Archives of “January 21, 2020” day

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North Korea warns the US that there may not be deunclearisation if sanctions continue

  
Analysis, Politics
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Some comments from North Korea being cited by Reuters

US NK
  • US has ignored year-end deadline for nuclear talks
  • No reason for North Korea to be unilaterally bound to any commitment
  • US is applying ‘the most brutal and inhuman sanctions’
  • If US continues with ‘hostile policies’ towards North Korea, there will never be denuclearisation of the Korean peninsula
Much like the Iran issue, this is one that does not really matter until it does – when something escalates in a significant manner. For now, just take note that US-North Korea relations have been deteriorating as of late and tensions are beginning to mount once again.

Trump: Our relationship with China has never been better

  
  Analysis

Trump touches a little on China

  • My relationship with Chinese president Xi is an extraordinary one
  • Phase Two negotiations will start very shortly
  • Most of the tariffs will remain in place during Phase Two negotiations
  • We’re being paid billions and billions of dollars
He’s finally touching on more international issues now but not in much detail. The Phase Two remarks are a little more optimistic but I highly doubt we will get into extensive discussions given that China isn’t as keen to begin talks at this stage.

US president Trump: The US is in the midst of an economic boom

  
  Analysis
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Trump is speaking in Davos, Switzerland

Trump
  • US in in the midst of an economic boom like never seen before
  • Trade deals with China, Mexico represent new model for the 21st century
  • US economy was in a dismal state under the previous administration
  • Says he is creating the most ‘inclusive’ economy in the history of the country
  • Fed has raised rates too fast and lowered them too slow
It looks more like he is setting the stage for an election campaign speech, as he is talking down US and global economic growth under the previous administration before going on to talk about how things have changed ever since he took office.
Oh my, he is still going on about how the US has benefited from his presidency and the changes brought upon by his administration. I don’t think that there is going to be anything relevant for markets if things carry on in this manner.

From the BOJ’s quarterly report – risks are skewed toward downside for economy, prices

  
Analysis, Economy
More now, this from the quarterly outlook report:
  • Japan’s economy to continue expanding moderately as a trend
  • Japan’s economy likely to face impact of global slowdown for time being, though effect on domestic demand to be limited
  • inflation to gradually accelerate toward 2%
  • risks are skewed toward downside for economy, prices
  • Japan’s economy sustaining momentum for hitting 2% inflation, but momentum lacking strength
  • Japan’s economy expanding moderately as a trend, though overseas slowdown, natural disasters affecting exports, output, business sentiment
  • Consumer inflation hovering around 0.5%
  • Inflation expectations are moving sideways
  • downside risks regarding overseas economies remain high
  • no sign so far of excessively bullish expectations in asset markets, financial institutions’ activities
  • prolonged downward pressure on financial institutions’ profits from low rates could destabilise financial system
  • risk of financial system destabilising not big for now as financial institutions have sufficient capital bases

Quick Headlines via Reuters

BOJ raises its GDP forecasts but lowers its CPI forecasts

  
Analysis, Economy

From today’s Bank of Japan policy meeting outcome:

  • median core CPI forecast for fiscal 2019/20 at +0.6% vs +0.7% projected previously
  • median core CPI forecast for fiscal 2020/21 at +1.0% vs +1.1% projected previously
  • median core CPI forecast for fiscal 2021/22 at +1.4% vs +1.5% projected previously

Growth:

  • median real GDP forecast for fiscal 2019/20 at 0.8% vs +0.6% previously projected
  • median real GDP forecast for fiscal 2020/21 at 0.8% vs +0.7% previously projected
  • for 2021/22 GDP forecast is +1.1% (vs. +1.0% previously)
The thing to keep in mind is that while they are a little more optimistic on growth the CPI is still well below target … thus policy will be loose for some time to come.

BOJ announce no change to monetary policy settings, as expected

  
Analysis, Economy
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Bank of Japan monetary policy meeting for January 2020 has concluded

As expected, policy unchanged:
  • keeps monetary policy steady
  • maintains short-term interest rate target at -0.1%
  • maintains 10-year JGB yield target around 0%
  • maintains forward guidance on interest rates, says they will remain at current or lower levels for as long as needed to guard against risk momentum for hitting price goal may be lost
I’ll have more on this separately

ICYMI: Trump and Macron agreed to a truce on tariffs until the end of the year

  
  Analysis
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Presidents Trump and Macron spoke on Sunday, Greg had the info here:

  • The two leaders agreed to a truce on tariffs until the end of the year.
The news gave EUR/USD a boost heading into the US time zone close (and note the US was out on a holiday Monday which thinned out liquidity for tat session).
Presidents Trump and Macron spoke on Sunday, Greg had the info here:

Wondering what time the BOJ announcement is expected today? Here you go!

  
  Analysis
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Its the first BOJ statement for the year today. The Bank of Japan does not have a specific pre-announced time for issuing the statement at the conclusion of their monetary policy meeting.

  • It is likely in the 0230-0330 GMT time window (see below for why this a reasonable estimate)
  • The later the announcement, the more likely there is some material change to bank policy or guidance. So, if the clock ticks past 0315GMT, the likelihood of change increases.
  • Governor Kuroda will give a press conference after the announcement, and for that we do have a scheduled time, at 0630 GMT
Expectations are for no change in policy settings today:
  • BOJ policy statement due Tuesday – preview
Past statement times:
2016:

  • 29 January 12.38pm 0338GMT – added easing (negative interest rate)
  • 15 March 2016 1235pm 0335GMT
  • 28 April 2016 12.01pm 0301GMT
  • 16 June 2016 11.45am 0245GMT
  • 29 July 2016 12.44pm 0344GMT (more easing, added in further ETF purchases)
  • 21 September 2016 1.18pm Tokyo time, 0418GMT (comprehensive review and a stack of new policy moves)
  • 01 November 2016 0254GMT
  • 20 December 2016 0251GMT

2017

  • 31 January 2017 1156AM Tokyo time, 0256GMT (maintains policy steady)
  • 16 March 2017 1154am Tokyo time, 0254GMT (maintains policy steady)
  • 27 April 2017 1214pm Tokyo time, 0314GMT (maintains policy steady, upgraded economic outlook, pushes out inflation forecasts)
  • 16 June 2017 1154am, 0254GMT (maintains policy steady, maintains economic outlook … boosts its outlook for private consumption)
  • 20 July 2017 1210 Tokyo time 0310GMT (maintains policy steady, upgraded economic outlook, pushes out inflation forecasts)
  • 21 September 2017 0315GMT (maintains policy steady, upgraded assessment on public investment)
  • 31 October 2017 0304 GMT (maintains policy steady … noob on the Board Kataoka wants more easing!)
  • 21 December 2017 0245 GMT (maintains policy steady … noob on the Board Kataoka wants more easing … again. BOJ kept economic assessment unchanged)

2018

  • 23 January 2018 0314 GMT – monetary policy held steady
  • 9 March 2018 0245GMT
  • 27 April 2018 0302GMT – policy held steady, removes phrase on expected timing for hitting price goal
  • 15 June 2018 0241GMT – policy held steady, downgrades its assessment of CPI
  • 31 July 2018 0403GMT – policy tweaks
  • 19 September 0247GMT – – monetary policy held steady
  • 31 October (sry but I do not have a note of the time the statement was released for this one)
  • 20 December 2018 0252 GMT – no changes to policy

(more…)

No stock records today, but earnings season will be heating up over the next two weeks.

  
  Analysis

Will the earnings justify the lofty levels

That sound you hear in the distance may be a loud sucking sound, or it may just bethe bull train just picking up more and more steam?
With the stock markets in the US closed in observance of Martin Luther King Day, the one thing we know is that there will be no clues as to the direction today (or records for that matter).
However, we will be getting a lot of fundamental earnings news over the next few weeks that will either break (the loud sucking sound) or make (the runaway train), for the US stock market.
For this week, Netflix, IBM, Johnson and Johnson, Intel and American Express are some of the bigger names reporting. Below are a daily list of the scheduled major releases:

Tuesday, January 21

  • UBS
  • Netflix
  • United Airlines
  • Capital One
  • IBM

Wednesday, January 22

  • Abbott
  • Johnson & Johnson
  • Texas Instruments

Thursday, January 23

  • Comcast
  • P&G
  • Intel
  • American Airlines
  • Kimberly-Clark

Friday, January 24

  • American Express

Next week (starting January 27th) gets even more busy (and important) with AMD, Apple, McDonalds, Microsoft, Tesla, Amazon, Facebook, Boeing, Verizon, Honeywell and Exxon all on the schedule for earnings releases.

  • 3M
  • AMD
  • Xerox

Tuesday, January 28

  • Apple
  • Alibaba
  • Stryker
  • Lockheed Martin
  • United Technologies
  • McDonald’s
  • Starbucks
  • General Dynamics
  • Microsoft
  • Harley-Davidson
  • eBay
  • Tesla
  • Visa
  • Pfizer

Wednesday, January 29

  • Amazon
  • Baker Hughes
  • AT&T
  • Blackstone group
  • Boeing
  • General Electric
  • Cirrus Logic
  • Raytheon
  • Sprint
  • Facebook
  • MasterCard
  • Service Now

Thursday, January 30

  • Electronics Art
  • Hershey
  • Verizon
  • Northrop Grumman
  • PayPal
  • Honeywell
  • UPS

Friday, January 31

  • Phillips 66
  • Exxon Mobil
  • Caterpillar
  • Chevron

(more…)

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