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Macro

GUOSEN Closing Bell (November 20)


 MARKET

Chinese stocks closed higher, with the benchmark Shanghai Composite Index ended at 3392.40 points. The Chinese stocks gauge gained back the losing ground in the afternoon, making the gauge stand on 60-day moving average. Telecommunication and Electronic Component sector led the gains; while Food& Beverage and Non-bank Financial sector led the falls. Combined turnover for both markets was CNY 488.9 bn, down 24.27% dod.

 

 

Close

% Change

Vol (bn CNY)

%YTD

Shanghai

3392.40

0.28

228.31

9.30

Shenzhen

11437.55

1.28

261.10

12.38

CSI 300

4143.83

0.56

191.59

25.19

ChiNext

1859.75

1.41

63.01

-5.21

 

Sector

Top 1

Led by

Top 2

Led by

Upward-leading

Telecommunication

002281

Electronic Component

002049

Downward-leading

Food& Beverage

600186

Non-bank Financial

600816

 

NEWS

*Overnight Shibor up 4.8 basis points. The Overnight Shanghai Interbank Offered Rate (Shibor), the interest rate that banks in China charge each other to lend money overnight, rose by 4.8 basis points to 2.7860%. The 7-day Shibor fell 0.60 basis points to 2.8590%, while three-month Shibor rose 2.06 basis points to 4.6222%. (Caixin)

 

FUND FLOW

 

Click here for more information about Guosen.

This article is from Guosen Securities Co., Ltd. and is being posted with Guosen Securities Co., Ltd.’s permission. The views expressed in this article are solely those of the author and/or Guosen Securities Co., Ltd. and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


15402




Macro

German Coalition Talks Fail; Risk Off in Asia


Morning Briefing November 20th 2017


A very quiet session on both sides of the Atlantic. The economic docket kicks off with German Producer Price data at 0700GMT.

At 1145GMT ECB Governing Council member Ewald Nowotny will participate at conference of European Economic Integration 2017, in Vienna.

ECB Executive Board member Sabine Lautenschlaeger will deliver a keynote speech at IIF European CRO Forum, in Frankfurt at 1215GMT.

ECB President Mario Draghi will give an introductory statement at ECON Hearing of European Parliament, in Brussels at 1400GMT.

At 1415GMT ECB Vice President Vitor Constancio will chair a policy panel “Fiscal and Financial Union: Complements or Substitutes?” at ECB conference “Public Debt, Fiscal Policy at EMU Deepening” in Frankfurt.

The ECB will call for bids on the latest 7-day MRO at 1440GMT, before publishing the latest PSPP bond buying data at 1445GMT.

At 1500GMT US Leading Indicators data is released. The index of leading indicators is forecast to rise by 0.6% in October. Positive contributions are expected from stronger consumer expectations and stock prices, as well as the reversal in jobless claims back to normal levels following the sharp September run-up after the hurricanes.

ECB President Mario Draghi will speak in his capacity as ESRB Chair at ECON Hearings of European Parliament, in Brussels at 1600GMT.

At 1830GMT Bank of England Deputy Governor for Markets and Banking Dave Ramsden will speak at Kings College London with audience Q&A.

Global Economic Trading Calendar


Markets


SNAPSHOT: Below gives key levels of markets in the second half of the Asia-Pac session:- Nikkei 225 down 137.11 points at 22258.45 - ASX 200 down 6.152 points at 5951.3- Shanghai Comp. down 27.322 points at 3355.585 - JGB 10-Yr future down 0 ticks at 150.95, JGB 10-Yr yield up 1bp at 0.046% - Aussie 3-Yr future up 1 ticks at 98.05, Aussie 3-Yr yield down 0.8bp at 1.925% - Aussie 10-Yr future up 2.5 ticks at 97.435, Aussie 10-Yr yield down 2.5bp at 2.548% - US 10-Yr future up 6+ ticks at 125.03+, US 10-Yr yield down 1.77bp at 2.3258% 

US TSYS SUMMARY: Treasuries ended Fri mainly stronger/flatter amid weaker US$/yen in morning and firm German Bunds. Tsys extended session highs into midday as US%/Yen slipped below 112.0 to 111.96 (4-wk lows) before firming later, Gold jumped also: up 1.31% to 1295.00 recently.

AUSSIE BONDS: The Australian Office of Financial Management (AOFM) sells A$400mln of 3.25% April 2029 bonds, issue #TB138. - Average Yield: 2.6437% (prev. 2.811%)  - High Yield: 2.6450% (prev. 2.8125%); Allotted at high yield: 38.9% (prev. 43%) - Bid/Cover: 4.98 (prev. 6.50) - 32 bids (prev. 38), 13 successful (prev. 9), 5 allocated in full (prev. 3)

US EURODLR FUTURES: Slightly higher across the strip, moving alongside US treasuries which tick higher as German coalition talks fall apart, potentially paving the way for a round of fresh elections in Germany, and putting pressure on Angela Merkel.

STOCKS: Stocks in Asia-Pac are lower to start the week on Monday, in Japan stocks are weighed on by a stronger yen after USD/JPY dropped again and recorded the biggest weekly decline in USD/JPY in over 2 months. USD has weakened as political back and forth continues over the tax bill, while safe haven assets have been bid in Asia after news that German coalition talks fell apart on Sunday night. - The Nikkei 225 is currently down 120 points at 22,275. All 11 sectors are in the red on the Nikkei 225, led lower by Financials. Toshiba are also weighing on the index after announcing a Y600bln share offering. – In Australia the ASX200 is lower by around 7.5 points at 5,949. Financials and utilities lead the way lower, but energy shares are performing well as WTI holds gains above $56.50 made on Friday. - In China mainland shares are lower, the Shanghai Comp last down 10 points at 1,944 and extending the decline from Friday that was sparked by warnings in the state media publications that shares were rising too quickly. In Hong Kong the Hang Seng is 32 points lower at 29,166.

OIL: Oil is higher in Asia-Pac trade, WTI last trades up $0.08 at $56.63, holding gains made on Friday. - Oil gained on Friday after comments late on Thursday from Saudi Arabian oil minister Al-Falih that the OPEC output cut should be extended. The Keystone pipeline, a major US pipeline, sprung a leak on Friday also helped drive up prices - Baker Hughes rig count data on Friday showed oil rigs were steady at 738.

GOLD: Gold is slightly lower in Asia-Pac trade on Monday, the yellow metal last down $0.31 at $1292.11, but holds near the highest levels in a month that were hit late in trade on Friday. - The focus is on political turmoil in Asia after news that German coalition talks fell apart on Sunday night and the US govt continue to wrangle over the tax bill.

FOREX: Euro took centre stage during the Asia-Pacific region, after the German coalition talks to form the next coalition government collapsed, causing widespread euro weakness. Euro-dollar plummeted to $1.1722 from an earlier high of $1.1797. Euro-sterling dropped from stg0.8918 to stg0.8879. Euro-yen fell from Y132.33 to Y131.17. Meanwhile, Aussie consolidated in a $0.7549 to $0.7572 range. Dollar-yen trekked between Y111.89 to Y112.22, with large option strikes seen containing the range. Cable traded sideways within a $1.3186 to $1.3223 range. Focus now is on the European open and how their react to the news from Germany.

Technical Analysis


BUND: (Z17) Bulls Comforted By DMAs Supporting

*RES 4: 163.63 High Nov 8
*RES 3: 163.40 High Nov 9
*RES 2: 163.22 Hourly support Nov 8 now resistance
*RES 1: 163.08 High Nov 15

*PREVIOUS CLOSE: 162.84

*SUP 1: 162.38 21-DMA
*SUP 2: 161.96 55-DMA
*SUP 3: 161.63 Low Oct 27
*SUP 4: 161.55 Daily Bull channel base    

*COMMENTARY: The contract is now finding support around the 21-DMA having bounced form a dip below the 55-DMA last week. Bulls continue to look for a close above 163.08 to reconfirm immediate focus on 163.63. Bears now look for a close below the 21-DMA to ease bullish pressure and below the 55-DMA to shift focus back to the daily bull channel base off July lows. Daily studies are well placed for a fresh leg higher.
 

EUROSTOXX50: Bulls Need Close Above 3588.33

*RES 4: 3642.10 Low Nov 8 now resistance
*RES 3: 3624.24 21-DMA
*RES 2: 3588.33 High Nov 14
*RES 1: 3578.13 55-DMA

*PREVIOUS CLOSE: 3547.46

*SUP 1: 3541.22 Low Nov 17
*SUP 2: 3519.35 Low Nov 15
*SUP 3: 3508.60 200-DMA
*SUP 4: 3497.29 High Aug 16 now support

*COMMENTARY: Since closing below the daily bull channel base the sell-off has seen the index dup below the 100-DMA (3527.84) with focus currently on the 3467.78-3508.60 region where the 200-DMA is noted. O/S daily studies looking to correct are the key concern for bears. Bulls continue to look for a close above 3588.33 to confirm a break of the 55-DMA, easing bearish pressure and above 3642.10 to return focus to 2017 highs..

Eurex Futures Market Close


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MNI subscribers make critical decisions with deeper insight and greater confidence. Pinpoint information and market-moving interviews let them react instantly to market changes and more importantly, anticipate future market moves. MNI reporters are market professionals in the news business. They work like journalists but think like traders. When interviewing Fed officials, our reporters ask the same questions you would ask. They cover the angles you would cover. Write the way you read.

MNI’s news services are now available via the IB Trader platform. Please click here to view our provider page or contact MNI directly on sales@mni-news.com or +1 212 669 6400 for our Americas sales team and +44 207 862 7408 for our EMEA sales team.

This article is from Eurex Exchange and is being posted with Eurex Exchange’s permission. The views expressed in this article are solely those of the author and/or Eurex Exchange and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

 


15401




Technical Analysis

Soybean (ZS) Daily MACD Trying to Positively Cross


Soybean (ZS) bounced almost 2% Friday off symmetrical triangle support (on the 4hr and daily chart), and is now retesting symmetrical resistance (on the weekly chart).  Note that the triangle resistance in all 3 timeframes coincide roughly with the psychologically key 1000 whole figure level.  With the weekly, daily and 4hr RSI, Stochastics and MACD bottomish, rallying or consolidating recent gains, my bias is increasingly bullish.  I am looking to go long in the green zone (of the daily chart), and am targeting the red zone for Tuesday.  The amber/yellow zone is where I might place a stop if I was a swing trader (although in my personal account with which I seldom hold overnight I set my stops tighter).

 

Soybean (CME ZS Jan18) Weekly/Daily/4hr

Click here for today's technical analysis on Corn, Silver

 

Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures and spot FX markets can be analyzed to enhance trading performance. Tradable Patterns’ daily newsletter provides technical analysis on a subset of three CME/ICE/Eurex futures (commodities, equity indices, and interest rates), spot FX and cryptocurrency markets, which it considers worth monitoring for the day/week for trend reversal or continuation. For less experienced traders, tutorials and workshops are offered online and throughout Southeast Asia.

 

This article is from Tradable Patterns and is being posted with Tradable Patterns’ permission. The views expressed in this article are solely those of the author and/or Tradable Patterns and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

 


15400




Stocks

Riding a Seesaw


Selling into strength?  Yeah, that didn't happen yesterday.  The stock market started strong and stayed strong.  Reportedly, participants were enthused by the House GOP passing its tax bill, which just about everyone knew was going to happen on Wednesday when the stock market had a bad day.

The seesaw action made at least one thing clear to us:  the market reaction will not be good if the House and Senate fail to reconcile their bills and don't get a tax deal done.

Call Wednesday a warning shot, then, and Thursday a hot-shot move for the bulls who are not ready to release their hold over the stock market.

The default belief continues to be that a tax deal of some kind will get done soon.  On a related note, the Senate Finance Committee approved its tax plan approach in a partly-line vote, setting it up for consideration on the Senate floor the week after Thanksgiving.

That can be considered progress in the tax reform effort, yet the futures market, in its inimitable way, looks unimpressed this morning by that development.

The S&P futures are down two points, the Nasdaq 100 futures are up four points, and the Dow Jones Industrial Average futures are down 45 points.

It's a surprisingly lackluster indication considering a number of retailers, including Gap (GPS), Foot Locker (FL), Abercrombie & Fitch (ANF), Ross Stores (ROST), and Hibbett Sports (HIBB), reported positive earnings and/or sales surprises, Applied Materials (AMAT) exceeded sales and earnings expectations, Comcast (CMCSA) and Verizon (VZ) are reportedly interested in acquiring assets from Twenty-First Century Fox (FOXA), and the Housing Starts and Building Permits report for October blew past economists' average estimates.

In other words, many of the same factors driving yesterday's broad-based rally are in play again today, yet the response has been exceptionally neutral from a broad market standpoint.

Perhaps the trading attitude changes before the close, but one can reasonably assume not to expect much when the market opens.

In terms of the economic data, housing starts surged 13.7% month-over-month to a seasonally adjusted annual rate of 1.29 million (Briefing.com consensus 1.198 million) while building permits increased 5.9% to a seasonally adjusted annual rate of 1.297 million.

Those were the strongest readings for starts and permits since the beginning of the year and they were fueled by large increases for multi-unit dwellings.  Still, there was some strength in single-family units as well, with single-family starts up 5.3% and single-family permits up 1.9%.

The key takeaway from the report is that it will be a positive input for fourth quarter GDP forecasts as the number of units under construction --1.096 million -- was slightly ahead of the third quarter average of 1.077 million.

Strikingly, the Treasury market has not distanced itself from the curve flattening trade.  In the wake of the report, the 2-yr note yield is up three basis points to 1.73% while the 10-yr note yield is unchanged at 2.36%. 

The flattening is somewhat thematic this morning in the sense that the stock market should start today's session on a flattish note.

--Patrick J. O'Hare, Briefing.com


15395




Stocks

The Hammerstone Report - Mid-Morning Look


U.S. stocks open lower, putting weekly gains for the S&P 500 and Dow at risk, though the Nasdaq is still on track to post a weekly gain. The market focus this week has swirled around the developments surrounding the Republican tax cut plan in Washington (now on the Senate, after the House of Representatives passed bill to overhaul the tax code yesterday) along with earnings. Retailer resurgence is also a hot topic after Dow component WMT handily topped results yesterday, lifting the sector while results overnight and this morning from ANF, GPS, FL, HIBB, SCVL, ROST extend those gains. Technology was boosted by better earnings out of AMAT and SPLK, which followed a beat/raise by CSCO yesterday, pushing the Nasdaq Composite to record highs late yesterday. Volumes will likely dry up next week given the abbreviated holiday week and with earnings now in the “rear-view” mirror. Stocks have extended losses, now trading near the lows of the session.

Treasuries, Currencies and Commodities

  • Bonds mixed as long-dated Treasury yields dropped; short-dated yields rose as the December FOMC meeting still expects to yield a 25-bps hike; the 10-year Treasury note yield fell to 2.344%, from 2.361% late Thursday, while the 2-year note yield rose to 1.721%, from 1.71%
  • The U.S. dollar dropped following a report overnight that U.S. special counsel Robert Mueller’s probe into Russian election interference has made its first official order for information connected to President Donald Trump’s campaign; the buck reversed some of the gains yesterday after the House voted in favor of the Republican-led U.S. tax overhaul (next to Senate). The dollar index is down slightly, on track for 2nd weekly decline
  • Commodity prices; sector is broadly higher, led by more than 2% gains in crude and a jump in precious metals, helped greatly by a decline in the U.S. dollar

Stock GAINERS

  • ANF +27%; quarterly results beat, helped by surprise sales growth at Hollister unit
  • FL +25%; as Q3 results handily topped consensus estimates
  • GPS+8%; reported better earnings as comps surprised to the upside at +1% for core Gap
  • FOXA +3%; was reported that CMCSA has approached FOXA to express interest in buying a substantial piece of the company’s business. CMCSA is interested in assets like those DIS pursued when it recently held talks with FOX https://goo.gl/awvU53
  • JASO +6%; agreed to be taken private by an investor consortium in an all-cash deal with an equity value of about $362.1M, or $7.55 per ADS share https://goo.gl/bn8jh5
  • SPLK +17%; strong quarter, with revenue and billings both coming in well ahead of consensus estimates and with a FY revenue guidance raise/also license revenue growth continues
  • TSLA +2%; launched its Semi tractor-trailer and said JBHT has already ordered multiple tractors

 

Stock LAGGARDS

  • CHRW -2%; another name seen hurt by the TSLA news
  • CMI -3%; tumbled after TSLA’s unveiling of its new electric-powered Semi truck
  • EA -3%; suspended micropayments on its highly anticipated new video game "Star Wars: Battlefront II” given pushback from fans
  • HOG -3%; mentioned cautiously at UBS saying they may post lower shipments in 4Q
  • WSM -11%; downgraded at JP Morgan to underweight following mixed results, lower margins

Syndicate:

  • Bluegreen Vacations (BXG) 6.5M share IPO priced at $14.00
  • SailPoint Technologies (SAIL) 20M share IPO priced at $12.00
  • scPharmaceuticals (SCPH) 6.4M share IPO priced at $14.00
  • Sterling Bancorp (SBT) 15M share IPO priced at $12.00
  • Stitch Fix (SFIX) 8M share IPO priced at $15 per share, lower than the $18 to $20 range that the company originally expected

 

The content of this post was created by the Hammerstone Group. The Hammerstone Institutional Forum, a chat-based platform for traders, provides subscribers with up-to-the-minute breaking news headlines and instant analysis that drive the market. For more information please visit www.thehammerstone.com. For more information on the stocks mentioned in the Hammerstone Recap, please contact Brian Ducey at brian@thehammerstone.com.

This article is from the Hammerstone Group and is being posted with the Hammerstone Group's permission. The views expressed in this article are solely those of the author and/or the Hammerstone Group and IB is not endorsing or recommending any investment or trading discussed in the article. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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