Monday, December 31, 2018
U.S. stocks opened higher on this final day of trading of 2018, getting a boost on trade hopes after President Donald Trump reported “big progress” in trade talks with Chinese President Xi and that a deal was “moving along very well.” Stocks opened broadly higher, with only defensive utilities and REITs lagging initially…but stocks have failed to hold their strong gains, slipping well off the highs as bonds rise. While markets hope 2019 brings an orderly Brexit in the UK, rebounding oil prices (WTI crude on track for a 25% decline this year), improving global growth (China’s slowdown deepened last night as Its manufacturing PMI fell to 49.4 in December, the first drop below 50 since 2016), and a slowing rate environment – 2018 is ending in volatile trading action, something investors have had to deal with the last few weeks. Lone piece of US economic data today was weak as the Dallas Fed Manufacturing index unexpectedly falls to -5.1, below the expected rise of 15.0.
Treasuries, Currencies and Commodities
· In currency markets, the dollar is slightly lower on the day, but on track to post solid returns vs. most rival currencies (other than vs. the yen); the Japanese yen rises on year vs. dollar: the JPY/USD up 2.2% on the year….the euro lower by about 4.7% YTD vs. dollar, British Pound down about 6%, Canadian dollar down about 7.8% and Aussie dollar down nearly 10% YTD vs. the buck
· Commodity prices slip as oil reverses earlier gains, sliding well off intraday highs of $46.53 to move back near the $45 per barrel level. WTI crude is headed for its first annual loss since 2015, slumping more than 24% in a turbulent year that saw fears of supply scarcity turn to expectations of a surplus/WTI crude has also plunged 38% this quarter. Gold prices are down slightly
· Treasury market’s little changed ahead of their early market close at 2:00 PM EST; the 10-year yield is down around 2.72% but up around 30 bps so far this year, with the 30-yr yield at 3.03% (also up about 30bps this year)
· AMID -22%; as distribution not seen in Q4/a second amended and restated credit agreement.
· CRSP +7% after VRTX announced Friday after the close in a filing that it acquired an additional 40,198 shares, and now holds a 10.4% stake (2nd largest holder)
· GOOS +4%; after the company opened its flagship store in Beijing over the weekend.
· HRTX +4%; the U.S. FDA had accepted the new drug application for its non-opioid alternative for post-operative pain management, granting it priority review designation.
· KSS +1%; as retailers one of the few positive standouts in market today (HBI, BBY)
· TSLA -1%; has over 3,000 Model 3 vehicles left in inventory in the US, Electrek reported
Market commentary provided by Hammerstone Markets, a division The Hammerstone Group, a firm separate from and not affiliated with Regal Securities L.P. Regal Securities L.P. has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.