【Fujitomi】Tokyo Stock Market faces a heavy upward trend; G20 expression "opposed to protectionism" removed
The U.S. stock market closed slightly lower. The S&P 500 index fell 0.2% from the previous business day to 2373.47, and the Dow Jones Industrial Average finished at 20,905.86, down 8.76 points (0.04%). The Nasdaq composite index ended essentially flat at 5901.529 after hitting an intraday high. Uncertainty over economic policies of the Trump administration and the timing of future rate hikes kept buyers on the sidelines. A drop in crude oil also weighed on the energy sector. February industrial production was expected to grow 0.2% but was flat month over month, while March’s University of Michigan consumer sentiment index slightly beat expectations.
NYMEX WTI futures for April closed at 48.22 dollars per barrel, down 56 cents (1.15%) from the previous week’s close. Concerns included the prospect of Libyan oil export terminals restarting operations and an increase in U.S. oil rig activity.
In the forex market yesterday after the G20, the dollar/yen softened to the 112 range, suggesting the Nikkei may start with a five-day losing streak. The joint statement from the G20 Finance Ministers and Central Bank Governors included no explicit language opposing protectionism, reinforcing a trend toward yen strength in the currency markets. If morning trading falls, the Bank of Japan’s ETF purchases are expected to provide a floor.
【Factors to Watch】
・Policy expectations for President Trump
・BOJ ETF purchases providing supply-demand support
・Nasdaq up (5901.53, +0.53)
・U.S. Walt Disney live-action “Beauty and the Beast” set to release in March, with record earnings—weekend data
【Reasons to Sell】
・Dow Jones declines (20905.86, -8.76)
・NY crude futures retreat on concerns over increased supply (48.22, -0.56)
・G20 reiterates U.S. protectionism, dollar remains heavy; USD/JPY around 112.50–112.55
・CME225 futures down versus Osaka Exchange (19270, -80)
・CBOE Volatility Index (VIX) at 11.34, up from the previous day
・Uncertainty surrounding the French presidential election
・Geopolitical risks on the Korean peninsula
・Greece debt crisis reignites
【Other Points】
・Prime Minister Abe meets EU leaders in Brussels
・U.S. stock market mixed; financials weak
・European stock markets mixed; UK shares buoyed by a weaker pound
・U.S. bond market continues to rise; hawkish statements but no major shift in direction
・NY gold futures extend gains, supported by gradual rate hikes and a weaker dollar
・No evidence to corroborate Trump wiretap claims, says FBI Director Comey
・Google apologizes to U.K. government and companies for placing ads on hateful videos
・Japan and France leaders agree to push free trade; support for early conclusion of the EPA
・U.S. to ban possession of electronics on some aircraft; U.S. carriers excluded
・U.S. Federal Reserve likely to wait until at least the June meeting to raise rates, says Chicago Fed President
・Bitcoin holds firm against the dollar; rebounds after ETF rejection
・Trump’s net worth reportedly down to $3.5 billion, according to Forbes
・Toshiba considering financing options after filing for U.S. WH bankruptcy protection, sources say
・Internet Infinity to debut on the Tokyo Stock Exchange Mothers market
・RikurinoGEN Holdings to go public on the TSE Mothers market
《Schedule》
10:00 Copper wire shipments (February)
16:00 Convenience store sales (February)
16:50 Land price (2017)
09:30 Australian housing price index for Q4 (expected QoQ 2.5%, YoY 6.3%)
09:30 RBA Board Meeting minutes
16:00 February Swiss trade balance
17:30 February Hong Kong CPI (YoY 0.7% expected)
18:30 February UK CPI (expected: MoM 0.5%, YoY 2.1%)
Retail price index (RPI, expected MoM 0.8%, YoY 2.9%)
18:30 February UK PPI (core, excluding food and energy, YoY 2.5% expected)
19:35 Bullard, President of the Federal Reserve Bank of New York, speaks in London with Carney, Governor of the Bank of England
21:30 U.S. current account deficit for Q4 (expected a deficit of $1290 billion)
21:30 January Canada retail sales (expected: MoM 1.5%, ex-auto MoM 1.3%)
January 22, 01:00 George, President of the Federal Reserve Bank of Dallas, to speak
EU Finance Ministers meeting (Brussels)
For market conditions, please refer to Twitter. https://twitter.com/fujitomi_8740
