CFD Markets News and Forecasts — 16-07-2018

Major US stock indices fell mainly on Monday, as a sharp fall in crude oil prices affected the energy sector and offset the rebound of shares of financial corporations after strong results from Bank of America strengthened the expectations of the earnings season.

Negligible impact on the course of trading also provided data on the United States. As it became known, in June retail sales increased significantly, which was facilitated by an increase in purchases of cars and a number of other goods, which led to the revival of reliable economic growth in the second quarter. The Commerce Department reported that retail sales rose 0.5% last month. Data for May were revised upward to show an increase in sales of 1.3% instead of the previously achieved 0.8% growth. May's growth in retail sales was the largest since September 2017.

However, the results of research published by the Federal Reserve Bank of New York, showed that the region's production index fell in July slightly less than the average forecast of economists. According to the data, the production index in the current month fell to +22.6 points compared to +25.0 points in June. Previous value was not revised. Economists had expected the index to fall to +22.0 points.

Inventories in the US continued to grow in May, and sales recorded the largest increase in eight months, according to government data on Monday. The Ministry of Trade reported that inventories increased by 0.4% after an unrevised growth of 0.3% in April. The May growth in inventories, which are a key component of the gross domestic product, met the expectations of economists.

Most components of DOW finished trading in the red (18 out of 30). Outsider were shares of Caterpillar Inc. (CAT, -1.90%). Leader of the growth were shares of JPMorgan Chase & Co. (JPM, + 3.97%).

Most S & P sectors recorded a decline. The largest drop was shown by the commodity sector (-1.2%). The conglomerate sector grew most (+ 1.2%).

At closing:

Dow 25,064.36 +44.95 +0.18%

S&P 500 2,798.43 -2.88 -0.10%

Nasdaq 100 7,805.72 -20.26 -0.26%

U.S. stock-index futures were flat on Monday, as expectations of a solid corporate earnings season were outweighed by a drop in crude oil and expectations of the outcomes of the meeting between U.S. President Donald Trump and Russian President Vladimir Putin.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

FedEx (FDX) downgraded to Neutral from Buy at UBS

Business activity continued to grow at a fairly brisk pace in New York State, according to firms responding to the July 2018 Empire State Manufacturing Survey. The headline general business conditions index edged down by over two points to 22.6-still a high level, suggesting a continuation of robust growth. The new orders index dipped three points to 18.2, while the shipments index fell nine points to 14.6, pointing to a modest pullback in growth of orders and shipments.

Foreign investment in Canadian securities slowed to $2.2 billion in May, down from $9.1 billion in April. Meanwhile, Canadian investors resumed their investment in foreign securities by adding $5.7 billion worth to their holdings, mainly in foreign bonds.

The investment pattern in May, both inward and outward, reflected acquisitions of bonds and reductions in holdings of equities. Overall, Canada's international transactions in securities generated a net inflow of funds of $4.6 billion in the Canadian economy in the first five months of 2018, compared with a net inflow of $72.8 billion for the same period in 2017.

Advance estimates of U.S. retail and food services sales for June 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $506.8 billion, an increase of 0.5 percent from the previous month, and 6.6 percent above June 2017. Total sales for the April 2018 through June 2018 period were up 5.9 percent from the same period a year ago. The April 2018 to May 2018 percent change was revised from up 0.8 percent (±0.5 percent) to up 1.3 percent (±0.2 percent).

Retail trade sales were up 0.3 percent from May 2018, and 6.4 percent above last year. Gasoline Stations were up 21.6 percent from June 2017, while Nonstore Retailers were up 10.2 percent (±1.4 percent) from last year.

Bank of America (BAC) reported Q2 FY 2018 earnings of $0.63 per share (versus $0.46 in Q2 FY 2017), beating analysts' consensus estimate of $0.57.

The company's quarterly revenues amounted to $22.600 bln (-0.9% y/y), generally in-line with analysts' consensus estimate of $22.486 bln.

BAC rose to $28.91 (+1.26%) in pre-market trading.

Deutsche Bank AG on Monday said second-quarter profit and revenue would come in considerably above analysts' forecasts, welcome news for the German bank's new chief executive as he seeks to revive the lender's fortunes.

The bank said it expects net income of around EUR400 million ($663.4 million) for the period, compared with a consensus estimate of EUR159 million, and pretax profit of about EUR700 million versus expectations of EUR321 million. It expects revenue of EUR6.6 billion against analysts' forecasts of EUR6.4 billion.

In May 2018 seasonally-adjusted data, compared to April 2018, decreased for outgoing flows (-1.6%) and increased for incoming flows and (+0.8%). Exports fell for both non EU and EU countries (-3.1% and -0.5% respectively). Imports raised for EU countries (+1.9%) and decreased for non EU countries (-0.8%). Over the last three months, seasonally-adjusted data, compared to the three months earlier, showed a decreased for exports (-0.7%) and an increased for imports (+0.8%).

In May 2018, compared with the same month of the previous year, exports declined (-0.8%) while import increased (+1.7%). Outgoing flows raised by 0.7% for EU countries and decreased by 2.8% for non EU countries. Incoming flows increased by 3.9% for EU area and fell by 1.4% for non EU area. The trade balance in May 2018 amounted to +3,378 million Euros (+2,362 million Euros for non EU area and +1,015 million Euros for EU countries).

The first estimate for euro area (EA19) exports of goods to the rest of the world in May 2018 was €189.6 billion, a decrease of 0.8% compared with May 2017 (€191.2 bn). Imports from the rest of the world stood at €173.1 bn, a rise of 0.7% compared with May 2017 (€171.9 bn). As a result, the euro area recorded a €16.5 bn surplus in trade in goods with the rest of the world in May 2018, compared with +€19.3 bn in May 2017. Intra-euro area trade rose to €162.3 bn in May 2018, up by 0.5% compared with May 2017.

In January to May 2018, euro area exports of goods to the rest of the world rose to €927.6 bn (an increase of 2.8% compared with January-May 2017), while imports rose to €847.6 bn (also an increase of 2.8% compared with January-May 2017). As a result the euro area recorded a surplus of €80.0 bn, compared with +€78.0 bn in January-May 2017. Intra-euro area trade rose to €808.0 bn in January-May 2018, up by 4.8% compared with January-May 2017

July 16

Before the Open:

Bank of America (BAC). Consensus EPS $0.57, Consensus Revenues $22485.63 mln.

After the Close:

Netflix (NFLX). Consensus EPS $0.79, Consensus Revenues $3937.69 mln.

Jul 17

Before the Open:

Goldman Sachs (GS). Consensus EPS $4.65, Consensus Revenues $8743.43 mln.

Johnson & Johnson (JNJ). Consensus EPS $2.07, Consensus Revenues $20387.21 mln.

UnitedHealth (UNH). Consensus EPS $3.04, Consensus Revenues $56094.64 mln.

After the Close:

July 18

Before the Open:

Morgan Stanley (MS). Consensus EPS $1.10, Consensus Revenues $10051.52 mln.

After the Close:

Alcoa (AA). Consensus EPS $1.29, Consensus Revenues $3469.28 mln.

American Express (AXP). Consensus EPS $1.81, Consensus Revenues $10049.34 mln.

IBM (IBM). Consensus EPS $3.04, Consensus Revenues $19860.34 mln.

July 19

Before the Open:

Travelers (TRV). Consensus EPS $2.43, Consensus Revenues $6664.94 mln.

After the Close:

Microsoft (MSFT). Consensus EPS $1.08, Consensus Revenues $29228.68 mln.

July 20

Before the Open:

General Electric (GE). Consensus EPS $0.18, Consensus Revenues $29342.97 mln.

Honeywell (HON). Consensus EPS $2.01, Consensus Revenues $10813.52 mln.

China's gross domestic product expanded a seasonally adjusted 1.8 percent on quarter in the second quarter of 2018, according to rttnews.

That beat forecasts for an increase of 1.6 percent following the rise of 1.4 percent in the three months prior.

On a yearly basis, GDP climbed 6.8 percent - unchanged from Q1 but beating expectations for 6.7 percent.

The National Bureau of Statistics also said that retail sales advanced an annual 9.0 percent - exceeding expectations for 8.8 percent and up from 8.5 percent in May.

Industrial production gained 6.0 percent on year, shy of forecasts for 6.5 percent and down from 6.8 percent in the previous month.

Fixed asset investment gained 6.0 percent on year, in line with expectations and down from 6.12 percent a month earlier.

"Received many calls from leaders of NATO countries thanking me for helping to bring them together and to get them focused on financial obligations, both present & future. We had a truly great Summit that was inaccurately covered by much of the media. NATO is now strong & rich!".

EUR/USD

Resistance levels (open interest**, contracts)

$1.1832 (2237)

$1.1790 (2655)

$1.1751 (155)

Price at time of writing this review: $1.1656

Support levels (open interest**, contracts):

$1.1609 (3125)

$1.1571 (3914)

$1.1530 (2410)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date August, 13 is 86095 contracts (according to data from July, 13) with the maximum number of contracts with strike price $1,1850 (5190);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3336 (654)

$1.3306 (669)

$1.3280 (105)

Price at time of writing this review: $1.3239

Support levels (open interest**, contracts):

$1.3181 (1542)

$1.3156 (1459)

$1.3127 (2040)

Comments:

- Overall open interest on the CALL options with the expiration date August, 13 is 21949 contracts, with the maximum number of contracts with strike price $1,3600 (3217);

- Overall open interest on the PUT options with the expiration date August, 13 is 25349 contracts, with the maximum number of contracts with strike price $1,3100 (2128);

- The ratio of PUT/CALL was 1.15 versus 1.15 from the previous trading day according to data from July, 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.