Asian Morning Briefing: U.S. Stocks End Flat

 


LAST    CHANGE   % CHG 
DJIA                 17745.98    -5.41  -0.03% 
Nasdaq                5128.78    17.05   0.33% 
S&P 500               2108.63     0.06   0.00% 
Japan: Nikkei 225    20522.83   219.92   1.08% 
Hang Seng            24497.98  -121.47  -0.49% 
Shanghai Composite    3705.77    -83.4  -2.20% 
S&P BSE Sensex       27705.35   141.92   0.51% 
Australia: S&P/ASX     5669.5     45.3   0.81% 
UK: FTSE 100          6668.87    37.87   0.57% 
 
 
                    PRICE CHG  YIELD 
U.S. 2 Year              0/32   0.72 
U.S. 5 Year              0/32  1.617 
U.S. 10 Year             7/32   2.26 
Australia 10 Year      -15/32  2.855 
China 10 Year          -21/32   3.48 
India 10 Year           -3/32  7.988 
Japan 10 Year           -3/32  0.416 
German 10 Year          18/32  0.616 
 
 
                          LAST(MID)  CHANGE 
Australia $ (AUD/USD)        0.7291  -0.0004 
Yen (USD/JPY)                124.14     0.21 
S. Korean Won (USD/KRW)     1173.23    11.19 
Chinese Yuan (USD/CNY)       6.2095   0.0098 
Euro (EUR/USD)               1.0932  -0.0054 
WSJ Dollar Index               88.7      0.3 
 
 
               LAST   CHANGE  % CHG 
Crude Oil      48.46   -0.33  -0.68% 
Brent Crude    53.33   -0.05  -0.09% 
Gold          1087.7    -5.6  -0.51% 
 

        MARKETS AT A GLANCE
        (Data as of approximately 5 p.m. ET)
        SNAPSHOT:
        U.S. stocks ended Thursday little changed as investors focused on the latest batch of corporate earnings. Oil and gold fell on a stronger dollar. Short-dated Treasury prices fell, while the benchmark 10-year notes rose.
        OPENING CALL:
        Bets are rising that China's currency is headed lower with its stock market, a signal of waning investor confidence in the country's ability to manage its economic slowdown and market turmoil.
        Activity has ramped up in the yuan options market, where investors are taking positions to protect against a potential weakening of the yuan against the U.S. dollar over the next three to six months.
        Those bets have increased after Beijing last week announced measures to support China's flagging trade sector, including allowing a more market-driven currency.
        "The market is implying that a lot of people are expecting a depreciation," said Cynthia Wong, who heads Societe Generale's emerging market Asia fixed income and currencies trading in Hong Kong and Singapore. Ms. Wong said hedge funds have gotten more active over the last couple of weeks, helping send trading volumes of yuan and offshore yuan options up as much as 40%.
        EQUITIES:
        U.S. stocks ended the trading day little changed as investors focused on the latest batch of corporate earnings.
        The pause follows two days of solid advances that position the Dow Jones Industrial Average to end a tumultuous trading month with slight gains.
        On Thursday, U.S. stocks started the day in the red following data that indicated the U.S. economy has yet to fully rebound from a weak start to the year.
        The Commerce Department said that U.S. economic output in the second quarter expanded at an annual rate of 2.3%. Economists surveyed by The Wall Street Journal had expected the rate of growth to be 2.7%.
        The government also said that first-quarter GDP, or the broadest sum of goods and services produced across the economy, grew at a 0.6% rate, an upward revision from a previously reported 0.2% contraction.
        Major indexes pared their losses, though, and spent the afternoon hovering near the flat line.
        The Dow industrials ended the day down 5.41 points, or 0.03%, at 17745.98. The S&P 500 added 0.06 point to 2108.63, while the Nasdaq Composite Index rose 17.05 points, or 0.3%, to 5128.78.
        The Dow industrials are up 0.7% for July, but remain down 0.4% for the year.
        "The economy continues to grow, but we're not seeing the kind of growth everybody wants," said Brad McMillan, chief investment officer at Commonwealth Financial Network. Still, he said he believes moderate growth is good for stock investors, because it means the U.S. Federal Reserve will take its time to raise short-term interest rates.
        In corporate news, Procter & Gamble's shares fell 4% after sales growth decelerated at the consumer products company and it hinted that profit might decline for its new business year.
        In Asia on Thursday, the Shanghai Composite closed down 2.2% after snapping a three-day losing streak on Wednesday, while the Nikkei Stock Average ended the session up 1.1%, helped by a weaker yen.
        FOREX:
        The dollar pushed higher against the euro and the yen after encouraging U.S. economic data moved investors to nudge forward their expectations for higher borrowing costs.
        The dollar gained 0.5% versus the common currency, as one euro bought $1.0932 in late-afternoon trade, on pace for its lowest close against the U.S. currency in a week. The dollar increased 0.2% against the yen to Yen124.15, heading for its strongest close since July 20.
        The Wall Street Journal Dollar Index, which measures the dollar against a basket of commonly traded currencies rose 0.3% to 88.71, its highest in four months.
        Currency traders and investors looked past a lower-than-expected number measuring overall U.S. growth from April through June to focus on stronger underlying data for consumer spending, the housing market, exports and inflation, as well as upward revisions to numbers for the first three months of 2015, said Brad Bechtel, managing director at Jefferies FX Group. They also noted that numbers for weekly jobless claims remained near four-decade lows, consistent with a strengthening labor market.
        The dollar continued to appreciate one day after the Federal Reserve's policy-making group signaled in its statement that the bar to meet conditions necessary for a September interest-rate increase was low. Thursday's U.S. data helped to reinforce such a timeline.
        "Markets still generally want to be long dollars," Mr. Bechtel said. "Going forward, the dollar should have a slow grind, but on trend, push a little higher."
        BONDS:
        Yields on short-dated Treasury notes nearly breached the highest level of the year after a report showed the U.S. economy picked up speed in the second quarter, bolstering the case for the Federal Reserve to raise interest rates in September.
        While the 2.3% growth rate was below the 2.7% forecast by economists, the pace quickened from 0.6% in the first quarter, which was revised higher from a 0.2% contraction. An upturn in exports and stronger consumer spending were among factors boosting economic growth last quarter.
        The Federal Reserve didn't offer clear signals Wednesday about a rate increase in September, but analysts say its brighter assessment on the labor market suggests the door remains wide open for the central bank to act in that month.
        The report "allows the Fed the leeway to tighten in September," said Larry Milstein, head of government and agency trading at R.W. Pressprich & Co. in New York.
        The yield on the two-year Treasury note, among the most sensitive to changes in the Fed's rate policy outlook, rose to 0.731% Thursday afternoon, compared with 0.704% on Wednesday. Yields rise as prices fall.
        It marks the yield's highest closing level since 0.733% on June 10, which was the highest closing level since December.
        As investors migrated money out of shorter-dated notes and into longer-dated bonds, the yield on the benchmark 10-year Treasury note fell to 2.268% from 2.279% on Wednesday.
        COMMODITIES:
        Oil prices slipped, erasing early gains as the dollar strengthened.
        Prices have dropped sharply in July as persistently high U.S. production, coupled with record output from other major suppliers like Saudi Arabia, met worries about slowing demand exacerbated by this month's massive selloff in Chinese equities.
        Currency moves have also weighed on oil prices in recent months, with a strengthening dollar making oil, which is priced in dollars, more expensive for foreign buyers. The WSJ Dollar Index, which tracks the dollar against a basket of foreign currencies, recently traded up 0.4%.
        Light, sweet crude for September delivery settled down 27 cents, or 0.6%, at $48.52 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 7 cents, or 0.1%, to $53.31 a barrel on ICE Futures Europe.
        Prices rose earlier in the day after U.S. inventory data on Wednesday showed a surprise drop in U.S. crude inventories and production.
        "The little bounce we had seems to have dried up," said Gene McGillian, analyst at Tradition Energy in Stamford, Conn. "The stronger the dollar got, the selling pressure picked up, and that's why the market turned lower."
        Gold futures drummed a retreat as some investors adjusted their outlook on U.S. interest rates while others sold precious metals amid pressure from a stronger dollar.
        TODAY'S HEADLINES:
        U.S. Economy Expanded 2.3% in Second Quarter
        The U.S. economy accelerated modestly in the second quarter--up 2.3%--after a slow start to 2015, but growth this year is still less than last year's tepid first half and is well below the overall pace of the recovery.
        LinkedIn Earnings Top Expectations
        LinkedIn's second-quarter earnings grew faster than expected, a sign that the professional network is seeing success as it shifts strategies in multiple segments.
        Google Quietly Distributes New Version of Glass
        Google is quietly distributing a new version of its Glass wearable computer aimed at businesses in industries such as healthcare, manufacturing and energy, according to people familiar with the situation.
        Deutsche Bank Didn't Archive Chats Used by Some Employees Tied to Libor Probe
        A month after reaching a $2.5 billion settlement over interest rate rigging, Deutsche Bank told regulators its disclosures may have been incomplete because it accidentally failed to archive electronic chats involving its employees.
        (MORE TO FOLLOW) Dow Jones Newswires

        July 30, 2015 17:30 ET (21:30 GMT)
        Coca-Cola Enterprises in Advanced Talks to Combine with Other Bottlers
        Three bottlers of Coca-Cola products in Europe are in advanced talks for a merger that would further a push by the U.S. soda giant to consolidate its bottlers around the world and lower costs.
        Tax Status of Avago-Broadcom Merger Uncertain
        The Internal Revenue Service has declined to assure that Avago's pending $37 billion takeover of Broadcom will be tax-free to Broadcom shareholders, highlighting an unusual consequence of some cross-border deals.
        Procter & Gamble Gives a Muted Outlook
        Procter & Gamble gave weak guidance for its new fiscal year and said sales in the latest quarter dropped more than expected, sending shares south.
        Nasdaq OMX, Markit Express Interest in IDC
        Nasdaq OMX Group and Markit have expressed interest in acquiring financial data provider Interactive Data Corp., according to people familiar with the matter.
        Obama Asks Supreme Court to Review Insider-Trading Ruling
        The Obama administration asked the Supreme Court to review last year's insider-trading decision by a federal appeals court that overturned two convictions and set a higher standard for proving the financial crime.
        Amgen Raises 2015 Outlook, Results Beat Expectations
        The biotechnology company raised its 2015 guidance after reporting that its second-quarter earnings rose 6.9% on better-than-expected sales growth and lower operating expenses.
        RECENT DJ EXCLUSIVES:
        Thrifty Sony Still Has Some Explaining to Do -- Heard on the Street
        IRS Declines to Assure Avago Takeover Will Be Tax-Free to Broadcom Holders
        Coca-Cola Enterprises in Advanced Talks to Combine with Other Coke Bottlers
        Boeing Moves Top Executive to Fix Aerial Tanker Project
        Deutsche Bank Didn't Archive Chats Used by Some Employees Tied to Libor Probe
        TODAY'S CALENDAR
        (Times in GMT, followed by country and event)
        2100 SKA Aug Business Survey Index
        2300 SKA Jun Industrial Production Index
        2300 SKA Jun Service Industry Activity Index
        2330 JPN Jul CPI (Tokyo), CPI ex-Food (Tokyo)
        2330 JPN Jun CPI (Nation), CPI ex-food (Nation)
        2330 JPN Jun Labour Force Survey
        2330 JPN Jun Household Spending
        0030 TAI Q2 Advance GDP
        0100 NZ Jul ANZ Business Outlook
        0130 AUS Jun Financial Aggregates, incl Private Sector Credit
        0130 AUS Q2 PPI
        0200 SIN Jun Money Supply
        0200 SIN Jun Bank Loans
        0401 MAL Jun PPI
        0430 JPN Jun Preliminary Report on Petroleum Statistics
        0500 JPN Jun Construction Orders
        0500 JPN Jun Housing Starts
        0600 GER Jun Retail Trade
        0630 AUS Jun International Reserves & Foreign Currency Liquidit
        0645 FRA Jun PPI
        0645 FRA Jun Household consumption expenditure in manufactured goods
        0730 THA Week En Weekly International Reserves
        0730 EU Jul EuroCOIN indicator of euro area economic activity
        0800 ITA Jun Unemployment
        0815 HK Jun Money Supply
        0830 HK Jun Retail Sales
        0900 MAL Jun Money Supply
        0900 ITA Jul Provisional CPI
        0900 ITA Jul Cities CPI
        0900 EU Jun Unemployment
        0900 EU Jul Flash Estimate euro area inflation
        1000 ITA Jun PPI
        1130 IND Weekly foreign exchange reserves
        1230 US Q2 Employment Cost Index
        1230 CAN May GDP
        1345 US Jul ISM-Chicago Business Survey - Chicago PMI Employment Index
        1400 US Jul University of Michigan Survey of Consumers -- final
        1800 CAN Bank of Canada Weekly Financial Statistics
        (END) Dow Jones Newswires

        July 30, 2015 17:30 ET (21:30 GMT)

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