MARKETS AT A GLANCE
LAST CHANGE # CHG
DJIA 17977 -80.61 -0.45%
Nasdaq 4988.25 -7.73 -0.15%
S&P 500 2092.43 -9.63 -0.46%
Japan: Nikkei 225 19905.5 -2.17 -0.01%
Hang Seng 28016.3 743.95 2.73%
Shanghai Composite 4121.71 87.41 2.17%
S&P BSE Sensex 29044.4 165.06 0.57%
Australia: S&P/ASX 5960.3 -8.1 -0.14%
UK: FTSE 100 7064.3 -25.47 -0.36%
PRICE CHG YIELD%
U.S. 2 Year 1/32 0.532
U.S. 5 Year 4/32 1.368
U.S. 10 Year 4/32 1.932
Australia 10 Year 7/32 2.352
China 10 Year 10/32 3.7
India 10 Year 2/32 7.8
Japan 10 Year -1/32 0.342
German 10 Year 0/32 0.16
LAST(MID) CHANGE
Australia $ (AUD/USD) 0.7589 0
Yen (USD/JPY) 120.12 0
S. Korean Won (USD/KRW) 1101.61 -0.03
Chinese Yuan (USD/CNY) 6.2173 -0.0006
Euro (EUR/USD) 1.0573 0.0004
WSJ Dollar Index 88.3 -0.02
LAST CHANGE % CHG
Crude Oil 52.01 0.37 0.72%
Brent Crude 59.16 0.21 0.36%
Gold 1198.8 -5.8 -0.48%
(Data as of approximately 5 p.m. ET)
SNAPSHOT:
U.S. stocks finished lower in quiet trading ahead of earnings reports. Treasury bonds rose after last week's selloff. The dollar gained on U.S. interest-rate hopes and gold prices pulled back as a stronger dollar overwhelmed interest from foreign buyers. Oil prices ended higher on expectations of declining U.S. production.
OPENING CALL:
The Bank Indonesia Board of Governors is expected to keep its benchmark rate unchanged when it meets Tuesday. Indonesia is understandably worried about capital outflows and a weaker rupiah if and when the U.S. Federal Reserve raises rates -- that seems to have been a key reason why the government is introducing tax credit incentives for foreign direct investors to keep their money in the country. Those measures also reflect seemed intended to ensure that the duty for propping up the rupiah doesn't fall solely on the central bank, which would otherwise have to achieve that goal via growth-squeezing rate hikes.
EQUITIES:
U.S. stocks edged lower after two consecutive weeks of gains.
Traders said there was no single reason for stocks moving lower, adding that low trading volumes may have exacerbated declines. It was a quiet day in the markets, a continuing trend for U.S. equities. Just 5.4 billion shares changed hands, making it the second-lowest volume day of 2015.
Market participants are watching closely first-quarter earnings and the Federal Reserve's monetary policy. The Fed is widely expected to raise short-term rates later this year after keeping them near zero since December 2008.
"Investors are anticipating the first Fed hike, and that, coupled with pretty full valuations, is going to make for a sideways market for the rest of the year," said Wayne Lin, a portfolio manager at QS Investors, which manages about $19 billion. "It's going to have to be earnings to drive the market higher."
Some investors say they're waiting until companies report first-quarter earnings before making major changes in their portfolios.
On Tuesday, J.P. Morgan Chase & Co. and Wells Fargo & Co. are set to report quarterly results, setting the tone for the financial sector.
Leading up to those earnings reports, shares of financial companies rose, making the sector the best performer in the S&P 500.
"The group is more of a value-oriented trade, and a lot of what we've been seeing in the market of late has been growth-focused," said Justin Wiggs, managing director of equity trading at Stifel Financial Corp. So long as there are no "massive misses" from banks, portfolio managers of value funds, which lately have been on the sidelines of the stock market, may buy more shares, he said.
Overall, first-quarter earnings are projected to decline year-over-year, with the strong dollar expected to hit earnings of companies with significant operations overseas, while low oil prices should continue to weigh on earnings in the energy sector. As of Friday, companies in the S&P 500 are expected to post a 4.8% fall in earnings, according to FactSet. Energy earnings are expected to slump 65% from a year earlier.
In corporate news, Sears Holdings Corp. said it has formed a joint venture with mall owner Simon Property Group Inc., the latest move by the struggling retailer to cash in on the value of its real estate. Sears shares rose 0.7%.
General Electric Co. shares fell 3.1%. The conglomerate's plan to divest its banking operation GE Capital over the next two years boosted shares last week, leading to GE's largest one-week percentage gain since May 2009.
In Asian trading Monday, Hong Kong's Hang Seng Index rose above the 28000-mark for the first time in more than seven years, fueled by expectations of more investment from the mainland.
FOREX:
The dollar climbed in a broad rally on renewed optimism among investors that the Federal Reserve would stay on track to raise interest rates this year.
The greenback's resurgence chalked up big losses against many rivals, with the euro headed toward a 12-year low, both the Australian and New Zealand dollar losing more than 1%, and the Turkish lira hitting a record low against the buck.
"We are having a big shift back toward U.S. dollar strengthening," said Camilla Sutton, chief currency strategist at Scotiabank.
The dollar's ascent this year had paused in recent weeks, with investors pushing back their expectations of a Fed rate increase amid some disappointing U.S. economic data. But growth in other major economies also seemed to be stalling, underlining the policy divergence between the Fed and many other central banks.
Despite the weaker-than-expected data, "the U.S. still stands out as an island of stable growth on a global scale," said Lennon Sweeting, a San Francisco-based dealer at broker and payment provider USForex Inc. "Even if the Fed doesn't raise rates in June, they're still on a path toward policy tightening, while a number of economies are loosening policies," he said.
The renewed dollar strength was also helped by earnings season, as many U.S. corporations convert their overseas revenues into dollars, driving up the demand for the greenback, Mr. Sweeting said.
Analysts at BNP Paribas said the effects of the European Central Bank's bond-buying program, which has driven down yields on bonds inside the eurozone, is likely to weaken the euro further. "We expect the negative real yields associated with (quantitative easing) in the eurozone to force eurozone investors increasingly into foreign markets," driving down the currency, they said.
The dollar was also buoyed by optimism that the Fed wouldn't try to weaken the dollar. Chairwoman Janet Yellen's remarks on the currency's negative effects on exports and inflation following the March Federal Open Market Committee meeting had raised doubts about whether the Fed would tolerate a stronger dollar.
But the meeting's minutes, released last week, showed "there were not as many concerns (about the dollar strength) as anticipated," said Thu Lan Nguyen, a foreign-exchange strategist at Commerzbank in Frankfurt. "The markets have been given the green light to further buy the dollar and drive the dollar appreciation further."
BONDS:
U.S. government bonds perked up as buyers stepped in after last week's selloff, the biggest in more than a month.
The price swings are the latest signal that bond investors are grappling with two conflicting forces in the world's largest bond market: the prospect of higher interest rates from the Federal Reserve versus U.S. bonds' attractiveness in a low yield world.
The Fed is the only major central bank prepared to raise short-term interest rates this year, though the timing remains hotly debated among policymakers and bond investors amid mixed U.S. economic releases. Investors are concerned the tightening campaign could hurt the value of outstanding bonds.
On the other hand, U.S. bonds offer global investors higher yields than their peers in Germany, Japan, the U.K. and France. A rising dollar over the past few quarters has added to the appeal of foreign investors buying in U.S. bonds.
Investors have been struggling to obtain bonds that offer a good mix of safety and income amid an uneven pace of global economic growth and subdued inflation. Data from China showed exports fell 15% and imports fell 12.7% last month in dollar terms as weak domestic and foreign demand weighed heavily on Chinese factories.
A mixed showing of U.S. economic releases has fueled debate among investors about whether the Fed can afford to raise rates in June or wait longer to act. Fed officials said the recent soft patch was driven by temporary factors such as harsh winter weather. But many investors remain cautious over the growth outlook, especially as a rising dollar undercuts U.S. exporters' competitiveness and corporate earnings outlooks.
The retail sales report due Tuesday and the consumer-price index data due Friday are the highlights of this week's U.S. economic releases.
COMMODITIES:
Oil prices rose for a third straight session on expectations that U.S. crude-oil production is set to slow while global demand may improve.
Prices have plunged in recent months amid a growing oversupply of oil in the global market. Companies have responded to low prices with large spending cuts and reducing the number of rigs drilling for oil in the U.S. to the lowest level since December 2010, but those cuts have yet to translate into a drop in production.
The U.S. Energy Information Administration said that total crude-oil production from seven key shale regions will likely decline by 57,000 barrels a day in May from April.
(MORE TO FOLLOW) Dow Jones Newswires
April 13, 2015 17:31 ET (21:31 GMT)
2200 NZ Q1 NZIER Quarterly Survey of Business Opinion"We're starting to get an anticipation of oil production dropping off," said Carl Larry, director of oil and gas at Frost & Sullivan. "Some people, like myself, are thinking that it's going to be a steep decline."
In the U.S., weekly data shows production near multidecade highs and inventories of crude oil at the highest level in more than 80 years.
The massive production and a seasonal decline in demand has allowed U.S. stockpiles to build. Data provider Genscape Inc. told clients that oil supplies in Cushing, Okla., rose by more than 2 million barrels in the week ended Friday, according to a broker.
However, the chief economist of the International Energy Agency said Monday that global demand would grow by a million barrels a day this year, but low prices could push oil consumption even higher. The global crude-oil market is currently oversupplied by one to two million barrels a day, analysts estimate.
Bearish investors also found news to bolster their view. The Organization of the Petroleum Exporting Countries reiterated in its monthly bulletin that it is not willing to cut production unless non-OPEC producers also cut. OPEC opted in November to keep its oil-output quota at 30 million barrels a day, though it is believed to be producing above the quota.
In the precious metals market, gold prices pulled back below $1,200 an ounce as a stronger dollar overwhelmed interest from foreign buyers.
TODAY'S HEADLINES:
U.S. Budget Deficit Widens Slightly
The Treasury ran a deficit of $439.47 billion during the first half of the fiscal year, up 6% from a year earlier, ending a streak of sustained declines. Deficits are still near their lowest levels in six years.
Activist Buys Big Stake in Qualcomm
Qualcomm is under pressure from activist investor Jana Partners to consider a breakup and other options to boost the giant chip maker's sagging stock price.
European Banks May Have to Pay Borrowers
Negative interest rates in Europe have created a previously inconceivable problem for some banks: they may soon have to pay customers for having lent them money.
Sears Holdings, Simon Property Form Joint Venture
Sears Holdings said it has formed a joint venture with mall owner Simon Property Group, the latest move by the struggling retailer to cash in on the value of its real estate. Sears shares up 1%.
New Offshore Drilling Rules Proposed
The Obama administration proposed new offshore oil and natural-gas drilling regulations aimed at preventing the kind of explosion that erupted nearly five years ago on BP's Deepwater Horizon rig.
Target Hires PetSmart Exec for Grocery Revamp
Target Chief Executive Brian Cornell has hired Anne Dament, a former colleague from the supermarket chain Safeway, to lead a revamp of the retailer's grocery business.
Fitch Affirms U.S. Credit Rating at Triple-A
Fitch Ratings affirmed its triple-A rating on the U.S., citing the nation's financing flexibility and liquid capital markets. The ratings firm said the U.S. deficit is expected to narrow in 2015 and 2016.
Telecom Industry Sues to Overturn Net Neutrality
Industry trade group United States Telecom Association filed a lawsuit to overturn the government's net neutrality rules, the first of what will likely be a wave of legal challenges.
RadioShack Trademarks, Customers, Dealer Network Up for Sale
The RadioShack name is up for sale. Headed to the bankruptcy auction block in May is the well-known trademark of the electronics retailing pioneer, as is the data of millions of customers.
Russia Lifts Iran Missile Ban
The Kremlin lifted its self-imposed ban on the delivery of a powerful air-defense installation to Iran, provoking immediate criticism from the White House and Israel.
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TODAY'S CALENDAR:
(All times GMT, followed by country and event)
0000 SIN Singapore Monetary Policy Statement
0000 SIN Q1 Advance GDP Estimates
0130 AUS Mar NAB Business Survey
0130 AUS Feb Lending Finance
0630 IND Mar Monthly WPI (all commodities)
0630 INA Apr Bank Indonesia Board of Governors meeting & decision
0600 GER Mar WPI
0800 ITA Mar CPI
0800 EU Mar Long term interest rates statistics
0800 EU ECB Bank Lending Survey
0830 UK Mar UK producer prices
0830 UK Feb ONS House Price Index
0830 UK Feb CML Monthly Lending Trends
0830 UK Mar UK monthly inflation figures
0900 EU Feb Industrial Production
0900 EU Q4 Quarterly sectoral accounts
1145 US 04/11 The Retail Economist/Goldman Sachs Weekly Chain Store Sales Index
1230 US Mar PPI
1230 US Mar Advance Monthly Sales for Retail & Food Services
1255 US 04/11 Johnson Redbook Retail Sales Index
1300 US Mar NFIB Index of Small Business Optimism
1300 US IMF World Economic Outlook forecast chapters published
1400 US Feb Manufacturing & Trade: Inventories & Sales
2030 US 04/10 API Weekly Statistical Bulletin
Access Investor Kit for General Electric Co.
Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US3696041033
Access Investor Kit for Sears Holdings Corp.
Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US8123501061
Access Investor Kit for Simon Property Group, Inc.
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(END) Dow Jones Newswires
April 13, 2015 17:31 ET (21:31 GMT)
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