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Reports US

US stock market, economy and companies update (May 20, 2014)

May 20, 2014, Tuesday, 15:59 GMT | 10:59 EST | 19:29 IST | 21:59 SGT
Contributed by Trade The News

- Overnight European indices declined thanks to a broad spectrum of weak equity news gave traders an excuse to sell markets. This set the tone for the US session, where an absence of big economic data or equity stories plus low trading volumes left the risk-off tone in place. As of writing, the DJIA is down 0.28%, the S&P500 is off 0.33% and the Nasdaq is down 0.37%.

- German financial industry regulator BaFin disclosed it found evidence that multiple currencies have been subject to manipulation by global banks. BaFin said the targets were not the largest currencies (EUR/USD, USD/JPY) but tended to be smaller ones. The BaFin revelation comes amid an investigation of the entire industry and key players by more than 15 authorities globally, and only a day after Credit Suisse pleaded guilty to criminal charges of helping US citizens evade US taxes.

- Russia and China have failed to agree on a price for the 30-year natural gas deal. President Putin is visiting China this week and the two sides were widely expected to reach a deal, capping more than a decade's worth of talks. The $400B supply agreement is up in the air for now unless negotiators can iron out differences before Putin leaves on Wednesday.

- Shares of Home Depot are up a modest 2% after earnings this morning. Home Depot more or less met expectations and saw restrained y/y growth in revenue and earnings. The company also reaffirmed its FY14 outlook. Shares had lagged in the premarket, however on the conference call executives said May sales had been robust and that sales lost to bad weather in the first quarter would be made up in the second. LOW gained about 1.5% in sympathy just after the open but has given up its gains.

- Caterpillar released troubling April dealer statistics, with retail sales of machines down 13% y/y, slightly worse than the firm's March performance. China's housing and resource sectors are cooling off rapidly, and Caterpillar's sales drop in Asia was -25% y/y, compared to March and February declines of 20% and 17%, respectively. Shares of CAT dropped 1.75% in the early going.

- Shares of DISH Network rose approximately 3.5% as of midday yesterday after reports made the rounds in a popular M&A blog that Verizon was holding negotiations with the firm in the wake of AT&T's move on DirecTV. At a JPMorgan conference this morning, Verizon's CEO said he was not holding talks to acquire any satellite firm and further said that Verizon does not need to pursue a large acquisition. DISH is down 3.2% as of writing.

***Looking Ahead***
- 11:30 (US) Treasury to sell $40B in 4-Week Bills
- 12:00 (AT) ECB's Nowotny in Vienna
- 12:30 (US) Fed's Plosser speaks on the Economy in Washington
- 13:00 (US) Fed's Dudley in NY
- 13:30 (UK) BOE's Bean in London
- 16:30 (US) Weekly API Oil Inventories
- 17:00 (CO) Colombia Mar Trade Balance: No est v -$505.6M prior; Total Imports: No est v $5.0B prior
- 19:50 (JP) Japan Apr Trade Balance: -¥646.3Te v -¥1.446T prior; Adj Trade Balance: -¥633.0Te v -¥1.714T prior
- (MX) Mexico Banamex Survey of Economists
- (JP) Bank of Japan (BOJ) Interest Rate Decision: Expected to keep monetary policy steady

***Economic Data***
- (EU) ECB drained €137.5B v €167.5B target in 7-day Term Deposit Tender to offset govt bond purchases under SMP
- (RU) Russia Apr Industrial Production Y/Y: 2.4% v 0.8%e
- (US) ICSC Chain Store Sales w/e May 17th: w/w -1.3%; y/y: +2.4%
- (PL) Poland Apr Sold Industrial Output M/M: -2.6%e v +9.4% prior; Y/Y: 5.1%e v 5.4% prior
- (PL) Poland Apr PPI M/M: -0.1% v 0.0%e; Y/Y: -0.7% v -0.7%e
- (CA) Canada Mar Wholesale Trade Sales M/M: -0.4% v +0.4%e
- (US) Redbook Retail Sales w/e May 17th: +3.9% y/y, May MTD: 1.0% m/m, May MTD: 4.1% y/y
- (EU) Weekly ECB Forex Reserves: €210.0B v €210.4B prior
- (BE) Belgium May Consumer Confidence Index: -6 v -9 prior