10Y China dollar economy S&P 500 stocks

Daily Kickstart (Britney Spears Edition)

“Sony Music apologizes to Britney Spears and her fans for any confusion. This has been rectified"...

Well first thing’s first. Britney Spears is not dead. Sony Music’s Twitter account was hacked, so the “Britney is dead by accident” tweet was just as fake as a forged document on a Chinese entrusted bond deal. That’s what CNBC led with this morning, so I feel like I should go with it.


“Sony Music apologizes to Britney Spears and her fans for any confusion,” the company said. “This has been rectified.”


Having gotten the important stuff out of the way let’s get to markets. At least some bleary-eyed traders are back at the desk today (those who aren’t fortunate enough to still be in Swiss Alps or some other more desirable locale for the duration of the year) but you probably won’t be able to tell as trading will invariably be thin again this week.

Asian shares were mixed overnight and European shares are similarly flat although the Stoxx 600 is headed for its biggest monthly gain in at least a year. One notable piece of news: the ECB told  Banca Monte dei Paschi it needs to raise some €8.8 billion in capital. The “ECB based its calculation on the results of 2016 stress test,” the bank said, adding that “the ECB considers bank ‘still solvent'”.  I’m not entirely sure how comforting that is. Meanwhile, Sole reports that the “Italian state contribution to the Monte Paschi recap could total EU6.3b, with rest from bondholders.”

Chinese shares closed a bit lower after some upbeat data on industrial profits which rose 14.5% in November versus a 9.8% rise in October. Meanwhile, Japanese household spending and inflation both fell in November. The 0.4% decline in core consumer prices compares with expectations of -0.3%.

Here’s the top news via Bloomberg:

  • Toshiba Says Nuclear Writedown May Reach Billions of Dollars: Writedowns may be more than company’s projected profit
  • Oil Extends Longest Run of Gains Since Aug. Before OPEC Cuts: Prices to recover as output curbs help rebalancing: Al-Falih
  • Dollar Gains Amid Japan Importer Buying, Rise in Treasury Yields: Greenback set for first advance versus yen in five days
  • Democrats Plotting ‘Collision Course’ With Trump’s Tax Plan: They’ll emphasize benefits for the rich amid populist pitch
  • Gold Surges Above $1,150 as Precious Metals Post Year-End Rally: Platinum, palladium, silver also rallying
  • Panasonic, Tesla to Start Output at Buffalo Plant Next Summer: Plant’s capacity to reach 1GW by 2019
  • Qualcomm Signs 3G/4G China Patent License Pact With Gionee: Qualcomm granted Gionee a royalty-bearing patent license
  • Outrage Over Economy Doesn’t Explain Surging Global Populism: Greece’s anti-establishment push shows progress can be slow
  • Russia Urges Libya Leadership Role for UN-Defying Military Chief: UN envoy ignoring influential players in Libya: Gatilov

And here’s a market wrap:

  • S&P 500 futures down less than 0.1% to 2258
  • Stoxx 600 up 0.1% to 360
  • MSCI Asia Pacific up less than 0.1% to 134
  • U.S. 10-yr yield up 2bps to 2.55%
  • Dollar Index up 0.02% to 102.99
  • WTI Crude futures up 0.5% to $53.27
  • Brent Futures up 0.1% to $55.24
  • Gold spot up 0.8% to $1,144
  • Silver spot up 1.7% to $16.01
  • DAX up less than 0.1% to 11459
  • German 10Yr yield down less than 1bp to 0.22%
  • Italian 10Yr yield up 2bps to 1.84%
  • Spanish 10Yr yield up 2bps to 1.4%
  • S&P GSCI Index up 0.5% to 393.8
  • MSCI Asia Pacific up less than 0.1% to 134
  • Nikkei 225 up less than 0.1% to 19403
  • Shanghai Composite down 0.3% to 3115

Finally, for anyone who missed it, here’s a look ahead at this week’s key data out of the US via Deutsche Bank:

Pending home sales (+0.2% vs. +0.1%) report for November should show modest gains. Note that the November data are unlikely to capture the full impact of the recent sharp increase in long-term interest rates. Fed policymakers will be keeping an eye on how the recent tightening of financial conditions will impact the housing market and the broader economy over the coming months.

Thursday’s advance goods trade balance (-$62.0 billion vs. -$62.0 billion) should remain close to last month’s figure. This series is part of a more comprehensive Advance Economic Indicators report that the Census Bureau now releases, which includes estimates of wholesale and retail inventories.

Friday’s Chicago PMI (58.0 vs. 57.6) for December is one of the more important releases this week. As we have repeatedly emphasized over the past several weeks, forward-looking measures of consumer and business attitudes are of greater importance at the moment given the potential for substantial fiscal stimulus next year. Thus far, the December manufacturing sentiment data have been encouraging. Recall that the Philadelphia Fed manufacturing survey surged 13.9 points in the month to 21.5, which was its highest level since November 2014 (33.6). H

In summary, this week’s data should point to improving growth prospects in 2017.

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