The CHF is the strongest and the JPY is the weakest as the NA session begins. The USD is mostly higher. Stocks in the US are mixed. Oil is higher. Yields are mixed.
Justin posted today that the Bank of Japan (BOJ) is leaning towards maintaining its current policy settings unchanged in the coming week (they announce on Friday), according to a report by Reuters that cited five sources familiar with the central bank's thinking. They noted that many policymakers do not see an immediate need for fresh steps, and there is no consensus on when they might begin to roll back stimulus measures.
While the BOJ is anticipated to revise its inflation forecasts upward for the current year, the forecasts for fiscal years 2024 and 2025 are expected to remain largely unchanged. The central bank reportedly prefers to wait for more data before considering any potential changes to its policy.
The USDJPY is trading higher today increasing the move for the week. The USDJPY is trading up 2.2% this week.
PS The CPI data out of Japan today came in a little lower for the headline at 3.3% vs 3.5% expected. The ex food came as expected at 3.3%. The ex food and energy came in at 4.2% as expected. All are still well above the 2% target. HMMMM
Post this week regarding the policy decision next week::
- Bank of Japan Governor Ueda comments this week have watered down YCC tweak expectations
- October is now the month most cited as the likely timing for a BOJ policy change
Meanwhile, next week the Federal Reserve is expected to raise rates by 25 basis points. The combination is helping to support the USDJPY again.
The pair today raced through the 50% midpoint of the move down from the June high at 141.149 and looks next toward the 61.8% of the same move lower (see chart below). See the video outlining the technicals yesterday HERE.
Earnings releases this morning were highlighted by American Express (Friday's are typically a light day for earnings).
American Express Co (AXP): For Q2 2023, reported earnings per share (EPS) of 2.89 USD, slightly above the expected 2.81 USD. However, their revenue was 15.05 billion USD, which was below the expected 15.48 billion USD. They also reaffirmed their full year EPS and revenue guidance. Shares are trading at $170.86 down -3.53% from the close at $177.11
AutoNation Inc (AN): For Q2 2023, reported EPS of 6.29 USD, beating the expectation of 5.91 USD. Their revenue was 6.89 billion USD, surpassing the expected 6.78 billion USD. They indicated that consumer demand for personal vehicle ownership remains strong. AutoNation is trading at $174.50 down from $176.92.
Roper Technologies Inc (ROP): For Q2 2023, reported EPS of 4.12 USD, above the expected 3.99 USD. Revenue was 1.53 billion USD, which was also above the expected 1.5 billion USD. They also upgraded their full year EPS view from the range of 16.10-16.30 USD to 16.36-16.50 USD, which is above the expected 16.30 USD. Shares are trading at $489 up up 1.54% in premarket trading
Schlumberger Ltd (SLB): For Q2 2023, reported adjusted EPS of 0.72 USD, slightly above the expected 0.71 USD. However, their revenue was 8.1 billion USD, which was slightly lower than the expected 8.22 billion USD. They also announced a significant increase in their quarterly dividend by 42.9% to 0.25 USD per share, up from the previous 0.175 USD per share. Shares are trading down -1.73% $56.27
Regions Financial Corp (RF): For Q2 2023, reported EPS of 0.59 USD, matching the expected 0.59 USD. Their revenue was 1.96 billion USD, slightly above the expected 1.95 billion USD. Shares are trading unchanged
This week, the second quarter earnings season saw many regional banks reporting stable or increased deposits, a result that exceeded investor expectations. KeyCorp, Western Alliance Bancorp, and Zions Bancorp reported lower profits but stable deposits, while other regional banks like Citizens Financial Group and M&T also posted higher deposits. These results boosted investor sentiment, pushing the shares of Citizens, U.S. Bancorp, and KeyCorp up by 10% or more. The KRE regional bank ETF is trading up close to 9% this week (see weekly chart below). The price is up 0.36% in premarket trading and has extended back above the broken 61.8% retracement of the move up from the 2020 low at $46.95.
A snapshot of the markets as the NA session gets underway shows:
- Crude oil is trading up $1 or 1.28% at $76.62
- Spot gold is trading down -$4.86 or -0.25% at $1964.39
- Silver is trading up $0.05 or 0.18% at $24.77
- Bitcoin is trading at $29,755. Yesterday at this time Bitcoin was trading at $30,309.
In the premarket for US stocks, the major indices are trading mixed. The Dow is trying to close higher for the 10th consecutive day. It is trading near unchanged. The Nasdaq is rebounding after falling sharply yesterday (the largest decline since March 2023). The S&P index fell yesterday as well
- Dow Industrial Average is trading up 14 points after rising 163.97 points
- S&P index is trading up 12 points points after yesterday's -30.85 point decline
- NASDAQ index is trading up 75 points after tumbling -294.71 points yesterday
In the European equity markets, the major indices are higher:
- German DAX, -0.54%
- France's CAC, +0.18%
- UK's FTSE 100, +0.11%
- Spain's Ibex, unchanged
- Italy's FTSE MIB, +0.11% (delayed).
In the Asian Pacific market today, markets closed mixed:
Japan’s Nikkei 225, -0.57%
China’s Shanghai Composite, -0.06%
Hong Kong’s Hang Seng, +0.78%
Australia’s S&P/ASX 200, -0.15%
In the US debt market, yields are lower in early US trading
- 2-year yield, 4.860% up to .2 basis points. The yield is down from 5.118% before the US CPI data earlier this month
- 5-year yield 4.105% up 0.5 basis points.
- 10-year yield 3.844%, -0.9 basis points
- 30-year yield 3.895%, -1.8 basis points
In the European debt market, benchmark 10-year yields are mostly lower:
