Rover’s Weekly Market Brief — 2/9/2018

Economy

December’s trade deficit ^[6] widened by $2.7 billion to $53.1 billion, with a $6.2 billion increase in imports outpacing a $2.7 billion increase in exports. The trade deficit for December was the widest since October 2008, and over the full year, 2017’s the deficit grew by 12% to $566 billion, making it the largest yearly deficit since 2008. Goods exports increased significantly for industrial supplies (+$1.5 billion) and capital goods (+1.2 billion), while imports increased chiefly for pharmaceutical preparations (+$1.8 billion), cell phones and other household goods (+$1.7 billion), and automotives (+$1.1 billion). The trade deficit increased for the top three countries with the widest deficits: +$0.6 billion with China (to $34 billion), +$3.8 billion with the European Union (to $17.2 billion), and +$0.2 billion with Mexico (to $6 billion).

December’s Job Openings and Labor Turnover Survey ^[7] (JOLTS) was substantially unchanged from November’s report, showing 5.8 million job openings, 5.5 million hires, and 5.2 million separations at the end of the month. The job openings rate was 5.8%, with increases for jobs in information (+33,000) and the federal government (+13,000), and decreases for professional and business services (-119,000), retail trade (-85,000), and construction (-52,000). The total separations rate was 3.6%, with the rate for workers voluntarily leaving a job (the “quit” rate) at 2.2%, and the layoff and discharges rate at 1.1%. Over the 12 months ending in December, there were 64.7 million hires and 62.6 million separations, resulting in a net gain of 2.2 million jobs for 2017.

The Energy Information Administration’s (EIA) Weekly Petroleum Status Report ^[8] showed that both crude oil and commercial petroleum products are at the middle of their average range of supplies for the year, while crude oil imports decreased -538,000 barrels/day,   lowering the   4-week average of imports to 8.1 million barrels/day, down -4.5% compared to the same period last year. Products supplied were up +4.8% compared to last year, with a +6.5% increase in gasoline, a +8.9% increase in distillate fuel, and a -0.6% drop for jet fuel. The benchmark West Texas Intermediate (WTI) crude oil price was $65.50, down -$0.77 for the week, but up +$11.69 for the year, while gasoline prices increased to $2.637/gallon, up +$0.03 for the week and +0.344 for the year. The EIA’s Monthly Short Term Energy Outlook ^[9] projected that WTI prices would average $4/barrel lower than Brent prices, and that WTI prices for May would range from $55/barrel to $77/barrel, while U.S. crude production would increase to a record 10.6 million barrels/day in 2018 compared to 2017’s average of 9.3 million barrels/day.

Upcoming Economic Reports:

Wednesday February 14 – Consumer Price Index

Thursday February 15 – Producer Price Index – Final Demand (PPI-FD)

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Heineken (HEINY) [10]	PepsiCo (PEP) [11]	Cisco Systems (CSCO) [12]	Nestle (NSRGY) [13]	Coca-Cola (KO) [14]
Loews (L) [15]	Baidu (BIDU) [16]	Marriott International (MAR) [17]	Allianz (AZSEY) [18]	Kraft Heinz (KHC) [19]