Good morning. Here’s what’s happening as Friday gets underway and warnings signs point to the conclusion of the longest bull run in global stocks.
First, the scoreboard (8:05am AEDT):
• Dow: 20619 +8 (+0.04%)
• S&P 500: 2348 -1.3 (-0.1%)
• SPI 200 Futures (March): 5,763 +6.5 (+0.1%)
• AUD/USD: 0.7694 +-(-0.2%)
And the news.
1. Stocks rally eases: Australia and Asian shares are poised to a open little changed as the global stocks rally loses steam. US stocks slipped after the longest rally in three years, Treasuries snapped a five day losing streak and green back weakened as the familiar theme over the last few weeks came to the fore — details on the Trump administration’s pro-growth policy promises and the timing of the Federal Reserve’s next rate increase.
2. Data today: New Zealand had manufacturing PMI and fourth quarter retail sales volumes. UK has retail sales too while US posts January leading index.
3. Company news: ANZ Bank reported a first quarter cash profit of $2 billion. Other releasing earnings include Medibank, Virgin AUstralia, Coco-Cola Amatil and Santos.
4. Sputtering rally: The current stocks rally, which has lasted 2002 trading days, is the longest one since that which preceded the 1929 stock market crash. Coincidentally, that rally lasted 2002 days. The coincidence raises an interesting question that has a lot of Wall Streeters asking: will this rally ever end? Michael Paulenoff, president of Pattern Analytics, says there are some indications that a correction is on the horizon. He said declining volume in the stock market is one red flag.
5. Iron Ore:Iron ore prices are still in retreat. The spot price for 62% fines fell 1.1% to $US90.06 overnight, according to Metal Bulletin. It still leaves prices at elevated levels, with the benchmark price for the 62% ore having broken through $US90 earlier this week.
6. Aussie dollar: The Australian dollar, which Thursday broke through the 77 US cents marks, has dipped back. the 77 mark is considered the “death zone” of sorts and the currency has struggled to sustain above it.
7. US dollar a problem: The US dollar has been getting stronger, but at what point is it just too much for the market to bear? In short, there’s no simple answer. The dollar on a global trade-weighted basis has strengthened by about 20-25% over the course of the last year. In the weeks following Trump’s presidential victory, the dollar had one of its sharpest rises ever against a basket of peers – and is now up more than 40% from its 2011 low.
8. Snap IPO: Snapchat’s parent company, Snap Inc., is pricing its IPO at $14 to $16 per share, according to documents filed with the SEC on Thursday. The regulatory filing shows Snap is looking to sell 200 million Class A shares, which it estimates will generate between $2.1 billion and $2.3 billion.
9. Wall Street darling: OpenFin, the startup, which helps electronic trading firms build their desktop applications, is getting its own moment in the spotlight. The firm has raised $US15 million in a Series B fundraising round from investors including JPMorgan, fintech backer Euclid Opportunities and high-speed trading firm DRW. Bain Capital Ventures, Pivot Investment Partners and Nyca Partners have already invested in the firm, as have the likes of Chris Conde, former CEO of Sungard, and Tom Glocer, former CEO of Thomson Reuters.
10. Trump enthusiasm catching up to data: The Trump bump may be finally showing up in the hard data. Recent data releases about the US economy appear to show that economic activity in the US has increased, following surges in post-election enthusiasm in surveys. Since Trump was elected, various measures of economic confidence — from University of Michigan’s consumer confidence to CEO confidence to manufacturing firm confidence — have increased, some hitting record highs.