European cash equity markets are broadly lower at the closing bell after an afternoon rally ran out of steam in the latter stages (FTSE -0.5%, DAX -0.5%, CAC -0.4%). US bourses have also moved lower in recent trade, paring opening gains to briefly turn negative as comments from Fed Chair Powell yesterday continued to impact the markets. The Dollar Index has climbed further this afternoon as investors looked through a soft batch of US macro data – Q4 GDP was unrevised from the prior reading +2.5% but Chicago PMI dropped to a six-month low and pending home sales slumped -4.7% MoM. Core EU bonds are ahead, along with US Treasuries and other perceived safe-haven assets including the Japanese Yen which is the best performer among the G10’s. Sterling is the laggard meanwhile, falling after the EU released their draft Brexit agreement which included the possibility of Northern Ireland staying in the customs union. In response, UK PM May said the draft would, if implemented, threaten the UK’s constitutional integrity and no UK PM could agree to it. Elsewhere, oil prices have dropped with US crude futures losing over one-percent at the lows after the DoE reported a larger-than-expected build in crude stocks. Still to come today, earnings after the Wall Street close from Mylan, SalesForce.com and L-Brands.
* US Corporate News:
- Express Scripts (-2.3%): Q4 EPS $2.16 versus $2.09 expected | Q4 Revenue $25.38 Bln versus $25.11 Bln expected | Sees FY18 EPS $9.27-9.47 versus $8.86 expected
- Booking Holdings/Priceline.com (+8.1%): Q4 EPS $16.86 versus $14.13 expected | Q4 Revenue $2.8 Bln | Sees Q1 EPS $10.00-10.40 versus $10.2 expected
- TJX (+7.1%): Q4 EPS $1.19 versus $1.27 expected | Q4 Revenue $11.0 Bln versus $10.76 Bln expected | Comp sales +4% | Sees Q1 19 EPS $1.00-1.02
- Lowe’s (-6.6%): Q4 EPS $0.74 versus $0.86 expected | Q4 Revenue $15.5 Bln versus $15.3 Bln expected | Comparable sales +3.7% | Sees FY18 EPS $5.40-5.50 versus $5.85 expected
- Dicks Sporting Goods (+0.9%): CEO confirmed the company would stop selling assault weapons
- Celgene (-8.9%): FDA will not allow approval of its ozanimod drug for relapsing multiple sclerosis, due to insufficient sections in the drug application
- United Technologies (+2.0%): CNBC reporting a well-known activist is long the stocks
* The European Union published a draft of the Brexit agreement, which includes the possibility of Ireland remaining in the customs union. It also noted that single market access could be suspended during the transition period.
* EU Brexit Minister Barnier said an agreement on Irish issues must be reached by the Autumn, adding they will remove the current Ireland protocol from the draft treaty of they find a better solution for Northern Ireland. He did also warn that at the moment, a transition is not a given.
* UK PM May said there will not be hard border in Northern Ireland and they are committed to that. She added that the EU draft legal text would, if implemented, threaten the UK’s constitutional integrity and no UK PM could agree to it.
* DUP leader Foster says EU Brexit draft is constitutionally unacceptable.
* OPEC output rose 155K BPD in January to 32.3 Mln – JBC Energy
* US MBA Mortgage Applications (Feb 23) +2.7%, previous -6.6%
* US GDP – Annualized Q/Q (Q4 S) +2.5% versus +2.5% expected, previous +2.6%:
- Personal Consumption +3.8% versus +3.6% expected, previous +3.8%
- GDP Price Index +2.3% versus +2.4% expected, previous +2.4%
- Core PCE Q/Q +1.9% versus +1.9% expected, previous +1.9%
* Canadian Raw Material & Industrial Product Prices (Jan):
- Raw Material Price Index M/M +3.3% versus +1.8% expected, previous -0.9%
- Industrial Product Price Index M/M +0.3% versus +0.5% expected, previous -0.1% revised to %
* CNBC: U.S. regulators are considering changes to the “Volcker rule” that Wall Street has sought for years, including eliminating big banks’ responsibility to prove they do not trade on their own account, according to several regulatory and industry sources.
* Belgium GDP Data (Q4):
- GDP Q/Q +0.5%, previous +0.5%
- GDP Y/Y %, previous +1.9%
* Chicago PMI (Feb) 61.9 versus 64.2 expected, previous 65.7
* US Pending Home Sales (Jan):
- Pending Home Sales M/M -4.7% versus +0.3% expected, previous +0.5%
- Pending Home Sales Y/Y -1.7%, previous -1.8%
* DoE Weekly Oil Inventories (Feb 23)
- Crude +3.02 Mln versus +2.8 Mln expected previous -1.6 Mln
- Distillate -0.96 Mln versus -1.0 Mln expected previous -2.4 Mln
- Gasoline +2.48 Mln versus -0.8 Mln expected previous +0.3 Mln
* Fitch Affirms European Union and Euratom at ‘AAA’; Outlook Stable