Top 3 Things to Watch Today – U.S. Jobless Claims in Focus
Here’s a preview of the top 3 things that could rock markets today.
1. PPI, Jobless Claims Scheduled
More inflation data, this time on the wholesale side, comes today following today’s core retail inflation that rose less than expected.
The Labor Department will release the March producer price index (PPI) at 8:30 AM ET.
Economists expect that the PPI rose 0.3% last month, according to forecasts compiled by Investing.com.
The core PPI, which excludes volatile food and energy prices, is forecast to have risen 0.2%, with the year-on-year core PPI ticking down to 2.4%.
At the same time the Labor Department will also release weekly initial jobless claims figures.
Claims for first-time unemployment benefits are expected to rise to 211,000 after dropping to their lowest levels since 1969 the week before.
2. Investors Anxious for Disney+ Streaming Details
Wall Street analysts are pretty excited about Walt Disney ‘s (NYSE:DIS) investor day, which comes after the bell today. The stock caught two sell-side upgrades this week going into the event.
S.G. Cowen raised the stock Tuesday to outperform from market perform, saying, “Thursday’s investor day will likely be a deck-clearing event for sentiment.”
On Wednesday, BMO boosted its rating to outperform from market perform.
What everyone will be looking for today is details on the company’s upcoming streaming service Disney+, which is expected to go toe-to-toe with Netflix (NASDAQ:NFLX), armed with Disney’s stable of classic animated films and the Star Wars franchise.
While investors have a good idea of the content, more precise details like pricing will be what the market wants now.
The company may also update investors on its integration of newly-purchased Fox and on its theme parks. Its Star Wars: Galaxy’s Edge land opens in Disneyland on May 31.
The investor day presentation starts at 5:00 PM ET (21:00 GMT). Disney was up 0.26% on Wednesday and is up 6.85% this year. The gain is 20th best among the 30 Dow stocks.
3. Fed Speakers Galore
After the market digests yesterday’s Federal Reserve minutes, today brings a bevy of Fed speakers.
At 9:30 AM ET (13:30 GMT), Fed Vice Chairman Richard Clarida will give a speech on U.S. economic outlook and monetary policy at the Institute of International Finance Washington Policy Summit.
At 9:35 AM ET, New York Fed President John Williams will deliver the keynote address at the Association for Neighborhood & Housing Development conference.
And at 9:40 AM ET, St. Louis Fed President James Bullard will speak at the Community Development Foundation of Tupelo, Miss.
Fed minutes cap dollar, pound steady after Brexit extension
The dollar hovered near two-week lows on Thursday as Federal Reserve minutes reinforced its recent dovish policy tilt while the pound held steady after European leaders extended the deadline for Britain to leave the union.
Currency markets are also awaiting key economic data from the world’s second-largest economy with March Chinese trade figures due on Friday and first quarter gross domestic product due next week.
The U.S. dollar lacked momentum, with its index against six other currencies hovering near a two-week low, as the minutes from the Fed’s last meeting cemented its recent dovish policy stance with no change to rates expected this year.
The dollar index last stood at 96.93, flat on the day after having slipped to a two-week low of 96.823 on Wednesday.
U.S. central bankers also debated possible policy moves the Fed could make after it ends its balance sheet reduction program by September, with some advocating purchases of U.S. Treasury securities at that point.
“Some people say the minutes contained few surprises but a close look suggests the Fed is likely to become more dovish as time goes by,” said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.
The U.S. consumer price data released on Wednesday also painted a mixed picture, with annual core CPI inflation slipping to 2.0 percent in March, the smallest increase since February 2018.
The dollar changed hands at 111.07 yen, having fallen 0.58 percent so far this week.
The greenback also gave up its earlier gains against the euro that were driven on Wednesday when European Central Bank President Mario Draghi underscored growing risks facing the euro zone economy.
The ECB left its ultra-easy stance unchanged as expected and Draghi noted that economic data was weak.
He also confirmed the ECB was considering if measures were needed to mitigate the impact on banks of its negative deposit rates as well as the pricing of new cheap two-year loans to banks.
The euro last held at $1.1276, recovering from Wednesday’s low of $1.12295, keeping intact its slow uptrend from $1.1183 touched on April 2.
It is up 0.52 percent so far, which will be its first weekly gains in four weeks if sustained.
The British pound stood little changed at $1.3097, staying in a triangle holding pattern between $1.2945 and $1.3380 during the past month or so.
Sterling showed no reaction after the EU delayed the deadline for Brexit for the second time in less than a month, in line with market expectations that Britain will not crash out of the bloc on Friday without a deal.
Still, the decision did little to boost clarity on exactly how, when, or even if at all, the UK will leave the EU, is keeping the pound in check.
“At least there won’t be a no-deal Brexit this month. But while I’m no expert on British politics, it seems difficult for the parliament to come to any agreement,” said Kazushige Kaida, head of forex at State Street Bank.
“They just kicked the can down the road. Once the dust settles, I would expect to see selling in sterling,” he added.
UAE Oil Minister: OPEC Won’t Repeat Last Year’s Mistakes
OPEC and its allies in the production cut deal are committed to rebalancing the market and will not repeat last year’s preemptive production increase to offset expectations of oil supply losses, Suhail Al Mazrouei, the energy minister of the United Arab Emirates (UAE), said on Wednesday.
“I think we have learned the lesson. We will do what is required to balance the market. We are not going to jump the gun, pre-produce the volumes that are not required yet,” the UAE’s The National quoted Al Mazrouei as saying at the Bloomberg Invest Abu Dhabi conference today.
Al Mazrouei was obviously hinting at the decision by OPEC and Russia to reverse the production cuts in the summer of 2018, in order to ensure a well-supplied market amid expectations that the U.S. would drive Iranian oil exports to zero.
For months, the United States had said that it was aiming to cut off Iran’s oil exports, and the oil market started to fear in the summer of 2018 that a steep decline in Iranian oil barrels would tighten the global market too much. OPEC and Russia moved in to compensate for what was expected to be a significant loss of Iranian oil supply.
But then the U.S. granted waivers to Iran’s biggest oil customers, including China and India, and OPEC and its Russia-led allies forged in December a new production cut deal aimed at reversing the new glut that had started to build in Q4 2018 after OPEC anticipated incorrectly.
“I think we got a bit carried away with the fact that we took it for granted that those volumes were required by November,” Al Mazrouei said, suggesting that this time around, the OPEC-Russia alliance won’t be fooled into pre-producing more oil when it’s not immediately required by the market.
Last month, the OPEC+ allies canceled a scheduled extraordinary meeting in mid-April, leaving the decision for the cuts extension for a meeting at the end of June instead. Earlier this year, OPEC officials started to signal that mid-April would have been too early to assess the actual impact of the sanctions on Venezuela and the U.S. policy on the waivers for Iranian oil customers, after the current waivers expire in early May.
At the June meeting, OPEC and partners will have a clearer picture of where supply might be going, because the U.S. will have already decided whether to extend and to whom to extend waivers for Iranian oil purchases.
Stock Market News
U.S. stocks higher at close of trade; Dow Jones Industrial Average up 0.03%
U.S. stocks were higher after the close on Wednesday, as gains in the Technology, Financials and Consumer Goods sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average gained 0.03%, while the S&P 500 index climbed 0.35%, and the NASDAQ Composite index added 0.69%.
The best performers of the session on the Dow Jones Industrial Average were Goldman Sachs Group Inc (NYSE:GS), which rose 1.18% or 2.36 points to trade at 202.98 at the close. Meanwhile, Cisco Systems Inc (NASDAQ:CSCO) added 1.16% or 0.64 points to end at 55.82 and Walmart Inc (NYSE:WMT) was up 0.92% or 0.91 points to 99.60 in late trade.
The worst performers of the session were Boeing Co (NYSE:BA), which fell 1.11% or 4.10 points to trade at 364.94 at the close. UnitedHealth Group Incorporated (NYSE:UNH) declined 1.11% or 2.76 points to end at 246.03 and Dow Inc (NYSE:DOW) was down 1.00% or 0.56 points to 55.71.
The top performers on the S&P 500 were ConAgra Foods Inc (NYSE:CAG) which rose 6.72% to 29.39, Discovery Inc Class A (NASDAQ:DISCA) which was up 6.07% to settle at 30.59 and Discovery Communications C Inc (NASDAQ:DISCK) which gained 4.71% to close at 28.25.
The worst performers were AmerisourceBergen (NYSE:ABC) which was down 4.43% to 74.00 in late trade, Humana Inc (NYSE:HUM) which lost 2.96% to settle at 266.50 and KKR & Co LP (F:KR51) which was down 2.96% to 20.16 at the close.
The top performers on the NASDAQ Composite were ATA Inc (NASDAQ:ATAI) which rose 81.60% to 3.850, Inpixon (NASDAQ:INPX) which was up 47.87% to settle at 1.1800 and Marathon Patent Group Inc (NASDAQ:MARA) which gained 42.44% to close at 3.860.
The worst performers were Helius Medical Technologies Inc Class A (NASDAQ:HSDT) which was down 66.18% to 2.1000 in late trade, OUTLOOK THERAPEUTICS INC (NASDAQ:OTLK) which lost 45.08% to settle at 1.73 and Wave Life Sciences Ltd (NASDAQ:WVE) which was down 18.78% to 33.91 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 2165 to 826 and 92 ended unchanged; on the Nasdaq Stock Exchange, 1799 rose and 837 declined, while 81 ended unchanged.
Shares in Cisco Systems Inc (NASDAQ:CSCO) rose to 5-year highs; up 1.16% or 0.64 to 55.82. Shares in Helius Medical Technologies Inc Class A (NASDAQ:HSDT) fell to all time lows; losing 66.18% or 4.1100 to 2.1000. Shares in OUTLOOK THERAPEUTICS INC (NASDAQ:OTLK) fell to all time lows; falling 45.08% or 1.42 to 1.73.
Factbox: Four measures to watch for in Uber’s IPO filing
Uber Technologies Inc’s initial public offering (IPO) filing on Thursday will draw inevitable comparisons to its smaller ride-hailing rival Lyft Inc, which completed its initial public listing last month.
Following Lyft’s poor stock market performance of late, investors will be scrutinizing Uber’s financial results and projections closely.
Not only is Uber much larger than Lyft, but it is also more complex, with operations that go beyond its core ride-hailing business and extend into areas such as food delivery and freight transit.
The following are four key financial metrics which investors will be watching for:
Uber is a much larger company than Lyft, with operations in markets ranging from the United States to Latin America to North Africa. Lyft operates entirely in North America.
Uber also has a broader array of business lines, including a food delivery service and a platform for commercial freight.
As a result, Uber clocks much higher revenues than Lyft. Uber reported net revenues of $11.4 billion in 2018. That is in comparison to $2.2 billion for Lyft during the same year.
If one considers revenue growth, however, Uber may take a back seat to Lyft. Lyft has been rapidly gaining market share relative to its larger rival, meaning that its revenue growth has been outpacing Uber’s.
Lyft’s revenue more than doubled between 2017 and 2018, from just over $1 billion to more than $2.1 billion. Uber’s, meanwhile, grew 43 percent, to $11.4 billion.
Crypto Bulls Return as Bitcoin Rallies 1.65% in Last 24 Hours
The leading digital currency Bitcoin rallied 1.65 percent in the last 24 hours to settle at a price of just above $5,300 as of 6:15 p.m. ET.
Bitcoin touched past the $5,000 earlier this month, hitting its highest level since November with analysts citing investor interest after it went above the $4,200 price mark. Bitcoin, the largest cryptocurrency based on market size, is up almost 34 percent within the past month.
It was languishing in the $3,000 price range for the last few months before making its move higher. As the prospects of a Bitcoin exchange-traded fund (ETF) are looming, it could be more closely-watched given its latest price increase.
A recent Bitwise report peeled back the layers of Bitcoin trading and found that most bitcoin trading is faked by unregulated exchanges–a red mark on a cryptocurrency industry that is trying to obtain some legitimacy, especially on Wall Street where digital currency-based exchange-traded funds are pending with the Securities Exchange Commission (SEC). However, the story could be slanted in favor of digital currencies.
Per a story by the Wall Street Journal referencing the Bitwise report, “Nearly 95% of all reported trading in bitcoin is artificially created by unregulated exchanges, a new study concludes, raising fresh doubts about the nascent market following a steep decline in prices over the past year.”
On the other hand, Bitwise, a provider of index and cryptoasset funds, said it met with the SEC with regard to its application for a crypto-based ETF. On the surface, the report might cast more doubt on a cryptocurrency industry that is a lightning rod for manipulation, but it also shows regulators what is real and what isn’t in terms of cryptocurrency trading.
In essence, excluding the artificial trading will also highlight the real trading where an efficient market is actually taking place. This will certainly be an important point to highlight as the SEC is set to decide on the Bitwise Bitcoin ETF around mid-May.
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