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Nasdaq, S&P End at Record Peaks; Dow Weighed Down by J&J, Procter





U.S. stocks rose on Tuesday, as solid results from Netflix helped boost the S&P and Nasdaq Composite. However, losses in Johnson & Johnson and Procter & Gamble added pressure on the Dow Industrials.


The Nasdaq composite ended at a record peak, rising 0.7 percent to 7,460.29. The S&P 500 also closed at an all-time peak, gaining 0.2 percent at 2,839.13, as the corporate earnings season continued. The Dow Jones industrial average notched an intraday record, before closing 3.79 points lower at 26,210.81.


Video streaming giant Netflix after the close announced that total net adds reached 8.33 million, well above a StreetAccount estimate of 6.39 million. Netflix's stock jumped ten percent, lifting the company's market cap above $100 billion for the first time.


Dow components Johnson & Johnson, Procter & Gamble and Travelers Cos. all posted better-than-expected earnings and revenue on Tuesday. Verizon, another Dow component, posted a profit that fell short of expectations, while sales exceeded analyst estimates.


Other stocks, known as part of the “FAANG” - Facebook, Apple, Amazon and Google parent Alphabet - also moved higher.


Insurer Travelers provided the biggest boost to the Dow, climbing 5.32 percent after the company's profit topped estimates.


Equities are off to a strong start for the year, with the three major indexes rising at least 6 percent in January. Stocks are building on the strong gains made in 2017.


Whirlpool jumped 3.2 percent after Trump approved a 20 percent tariff on the first 1.2 million imported large residential washing machines in the first year and a 50 percent tariff on machines above that number.


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BRAZIL: Ibovespa Spikes 3.7% And Sets New Record Following Lula Conviction





Ibovespa, the benchmark stock market index in Brazil, rose 3.72% to 83,680 points Wednesday, a new settlement record amid a R$ 15.69 billion trading volume - nearly twice the average.


The rally was the result of a higher court unanimously upholding former president Lula's conviction for corruption and money laundering, which may reduce the chances of the center-left leader competing in this year's election.


"The markets have reacted positively to Lula's trial. The conviction lessens the likelihood of him becoming a presidential candidate, and this reinforces the expectation that a more centrist candidate be elected," said Guide Investimentos analyst Ign?cio Crespo.


According to chief economist of Gradual Investimentos, Andr? Perfeito, "we will still have many developments in Lula's campaign to become a presidential candidate. Today's episode may have been dramatic, but it is far from definitive."


In the conviction, the three judges increased the former president's prison sentence for 12 years and a month and indicated that he could be arrested after all the resources have been exhausted in TRF4. According to H. Commcor's chief operating officer, Ari Santos, the result was "predictable," but encouraged the markets.


The locally traded U.S. dollar reached minimum levels in the year against the Brazilian after Lula's conviction in the second instance. The greenback fell 2.43%, closing at R$ 3.1600, after reaching the intraday low of R$ 3.1530 (-2.73%).


For Friday, Santos projects that the index may fall into a profit-taking movement. For Crespo, however, the index may remain positive.


"The scenario remains optimistic for Brazil in the short and medium term," says the analyst.


The Ibovespa will remain closed Thursday for a local holiday.


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UK Employment Notched Record Peaks





Employment in Britain increased in the three months to the end of November, surpassing analysts expectations as pressure on employers to find skilled staff seems to have pushed up wages.


The number of people in work grew by 102,000 compared with the previous three months, bringing the number of people employed to 32.21 million, a fresh record peak. Analysts had forecasted a decline of 13,000.


The jobless rate was 4.3 percent over the three month period.


The employment rate, which measures the proportion of 16- to 64-year-olds in work, reached 75.3 percent, a figure that was higher than for a year earlier and the joint highest since comparable records began in 1971.


The UK labour market has created large numbers of jobs since the financial crisis but has struggled to generate real wage growth. Many of the jobs created have also been part time or self-employed.


However, the latest figures show an increase in the number of full time jobs, with the number of self-employed falling by 82,000.


Average weekly earnings were 2.5 percent higher than the previous year, including bonuses, and 2.4 percent higher excluding bonuses. That compares with 2.5 percent and 2.3 percent respectively during the previous three month period.


The Office for National Statistics, which produces the figures, calculates that this means real earnings dropped by 0.2 percent over the past year, including bonuses, and by 0.5 percent without them.


According to the ONS, the number of job vacancies increased to a record peak of 810,000 in the three months to the end of October.


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BoJ Minutes: Japan Economy Expected To Continue Expansion





Members of the Bank of Japan's Monetary Policy Board said that Japan's economy is expanding moderately and should continue to do so, minutes from the bank's December 20-21 meeting revealed on Friday.


"The Bank will make policy adjustments as appropriate, taking account of developments in economic activity and prices as well as financial conditions, with a view to maintaining the momentum toward achieving the price stability target," the minutes said


At the meeting, the central bank decided to maintain the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.


It also voted to maintain its aggressive monetary easing, as inflation remains well below the 2 percent target. The bank will hold its target of raising the amount of outstanding JGB holdings at an annual pace of about JPY 80 trillion.


The bank will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.


"The year-on-year rate of change in the CPI for all items less fresh food was in the range of 0.5-1.0 percent, while the rate of change for all items less fresh food and energy remained slightly positive," the minutes said.


The board also noted that inflation expectations are in a weakening phase, although prices are expected to maintain an upward trend over the longer term.


The bank added that private consumption has been increasing moderately and business fixed investment continued an increasing trend with corporate profits and business sentiment improving.


"With regard to the outlook, the year-on-year rate of change in the CPI (all items less fresh food) was likely to continue on an uptrend and increase toward 2 percent, mainly on the back of an improvement in the output gap and a rise in medium- to long-term inflation expectations," the minutes said.


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Japan Inflation Steady in December





Japan's key price gauge increased at the same pace in December as in November, highlighting challenges for the Bank of Japan as it attempts to get faster inflation toward its ambitious 2 percent target.


The core consumer price index, which excludes fresh food prices but leaves in fuel costs, reached a year-on-year rise of 0.9 percent in December, according to Japan's Statistics Bureau. That brought core inflation to 0.5 percent for the whole of 2017.


The recent stability for the core inflation rate was supported by year-on-year growth of 5.2 percent in the cost of fuel, light and water and 1.6 percent growth in the cost of medical care.


Headline inflation increased one percent year on year, up from 0.6 percent in November, while core-core inflation - excluding both fresh food and fuel and energy costs - was unchanged from November with a growth of 0.3 percent.


The continued weakness supports the outlook that the BOJ will keep its stimulus program unchanged.


Some BOJ board members are already starting to get nervous about keeping policy loose for a prolonged period, claiming they saw room to hike rates or slow purchases of risky assets if the recovery continues, minutes of the December rate review showed.


Japan's economy grew for the seventh consecutive quarter in July-September, its longest uninterrupted stretch of expansion since 1994, on booming exports and an acceleration in consumption.


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Aussie Rally Brings Out the Bears





The Australian dollar's recent rally in 18 months is bringing out the bears.


The Aussie is on track to go into reverse as the Federal Reserve keeps hiking interest rates, while the Reserve Bank of Australia leaves borrowing costs at a record low, according to James Athey at Aberdeen Standard Investments in London, who is adding to his short positions.


Schroder Investment Management Australia Ltd., which is also short, said the Aussie is likely to trade closer to 70 U.S. cents than 80 cents in 12 months.


The Australian dollar has increased for seven consecutive weeks as the U.S. dollar has dropped while growing prices for commodities like iron ore have supported the outlook for Australia's exports.


Aberdeen and Schroder expect the RBA to likely leave its benchmark at 1.5 percent this year as debt-laden households struggle with stagnant wages and inflation at the lower end of the central bank's 2-to-3-percent target. Swaps traders are placing wagers that policy makers will tighten in the second half of 2018.


The Aussie rose to 81.36 U.S. cents on Friday, the highest since May 2015. It was little changed Monday at 81.14 cents.


Options traders are the most bearish on the Aussie among developed-market currencies, six-month risk reversals show. The premium investors paid for options giving the right to sell the Aussie against the U.S. dollar, over those to buy, was about 47 basis points. The gauge of bearishness has dropped from 165 basis points a year ago.


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Singapore Producer Prices Fall In December





Singapore's producer prices declined for the first time in one year in December, figures from the Department of Statistics showed Monday.


The manufactured product price index dropped 0.6 percent year-over-year in December, reversing a 2.9 percent rise in November.


Producer prices climbed 3.8 percent in the whole year 2017, in contrast to a 5.5 percent decrease in 2016.


The domestic supply price index rose 0.6 percent annually in December, while it edged down 0.2 percent from a month ago.


On a monthly basis, producer prices increased 0.8 percent in December, extending the 1.1 percent rise in November.


Data also revealed that import prices slid 0.5 percent yearly in December, following a 4.1 percent climb in the preceding month.


Export prices declined 2.4 percent in December over the prior year, after a 0.8 percent rise in November.


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Japan Labor Demand Grew in December





Labor demand in Japan increased in December to its highest in over 40 years, which could provide labor unions extra leverage in impending spring wage negotiations.


The jobs data implies that employers may be more likely to heed the government's call to increase wages by three percent or more at annual negotiations with unions this spring, boosting the chance that consumer spending and inflation will accelerate.


The jobs-to-applicants ratio climbed to 1.59 from 1.56 in November, which is the highest since January 1974.


The seasonally adjusted jobless rate rose to 2.8 percent from 2.7 percent in November, according to the Internal Affairs ministry. Economists' median forecast was for the jobless rate to remain at 2.7 percent, the lowest since November 1993.


Retail sales grew in December by the most in nearly three years on higher spending on cars and clothes, separate data showed, which could ease concerns about a sudden drop in household spending in the same month.


Sales were 3.6 percent higher in December from the previous year, compared with a median market forecast for a 1.8 percent rise. That also recorded the biggest increase since a 4.9 percent annual increase in April 2015.


Japanese household spending, which is different from retail sales because it is based on surveys sent to a small sample of consumers, dropped 0.1 percent in December from a year earlier in price-adjusted real terms.


Japan marked seven consecutive quarters of economic growth to end-September, its longest uninterrupted stretch of expansion since 1994.


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European Economics Preview: Eurozone GDP Data Due





Quarterly national accounts and economic confidence from euro area are due on Tuesday, headlining a light day for the European economic news.


At 1.30 am ET, France's GDP data is due. The economy is expected to grow 0.6 percent in the fourth quarter. At 2.00 am ET, Swiss foreign trade data for December is due.


At 3.00 am ET, GDP from Spain and unemployment from Hungary are due. Spain's GDP is forecast to grow 0.7 percent sequentially in the fourth quarter, slower than the 0.8 percent increase seen in the third quarter.


At 4.00 am ET, Italy's business and consumer confidence survey results are due. The consumer sentiment index is forecast to rise marginally to 116.7 in January from 116.6 in the previous month.


At 4.30 am ET, the Bank of England is set to issue mortgage approvals data. The number of mortgages approved in December is seen at 63,500 compared to 65,100 in November.


At 5.00 am ET, Eurostat is scheduled to issue euro area GDP data. The currency bloc is forecast to grow 0.6 percent sequentially in the fourth quarter.


In the meantime, European Commission publishes economic confidence survey data. Economists forecast the economic sentiment index to rise to 116.2 in January from 116.0 in December.


At 8.00 am ET, Germany's flash consumer price data is due. Inflation is seen at 1.7 percent in January, the same rate as seen in December.


In the meantime, Hungary's central bank announces its interest rate decision. The bank is expected to keep its key rate unchanged at 0.90 percent.


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COLOMBIA: Colcap Trades 1.34% Lower Due To Ecopetrol's Underperformance





Colcap, the main index of the Colombian Stock Exchange, fell 1.34% to 1,576.89 points near to the closing of Tuesday's session, due to the fall in Ecopetrol's shares.


Erika Baquero, an analyst at Alianza Valores, noted that the state-owned oil company was influenced by the decline in oil prices abroad.


The shares of Canacol (+0.20%) are rising, while Ecopetrol (-3.06%), Promigas (-3.04%), Sura (-1.73%), and Avianca (-1.37%) trade lower.


The locally traded U.S. dollar closed at 2,851.15 Colombian pesos, marking a 0.47% rise due to the drop in oil prices abroad.


Ramses Pestanapalmett, an analyst at Ultraserfinco, noted that the commodity falls due to the increase in exploratory activities in the United States and Canada, which values the U.S. currency against emerging currencies such as the Colombian peso.


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