U.S. stock-index futures fell on Friday, as weak economic data from China and Europe exacerbated global growth fears.
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Industrial production rose 0.6 percent in November after moving down 0.2 percent in October; the index for October was previously reported to have edged up 0.1 percent. In November, manufacturing production was unchanged, the output of mining increased 1.7 percent, and the index for utilities gained 3.3 percent. At 109.4 percent of its 2012 average, total industrial production was 3.9 percent higher in November than it was a year earlier. Capacity utilization for the industrial sector rose 0.4 percentage point in November to 78.5 percent, a rate that is 1.3 percentage points below its long-run (1972–2017) average.
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Wall Street. Stocks before the bell
(company / ticker / price / change ($/%) / volume)
ALTRIA GROUP INC.
Amazon.com Inc., NASDAQ
Barrick Gold Corporation, NYSE
Cisco Systems Inc
Citigroup Inc., NYSE
Exxon Mobil Corp
FedEx Corporation, NYSE
Freeport-McMoRan Copper & Gold Inc., NYSE
General Electric Co
General Motors Company, NYSE
Home Depot Inc
JPMorgan Chase and Co
Merck & Co Inc
Procter & Gamble Co
Starbucks Corporation, NASDAQ
Tesla Motors, Inc., NASDAQ
The Coca-Cola Co
Twitter, Inc., NYSE
United Technologies Corp
UnitedHealth Group Inc
Verizon Communications Inc
Wal-Mart Stores Inc
Walt Disney Co
Yandex N.V., NASDAQ
Initiations before the market open
Tesla (TSLA) initiated with Outperform at Wedbush; target $440
Tesla (TSLA) initiated with Hold at Deutsche Bank
General Motors (GM) initiated with Buy at Deutsche Bank
Procter & Gamble (PG) upgraded to Overweight from Equal-Weight at Morgan Stanley
Advance estimates of U.S. retail and food services sales for November 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $513.5 billion, an increase of 0.2 percent from the previous month, and 4.2 percent above November 2017. Total sales for the September 2018 through November 2018 period were up 4.3 percent from the same period a year ago.
The September 2018 to October 2018 percent change was revised from up 0.8 percent to up 1.1 percent (±0.2 percent). Retail trade sales were up 0.3 percent from October 2018, and 4.0 percent (±0.5 percent) above last year. Nonstore Retailers were up 10.8 percent (±1.4 percent) from November 2017, while Gasoline Stations were up 8.2 percent (±1.6 percent) from last year.
Costco (COST) reported Q1 FY 2019 earnings of $1.67 per share (versus $1.36 in Q1 FY 2018), beating analysts’ consensus estimate of $1.62.
The company’s quarterly revenues amounted to $34.310 bln (+10.3% y/y), missing analysts’ consensus estimate of $34.659 bln.
COST fell to $218.00 (-3.76%) in pre-market trading.
The IHS Markit Eurozone Composite PMI fell from 52.7 in November to 51.3 in December, its lowest since November 2014, according to the preliminary ‘flash’ reading, which is based on approximately 85% of usual monthly replies.
The latest reading indicated only modest output growth, in turn reflecting a near-stalling of growth in new work, which registered the smallest increase since December 2014. New export orders (which include intra-eurozone trade) fell for the third successive month, recording the steepest decline since the series began over four years ago.
Germany’s private sector remained stuck in a low growth phase in the closing month of 2018, with December’s ‘flash’ PMI data from IHS Markit showing the slowest rise of business activity for four years. The survey’s forward-looking indicators also deteriorated, signalling a near-stalling of order books and a further softening of business confidence towards the outlook.
Commenting on the flash PMI data, Phil Smith, Principal Economist at IHS Markit said: “The PMI data disappointed again in December, indicating the continuation of only a modest rate of underlying growth across Germany’s private sector. Furthermore, with new orders close to stalling in December and firms reporting reduced optimism towards the outlook, there’s a lack of momentum heading into the New Year. “It's a stark contrast from the situation this time last year. Reports of an economy close to overheating have been supplanted by concerns about an increasingly uncertain political backdrop, trade wars and a struggling autos industry”.
At 49.3 in December, the IHS Markit Flash France Composite Output Index fell markedly from 54.2 in November, amid widespread reports of disruption to business due to the ongoing ‘gilets jaunes’ protests.
The largest impact was seen in the services sector, as business reported the first contraction in activity since June 2016. The latest reading was in stark contrast to the robust growth seen in 2018 overall. Meanwhile, manufacturing production fell following November’s stabilisation.
Although moderate overall, the contraction was the fastest for 44 months. In contrast to services, manufacturers often blamed automotive sector slowdown for lower output rather than recent protests.
Resistance levels (open interest**, contracts)
Price at time of writing this review: $1.1351
Support levels (open interest**, contracts):
- Overall open interest on the CALL options and PUT options with the expiration date January, 7 is 68777 contracts (according to data from December, 13) with the maximum number of contracts with strike price $1,1500 (7249);
Resistance levels (open interest**, contracts)
Price at time of writing this review: $1.2623
Support levels (open interest**, contracts):
- Overall open interest on the CALL options with the expiration date January, 7 is 32031 contracts, with the maximum number of contracts with strike price $1,3400 (3838);
- Overall open interest on the PUT options with the expiration date January, 7 is 30055 contracts, with the maximum number of contracts with strike price $1,2450 (2838);
- The ratio of PUT/CALL was 0.94 versus 0.95 from the previous trading day according to data from December, 13
* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.
** - Open interest takes into account the total number of option contracts that are open at the moment.
As reported by the Federal Statistical Office, the selling prices in wholesale trade increased by 3.5% in November 2018 from the corresponding month of the preceding year. In October 2018 and in September 2018 the annual rates of change were +4.0% and +3.5%, respectively.
From October 2018 to November 2018 the index rose by 0.2%.
Flash Japan Manufacturing PMI increases to 52.4 in December, from 52.2 in November
New order growth accelerates despite exports declining to sharpest extent in over two years
Business confidence drops for seventh straight month to lowest since October 2016
Commenting on the Japanese Manufacturing PMI survey data, Joe Hayes, Economist at IHS Markit, which compiles the survey, said: Production expanded solidly in December and at the fastest rate since April. There appears to be no lagged impact on output from the strong contraction in capex spending during Q3. The case for a year-end rebound in GDP looks strong based on PMI data thus far in Q4. “Survey data does bring some cautious undertones to the fore, however. Export orders declined at the fastest pace in over two years, while total demand picked up only modestly. Confidence also continued to fall, a seventh straight month in which this has now occurred. The prospects heading into 2019 ahead of the sales tax hike still appear skewed to the downside.”
It was Trump's latest criticism of the central bank's policy, which came in a Fox News interview shortly ahead of the next Fed meeting.
The U.S 10-year Treasury note yield was up 0.4 basis point to 2.911%, while the 2-year note yield was down 1.2 basis points to 2.760%. The 30-year bond yield advanced 1.6 basis points to 3.163%. Bond prices move in the opposite direction of yields.
The European Central Bank affirmed it will end bond purchases this year, promising not to raise rates until at least through the summer of next year. The central bank also said it would keep reinvesting the proceeds from the maturing securities in its portfolio for an extended duration after the central bank starts raising rates.
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