• US stock market, economy and companies update (September 16, 2015)

    European equities are seeing strong gains this morning, while US indices are seeing more modest gains. As of writing, the DJIA is up 0.47%, the S&P500 is up 0.24% and the Nasdaq is up 0.20%.

    The headline m/m CPI reading turned negative for the first time since January, while the core (ex food and energy) figure showed very tepid growth. Core y/y growth was +1.8%, narrowly missing expectations. Airfares held back the core measures, as did flat medical care and rent costs. Note that energy prices declined 2% in August, and the cost of a gallon of gas fell about 8%, according to the EIA. While CPI is not the Fed's preferred measure of inflation, the decline in core CPI may figure into Thursday's FOMC meeting as just another sign the Fed is far from meeting its price goals. The dollar strengthened into the announcement and then gave up all its gains: EUR/USD slipped below 1.1290 to 1.1215 through the European session, then surged above 1.1300 US morning session.

    WTI crude took out $45 yesterday and has gained another 2.4% today to test $47 after the weekly inventory reports. Surprise drawdowns were seen in both the API and DoE reports, including the first drawdown in nearly a month in the API numbers. The sizable gain in crude prices is boosting the oil patch and helping to lift broader US equity indices. XOM and CVX are both gaining more than 2% in today's session.

    Anheuser-Busch InBev said it approached SABMiller about a takeover, paving the way for a deal that would likely value SABMiller well in excess of its $75 billion and create a brewing giant that would dominate the global market. SABMiller said AB InBev "has informed SABMiller that it intends to make a proposal to acquire SABMiller." It cautioned that no deal was certain. CNBC's Faber reported that Ambev had no plans to go hostile in its bid and has until Oct 14th to make an offer under UK takeover rules. SABMiller's US-traded ADR, SBMRY, gained 20% on the news, BUD gained 6% and the US-listed ADR for Carlsberg, CABGY, gained 5.5%.

    Bank of England MPC members Forbes, Weale and McCafferty, plus Governor Carney, delivered their semi-annual inflation report to Parliament today. The report comes after July UK hourly earnings beat expectations and saw their strongest gain since early 2009, while ILO unemployment hits BoE's Nairu threshold of 5.5%. Many observers believe the BoE is only a few steps behind the Fed on raising rates, and Carney reiterated that tightening would begin very soon with wage growth starting to pick up and the UK economy looking more and more robust. Dissenter McCafferty said he was more worried now about inflation than he was three months ago, citing upside risks from wage growth. Weale and Forbes both suggested that lower energy and raw material prices should give the BoE a bit more breathing room on rates. Sterling saw its biggest gain since July after the jobs data and the BoE remarks, with GBP/USD gaining rapidly to 1.5518 from 1.5350 during the Asia session.

    Looking Ahead
    - 16:00 (US) July Net Long-term TIC Flows: No est v $103.1B prior; Total Net TIC Flows: No est v -$110.3B prior
    - 18:45 (NZ) New Zealand Q2 GDP Q/Q: 0.6%e v 0.2% prior; Y/Y: 2.5%e v 2.6% prior
    - 19:50 (JP) Japan Aug Trade Balance: -540.0Be v -268.4B (revised from -268.1B); Adj Trade Balance: -377.3Be v -368.8B prior; Exports Y/Y: 4.3%e v 7.6% prior; Imports Y/Y: -2.5%e v -3.2% prior
    - 20:30 (SG) Singapore Aug Non-oil Domestic Exports M/M: No est v 2.4% prior; Electronic Exports Y/Y: No est v 2.3% prior; Non-oil Domestic Exports Y/Y: No est v -0.8% prior


    Economic Data
    - (US) MBA Mortgage Applications w/e Sept 11th: -7.0 v -6.2% prior
    - (ZA) South Africa July Retail Sales M/M: 0.1% v 0.2%e; Y/Y: 3.3% v 2.5%e
    - (PL) Poland Aug CPI Core M/M: -0.1% v -0.1%e; Y/Y: 0.4% v 0.4%e
    - (PL) Poland Aug Employment M/M: 0.1% v 0.0%e; Y/Y: 0.9% v 0.9%e
    - (PL) Poland Aug Average Gross Wages M/M: -1.7% v 1.4% prior; Y/Y: 3.4 v 3.3% prior
    - (BR) Brazil July Retail Sales M/M: -1.0% v -1.0%e; Y/Y: -3.5% v -3.8%e
    - (BR) Brazil July Broad Retail Sales M/M: +0.6% v -0.2%e; Y/Y: -6.8% v -7.7%e
    - (US) Aug CPI M/M: -0.1% v -0.1%e; Y/Y: 0.2% v 0.2%e
    - (US) Aug CPI Ex Food and Energy M/M: 0.1% v 0.1%e; Y/Y: 1.8% v 1.9%e
    - (US) Aug CPI NSA: 238.316 v 238.418e; CPI Core Index: 242.693 v 242.805e
    - (US) Aug Real Avg Weekly Earnings Y/Y: 2.3% v 2.0% prior
    - (CA) Canada July Manufacturing Sales M/M: 1.7% v 1.1%e
    - (CA) Canada July Int'l Securities Transactions: -C$10.1B v C$8.8B prior
    - (US) Sept NAHB Housing Market Index: 62 v 61e
    - (US) DOE Crude: -2.1M v +1.0Me; Gasoline: +2.8M v -0.5Me; Distillate: M v +1.0Me

    [I]Contributed by Trade The News[/I]
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