【Fujitomi】Nikkei Stock Average opens soft but stays firm on track; ex-dividend date for March-end (around 131.97 yen)

The U.S. stock market inched higher yesterday. The S&P 500 index rose 0.7% from the previous close to 2358.57. The Dow Jones Industrial Average gained 150.52 points (0.7%) to 20,701.50. The Dow posted its first nine sessions of gains in a while. With consumer confidence hitting a 16-year high and indications that the Trump administration plans to push tax reform and increased infrastructure spending simultaneously, the New York stock market extended its gains. The comments by Fed Vice Chair Janet Yellen that two more rate hikes would be appropriate were also well received. Sector-wise, the financials, led by banks, rose notably.

New York crude-oil futures for May on the NYMEX closed up 64 cents (1.34%) at $47.37 a barrel. Iran’s Oil Minister Zanganeh said cooperation between OPEC members and non-members to cut output is likely to be extended, and reports that Libya is curtailing output from its largest field supported buying interest.

In the NY foreign exchange market, the dollar rose against major currencies. This was underpinned by expectations of further Fed rate hikes and ongoing political uncertainty surrounding the UK’s withdrawal from the EU, which weighed on the euro and other European currencies.

Today, the Nikkei Stock Average is expected to start softer due to the end-of-quarter ex-dividend day (about 131.97 yen). However, the recovery in the dollar/yen, and strong U.S. stock prices are likely to keep the trend firm. Historically, passive funds trackings errors and pre-and post-dividend purchasing tend to occur on the final rights issue and ex-dividend days, and with GPIF and BOJ ETF buying increasing passive-linked assets, today’s supply-demand dynamics warrant close attention.

https://www.fujitomi.co.jp/?p=14041

【Positive factors】

- U.S. stock market — Dow rebounds for the ninth session, strong economic data welcomed (20,701.50, +150.52)

- VIX fear index at 11.53, down from the previous day

- NY forex market — dollar up, driven by Fed official comments and consumer confidence index

- U.S. March Conference Board consumer confidence at a 16-year high, optimistic outlook broadening

- U.S. Case-Shiller home price index shows notable January gains not seen since July 2004

- European equity markets up, Germany’s DAX up 1.28%

- London stock market higher, supported by buying in Usherly

- NY oil futures — rebound, Libya's output curtailment lifts prices back into the $48s (48.37, +0.64)

- NY dollar rally on Yellen comments, dollar/yen around 111.10–111.15

- CME 225 futures up versus Osaka Exchange (19,185, +145)

- Expectations of demand support from BOJ ETF purchases

【Negative factors】

- Trump administration policy-making remains opaque

- U.S. public opinion shows Trump’s approval rating at 36%

- Political risks from the Moritomo Gakuen issue

- Uncertainty around the French presidential election

- Geopolitical risk from North Korea

- Greece’s debt crisis resurfaces

【Other notable points】

- U.S. Treasury market — declines, yields rise on Yellen remarks

- NY gold futures — flat but a sharp drop after session close

- Darden Restaurants up 9.31% on acquisition of Cheddar’s Scratch Kitchen

- U.S. March Consumer Confidence Index 125.6 (expected 114.0) vs 114.8 previously

- U.S. S&P/Case-Shiller Home Price Index (year-on-year) +5.73% (forecast +5.60%) (previous +5.58%)

- President Trump signs executive order to repeal climate-change policy

- President Trump to attend July G20 summit — White House

- Republicans discuss reviving Obamacare replacement; aiming for passage in April — sources

- White House regards U.S. security concerns as significant; statements by U.S. officials

- Two more rate hikes this year are seen as broadly appropriate — Fed Vice Chair Janet Yellen

- UK Prime Minister May signs letter notifying EU of Brexit

- Toshiba’s U.S. nuclear unit files for bankruptcy on the 29th

《Schedule》

08:50 February Retail Trade

15:00 February German Import Prices

15:45 March French Consumer Confidence

17:30 February UK Consumer Credit

17:30 February UK Money Supply M3

20:00 MBA Mortgage Applications

22:20 Evans, President of the Chicago Fed, speaks

23:00 February U.S. Pending Home Sales

23:30 EIA Weekly Petroleum Status Report

30th 00:30 Rosengren, President of the Boston Fed, speaks

30th 01:50 Bang or Plante? European Central Bank Executive Board member speaks

30th 02:00 U.S. Treasury to auction 7-year notes ($28 billion)

30th 02:15 Williams, President of the San Francisco Fed, speaks

UK notifies EU of its Brexit

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