CFD Markets News and Forecasts — 27-06-2018

Информационно-аналитический отдел TeleTrade

Major US stock indexes lost all the previously earned positions, and ended the session in negative territory, which was due to the market's concern over trade, as well as the fall in the shares of the technology sector.

A certain influence on the course of trading was provided by the US data. As it became known, the deficit of trade in goods in May fell by 3.7% to $ 64.8 billion, the government said in its preliminary report. This was well below the economists estimate of 69.2 billion, surveyed by MarketWatch, and noted a second decline in a row. In May, the revised government report on wholesale stocks showed an increase of 0.5%. The revised retail stocks increased by 0.4%.

In addition, according to the National Association of Realtors, unfinished transactions for the sale of housing fell slightly in May and fell year on year for the fifth consecutive month. A more significant decrease in contract activity in the South compensates for profits in the Northeast, the Midwest and the West. The index of unfinished transactions for the sale of housing, the forecast indicator, based on the signing of contracts, fell to 105.9 from 106.4 in April.

Quotes of oil rose strongly on Wednesday, as the fall in oil reserves in the US exacerbated supply problems due to uncertainty about Libyan exports, a violation of production in Canada, and US demands that importers stop buying Iranian oil from November. The US Energy Ministry reported that last week it was recorded the largest drop in oil reserves since September 2016, while stocks of gasoline and distillates rose less than expected. According to the report, in the week of June 16-22, oil reserves fell by 9.891 million barrels, to 416.6 million barrels. Analysts had expected a drop in inventories of 2.572 million barrels.

Most of the components of DOW finished trading in the red (25 of 30). Outsider were shares of McDonald's Corporation (MCD, -2.16%). The leader of growth was shares of General Electric Company (GE, + 1.60%).

Almost all S & P sectors recorded a decline. The biggest decline was shown by the technological sector (-1.7%). Only the commodities sector showed growth (+ 0.4%).

At closing:

Dow 24,117.59 -165.52 -0.68%

S&P 500 2,699.63 -23.43 -0.86%

Nasdaq 100 7,445.08 -116.54 -1.54%

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 9.9 million barrels from the previous week. At 416.6 million barrels, U.S. crude oil inventories are about 4% below the five year average for this time of year.

Total motor gasoline inventories increased by 1.2 million barrels last week and are about 6% above the five year range. Finished gasoline inventories decreased while blending components inventories increased last week.

Distillate fuel inventories remained unchanged last week and are about 14% below the five year average for this time of year. Propane/propylene inventories increased by 4.3 million barrels last week and are about 12% below the five year average for this time of year. Total commercial petroleum inventories decreased by 4.6 million barrels last week.

After two straight months of modest increases, pending home sales dipped in April to their third-lowest level over the past year, according to the National Association of Realtors. All major regions saw no gain in contract activity last month.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, declined 1.3 percent to 106.4 in April from an upwardly revised 107.8 in March. With last month's decrease, the index is down on an annualized basis (2.1 percent) for the fourth straight month.

U.S. stock-index futures were little changed on Wednesday, as the Trump administration softened somewhat its position on regulating foreign investment in the U.S. technology companies.

Global Stocks:

• Says He's 'Available to Listen' to Any Chinese Proposal

• U.S. Won't Discriminate Against China on Wholesale Basis

• CFIUS Legislation Gives U.S. 'Many More Tools'

• He's Not Uncomfortable With U.S. Debt to GDP 'Right Now'

Wall Street. Stocks before the bell

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

Upgrades before the market open

General Electric (GE) upgraded to Perform from Underperform at Oppenheimer

Analyst coverage resumption before the market open

AT&T (T) resumed with a Overweight at Morgan Stanley; target $37

Analyst coverage initiations before the market open

3M (MMM) initiated with a Underperform at Wolfe Research; target $204

United Tech (UTX) initiated with a Outperform at Wolfe Research; target $149

Honeywell (HON) initiated with a Outperform at Wolfe Research; target $170

Johnson & Johnson (JNJ) initiated with a Mkt Perform at Bernstein; target $129

The international trade deficit was $64.8 billion in May, down $2.5 billion from $67.3 billion in April. Exports of goods for May were $143.6 billion, $2.9 billion more than April exports. Imports of goods for May were $208.4 billion, $0.4 billion more than April imports.

Wholesale inventories for May, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $633.2 billion, up 0.5 percent (±0.2 percent) from April 2018, and were up 5.9 percent (±3.7 percent) from May 2017. The March 2018 to April 2018 percentage change was unrevised from the preliminary estimate of up 0.1 percent (±0.2 percent).

New orders for manufactured durable goods in May decreased $1.4 billion or 0.6 percent to $248.8 billion, the U.S. Census Bureau announced today. This decrease, down two consecutive months, followed a 1.0 percent April decrease. Excluding transportation, new orders decreased 0.3 percent. Excluding defense, new orders decreased 1.5 percent. Transportation equipment, also down two consecutive months, led the decrease, $0.9 billion or 1.0 percent to $86.1 billion.

Shipments of manufactured durable goods in May, down following nine consecutive monthly increases, decreased $0.2 billion or 0.1 percent to $246.9 billion. This followed a virtually unchanged April increase. Transportation equipment, down two consecutive months, drove the decrease, $0.5 billion or 0.6 percent to $82.1 billion.

The survey of 106 firms, consisting of 45 retailers, also revealed that sales volumes were well above average for the time of year, following three months when they were below seasonal averages. Additionally, the survey reported a jump in growth in the volume of orders placed on suppliers.

Retail sales growth was fairly broad-based across retail sub-sectors, with the pick-up in June driven particularly by a rise in non-store sales, department stores, durable household goods, and "other" normal goods. Grocers and hardware & DIY stores also fared well, reporting robust sales. Meanwhile, carpet & furniture stores and clothing retailers saw a drop in sales volumes in the year to June.

• Further Action Needed By EU, UK Authorities to Mitigate Risks of Disruption

• UK Banks' Capital Positions Strong Enough to Withstand Disorderly Brexit

"The euro edges up against the dollar, last up 0.2% at 1.1670, but looking unlikely to break back towards this week's peak of around 1.1721. U.S. President Donald Trump playing down reports of plans to limit Chinese investment in technology helps ease risk aversion in markets, lending some support to the euro. However, uncertainties remain which will ensure trading in EUR/USD will remain choppy,. It is not easy for the FX market to work out which currency will end up as the possible winner or loser and whether the feared global recession will occur or not,". - Commerzbank

• Annual growth rate of broad monetary aggregate M3 increased to 4.0% in May 2018 from 3.8% in April (revised from 3.9%)

• Annual growth rate of narrower aggregate M1, comprising currency in circulation and overnight deposits, increased to 7.5% in May from 7.0% in April

• Annual growth rate of adjusted loans to households stood at 2.9% in May, unchanged from previous month Annual growth rate of adjusted loans to non-financial corporations increased to 3.6% in May from 3.3% in April

EUR/USD

Resistance levels (open interest**, contracts)

$1.1800 (3011)

$1.1758 (1090)

$1.1732 (130)

Price at time of writing this review: $1.1659

Support levels (open interest**, contracts):

$1.1615 (2630)

$1.1577 (2747)

$1.1535 (4558)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date July, 9 is 100624 contracts (according to data from June, 26) with the maximum number of contracts with strike price $1,1550 (4558);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3388 (699)

$1.3358 (554)

$1.3316 (167)

Price at time of writing this review: $1.3229

Support levels (open interest**, contracts):

$1.3166 (2089)

$1.3128 (1666)

$1.3086 (2490)

Comments:

- Overall open interest on the CALL options with the expiration date July, 9 is 23234 contracts, with the maximum number of contracts with strike price $1,3650 (2457);

- Overall open interest on the PUT options with the expiration date July, 9 is 29776 contracts, with the maximum number of contracts with strike price $1,3250 (2500);

- The ratio of PUT/CALL was 1.28 versus 1.26 from the previous trading day according to data from June, 26.

* - 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.

• UK annual house price softened to 2%.

• Prices up 0.5% during the month, after taking account of seasonal factors.

• London was the weakest performing region in Q2, with prices down 1.9% year-on-year.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: "Annual house price growth fell to its slowest pace for five years in June. However, at 2% this was only modestly below the 2.4% recorded the previous month. "Indeed, annual house price growth has been confined to a fairly narrow range of c2-3% over the past 12 months, suggesting little change in the balance between demand and supply in the market over that period".

ANZ Business Outlook Survey provides a timely gauge of sentiment in the business community and expectations regarding the outlook. When businesses were asked what they thought about business conditions in the year ahead, a net 39% of businesses were pessimistic, down 12 points and back at November lows. Business confidence has been falling since June last year as economic headwinds have strengthened. Business sentiment is only one input into the decision-making that drives the economy. Firms' expectations of their own activity are a better gauge of future GDP growth. Firms' views of their own activity dipped from +14 to +9 in June but remain positive. Looking at own activity by industry, retailers remain the least positive (+6), while manufacturers are the most upbeat (+16).

• Goods exports rose $509 million (10 percent) to $5.4 billion, a new high for total exports in a May month, and the second-highest for any month. The highest was $5.5 billion in December 2017.

• Goods imports rose $277 million (5.7 percent) to $5.1 billion, a new high for total imports in a May month. The previous high was $4.8 billion in May 2017.

• The monthly trade balance was a surplus of $294 million (5.4 percent of exports), higher than the average monthly surplus in the last five May months ($215 million).

• Meat and edible offal lead exports rise

• Meat and edible offal led the export rise, up $119 million (17 percent) to $812 million, the second highest for any month. The previous high was in March 2015.

• Lamb led the rise, up $89 million (32 percent) in value and 22 percent in quantity.

• Beef also rose, up $16 million (4.5 percent) in value and 5.3 percent in quantity.

• Logs, wood, and wood articles rose $99 million (26 percent) to $477 million.

• Untreated logs rose $76 million (32 percent) to $314 million.

• Petroleum and products (other than crude oil) rose $84 million to $104 million.

• Preparations of milk, cereals, flour, and starch rose $60 million (52 percent) to $175 million. This group includes infant formula.

• Fruit rose $55 million (10 percent) to $599 million.

• Kiwifruit was up $40 million to $414 million.

• Milk powder, butter, and cheese rose $36 million (3.2 percent) to $1.2 billion.

• Casein and caseinates fell $33 million (37 percent).