Market Update: Friday, February 17, 2017


  • Global markets red, cutting into early-week gains. (10:01am ET) Domestic indexes are lower this morning after the S&P 500 (-0.1%) slipped Thursday for the first time in eight sessions. Energy (-1.4%) was by far the worst performing sector, balanced out by strength in utilities (+1.0%); the other nine sectors did not change by more than half a percent. Overseas, Asian markets saw broad weakness overnight as traders focused on corporate headlines amid little economic news; the Shanghai Composite (-0.9%) led the decline while Japan’s Nikkei (-0.6%) also lost ground. European indexes are mostly negative in afternoon trading, led down by France’s CAC (-1.0%). Meanwhile, WTI crude oil ($53.52/barrel) is marginally lower as markets contrast the potential for further OPEC cuts against increased U.S. production. Finally, COMEX gold ($1244/oz.) is trading near three-month highs and strength in Treasuries has lowered the yield on the 10-year note another 4 basis points (0.04%) to 2.41%.


  • Housing, FOMC minutes, and OPEC headline the week ahead. The minutes of the January 31-February 1 Federal Open Market Committee (FOMC) meeting appear to be one of the highlights of next week’s calendar, but they may be viewed as “stale” by some market participants given Federal Reserve Bank (Fed) Chair Yellen’s testimony to Congress earlier this week, which provided markets with a more up-to-date view of the Fed’s thinking. Housing (new and existing home sales for January) and manufacturing (PMI for February) data are also on the docket next week as markets continue to gauge the likelihood of a March rate hike. Overseas, OPEC’s “technical” meeting ahead of a planned May 25 meeting of all OPEC ministers will put oil on the front burner as discussions continue around extending OPEC’s 6-month supply cut (agreed on last November) beyond May 2017. It is a relatively quiet week in Europe, China and Japan next week, although the German IFO data for February and the Chinese property price indices for January will get some attention. Brazil’s central bank is expected to cut rates next week, but it’s a quiet week for central banks aside from that.


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