US STOCKS-Wall St closes lower in rocky session on Amazon losses - Reuters News
29-Mar-2018 04:45:54 AM
Updates to market close
• Indexes close lower after volatile trading
• Amazon.com, Tesla weigh on consumer discretionary stocks
• Q4 GDP revised up, biggest consumer spending gain in 3 years
• Dow up 0.04 pct, S&P 500 up 0.29 pct, Nasdaq off 0.85 pct
By Stephen Culp
NEW YORK, March 28 (Reuters) - Wall Street closed lower after a rocky session on Wednesday as gains in consumer staples and healthcare were offset by a sharp drop in Amazon shares and a continuing slide in technology stocks.
All three major U.S. indexes ended the day in negative territory following Tuesday's late-session tech-driven sell-off following Monday's rally as traders moved to defensive stocks after recent weeks' heightened volatility.
"People should expect what's happening given the kind of volatility we've seen as well as the fact that we're kind of in a news vacuum prior to quarterly earnings," Chuck Carlson, chief executive at Horizon Investment Services in Hammond, Indiana, said. "It's a market that's really looking for the next leadership."
The Dow Jones Industrial Average fell 9.29 points, or 0.04 percent, to 23,848.42, the S&P 500 lost 7.62 points, or 0.29 percent, to 2,605 and the Nasdaq Composite dropped 59.58 points, or 0.85 percent, to 6,949.23.
Online retailer Amazon.com was down as much as 6.7 percent, losing more than $53 billion in market value after a report that President Donald Trump indicated he wanted to rein in the company. The stock later pared its loses to end the day down 4.4 percent.
Shares of automaker Tesla slumped 7.7 percent, extending recent losses, following a credit downgrade and news that officials are investigating a fatal crash and fire in California.
Countering those losses were gains for consumer staples, real estate, telecom, and healthcare.
The S&P Energy index posted the biggest loss of the 11 major S&P sectors, ending 1.99 percent lower as crude prices fell after data showed a surprise build in U.S. stocks.
The markets shrugged off a report from the U.S. Commerce Department that the U.S. economy slowed less than previously reported in the fourth quarter as consumer spending grew at its fastest quarterly pace in three years. GDP expanded at a 2.9 percent annual rate in the last three months of 2017, ahead of the previously reported 2.5 percent.
Strong economic data could invite a more hawkish approach by the U.S. Federal Reserve this year with respect to further interest rate hikes.
"I'm not surprised by the economic data," said Carlson. "But the market right now is looking past that from a valuation standpoint."
Stocks had jumped earlier in the week as trade war fears ebbed following comments from officials in the United States and China that implied the world's two largest economies would renegotiate tariffs and trade imbalances.
China is expected to announce a list of tariffs on U.S. imports in retaliation against the expected tariff proposals from the U.S. on Chinese goods.
Advancing issues outnumbered declining ones on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.22-to-1 ratio favored decliners.
Volume on U.S. exchanges was 6.96 billion shares, compared to the 7.36 billion average for the full session over the last 20 trading days.
(Reporting by Stephen Culp
Editing by Nick Zieminski and Susan Thomas)
UPDATE 2-Oil prices rise as OPEC seen continuing supply cuts through 2018 - Reuters News
29-Mar-2018 03:31:07 PM
• Crude up as OPEC/non-OPEC deal to hold through 2018
• But rising U.S. crude inventories, production cap prices
• Shanghai crude futures down almost 10 pct since Monday launch
• Goldman says Shanghai crude launch was "relatively successful"
Updates prices, adds chart
By Henning Gloystein
SINGAPORE, March 29 (Reuters) - Oil prices rose on Thursday as the producer cartel OPEC and other suppliers look set to continue withholding output for the rest of the year and potentially into 2019.
U.S. WTI crude futures were at $64.63 a barrel at 0729 GMT, up 25 cents, or 0.4 percent, from their previous settlement.
Brent crude futures were at $69.76 per barrel, up 23 cents, or 0.3 percent.
The Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) together with a group of non-OPEC producers led by Russia started cutting output in 2017 to rein in oversupply and prop up the market.
Brent, off which OPEC prices most its crude exports, has risen by around a quarter since then, which has lead to speculation that the restraints on production may be lifted.
But sources at OPEC told Reuters this week that the group and its allies were set to keep their deal on cutting production for the rest of 2018.
Despite this, Brent remained below $70 and WTI under $65 per barrel, weighed by rising crude inventories and production in the United States.
Commercial U.S. crude inventories rose by 1.6 million barrels in the last week to 429.95 million barrels, the Energy Information Administration (EIA) said on Wednesday.
U.S. crude oil production hit a record, at 10.43 million barrels per day (bpd). That puts the United States ahead of top exporter Saudi Arabia. Only Russia pumps out more, at 11 million bpd.
In China, Shanghai crude oil futures opened Thursday's morning session down nearly 2 percent, pushing the new market near to parity with U.S. prices, before closing at 409.7 yuan ($65.18) per barrel at 0700 GMT.
The latest drop takes the fall since the contract's launch on Monday to 10 percent.
Despite high volatility and lingering scepticism about Shanghai's trading hours, along with doubts about the process for physical delivery of crude under contract, most analysts expect the contract to establish itself as a third global oil price benchmark next to Brent and WTI.
Goldman Sachs said in a note to clients that there was "finally, an exchange traded price for Chinese crude oil."
Shanghai's "start of trading was relatively successful (as)...it is the first onshore Chinese commodity contract that allows direct trading by foreign investors and is denominated in RMB (yuan), indirectly promoting the use of the Chinese currency," Goldman said.
The U.S. bank said Shanghai crude futures represented 3 percent of combined WTI and Brent trading volumes since its launch on March 26.
(Reporting by Henning Gloystein
Editing by Aaron Sheldrick and Christian Schmollinger)
PRECIOUS-Gold steadies as N. Korea, global trade concerns ease - Reuters News
29-Mar-2018 04:00:54 PM
(Recasts with updated prices, adds quote and details)
• Gold heads for a third straight quarterly rise
• Silver set post its worst quarter in three
• Platinum to post worst month since September
• Palladium on track for worst quarter since end-2015
By Swati Verma
BENGALURU, March 29 (Reuters) - Gold prices held largely steady on Thursday, a day after posting its biggest one-day percentage fall in nearly 9 months, as tensions over North Korea and global trade eased.
Spot gold was nearly unchanged at $1,325.16 per ounce at 0736 GMT, after hitting a low of $1,322.50 earlier in the session, it's lowest since March 21.
Prices dropped 1.5 percent on Wednesday, their biggest one-day percentage decline since July 3, 2017.
U.S. gold futures for April delivery were steady at $1,324 per ounce.
"There was a premium in the (gold) price due to both the trade issue and with the North Korea. Both of these tensions look to be less inflamed currently," said Cameron Alexander, an analyst with Thomson Reuters-owned metals consultancy GFMS.
North Korea's leader Kim Jong Un pledged his commitment to denuclearisation and meet U.S. officials, China said on Wednesday after his meeting with President Xi Jinping, who promised China would uphold friendship with its isolated neighbour.
Gold, often seen as an alternative investment during times of political and financial uncertainty, was on track for a third straight quarter of gains, having risen nearly 2 percent so far.
Concerns about the global trade war have eased but that doesn't mean it is over, said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
U.S. President Donald Trump's tariffs on Chinese goods may not be imposed until early June, administration officials said on Wednesday, with public consultations and potential tariff revisions buying time for negotiations to forestall them.
In other precious metals, spot silver was steady after falling to $16.20 per ounce, its lowest in one week. Silver was on track to post its worst quarter in three.
Platinum rose 0.5 percent to $936.30 per ounce, after hitting a near three-month low in the previous session. The metal was down about 5 percent so far this month, on course to post its worst month since September.
Palladium was up 0.3 percent to $968.90 an ounce.
Palladium was set to fall over 7 percent this month, the steepest drop since December 2016.
For the quarter, the metal is down more than 8 percent so far, its worst since the quarter ended December 2015.
(Reporting by Swati Verma and Eileen Soreng in Bengaluru; Editing by Sherry Jacob-Phillips and Amrutha Gayathri)
RPT-COLUMN-Trade biases and trends for USDA's plantings, stocks reports –Braun - Reuters News
29-Mar-2018 01:30:00 PM
Repeats March 28 column for wider distribution. The opinions expressed here are those of the author, a market analyst for Reuters.
By Karen Braun
CHICAGO, March 28 (Reuters) - Agriculture market analysts may be a little off on their forecasts for U.S. corn and soybean plantings, but a missed prediction on supply could turn into the main event on Thursday in terms of possible impact on Chicago-traded futures.
This is all part of the fun each year when the U.S. Department of Agriculture publishes prospective plantings and March 1 grain inventories on the last trading day of March. This year, those reports are scheduled for release on Thursday at noon EDT (1600 GMT).
There are some important trends and market conditions to consider when it comes to the pre-report analyst polls, as the expectations may not always match the reality, and this can lead to high volatility in the futures market on the day.
ACRES
Industry analysts have pegged 2018 U.S. soybean plantings at an all-time high of 91.056 million acres, some 1 percent more than a year ago. The average corn guess is 89.42 million acres, fractionally lower than the final acreage in 2017.
But historical data suggests that Thursday's soy number may come in higher than the trade peg and the corn number may be a little smaller.
Since 2005, analysts have underestimated soybean plantings in only five years, one of them being 2017. These years all have one common link: an elevated new-crop futures price ratio.
When the ratio of CBOT November soybeans to December corn is near 2.5 or above heading into the spring, U.S. farmers may prefer planting soybeans over corn based on better expected returns. Through the first three weeks of March, this ratio averaged 2.56, very similar to the same period a year ago. In 2017, analysts' pre-report guess of 88.214 million soybean acres was too low by 1.3 million acres. They were also too low on March 1 soy stocks, and the most-active futures contract fell 17 cents a bushel or 1.8 percent on report day.
This analysis transfers over to corn, as the elevated bean-to-corn ratio tends to coincide with analysts overestimating corn acres. They tend to underestimate corn plantings when that ratio is relatively low.
This means that USDA's corn target may fall below 89.42 million acres on Tuesday, despite the fact that planting corn is probably more attractive than it was a year ago since futures prices have performed better and the supply outlook has tightened.
If the trade acreage numbers are realized, it will be the first time in history that U.S. farmers plant more soybeans than corn "organically" instead of in response to government influence. Bean plantings topped those of corn only one other time due to heavy participation in the government's 1983 acreage reduction program that was designed to curb corn production and stimulate prices.
Since 2012, market analysts either nailed or came in a little too high on planted wheat acres in prospective plantings.
Trade estimates place all U.S. wheat planted acres at 46.297 million acres, fractionally more than last year, but there is a chance that this number is even larger on Thursday.
From 2013 to 2017, USDA lowered its wheat planted area target by an average of 3 percent early on between the baseline projections and the agriculture outlook forum in February. For the most part, that ended up being the correct call in terms of final acres.
But in 2018, the agency increased this number by 3 percent, which is why the six-year streak of generally high-balling wheat plantings ahead of the March report could be in jeopardy.
STOCKS
Market analysts have had mixed luck in guessing March 1 corn and soybean stocks. But when their misses are big enough – by about 2 percent or more – it tends to dominate the futures price action for the day, even if the opposite signal is given by acres.
For soybeans, the stakes could be high. The average trade guess for March 1 stocks is 2.03 billion bushels, some 14 percent larger than 2007's record. And 18 of the 25 analysts polled by Reuters submitted an estimate larger than 2.03 billion.
Dec. 1, 2017 soybean stocks hit an all-time high of 3.16 billion bushels, and in the three months that followed, exports were pretty disappointing. Meanwhile, soy processors were crushing at a record rate, but this almost certainly cannot offset the pile-up of supply from slow shipments.
The market also expects March 1 corn stocks to edge last year's record with 8.706 billion bushels. Demand for U.S. corn started booming in early January, but this may not have had a sizable impact as of March 1 since a lot of the new commitments had not yet been fulfilled.
A year ago, analysts underestimated March 1 corn stocks by 1 percent, but the most-active contract rose 6.75 cents a bushel or 1.9 percent as the trade had been too high on corn acres.
Trade estimates place March 1 wheat stocks at 1.498 billion bushels, down about 10 percent from a year ago. Analysts have underestimated this number in four out of the last 5 years.
(Editing by Matthew Lewis)
TECHNICALS-CBOT soybeans may test support at $9.83 in 3 months - Reuters News
29-Mar-2018 12:34:01 PM
SINGAPORE, March 29 (Reuters) - CBOT soybeans first month may test a support at $9.83 per bushel in three months, a break below which could open the way to the next support at
$9.10-3/4.
These supports are identified respectively as the 14.6 percent and the 7 percent Fibonacci retracements on the downtrend from September 4, 2012 high of $17.94-3/4 to the Nov. 23, 2015 low of $8.44-1/4.
The failure of the contract to break above $10.68-1/2 not only triggered a deep correction to $9.83, but also signalled a completion of the bounce from the June 23, 2017 low of $9.00-1/4. The completion means the downtrend from $17.94-3/4 may have resumed.
Even if the uptrend from $9.00-1/4 extends, the contract may still approach $9.34, the Sept. 27, 2016 low, as suggested by the symmetrical nature of the chart pattern.
A projection analysis on the daily chart reveals that the current drop is closely related to the previous downtrend from the June 10, 2016 high of $12.08-1/2.
Wave pattern shows the contract is riding on a wave c, which is capable of travelling into the range of $8.80-1/2 to $9.53. A break above $10.71 could open the way towards $12.08-1/2.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **
(Reporting by Wang Tao; Editing by Sherry Jacob-Phillips)
UPDATE 1-China warns U.S. not to open Pandora's Box, unleash trade ills on world - Reuters News
29-Mar-2018 12:21:50 PM
• China could target goods including semiconductors and even service - China Daily
• China still mulling curbs on soybeans - U.S. Soybean Export Council Asia
• China warns U.S. not to open Pandora's Box
Adds scale of Chinese imports of U.S. chips, comments from Chinese commerce ministry
By Se Young Lee and Yawen Chen
BEIJING, March 29 (Reuters) - China warned the United States on Thursday not to open Pandora's Box and spark a flurry of protectionist practices across the globe, even as Beijing pointed to U.S. goods that it could target in a deepening Sino-U.S. trade dispute.
China could target a broad range of U.S. businesses from agriculture to aircraft, autos, semiconductors and even services if the trade conflict escalates, the official China Daily newspaper said in an editorial on Thursday.
President Donald Trump's move last week to slap up to $60 billion in tariffs on some Chinese imports has since provoked a warning from Beijing that it could retaliate with duties of up to $3 billion of U.S. imports.
China's biggest U.S. imports are aircraft and related equipment, soybeans and autos, with the total bill about $40 billion last year.
"The malicious practices of the United States are like opening Pandora's Box, and there is a danger of triggering a chain reaction that will spread the virus of trade protectionism across the globe," a commerce ministry spokesman said.
The official line from China continues to be stern even as Beijing says it is all for dialogue and negotiations. The feedback from U.S. and Chinese officials on the nature and extent of trade talks remains mixed, media reports show.
The Financial Times reported only on Monday that China had offered to buy more U.S. micro-chips and move more quickly to finalise rules allowing foreign firms to take majority stakes in Chinese securities firms, citing people briefed on the negotiations.
Chinese customs data shows the U.S. accounted for just $2.6 billion, or 1 percent, of China's total semiconductor imports last year by value, with suppliers in South Korea, Taiwan and Japan commanding a bigger share.
But a source in the U.S. semiconductor industry said U.S. companies have slightly more than 50 percent of China's market for chips, though export data doesn't reflect that because much of the product is sent off-shore for low value added processing.
The source said the U.S. semiconductor industry had not asked the Trump administration to urge China to buy more U.S. chips and had been told by senior U.S. officials that the U.S. government had not made such a request to Beijing.
"We don't need China to buy more chips," the source said, adding that U.S. industry was concerned about being targeted by Chinese non-tariff barriers.
"It's more about (Chinese) subsidies, IP protection, and cyber rules," the source said, referring to concerns over Chinese retaliation.
China has long said it would like to import more U.S. high-tech goods, including high-end chips, but has been stymied by U.S. export controls set on national security grounds.
China's commerce ministry said on Thursday the U.S. approach to trade could trigger a domino effect and U.S. trade protectionism will only hurt U.S. consumers.
While China hopes the U.S. will resolve trade conflicts with China through dialogue, it will take all possible steps to protect its interests, ministry spokesman Gao Feng told a regular briefing in Beijing.
"Negotiations must be equal, and China will not accept any consultation under unilateral coercion," Gao said.
SERVICES MAY BE TARGETED
On Wednesday, Trump's top trade envoy said he would give China a 60-day window before tariffs on Chinese goods take effect, but added that it would take years to bring the two countries' trading relationship "to a good place."
The tariff list is expected in the next several days.
The China Daily on Thursday quoted Premier Li Keqiang as telling a U.S. Congressional delegation this week that China was open to dialogue but "fully prepared with countermeasures".
It warned that if the conflict continued to escalate "China could consider taking reciprocal measures against U.S. imports of agricultural products besides soybeans, as well as aircraft, automobiles and semiconductors."
"And should the Trump administration further obstruct Chinese investments in the U.S., even tougher measures such as restrictions on imports of U.S. services and similar investment reviews would likely be on the table," it said.
Separately, Hong Kong's South China Morning Post reported on Thursday that U.S. and Chinese officials had been holding talks to shield American soybeans and other agricultural products from trade sanctions.
China is still considering import curbs on U.S. soybeans, U.S. Soybean Export Council Asia director Paul Burke said on Thursday, following a meeting with the Ministry of Agriculture.
(Reporting by Se Young Lee and Yawen Chen in BEIJING; Additional reporting by Michael Martina, John Ruwitch, Dominique Patton and Stella Qiu
Additional writing by Ryan Woo
Editing by Shri Navaratnam and Kim Coghill)
UPDATE 1-China still considering curbs on U.S. soybean imports -U.S. soybean council - Reuters News
29-Mar-2018 11:46:34 AM
• Soybeans were top U.S. agricultural export to China last year
• U.S. soybean trade group met with Ag Min on Monday
• Meeting comes as tensions between China, US over trade mount
Adds details throughout
By Dominique Patton
BEIJING, March 29 (Reuters) - China is still considering import curbs on U.S. soybeans in retaliation for moves by Washington to impose trade tariffs, U.S. Soybean Export Council Asia director Paul Burke said on Thursday, following a meeting with the Ministry of Agriculture.
The ministry requested an informal meeting in Beijing with the council, Burke told Reuters by phone. The meeting, which took place on Monday, was attended by the U.S. trade group's China director, Xiaoping Zhang, along with officials from the ministry's department of international relations.
In his comments, Burke rejected a report in Hong Kong's South China Morning Post that the council's meeting with the ministry had been part of official talks aimed at shielding American soybeans.
"The agriculture ministry wanted to discuss our view of the soybean industry regarding tariffs and the supply and demand situation," Burke said. "We are cautiously optimistic soybeans won't be targeted, but they're still on the table."
A trade spat between the world's top two economies is escalating, with U.S. President Donald Trump preparing to slap tariffs on $50 billion in Chinese imports over the alleged forced transfer of intellectual property.
Soybeans were the top U.S. agricultural export to China last year, worth more than $12 billion. China is the world's biggest soybean importer and the U.S. is its second-largest supplier.
In an editorial on Thursday, the China Daily newspaper said Beijing could target a broad range of U.S. businesses form agriculture to aircraft, autos and semiconductors if the conflict escalates.
(Reporting by Dominique Patton
Writing by Josephine Mason
Editing by Aaron Sheldrick)
