2017年9月13日 星期三

World Stocks Pull Back Amid Rising Concerns Of A Market Correction


For the first day in three S&P futures have pulled back modestly from record levels as some investors cautioned that gains had gone too far, too fast, European shares are mixed while Asian equities extended their longest rising streak in almost two months as continued gains in Japan and India offset the losses in Hong Kong. The dollar ended a two-day advance as TSY yields dropped in what has become a close correlation trade (see below) while oil and gold rose, perhaps in response to the ongoing plunge in bitcoin. 

Following yesterday's main, and largely disappointing events - the unveiling of the new iPhone(s) - European shares have faltered as a global equity rally showed signs of flagging, with Apple suppliers struggling after the new iPhone release disappointed with a later than expected shipping date. Chipmakers supplying to Apple were among the worst performers, with AMS down 3.9 percent, while Dialog Semiconductor slipped 1.7 percent and STMicro fell 1.1 percent.

Traders said their shares were under pressure due to Apple’s new $999 iPhone X shipping later than expected, on November 3. The price tag could also dent demand for the device in markets such as China. “With the iPhone coming in around $1,000 it will be interesting to see how healthy demand is,” said Mike Bell, global market strategist at JP Morgan Asset Management.  “If it’s relatively healthy I think it shows that there is still quite a lot of pricing power for U.S. companies and that consumers have confidence.”

Bloomberg writes this morning that record stock prices are provoking concern in some corners of the market, with the number of investors seeking protection from a possible plunge jumping. Leon Cooperman, the billionaire founder of hedge fund Omega Advisors, says a correction could start “very soon.” The imminent reduction of bond purchases by central banks in coming months will put pressure on riskier assets including high-yield bonds and equities, according to Citigroup Inc. According to the latest BofA FMS report, the last month saw the largest jump in market participants "taking out protection" in 14 months.

“Central banks will tread carefully and the direct impact of global tapering on the real economy will likely be modest,” Citigroup economists led by Ebrahim Rahbari wrote in a report. “But there is a material risk in our view that major asset price corrections could be triggered by this global tapering,” with U.S. high-yield corporate debt, euro-region periphery sovereign bonds, euro-area corporate bonds, global equities and emerging-market assets most at risk, they wrote.

Furthermore, geopolitical concerns also remain after North Korea said it will accelerate its plans to acquire a nuclear weapon that can strike the U.S. homeland in its first response to fresh United Nations sanctions. Earlier, Treasury Secretary Steven Mnuchin warned the U.S. may impose additional sanctions on China -- potentially cutting off access to the American financial system -- if it doesn’t follow through on the new UN restrictions

With all that, Europe's Stoxx 600 index headed for the first drop in six days after U.S. benchmarks and the MSCI All-Country World Index closed at all-time highs a day earlier.
Miners led the decline as the price of industrial metals including copper and nickel retreated.

The MSCI Asia Pacific Index advanced 0.1% with basic materials and consumer discretionary shares rising the most among industry groups. Hong Kong’s Hang Seng Index fell 0.3 percent, while the Shanghai Composite Index fluctuated before adding 0.1 percent.  The Topix index rose 0.6 percent at the close in Tokyo. Australia’s S&P/ASX 200 Index was little changed and the Kospi index in Seoul finished the session 0.2 percent lower. Among Apple suppliers, Hon Hai Precision Industry Co. and Pegatron fell, weighing on the Taiex index, which was down 0.7 percent. AAC Technologies Holdings Inc. in Hong Kong also declined. Apple slid along with some of its biggest suppliers on Tuesday.  Japan’s Topix climbed for a third day as investors focused on the local currency’s decline. India’s benchmark S&P BSE Sensex rose to a five-week high, led by the country’s most-valued company Reliance Industries Ltd. Hong Kong’s Hang Seng Index declined after nearing the key resistance level of 28,000. “Positive overnight leads support Asian markets to seek continued upside in the day, though we may witness more caution within the region,” Jingyi Pan, a market strategist at IG Asia Pte Ltd, wrote in an note.

In FX, the overnight session was dominated by a sharp reversal in the pound, with U.K. wages coming in weaker than expected underscored the dilemma facing Bank of England policy makers meeting on Thursday to review interest rates. Meanwhile the theme of inflation uptrend is intact across Europe, with CPI prints in Germany and Spain matching estimates; dollar bulls turn cautious, take some money off the table as market attention turns to U.S. CPI data on Thursday, while Canadian dollar advances as WTI crude rises for a third day; Treasuries and core euro-area bonds trade steady, with brief pressure on bund futures heading into auction supply window.

In rates, the yield on 10-year Treasuries fell one basis point to 2.16 percent.  Germany’s 10-year yield decreased one basis point to 0.39 percent.  Britain’s 10-year yield dipped two basis points to 1.087 percent.

West Texas Intermediate crude extended an advance after the International Energy Agency said global oil demand will climb this year by the most since 2015. Gold climbed 0.1 percent to $1,332.60 an ounce. Copper declined 1.6 percent to $2.99 a pound, the lowest in more than three weeks.  The Bloomberg Commodity Index fell less than 0.05 percent to 84.79.

Economic data include MBA mortgage applications, PPI and oil inventories. Cracker Barrel and United Natural are reporting earnings