. The S&P 500 futures are flat, hovering one point above fair value, while the tech-heavy Nasdaq futures show relative strength, up 20 points (or 0.3%).

Congress passed, and President Trump signed, a new funding bill on Monday, ending a three-day government shutdown. The measure, which will keep the government running through February 8, managed to get enough Democratic support only after Senate Majority Leader Mitch McConnell (R-KY) promised to consider immigration legislation for the so-called "Dreamers."

Elsewhere, equity indices in the Asia-Pacific region posted solid gains on Tuesday, with Japan's Nikkei (+1.3%) hitting a 26-year high and Hong Kong's Hang Seng (+1.5%) and India's Sensex (+1.0%) touching new records. 

In Europe, the Euro Stoxx 50 is up 0.2% as the World Economic Forum kicks off in Davos, Switzerland. Prime Minister of Canada, Justin Trudeau, and Prime Minister of India, Narendra Modi, will be speaking today, while President Trump is set to speak on Friday.

U.S. Treasuries are in demand this morning, sending yields lower across the curve. The yield on the benchmark 10-yr Treasury note is down three basis points at 2.63%, while the 2-yr yield is down two basis points at 2.05%.

Meanwhile, the U.S. Dollar Index is up 0.1% at 90.22, and West Texas Intermediate crude futures are higher by 0.4% at $63.82 per barrel.

Investors will not receive any economic data on Tuesday.

In U.S. corporate news:

  • Netflix (NFLX 251.30, +23.72): +10.3% after adding more subscriptions than expected and issuing upbeat guidance for the first quarter.
  • Johnson & Johnson (JNJ 149.50, +1.36): +0.9% after reporting better-than-expected earnings and providing upbeat earnings guidance for fiscal year 2018.
  • Procter & Gamble (PG 90.45, -1.44): -1.6% despite beating earnings estimates and raising the high end of its profit guidance for fiscal year 2018.
  • Verizon (VZ 53.92, +0.46): +0.9% after better-than-expected revenues overshadowed worse-than-expected earnings.
  • Travelers (TRV 143.00, +3.65): +2.6% after beating earnings and revenue estimates.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region posted strong gains across the board. Japan's Nikkei +1.3%, Hong Kong's Hang Seng +1.5%, China's Shanghai Composite +1.3%, India's Sensex +1.0%.
    • In economic data:
      • Japan
        • Dec Nationwide Department Store Sales: -0.6% vs +2.2% in Dec 2016
        • All Industry Activity Index: +1.0% vs +0.8%e
        • Dec Final Machine Tool Orders: +48.3% vs +48.3% prelim
    • In news:
      • The Bank of Japan left monetary policy unchanged.
  • Major European indices are mixed after pulling back from larger gains registered early in today's trading. UK's FTSE +0.2%, France's CAC -0.1%, Germany's DAX +0.6%.
    • In economic data:
      • Germany January ZEW Economic Sentiment 20.4 (expected 17.8; last 17.4); ZEW Current Conditions 95.2 (expected 89.8; last 89.3)
      • Eurozone ZEW Economic Sentiment 31.8 (expected 29.7; last 29.0)
      • UK January CBI Industrial Trends Orders 14 (expected 13; last 17)
    • In news:
      • A continuation of the positive moves made by the U.S. market on Monday and the bullish bias seen in Asian markets overnight has helped support equities in Europe.
      • All eyes on Davos today where the World Economic Forum kicks off.

05:52AM ET
[BRIEFING.COM] S&P futures vs fair value: +4.00. Nasdaq futures vs fair value: +25.00.

05:52AM ET
[BRIEFING.COM] Nikkei...24124...+307.80...+1.30%.  Hang Seng...32931...+537.30...+1.70%.

05:52AM ET
[BRIEFING.COM] FTSE...7740.06...+24.60...+0.30%.  DAX...13576.59...+112.90...+0.80%.

04:30PM ET

[BRIEFING.COM] Stocks shot to new records on Monday, helped by a Senate vote to reopen the government and provide funding through February 8.

The Nasdaq Composite jumped 1.0% to 7408.03, the S&P 500 climbed 0.8% to 2832.97, the Dow Jones Industrial Average rose 0.3% to 26140.97, and the Russell 2000 advanced 0.5% to 1605.17. All four stock indices closed at fresh records and finished at their best marks of the day.

The federal government closed nonessential operations at midnight on Friday after the Senate failed to reach an agreement on a short-term funding measure, mainly due to differences over immigration. Although Republicans hold a slim majority in the Senate (51 to 49), they needed some Democratic support to reach the required 60-vote threshold.

Republican leadership managed to secure Democratic support on Monday, passing a short-term funding measure 81-18, by promising to consider immigration legislation in early February. More specifically, Democrats are looking for Republicans to address the fate of the so-called "Dreamers"--immigrants who were illegally brought to the U.S. as children.

The funding bill is expected to pass in the House of Representatives on Monday evening. President Trump is then expected to sign the bill into law, which would officially bring the shutdown to an end.

On Wall Street, advancing stocks outnumbered declining stocks 1.8 to 1 with nine of eleven sectors finishing in the green. The energy and telecom services sectors were the top performers, adding 2.1% and 2.3%, respectively, while the consumer discretionary (+1.1%) and real estate (+1.0%) groups also had a relatively strong showing.

Within the energy space, Halliburton (HAL 56.40, +3.39) jumped 6.4% after reporting better-than-expected earnings and revenues for the fourth quarter. News that OPEC and other producers would continue to cooperate on production beyond 2018 helped energy shares, as did updated economic growth projections from the International Monetary Fund; the IMF projects that the U.S. economy will grow 2.7% in 2018 (up from 2.1%) and that the world economy will grow 3.9% (up from 3.7%).

In the consumer discretionary sector, Amazon (AMZN 1327.31, +32.73) climbed 2.5% to a new all-time high while Wynn Resorts (WYNN 195.23, +15.59) spiked 8.7% after reporting better-than-expected revenues for the fourth quarter. WYNN shares finished Monday at their best level in more than three years.

Biotechnology shares also had a positive showing, sending the iShares Nasdaq Biotechnology ETF (IBB 115.52, +3.52) higher by 3.1%, but the broader health care sector (+0.7%) finished roughly in line with the S&P 500. Celgene (CELG 102.91, +0.26) added 0.3% after announcing it plans to acquire Juno Therapeutics (JUNO 86.00, +18.19) for $9 billion, and French drugmaker Sanofi (SNY 43.20, -1.40) lost 3.1% after announcing it plans to acquire Bioverativ (BIVV 103.79, +39.68) for $11.6 billion. Juno Therapeutics and Bioverativ surged 26.8% and 61.9%, respectively.

The materials (-0.2%) and industrials (unch) sectors were the only groups to finish in negative territory. Within the industrial space, General Electric (GE 16.17, -0.09) dropped 0.6%, extending its three-month loss to 32.2%, after Bank of America/Merrill Lynch downgraded GE shares to 'Neutral' from 'Buy.'

In the bond market, U.S. Treasuries finished Monday mostly flat, with the benchmark 10-yr yield unchanged at 2.66%.

Elsewhere, equities had a good day in Europe, evidenced by the Euro Stoxx 50, which climbed 0.4%. Germany's Social Democrats (SPD) agreed to pursue formal coalition talks with German Chancellor Angela Merkel's CDU/CSU conservative bloc, a positive sign for a country that's faced political uncertainty for months.

In Asia, the major stock indices finished modestly higher, with India's Sensex (+0.8%) climbing to a new all-time high.

Investors did not receive any economic data on Monday. Tuesday's economic calendar is also blank.

Dow: +142.88… | Nasdaq: +71.65… | S&P: +22.67…
NASDAQ Adv/Dec 1279/1236. …NYSE Adv/Dec 1862/1055.

Copyright © 2008 Briefing.com, Inc. All rights reserved.
Sponsor Center
Sponsored Links
Buy a Link Now
Content Partners