Market news

Investing.com – The final data released on Thursday show s that the US Department of Commerce lowered the estimate of GDP growth in the 1st quarter of 2018 from 2.2% to 2%, calculated on annual rates.

Analysts of Wall Street didn’t expect revision of the estimate, according to MarketWatch.

In January-March this year, the growth rate of US GDP was the weakest since the first quarter of 2017.

As it was noted in the Ministry of Trade, the deterioration in the estimation of GDP growth reflects, in particular, the weaker than expected earlier dynamics of consumer spending.

The estimate of the increase in consumer spending in the 1st quarter was revised to 0.9% from 1%. In particular, the cost of services grew by 1.5%, and not by 1.8%, as previously was reported.

The export growth estimate was revised to 3.6% from 4.2%, which also contributed to the deterioration of the economic recovery in the US in the first quarter.

Meanwhile, the volume of investment in intellectual property in the US in January-March jumped by 13.2%, the maximum rate since the 3rd quarter of 1999. Earlier it was reported an increase of 10.9%.

Investments of US companies in the past quarter increased by 7.6% (previous estimate – 6.5%), investments in equipment increased by 5.8% (5.5%).

Public spending in the past quarter jumped 1.3% in terms of annual rates (1.1%).

The PCE Core Index (Personal Consumption Expenditures, Excluding Food & Energy), which is closely monitored by the Federal Reserve in assessing inflation risks, rose 2.3% in the first quarter. The assessment of the rate of change in the indicator remained unchanged.

Real disposable income of the US population increased by 3.6% in the last quarter (preliminary estimate 3.3%), corporate profits jumped 1.8% compared to the fourth quarter and 6.8% in annual terms.

Bloomberg.com — Stocks in Asia resumed a decline as traders remained skeptical about the Trump administration’s less harsh measures on Chinese investments. Treasury yields steadied and emerging-market currencies declined.

Stocks dropped in Japan and South Korea, while developing-markets equities fell and European futures pointed to losses. Chinese shares failed to maintain gains as anxiety remained around the nation’s assets and the yuan stayed under pressure. The dollar was little changed while the MSCI Emerging Market Currency Index fell for a fourth session, heading for its worse quarter since the three months through September 2015.

White House economic adviser Larry Kudlow said that President Donald Trump’s decision not to adopt a more stringent approach on trade did not represent a softer stance on China. The comments re-established the White House’s hard line on trade as investors grapple with the implications of the on-again, off-again dust-ups with key partners. In China, the yuan’s fastest fall since its 2015 devaluation is adding a new dimension to already frayed tensions with America.

Elsewhere, the rupee slumped to an all-time low as a resurgence in crude oil prices and the emerging market selloff took its toll. Indonesia’s rupiah fell to the lowest level since October 2015 even as the central bank is expected to raise rates on Friday. Oil pared some of its jump to a level last seen in late 2014 after U.S. crude stockpiles tumbled by the most in almost two years.

Bloomberg.com — Japanese retail sales fell in May by the most in nearly two years, pointing to weaker consumption that could restrain any rebound in the economy following a contraction in the first quarter.

Highlights

• Retail sales fell 1.7 percent in May (forecast -0.8 percent) from April, when they rose a revised 1.3 percent.
• Sales increased 0.6 percent from a year earlier (forecast +1.4 percent).
• Sales at department stores and supermarkets fell 2 percent from the previous year (forecast -1 percent).
• Sales of automobiles fell 2.8 percent from a year earlier, while clothing and apparel sales dropped 4.1 percent on year. […]

Investing.com – According to the official report released on Wednesday, the volume of durable goods orders in the US declined in May.

The US Department of Commerce report said that the volume of orders for durable goods in the US last month fell by 0.6%. Analysts forecasted a decline in this indicator by 0.9%.

The figure for this indicator for April was revised upward to a decline of 1.0% after the originally defined decline of 1.6%.

Basic orders for durable goods in the US, which don’t include shipping costs, in May decreased by 0.3%. This turned out to be worse than the forecasts of analysts about the growth of this indicator by 0.5%.

The figure for this indicator for April was revised upwards to growth by 1.9% after the initially defined growth by 0.9%.

The number of orders for capital goods in the US (excluding defense and aviation) in May decreased by 0.3% compared to the previous month. This indicator is considered key in relation to the volume of investment in business.

Analysts had expected the growth of this indicator by 0.3%.

LONDON (Reuters) – The euro weakened while trading on Wednesday amid investors’ concerns over the escalation of the trade conflict that contributed to the growth of the dollar and the yen, while the Chinese yuan fell to a six-month low.

The fears of a full-scale trade war between Beijing and Washington continued to put pressure on the currencies and sent down the stock indices of China, despite data on the growth of profits of Chinese industrial enterprises in May.

During European trade, the single currency fell on 0.2 percent to $ 1.1622, the low since June 22, due to the trade conflict, the threat of a political crisis in Germany and the uncertainty about the upcoming EU summit.

Meanwhile, the yen, which is a traditional indicator of risk aversion, has strengthened its position. In relation to the dollar, the Japanese currency increased by 0.1 percent to 109.92 yen.

The dollar index, which tracks the dynamics of the US currency against a basket of six major competitors, is trading near 94.849, 0.2 percent higher than the previous close.

The Chinese yuan went down to 6.6195, the lowest since December, after the People’s Bank of China lowered the official rate of the national currency for the sixth day in a row to a minimum in six months.

The yuan fell sharply on Tuesday amid expectations that Beijing would allow further weakening of the currency to mitigate the impact of US import duties imposed.

The Australian dollar weakened 0.2 percent to $ 0.7372, again approaching the 13-month low of $ 0.7345, reached last week.

Bloomberg.com — Stocks in Asia struggled for direction Wednesday, while Chinese shares slumped as concerns lingered over the impact of potential global trade restrictions. The dollar and Treasury yields steadied.

The steepest declines were in Hong Kong and China, with Chinese shares sliding for a third day and extending a bear market, as the yuan continued to weaken. Equity benchmarks in Tokyo ended little changed after swinging between gains and losses, and the yen climbed. A gauge of energy companies on the MSCI Asia Pacific Index of stocks rose as oil consolidated above $70 a barrel following reports the U.S. is pressing allies to halt imports of Iranian crude. European futures signaled a softer open for equities.

Investors focused on the simmering trade tensions are awaiting more clarity from the White House on its plans. President Donald Trump signaled he may take a less confrontational path toward curbing Chinese investments, backing down from earlier reports that the U.S. would bar Chinese money in certain technologies. As traders fret over the immediate outlook they also have doubts about the longer-term path for U.S. rates; the Treasury curve is the flattest in years, stoking fears about the prospect of a recession.

Meanwhile, in China, a deepening sense of unease continued to weigh on markets. The benchmark Shanghai stock index tumbled 20 percent in just five months to enter a bear market. The yuan posted its longest losing streak in four years in Hong Kong.

Elsewhere, the Korean won fell to a seven-month low as emerging currencies remained under pressure. Gold traded at its lowest price this year. Copper extended a drop to its lowest in almost three months amid trade uncertainty.

Bloomberg.com — Brent crude traded near $75 a barrel as key Libyan oil ports were handed to a company rivaling the nation’s internationally recognized energy producer.

The global oil benchmark added as much as 0.8 percent. The chairman of Tripoli-based National Oil Corp. said any attempt to buy crude from the rival company is a deviation from United Nations resolutions and Libyan law. In North America, Goldman Sachs Group Inc. warned that an oil-sands outage in Canada could lead to a shortage through July and drain stockpiles.

Investor focus is shifting to U.S. crude inventories, after Goldman said a decline at the storage hub in Cushing, Oklahoma, could have a stronger impact on the market than OPEC’s recent deal to raise output. U.S. Energy Secretary Rick Perry also said the organization’s plan to increase production “may be a little short” of what’s required amid supply concerns from Venezuela to Iran. […]

Bloomberg.com — A global equity sell-off ran out of steam in Asia as investors continued to grapple with an escalating exchange of trade and investment restrictions, triggered by the Trump administration. Treasury yields edged higher for the first time in four sessions.

A slide in shares from Sydney to Hong Kong stalled, with Japanese shares reversing declines even as the yen advanced, as gains in banks offset losses in technology and telecom stocks. Chinese equities were set to enter a bear market amid concerns about the country’s ability to fight a trade war. European futures tipped a firmer open and U.S. equivalents rose, while the dollar pared recent losses. Traders are now girding for a U.S. Treasury release on planned restrictions in technology investment.

The let-up in the rout that saw the S&P 500 Index tumble the most since April on Monday
came as White House trade adviser Peter Navarro sought to ease investor concerns about U.S. trade policy. Evidence is starting to come in that the trade tensions are affecting business decisions. Harley-Davidson Inc. said Monday it would shift some production out of the U.S. in order to mitigate the impact of European Union tariffs targeting its motorcycles. and Daimler AG last week blamed its profit warning on a potential China import-levy increase.

“It’s taken a long time for the markets to feel like the trade commentary that’s been coming, particularly out of the U.S., had some meaning and so what we are seeing investors doing is finally taking a look at this and saying something might actually happen,” Sheila Patel, chief executive officer of Goldman Sachs Asset Management’s international division, said in a Bloomberg Television interview. “We’ve turned more cautious as have our investors.”

Elsewhere, oil ticked higher on speculation that America faces a supply crunch while uncertainty lingered over OPEC’s planned output boost.

Bloomberg.com — Stocks fell in Asia with U.S. equity-index futures and the yen advanced as investors assessed prospects for continuing trade tensions between U.S. and China. Turkey’s lira climbed after Recep Tayyip Erdogan claimed victory in the weekend’s election.

Futures pointed to a weaker European open as shares accelerated declines led by Tokyo and Hong Kong in the wake of reports the Trump administration is preparing new curbs on Chinese investments. China’s shares and the currency fell after its announcement Sunday it would free up more than $100 billion in the banking system to help cushion a slowing economy, a move that had been widely anticipated. Treasury yields declined, in another sign of a risk-off impulse that saw emerging-market equities tumble last week. […]