Market Update US tsys reversing earlier losses, near upper end of overnite range after weaker July Housing Starts, big miss on Aug Phili Fed (11.9 vs 22)- US 10Y 2.865%. US equity futures positive – Walmart +10% pre-mkt after Q2 eps beat ($1.29 vs $1.22), same store sales +4.5% vs 2.4% exp. GOCs higher in line with tsys after ADP, Man. Sales data , GOC curve 1bp flatter 2s10s, 10s30s unch @ 1.8bps. Core EGBs also lower, gilts weighed by better than exp UK retail sales (0.9% vs 0.0%). Credit 4-5bps wider wk/wk, Ontario 28s trading down 0.5bps on expectatiosn of supply.
News headlines
One Year Later Nafta Lives On, Resisting Trump’s Trade Wrath (Bloomberg) President Donald Trump has made no secret that he wanted the North American Free Trade Agreement gone. A year of on-again-off-again negotiations without a clear view of an endgame has demonstrated the pact’s staying power. The survival of Nafta was hardly a given exactly a year ago, when negotiators from the U.S., Canada and Mexico gathered at a hotel in Washington. Their task was to start hammering out a fast update to the 24-year-old pact, which governs $1.2 trillion in trade.
China and U.S. to Resume Low-Level Talks in Bid to Resolve Trade War (Bloomberg) China will dispatch Vice Commerce Minister Wang Shouwen to the U.S. for low-level trade talks in late August, the first official exchanges since earlier negotiations broke down two months ago. The Chinese delegation led by Wang will meet with an American group led by David Malpass, under secretary for international affairs at the Department of the Treasury, at the invitation of the U.S., China’s Ministry of Commerce said in a statement on its website on Thursday.
Erdogan Moves to Shore Up Alliances as U.S. Standoff Deepens (Bloomberg) President Recep Tayyip Erdogan moved to shore up alliances in Europe and the Middle East, easing pressure on the battered lira, as the standoff between Turkey and the U.S. deepened. Efforts to rally support and bolster domestic markets include a call between Turkish Finance Minister Berat Albayrak and international investors. Erdogan was set to speak with French President Emmanuel Macron on Thursday, a day after talks with German Chancellor Angela Merkel and a $15 billion pledge of support from Qatar.
U.S. Stock Futures Rise, Dollar Dips on Trade Hope: Markets Wrap (Bloomberg) U.S. equity futures climbed with European stocks and the dollar fell on renewed hopes for an easing of global-trade tensions. The yuan jumped and Treasuries dipped. Futures on the S&P 500, Dow and Nasdaq indexes extended gains after Walmart beat second-quarter sales and earnings estimates, following the Stoxx Europe 600 Index higher. The greenback, which has seen recent strength on its role as a haven, fell for the first time in six days. Stocks stayed lower in most Asian markets in the wake of disappointing earnings from tech giant Tencent Holding, though pared declines after China said its vice commerce minister will visit the U.S. for talks in late August.
Futures rise as U.S.-China trade talks expected to resume (Reuters) Futures for Canada’s main stock index rose on Thursday after China said it would hold trade talks with the United States later this month, while the Turkish lira continued to recover from its fall last week. September futures on the S&P/TSX index SXFc1 were up 0.55 percent at 7:15 a.m. ET. Manufacturing sales data for June is due at 8:30 a.m. ET. Canada’s main stock index slipped on Wednesday. Dow Jones Industrial Average e-mini futures 1YMc1 were up 0.79 percent at 7:15 a.m. ET, while S&P 500 e-mini futures ESc1 were up 0.51 percent and Nasdaq 100 e-mini futures NQc1 were up 0.79 percent.
Walmart surges after reporting best sales in more than a decade (BNN) Walmart Inc. bounced back from a lackluster start to the year with the strongest sales gain in more than a decade fueled by its grocery business, brightening the outlook for the overall retail sector. The stock jumped in early trading. Comparable sales at U.S. Walmart stores rose 4.5 per cent in the three months ended in July, the company said Thursday, more than double analysts’ estimates. Grocery sales rose the most in nine years thanks to improved fresh-food offerings, and web revenue growth accelerated from the the previous period. The world’s biggest retailer also boosted its full-year forecasts for comparable sales and adjusted profit.
Amazon in running to acquire Landmark movie chain (BNN) Amazon.com Inc. is in the running to acquire Landmark Theatres, a move that would vault the e-commerce giant into the brick-and-mortar cinema industry, according to people familiar with the situation. The company is vying with other suitors to acquire the business from Wagner/Cuban Cos., which is backed by billionaire Mark Cuban and Todd Wagner, according to the people, who asked not to be identified because the discussions are private. The chain’s owners have been working with investment banker Stephens Inc. on a possible sale, the people said. No final decisions have been made, and talks could still fall apart.
Overnight markets
Overview: US 10yr note futures are down -0.143% at 120-09, S&P 500 futures are up 0.51% at 2835.75, Crude oil futures are up 0.17% at $65.12, Gold futures are up 0.2% at $1187.4, DXY is down -0.07% at 96.63, CAD/USD is up 0.04% at 0.7607.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 2.093% | 2 Year | 2.618% |
| 5 Year | 2.193% | 5 Year | 2.746% |
| 10 Year | 2.271% | 10 Year | 2.873% |
| 30 Year | 2.287% | 30 Year | 3.041% |
US Economic Data
| 8:30 AM | Initial Jobless Claims, Aug 11th est 215k (213k prior) |
| Continuing Claims, Aug 4th est 1740k (1755k prior) | |
| Philadelphia Fed Business Outlook, Aug est 22.0 (25.7 prior) | |
| Housing Starts, Jul est 1260k (1173k prior) | |
| Housing Starts MoM, Jul est 7.4% (-12.3% prior) | |
| Building Permits, Jul est 1310k (1273k prior) | |
| Building Permits MoM, Jul est 1.4% (-2.2% prior) | |
| 9:45 AM | Bloomberg Economic Expectations, Aug (53.5 prior) |
| Bloomberg Consumer Comfort, Aug 12th (59.3 prior) |
Canadian Economic Data
| 8:30 AM | Manufacturing Sales MoM, Jun est 1.0% (1.4% prior) |
| ADP Publishes July Payrolls Report |
Disclosure and Disclaimer
The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.
Ivan Greenstein, Stephan Buu, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230