Good morning. Here’s what’s happening as Monday and RBA week begins. And for Sydneysiders, it’s going to be a another sweltering day.
First, the scoreboard (7:55am AEDT):
• Dow: 20071 +187 (+0.8%)
• S&P 500: 2297 +17 (+0.7%)
• SPI 200 Futures (March): 5,599 -8 (-0.14%)
• AUD/USD: 0.7680 +0.0023 (+0.3%)
And the news.
1. Stocks rise, US dollar holds six weeks decline: S&P 500 closed near a record high as the Donald Trump administration’s plan to roll back financial regulations sparked a rally in bank shares. The US greenback extended its drop for six consecutive weeks as the odds for a Fed rate hike in March fell. Weakness in mining stocks may weigh on Australian shares.
2. US jobs report beat on the headline, but other measures missed: Headline job growth came in at 227,000 jobs added, more than the 180,000 expected by economists. Wage growth, however, came in below expectations at just 2.5% year-over-year against expectations of 2.9%.
3. Trump rolled back two huge Wall Street regulations: Trump directed the Treasury department to review and make changes to the Dodd-Frank financial regulation, which attempted to make bank’s less risk-prone in the wake of the financial crisis. He also signed an order asking the Labour department for a rollback of the fiduciary standard, which requires investment advisers to put client interests above their own when it comes to investment choices for retirement accounts.
4. Data today: Australia has retail sales and job ads. In China, there will be business sentiment indicator and composite PMI and the euro area has retail PMI. The US has consumer spending and labor market conditions. Philadelphia Federal Reserve Bank President Patrick Harker discusses FinTech opportunities
5. Company news: National Australia Bank kicks off banks earnings seasons. It releases its first quarter trading update. Twenty-First Century Fox and Jones Lang Lasalle are among companies posting earnings in the US.
6. Alibaba’s Jack Ma says, “If trade stops, war starts”: Chinese tech billionaire Jack Ma made headlines last month for visiting Donald Trump and announcing his company Alibaba would help create one million jobs for the United States.
On Saturday in Australia, he warned in no uncertain terms that a retreat on globalisation would only result in trouble. “If trade stops, war starts,” said Ma, in Melbourne to launch Alibaba’s Australia and New Zealand headquarters.
7. Here’s Westpac in seven charts explaining why Asian exports may shrug off trade risks: While the potential for anti-trade policies from the new US administration is a significant risks for Asia in 2017, 2016 performance shows the resilience of the region’s outbound shipments and trends indicate it will continue in 2017, according to Robert Rennie, global head of markets strategy at Westpac.
8. Australian dollar: The Australian dollar is weaker in early Asian trade on Monday, underperforming against not only the US dollar but also major crosses. The renewed weakness in the AUD/USD has coincided with yet another failure to break convincingly above the 77 cent level on Friday despite a mixed US non-farm payrolls report for January.
9. Iron ore slips: Iron ore spot markets were hosed on Friday, tumbling upon the resumption of trade following the week-long Lunar New Year holiday. And Chinese futures, responsible for the weakness seen in spot and physical markets, continued to slide on Friday evening, hinting that the selloff may have further to run yet. According to Metal Bulletin, the spot price for benchmark 62% fines tumbled by 1.38% to $82.19 a tonne, marking the first movement in the index since January 26.
10. Hedge funds tracking you: Called “quantamental,” it’s a new investing strategy that uses algorithms to parse through reams of new data sets referred to as “alternative data.” Hedge fund managers in particular have always sought an edge over competitors; now they’re vying for new data sets that their competitors don’t have, or haven’t thought of using. This kind of data can range from the basic credit-card sales information to satellite data that tracks shipping routes.
Here’s a Monday bonus: Listen to Business Insider’s “Devils and Details” podcast, in which we discuss the housing market outlook for the year ahead.