Dentalfloss
Legendary member
- Messages
- 63,404
- Likes
- 3,726
** EVENTS PREVIEW **
********************
A very quiet start to the week in terms of scheduled data and events, with no major statistics and the Renzi, Merkel, Hollande 'summit' to discuss the future of the EU the only significant item on the policy side of the equation. Be that as it may, the slightly more defensive tone in so-called 'risk assets' looks to be a function of profit-taking on the back of the relatively 'hawkish' comments from Fed vice-chairman Fischer on the US economy and inflation, echoing those from Dudley and Williams last week. While there appears to be a little more effort to sing from the same hymn sheet by these Fed officials, markets will doubtless treat them with some scepticism, given the frequent 'back and switch' moves by the FOMC over the past 18 months. Oil markets would appear to be retreating after CFTC COT data which underlined that the rally has been a function of a colossal short squeeze, with very few fresh longs added, as the talk of a potential production agreement upended the seasonally typically accumulation of shorts, as the end of the US driving season sees demand dip, while output continues to rise (see attached charts via Reuters' John Kemp). Eminently a firmer USD in response to the Fischer comments can be given some of the 'blame', though this looks to be more of a straw/camels back interface. Following on from Balfour Beatty's comments in its earnings reports that government decisions on infrastructure spending have been delayed or postponed since the May cabinet was put in place, there also needs to be some attention to further similar reports over the weekend, which raises questions about precisely what Chancellor Hammond will deliver in his November Autumn Statement, particularly as this will be critical to leaning against some of the drag from weakness in Business Investment due to Brexit negotiations related uncertainties. Last but not least there are the comments from BoJ's Kuroda at the weekend hinting at the possibility of a further cut in rates, though this also has to be seen in the context of the latest Reuters poll of Japan Inc's views on Abenomics and BoJ policy, which saw only 5% of respondents seeing the latest fiscal package as proving any boost to the economy, and 62% calling for the BoJ to desisting from further easing or indeed eyeing an exit from QQE.
- Recap: The Week Ahead - Bullet point highlights: 22 to 26 August 2016
- A relatively subdued week in terms of the statistical schedule, with surveys featuring heavily ('flash' PMIs, Ifo, national business and consumer confidence, CBI Industrial Trends Orders & Retailers Sales), alongside US Home Sales, Durable Goods, and revised / detailed Q2 GDP readings in US, UK and Eurozone
- Yellen's Jackson Hole Symposium speech on the Fed's "Monetary Policy Toolkit" on Friday will be the most anticipated event, not only from the aspect of divisions on the FOMC about the near-term policy outlook, but also following SF Fed's Williams paper "Monetary Policy in a Low R-star World" (http://www.frbsf.org/economic-resea...licy-and-low-r-star-natural-rate-of-interest/) earlier this week.
- Markets seem likely to continue to be in peak 'summer holidays' mode, with oil price gyrations and speculation about whether the official chatter about a production cut is anything more than an attempt to shore up oil prices against adverse seasonal trends.
- Govt bond supply is typically light, with the US conducting its usual end of month sales of 2, 5 & 7-yr Treasuries totalling $88.0 Bln, plus $13.0 Bln 2-yr FRN); Germany sells EUR 4.0 Bln 5-yr, and Japan offers 20-yr JGBs. As ever there will be a close eye kept on the Bank of England's QE Gilt reverse auctions, above all the over 15-yr leg on Tuesday.
- On the political front, rising tensions between Russia and Ukraine will be carefully monitored, as will Frau Merkel's round of EU Diplomacy that includes a meeting with Hollande and Renzi, and trips to the Czech Republic and Estonia.
- Central Banks: Turkey's TCMB is seen tightening its rate corridor once again with a 25 bps cut to its overnight Lending Rate, but keeping the lower bound unchanged despite huge political pressure for a more meaningful cut. Rates in Hungary, Iceland, Paraguay are seen unchanged.
- The US Corporate Earnings is largely done, though it will be a relatively busy week for Asia and the resources sectors.
=========
** Factset S&P 500 Earnings Scorecard **
- Earnings Scorecard: With 95% of the companies in the S&P 500 reporting earnings to date for Q2 2016, 71% have reported earnings above the mean estimate and 54% have reported sales above the mean estimate.
- Earnings Growth: For Q2 2016, the blended earnings decline for the S&P 500 is -3.2%. The second quarter marks the first time the index has recorded five consecutive quarters of year-over-year declines in earnings since Q3 2008 through Q3 2009.
- Earnings Revisions: On June 30, the estimated earnings decline for Q2 2016 was -5.5%. Seven sectors have higher growth rates today (compared to June 30) due to upside earnings surprises, led by the Information Technology and Consumer Discretionary sectors.
- Earnings Guidance: For Q3 2016, 72 S&P 500 companies have issued negative EPS guidance and 30 S&P 500
companies have issued positive EPS guidance.
- Valuation: The forward 12-month P/E ratio for the S&P 500 is 17.1. This P/E ratio is based on Thursday’s closing price (2187.02) and forward 12-month EPS estimate ($128.46).
from Marc Ostwald
********************
A very quiet start to the week in terms of scheduled data and events, with no major statistics and the Renzi, Merkel, Hollande 'summit' to discuss the future of the EU the only significant item on the policy side of the equation. Be that as it may, the slightly more defensive tone in so-called 'risk assets' looks to be a function of profit-taking on the back of the relatively 'hawkish' comments from Fed vice-chairman Fischer on the US economy and inflation, echoing those from Dudley and Williams last week. While there appears to be a little more effort to sing from the same hymn sheet by these Fed officials, markets will doubtless treat them with some scepticism, given the frequent 'back and switch' moves by the FOMC over the past 18 months. Oil markets would appear to be retreating after CFTC COT data which underlined that the rally has been a function of a colossal short squeeze, with very few fresh longs added, as the talk of a potential production agreement upended the seasonally typically accumulation of shorts, as the end of the US driving season sees demand dip, while output continues to rise (see attached charts via Reuters' John Kemp). Eminently a firmer USD in response to the Fischer comments can be given some of the 'blame', though this looks to be more of a straw/camels back interface. Following on from Balfour Beatty's comments in its earnings reports that government decisions on infrastructure spending have been delayed or postponed since the May cabinet was put in place, there also needs to be some attention to further similar reports over the weekend, which raises questions about precisely what Chancellor Hammond will deliver in his November Autumn Statement, particularly as this will be critical to leaning against some of the drag from weakness in Business Investment due to Brexit negotiations related uncertainties. Last but not least there are the comments from BoJ's Kuroda at the weekend hinting at the possibility of a further cut in rates, though this also has to be seen in the context of the latest Reuters poll of Japan Inc's views on Abenomics and BoJ policy, which saw only 5% of respondents seeing the latest fiscal package as proving any boost to the economy, and 62% calling for the BoJ to desisting from further easing or indeed eyeing an exit from QQE.
- Recap: The Week Ahead - Bullet point highlights: 22 to 26 August 2016
- A relatively subdued week in terms of the statistical schedule, with surveys featuring heavily ('flash' PMIs, Ifo, national business and consumer confidence, CBI Industrial Trends Orders & Retailers Sales), alongside US Home Sales, Durable Goods, and revised / detailed Q2 GDP readings in US, UK and Eurozone
- Yellen's Jackson Hole Symposium speech on the Fed's "Monetary Policy Toolkit" on Friday will be the most anticipated event, not only from the aspect of divisions on the FOMC about the near-term policy outlook, but also following SF Fed's Williams paper "Monetary Policy in a Low R-star World" (http://www.frbsf.org/economic-resea...licy-and-low-r-star-natural-rate-of-interest/) earlier this week.
- Markets seem likely to continue to be in peak 'summer holidays' mode, with oil price gyrations and speculation about whether the official chatter about a production cut is anything more than an attempt to shore up oil prices against adverse seasonal trends.
- Govt bond supply is typically light, with the US conducting its usual end of month sales of 2, 5 & 7-yr Treasuries totalling $88.0 Bln, plus $13.0 Bln 2-yr FRN); Germany sells EUR 4.0 Bln 5-yr, and Japan offers 20-yr JGBs. As ever there will be a close eye kept on the Bank of England's QE Gilt reverse auctions, above all the over 15-yr leg on Tuesday.
- On the political front, rising tensions between Russia and Ukraine will be carefully monitored, as will Frau Merkel's round of EU Diplomacy that includes a meeting with Hollande and Renzi, and trips to the Czech Republic and Estonia.
- Central Banks: Turkey's TCMB is seen tightening its rate corridor once again with a 25 bps cut to its overnight Lending Rate, but keeping the lower bound unchanged despite huge political pressure for a more meaningful cut. Rates in Hungary, Iceland, Paraguay are seen unchanged.
- The US Corporate Earnings is largely done, though it will be a relatively busy week for Asia and the resources sectors.
=========
** Factset S&P 500 Earnings Scorecard **
- Earnings Scorecard: With 95% of the companies in the S&P 500 reporting earnings to date for Q2 2016, 71% have reported earnings above the mean estimate and 54% have reported sales above the mean estimate.
- Earnings Growth: For Q2 2016, the blended earnings decline for the S&P 500 is -3.2%. The second quarter marks the first time the index has recorded five consecutive quarters of year-over-year declines in earnings since Q3 2008 through Q3 2009.
- Earnings Revisions: On June 30, the estimated earnings decline for Q2 2016 was -5.5%. Seven sectors have higher growth rates today (compared to June 30) due to upside earnings surprises, led by the Information Technology and Consumer Discretionary sectors.
- Earnings Guidance: For Q3 2016, 72 S&P 500 companies have issued negative EPS guidance and 30 S&P 500
companies have issued positive EPS guidance.
- Valuation: The forward 12-month P/E ratio for the S&P 500 is 17.1. This P/E ratio is based on Thursday’s closing price (2187.02) and forward 12-month EPS estimate ($128.46).
from Marc Ostwald
