【Fujitomi】Nikkei average holds steady but reluctance due to approaching U.S. temporary budget deadline and risk of government shutdown
The U.S. stock market was largely flat. The S&P 500 index rose 0.05% to finish at 2388.77, and the Dow Jones Industrial Average gained 6.24 points (0.02%) to close at 20,981.33. With many company earnings reports due after the close, the mood was cautious as NAFTA, tax reform, and fiscal policy developments remained unresolved. Durable goods orders for March rose for the third consecutive month, but the reading fell short of market expectations. Initial jobless claims for last week topped forecasts.
NYMEX WTI crude oil futures for June settled at 48.97 dollars per barrel, down 65 cents (1.31%) from the previous day, amid concerns over the restart of production at Libya’s two main oil fields and an oversupply in U.S. gasoline inventories.
The overnight session for June Nikkei futures on the Osaka exchange was 50 yen lower at 19,240 on the night session compared to the daytime close. Today, with Golden Week approaching, selling for portfolio adjustments might ease as solid corporate results support individual stocks; meanwhile, in the U.S., the federal budget deadline is approaching. If the provisional budget is not passed, a partial government shutdown would be unavoidable. The lack of clarity in Trump administration policy could weigh heavily.
https://www.fujitomi.co.jp/?p=14820
【Factors Supporting Buying】
・U.S. stocks: Nasdaq at a record close; Dow and S&P roughly flat
・Dow Jones up (20,981.33, +6.24)
・Nasdaq closes at 6,048.94, a new high
・U.S. major corporate earnings broadly solid
・VIX at 10.36, down from the previous day
・Supportive supply-demand from Bank of Japan ETF purchases
【Factors Supporting Selling】
・March 28 U.S. provisional budget deadline, risk of government shutdown
・European stock markets fall, bank stocks decline
・London stock market down for the first time in four trading days, with falls in dividend-exhausted and mining stocks
・Euro declines, perceived as dovish by ECB, weighing on the New York market
・NY crude futures retreat to the lowest since late March (48.97, -0.65)
・CME 225 futures down versus Osaka (19,235, -55)
・Geopolitical risk on the Korean peninsula
・Uncertainty in Trump administration policies
・Greece debt crisis resurfacing
・Continued U.S. dollar appreciation containment efforts
【Other Notable Points】
・Japan-U.K. summit in London
・EU leaders' summit on 29th to adopt guidelines for Brexit negotiations
・BOJ monetary policy meeting keeping policy unchanged
・U.S. bond market: Treasury prices rise; safe-haven buying amid doubts on U.S. tax reform and geopolitical risks
・Gold futures in New York slight rebound but hampered by dollar strength
・European bonds rise on ECB President’s remarks
・ECB keeps policy rate at 0.00%
・ECB deposits at -0.40%
・U.S. Intel misses Q1 sales forecast; data center business weak
・U.S. Microsoft Q1 sales miss; stock down 1.9% after hours
・Amazon Q1 profits and revenue beat; cloud and other segments strong
・Alphabet Q1 revenue up 22.2%; mobile ads strong
・U.S. March durable goods orders (vs. Feb) +0.7% [expected +1.2%] (previously +1.8%)
・U.S. March durable goods orders (excluding transportation) -0.2% [expected +0.4%] (previously +0.5%)
・U.S. initial jobless claims 257,000 [expected 245,000] (previously 244,000)
・U.S. March existing home sales index (month-on-month) -0.8% [expected -1.0%] (previously +5.5%)
・Trump says “NAFTA renegotiation possible”; if failing to agree, NAFTA could be scrapped
・Counselor of the Taiwan president says another phone call with President Trump possible
・U.S. Federal Reserve: weekly liquidity provision under swap agreement at $80 million
・ECB President: “downside risks retreating,” still cautious, maintaining easing stance
・China warns North Korea of independent sanctions if nuclear tests continue, according to U.S. Secretary of State
・Japan and Russia to work closely to ease tensions and avoid provocations
・Official and private mission to the northern territories next month
・OPEC preparing to extend coordinated production cuts at May meeting, says Secretary-General
・Japan's outlook revised to “stable”; Fitch affirms rating at A
《Schedule》
08:30 March unemployment rate
08:30 March job-to-applicant ratio
08:30 March household spending survey
08:30 March national consumer price index
08:30 March Tokyo metropolitan CPI
08:50 March industrial production provisional
08:50 March retail trade provisional
13:30 Petroleum statistics (March)
14:00 March new housing starts
14:00 February electronic material production
14:00 February global shipments of electronic components
15:00 March aluminum shipments
15:30 CEO Kiyota of Japan Exchange Group to hold a press conference
17:00 BOJ operation of purchases of long-term government bonds (monetary policy)
19:00 Foreign exchange intervention status
07:45 March New Zealand housing approvals
07:45 March New Zealand trade balance
08:01 April U.K. consumer confidence index
10:00 April NAB/ANZ business confidence
10:30 Q1 Australia wholesale prices index (PPI)
11:30 Q1 Singapore unemployment rate
14:30 Q1 France gross domestic product provisional
15:00 March German import price index
15:00 March German retail sales index
15:00 April U.K. Nationwide house price index
15:00 Q1 South Africa money supply M3
15:45 April French CPI provisional
15:45 March French PPI
15:45 March French consumption expenditure
16:00 April Swiss KOF leading indicators
17:00 March Eurozone money supply M3
17:30 Q1 U.K. GDP provisional
18:00 April Eurozone flash CPI
19:30 Russia central bank policy rate announcement
21:00 March South Africa trade balance
21:30 February Canada GDP
21:30 March Canada industrial product price index
21:30 March Canada raw material price index
21:30 Q1 U.S. GDP advance estimate
22:45 April U.S. Chicago Purchasing Managers' Index
23:00 April U.S. Consumer Confidence
March 29 02:15 Federal Reserve Board Governor Lael Brainard, speech
March 29 03:30 Harker, President of the Federal Reserve Bank of Philadelphia, speech
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