In Asian Equity Markets Japan’s Nikkei index rose on Tuesday, buoyed by companies reporting strong earnings such as Nitto Denko and Mitsui Sumitomo Financial Group, though gains were tempered by a stronger yen. By the midday break, the Nikkei was up 0.2 percent at 19,959.41 points, after opening slightly lower. The broader Topix gained 0.4 percent to 1,625.08 and the JPX-Nikkei Index 400 advanced 0.5 percent to 14,464.22. MSCI’s broadest index of Asia-Pacific stocks outside Japan was up 0.7 percent, led by gains in financials and energy stocks. Hong Kong’s Hang Seng added 0.7 percent and Australian stocks advanced 0.9 percent on the strength of financials and materials shares.
In Currency Markets the dollar inched up from a 2-1/2 year low versus the euro on Tuesday, but its outlook remained clouded by U.S. political turmoil and doubts about whether there will be another Federal Reserve rate hike this year. The euro edged down 0.1 percent to $1.1828, pulling back from a peak of $1.1846 touched in early Asian trade on Tuesday, its strongest level since January 2015. Against the yen, the dollar held steady at 110.30 yen, trading near a low of 110.21 yen touched this week, its lowest level since mid-June. The Australian dollar added 0.4 percent to $0.8039, not very far from a peak of $0.8066 set last week, its strongest level in more than two years. The dollar index last traded at 92.907, up 0.1 percent.
In Commodities Markets U.S. oil opened above $50 per barrel for the first time since late May on Monday, supported by strong fuel demand, but ongoing high supplies from producer club OPEC kept prices from rising further. U.S. West Texas Intermediate crude futures were at $50.25 per barrel, up 0.2 percent, from their last close. Brent crude futures were trading up 0.1 percent, at $52.78 per barrel. Spot gold was nearly flat at $1,269.30 per ounce and silver 0.3 percent to $16.84 per ounce. Palladium rose 0.4 percent to $886.73 per ounce and platinum climbed 0.4 percent to $938.90 per ounce, after rising to $943.70 in the previous session, the highest since June 14. Copper rose 0.2 percent to $6,380 per tonne.
In US Equity Markets t he Dow Jones Industrial Average hit a record closing high on Monday, helped by Boeing, while selling in Facebook, Alphabet and other technology companies checked the S&P 500 and pulled the Nasdaq lower. The Dow rose 0.28 percent to end at 21,891.12 points and the S&P 500 lost 0.07 percent to 2,470.3. The Nasdaq Composite fell 0.42 percent to 6,348.12. Tesla fell 3.46 percent after Chief Executive Elon Musk warned that the electric carmaker would face “manufacturing hell” as it ramps up production of its new mass-market Model 3 sedan. Boeing rose 0.49 percent and hit a record high of $242.46 after JPMorgan raised its price target on the world’s biggest plane maker to $280 per share.
In Bond Markets Japanese government bond prices were little changed on Tuesday, with the market caught between negative pressure stemming from weaker Treasuries and an upward pull from a well-received 10-year auction. The benchmark 10-year JGB yield was flat at 0.075 percent and the 20-year yield inched up half a basis point to 0.590 percent.
Economic Calendar
- 09:30 GMT+1 UK Manufacturing PMI
- 15:00 GMT+1 US ISM Manufacturing PMI
- 23:45 GMT+1 NZD Employment Change q/q
- 23:45 GMT+1 NZD Unemployment Rate
US Equity Upgrades
- WOLSELEY (WOSYY) UPGRADED TO OUTPERFORM FROM SECTOR PERFORM AT RBC CAPITAL
- UNITED UTILITIES (UUGRY) UPGRADED TO OUTPERFORM FROM SECTOR PERFORM AT RBC CAPITAL
- SEVERN TRENT (STRNY) UPGRADED TO OUTPERFORM FROM UNDERPERFORM AT RBC CAPITAL
- EAGLE MATERIALS (EXP) UPGRADED TO BUY FROM NEUTRAL AT CITI
- COLUMBIA BANKING (COLB) UPGRADED TO OVERWEIGHT FROM NEUTRAL AT PIPER JAFFRAY
- VIRTUS INVESTMENT (VRTS) UPGRADED TO OUTPERFORM FROM NEUTRAL AT CREDIT SUISSE
- ICON (ICLR) UPGRADED TO BUY FROM HOLD AT SUNTRUST
- COVANTA (CVA) UPGRADED TO BUY FROM HOLD AT STIFEL
- UNIVERSAL LOGISTICS (ULH) UPGRADED TO BUY FROM HOLD AT STIFEL
- DYNAVAX (DVAX) UPGRADED TO OVERWEIGHT FROM NEUTRAL AT JPMORGAN
- ALTRIA GROUP (MO) UPGRADED TO SECTOR PERFORM FROM UNDERPERFORM AT RBC CAPITAL
- GOPRO (GRPO) UPGRADED TO EQUAL WEIGHT FROM UNDERWEIGHT AT MORGAN STANLEY
- ADP (ADP) UPGRADED TO IN LINE FROM UNDERPERFORM AT EVERCORE ISI
- WELLS FARGO (WFC) UPGRADED TO MARKET PERFORM FROM UNDERPERFORM AT BMO CAPITAL
- AMERICAN AIRLINES (AAL) UPGRADED TO OUTPERFORM FROM MARKET PERFORM AT COWEN
- VISTEON (VC) UPGRADED TO OUTPERFORM FROM MARKET PERFORM AT WELLS FARGO
- M/I HOMES (MHO) UPGRADED TO OUTPERFORM FROM MARKET PERFORM AT JMP SECURITIES
- HILTON (HLT) UPGRADED TO HOLD FROM SELL AT BERENBERG
- CELGENE (CELG) UPGRADED TO BUY FROM HOLD AT ARGUS
US Equity Downgrades
- CARREFOUR (CRRFY) DOWNGRADED TO SELL FROM HOLD AT DEUTSCHE BANK
- MICROSTRATEGY (MSTR) DOWNGRADED TO EQUAL-WEIGHT FROM OVERWEIGHT AT FIRST ANALYSIS
- HERTZ (HTZ) DOWNGRADED TO UNDERWEIGHT FROM EQUAL WEIGHT AT BARCLAYS
- FACEBOOK (FB) DOWNGRADED TO SELL FROM HOLD AT PIVOTAL RESEARCH
- COACH (COH) DOWNGRADED TO HOLD FROM BUY AT JEFFERIES
- VISTEON (VC) DOWNGRADED TO NEUTRAL FROM BUY AT UBS
- NORFOLK SOUTHERN (NSC) DOWNGRADED TO HOLD FROM BUY AT DEUTSCHE BANK
- LANDSTAR SYSTEM (LSTR) DOWNGRADED TO HOLD FROM BUY AT DEUTSCHE BANK
- OLD DOMINION (ODFL) DOWNGRADED TO HOLD FROM BUY AT DEUTSCHE BANK
- CULLEN/FROST (CFR) DOWNGRADED TO UNDERWEIGHT FROM NEUTRAL AT JPMORGAN
- ATHENAHEALTH (ATHN) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT COWEN
- CITI (C) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT BMO CAPITAL
- ROCKWELL COLLINS (COL) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT COWEN
- WEYERHAEUSER (WY) DOWNGRADED TO BUY FROM CONVICTION BUY AT GOLDMAN SACHS
- ULTA BEAUTY (ULTA) DOWNGRADED TO PERFORM FROM OUTPERFORM AT OPPENHEIMER
- ESSEX PROPERTY TRUST (ESS) DOWNGRADED TO NEUTRAL FROM BUY AT MIZUHO
US Equity Initiations
- CISION (CISN) INITIATED WITH A BUY AT DEUTSCHE BANK
- COVANTA (CVA) INITIATED WITH AN OUTPERFORM AT BMO CAPITAL
- ANI PHARMACEUTICALS (ANIP) INITIATED WITH A BUY AT CANACCORD
- TELIGENT (TLGT) INITIATED WITH A BUY AT CANACCORD
- ACETO (ACET) INITIATED WITH A BUY AT CANACCORD