MARKETS AT A GLANCE
(Data as of approximately 5 p.m. ET)
SNAPSHOT:
U.S. stocks ended a volatile session higher Tuesday as investors bought shares of consumer, technology and health-care companies. U.S. oil prices briefly tumbled below $ 30 a barrel, underscoring the global economy's difficulty with absorbing a relentless flood of crude supplies. Treasurys rose on the new bout of selling in the oil market. Gold prices slipped, erasing some of the past week's strong gains, as the dollar strengthened.
OPENING CALL:
General Motors CEO Mary Barra said she expects more volatility in China in 2016 during an interview in Detroit. Barra said the turmoil in the world's largest auto market will continue this year, but she still expects low single-digit growth. Chinese auto demand showed signs of flagging last year before action from the Chinese government on tax incentives helped jump-start the market late in the year. GM ended the year on a high note in China to post record sales there.
EQUITIES:
U.S. stocks rose as investors bought shares of consumer, technology and health-care companies.
The Dow Jones Industrial Average added 118 points, or 0.7%, at 16516. The S&P 500 gained 0.8%, while the Nasdaq Composite rose 1%.
Major indexes swung between gains and losses several times during the session.
"It feels like to me that the panic selling is starting to abate," said Jeffrey Yu, head of single-stock derivatives trading at UBS AG.
Even with the rebound, the S&P 500 is down 5.2% this year.
The S&P 500's index of technology companies led the index higher with a 1.2% gain, followed by slightly smaller rise in health-care companies.
Still, oil dipped below $ 30 a barrel, and many energy companies slipped, even after broader indexes recovered.
Williams Cos. fell 12% to $ 16.54 and Southwestern Energy fell 9.2% to $ 5.94.
Seven of the 10 biggest laggards in the S&P 500 Tuesday were energy companies, as many investors stayed away from battered energy shares.
"I wouldn't want to be premature in investing my clients' money in anticipation of a turnaround," said Jim Margard, a senior portfolio manager at Rainier Investment Management, which he says has about $ 3.4 billion in assets under management.
China shares eked out a gain Tuesday, though trading there and across the region remained choppy, as investors struggled to parse officials' next moves.
FOREX:
The British pound sank to a fresh 5½-year low against the dollar, as weak economic data raised concerns that the Bank of England may hold off from increasing interest rates this year.
Sterling was recently down 1.1% at $ 1.4389, its lowest level since June 2010.
U.K. industrial production fell in November, government data showed Tuesday, adding to evidence that the U.K. economy slowed in the final months of 2015. Market participants increasingly believe that the U.K.'s bout of economic weakness will make it more difficult for the BoE to raise rates this year—bad news for the pound, which becomes more attractive to yield-seeking investors when borrowing costs rise.
Sterling is also suffering from worries about a looming referendum on the U.K.'s membership in the European Union, which could come as early as June, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.
"Given the mounting headwinds, the outlook for sterling remains negative," Mr. Esiner wrote in a note to clients.
Expectations of higher rates in the U.S., on the other hand, are giving the dollar a boost. The Wall Street Journal Dollar Index, which gauges the U.S. unit against a basket of 16 currencies, was recently up 0.3% at 91.24, a fresh 13-year high, amid gains against the pound and euro.
Stronger-than-expected U.S. employment data on Friday bolstered expectations that the Federal Reserve will raise rates at its March meeting, after tightening monetary policy for the first time in nearly a decade last month. The divergence in rates between the U.S. and the eurozone, where borrowing costs are at record lows, will drive the euro to $ 0.95 against the dollar by year-end, Deutsche Bank said in a report.
The euro was recently down 0.3% at $ 1.0823. The dollar was up 1.4% at 77.09 against the Russian ruble. It was unchanged against the yen at ¥117.71.
BONDS:
A new bout of selling in the oil market sent investors piling into haven assets, pushing the yield on the benchmark 10-year U.S. government debt to the lowest level in more than two months.
In late-afternoon trading, the yield on the benchmark 10-year Treasury note was 2.100%, compared with 2.160% on Monday.
The yield, a foundation of global finance, closed at the lowest level since Oct. 28. Bond yields fall as their prices rise.
After earlier gains, U.S. crude-oil prices fell 3.1% Tuesday and briefly fell below $ 30 a barrel for the first time since 2003. U.S. oil prices have fallen by 17.8% this year, extending the rout of the past two years.
"Decreases in commodity prices at a minimum augur a relatively benign inflation climate, but could also be signaling continued sluggishness in the global economy, both of which can provide benefits to the Treasury market," said Tony Crescenzi, senior market strategist at Pacific Investment Management Co. in Newport Beach, Calif., which had $ 1.47 trillion in assets under management at the end of September.
Anxiety over the global growth outlook boosted demand for a $ 24 billion sale of three-year Treasury notes Tuesday afternoon. Investors accepted an auctioned yield of 1.174%, the lowest since the October sale, in exchange for a place to preserve capital.
The highlight was 62.8% indirect bidding, a proxy of foreign demand. It was the second largest on record for the three-year note auction.
A $ 21 billion sale of 10-year Treasury notes is due Wednesday, followed by a $ 13 billion sale of 30-year bonds Thursday.
The 10-year Treasury yield had risen to 2.198% earlier in the session as some riskier markets regained some poise after last week's big price decline.
COMMODITIES:
U.S. oil prices briefly tumbled below $ 30 a barrel, underscoring the global economy's difficulty with absorbing a relentless flood of crude supplies.
The magnitude of the oil rout, now in its 19th month, has defied the forecasts of industry experts and Wall Street prognosticators who underestimated the ability of both big state-controlled producers and smaller private-sector energy firms to weather the historic slide in prices.
The benchmark U.S. oil contract has dropped from $ 40 a barrel to $ 30 in just one month, and the pace of the selloff has rattled stock, bond and currency markets from Moscow to Riyadh to New York. Oil is down more than 70% since last trading in the triple digits, back in June 2014.
Despite that fall, the steady supply in the oil markets has changed very little emboldening traders to push prices still lower. The amount of crude being stored is around record highs. Big exporters such as Saudi Arabia have kept pumping at a rapid clip even in the face of low prices. Meanwhile, U.S. producers are finding new ways to maintain their own output even as they cut costs.
"We just really haven't seen production (fall) in the U.S. and that's what we need to see for oil to stop going down," said Ben Ross, portfolio manager at Cohen & Steers Inc., which has $ 52 billion in assets under management. Producers "pushed the technology and they really squeezed the most out of… these rigs."
Oil jumped back over $ 30 after dipping as low as $ 29.93 a barrel during intraday trading. U. S. oil's losing streak hit a seventh session, the longest since its fall from above $ 100 began in the summer of 2014.
Light, sweet crude for February delivery settled down 97 cents, or 3.1%, at $ 30.44 a barrel on the New York Mercantile Exchange, the lowest settlement since Dec. 1, 2003. Brent, the global benchmark, fell 69 cents, or 2.2%, to $ 30.86 a barrel on ICE Futures Europe, at the lowest level since April 5, 2004.
Gold prices slipped, erasing some of the past week's strong gains, as the dollar strengthened. A stronger dollar can reduce demand for dollar-traded commodities like gold, by making them more expensive to foreign buyers.
TODAY'S HEADLINES:
MetLife Looks to Divest U.S. Life Insurance Unit
MetLife is seeking to divest a large piece of its U.S. life-insurance unit as part of a plan to ease some of the capital burden it is expected to face under new federal regulation, the company said.
BP to Lay Off About 4,000 Workers
BP said it would slash about 4,000 jobs from its exploration-and-production unit over the next year or so, the latest in a wave of cuts across an industry beset by plummeting oil prices.
Google to Seek Auto-Industry Input on Self-Driving Cars
The head of Alphabet's self-driving car project said the tech giant is entering a phase where more collaboration is needed with auto industry players on vehicle autonomy.
EU Launches Antitrust Review of Halliburton-Baker Hughes Merger
Halliburton faces a fresh hurdle toward its $ 35 billion acquisition of rival Baker Hughes after European Union regulators open a full-blown antitrust investigation into the deal.
Ford Declares Supplemental Dividend
Ford Motor, expecting to post record 2015 pretax profits, declared a supplemental dividend of $ 1 billion that it will pay to shareholders on top of its regular first-quarter dividend.
Nasdaq to Suspend KaloBios Shares
The Nasdaq Stock Market said it plans to officially suspend KaloBios Pharmaceuticals on Wednesday, as the biotech firm remains under scrutiny since the arrest of former Chief Executive Martin Shkreli.
Disney to Open First Theme Park in Mainland China in June
After more than a decade of planning and five years of construction, Walt Disney plans to open its first theme park in China on June 16.
'Toyota Still Has Many Issues,' President Says
Toyota has entrenched itself as the world's top-selling car company, but its president, Akio Toyoda, says the Japanese auto giant still has work to do.
Retailers Hired Fewer Holiday Workers For Second Straight Year
Retailers hired fewer workers during the holidays for the second straight year, as technology is helping retailers meet higher demand with fewer workers, Challenger Gray & Christmas said.
Aéropostale to Cut 13% of Staff in Cost-Cutting Move
Teen retailer Aéropostale plans to cut 13% of its staff as part of a cost-cutting effort that targets $ 35 million to $ 40 million in savings a year before taxes, the company said .
RECENT DJ EXCLUSIVES:
Disney to Open First Theme Park in Mainland China in June
'Toyota Still Has Many Issues,' President Akio Toyoda Says
How Lululemon Can Return to Form — Heard on the Street
Supervalu Starts Earning Its Name — Ahead of the Tape
Hedge Fund Glenview Capital Drops 8% to Start Year – Sources
TODAY'S CALENDAR
(Times in GMT, followed by country and event)
2100 SKA Dec Import price index
2100 SKA Dec Export price index
2300 SKA Dec Economically Active Population Survey, incl Unemployment
2300 NZ Dec QV Nationwide Residential Property Values
2350 JPN Dec Money Stock, Broadly-defined Liquidity
0030 AUS Nov Job Vacancies
0200 US Obama delivers final State of the Union address
0300 SKA Nov Money Supply index L
0300 SKA Dec Economic Trends, including household loans, money supply index Lf
0300 AUS Jan Monthly Leading Indicator of Employment
0430 JPN Dec Corporate Insolvencies
0745 FRA Dec CPI
0745 FRA Nov Balance of Payments
1000 EU Nov Industrial Production
1000 EU Q3 Balance of payments – 2nd release
1100 FRA Nov OECD Harmonised Unemployment Rates
1200 US 01/08 MBA Weekly Mortgage Applications Survey
1800 US FRB Chicago President Charles Evans speech at Corridor
1900 US Dec Monthly Treasury Statement of Receipts & Outlays of the U.S. Govt
1900 US U.S. Federal Reserve Beige Book
2350 JPN Nov Orders Received for Machinery
2350 JPN Dec Corporate Goods Price Index
No comments:
Post a Comment