Good morning. Here’s what’s happening as Monday begins.
First, the scoreboard (8:00am AEDT):
• Dow: 20822 +12 (+0.05%)
• S&P 500: 2367 +3.5 (+0.2%)
• SPI 200 Futures (March – delayed pricing): 5,702,5 -46 (-0.8%)
• AUD/USD: 0.7669 -0.0045 (-0.6%)
And the news.
1. Stocks may extend losing streak: Australian stocks are set to open lower notwithstanding Wall Street’s 11-day winning run, the most since 1987. Investors are turning cautious ahead of US president Donald Trump’s Congressional address this week. Markets are counting on him to reveal pro-growth policies including tax cuts and any disappointment could lead to an unwind of the Trump trade that has spurred risk appetite.
2. Data today: It is GDP week in Australia, which releases business indicators on Monday. National Australia Bank puts out its survey on inventories. New Zealand has visitors arrival. US has pending home sales and durable goods orders. Euro area has consumer and business confidence, loan growth and services and economic sentiment. UK releases house prices.
3. Company news: QBE Insurance and Lend Lease report results. American Tower Corp. releases earnings in US.
4. Fed speak: Dallas Federal Reserve Bank President Robert Kaplan participates in a moderated discussion.
5. Iron Ore pullback may be over: Iron ore spot markets continued to slide on Friday, notching up a third consecutive decline in the process. But with Chinese iron ore futures soaring on Friday evening, it points to the likelihood of a rebound in spot markets today. According to Metal Bulletin, the spot price for benchmark 62% fines fell 0.92% to $90.50 a tonne, extending the decline from the multi-year high of $94.86 a tonne stuck on Tuesday to 4.6%.
6. Aussie dollar in resistance zone: Australian dollar has failed to break convincingly above the 77 cent level, sliding lower against the US dollar on Friday evening despite yet another decline in US bond yields.
7. Grand champions of currency manipulation: Trump called China the “grand champions” of currency manipulation — and China responded. Chinese Foreign Ministry spokesman Geng Shuang said he hoped the US could “fully and correctly” view the exchange-rate issue. “China has no intention of seeking foreign trade advantages via an intentional devaluation of the renminbi. There is no basis for the continued devaluation of the renminbi,” he told a daily media briefing in Beijing.
8. Buffet says hedge fund managers taking in all profits: Investors have wasted about $US100 billion over the past decade in the search for superior performance, Warren Buffet says. His contention is twofold: active hedge fund managers’ fees crimp returns for their clients, and the promise of outperformance falls short when stacked against the S&P 500.
Here are more wise words from the sage of Omaha:
- “A CEO whose focus is centered on Wall Street will be tempted to make up the numbers”
- “Miraculous” America in partly due to “tide of talented and ambitious immigrants”
- “Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold”
The best book he read last year was Shoe Dog by Nike’s Phil Knight.
9. Bitcoin hovered around all-time highs again: The cryptocurrency rose amid the expectation that the US Securities and Exchange Commission will approve at least one of the three proposed bitcoin-focused exchange-traded funds by a March 11 deadline. Analysts have warned that the SEC’s decision is uncertain.
10. Troubling omens for the British economy: Writing in Oxford’s weekly briefing for the UK, economist Martin Beck argues that despite the strong headline figures in recent economic data, there are some signs that the impact of the vote for Brexit may finally be starting to filter into the habits of British consumers. Separately, JPMorgan says the proposed plan to lower corporation tax to keep Britain competitive after Brexit would be “no silver bullet for a hard Brexit.”
Here’s the Monday bonus:
Queen Mary 2 returns to Sydney.