In Asian Equity Markets Japanese stocks edged up on Friday as investors covered their short positions, but gains were tempered and volume was low as markets remained cautious before the inauguration of U.S. President-elect Donald Trump. The Nikkei ended 0.3 percent higher at 19,137.91. For the week, it lost 0.8 percent. MSCI’s broadest index of Asia-Pacific stocks outside Japan lost 0.2 percent, and looked set to end the week 0.1 percent lower. Australian stocks retreated 0.6 percent, heading for a 1.1 percent decline for the week. South Korean stocks slid 0.2 percent, poised to end the week 0.4 percent lower. The Shanghai Composite Index was up 0.49 percent and Hong Kong’s Hang Seng Index lost 0.65 percent.
In Currency Markets the dollar lost momentum on Friday as U.S. Federal Reserve Chair Janet Yellen spoke of a gradual pace of rate hikes and sounded less hawkish than some had expected, while investors braced for U.S. President-elect Donald Trump to be sworn in. The dollar was last down 0.1 percent against the yen at 114.75 yen, on track for a weekly gain of 0.2 percent. The euro gained 0.2 percent at $1.0679, adding to the rebound on the previous day after the announcement from the European Central Bank. It was up 0.3 percent for the week. The dollar index fell 0.2 percent to 100.97. The dollar came off peaks after Fed Chair Yellen spoke at the Stanford Institute for Economic Policy Research in early Asian trading hours.
In Commodities Markets oil climbed for a second day on Friday underpinned by expectations of tighter supply and on reports of record Chinese demand, but prices remained under pressure from rising U.S. crude and gasoline inventories. Brent crude rose 15 cents to $54.31 a barrel. U.S. West Texas Intermediate crude oil futures were trading up 17 cents at $51.54 per barrel. Crude inventories rose 2.3 million barrels in the week to Jan. 13, compared with analyst expectations for an increase of 342,000 barrels. Spot gold was up 0.1 percent at $1,206.26 per ounce, while silver eased by 0.18 percent at $16.98 an ounce. Platinum prices were firm at $958 an ounce. Palladium also remained steady at $753 an ounce.
In US Equity Markets stocks fell on Thursday, continuing to pull back from the post-election rally, on investor caution ahead of Donald Trump’s inauguration as president on Friday. The Dow Jones Industrial Average closed down 0.37 percent, to 19,732.4, the S&P 500 lost 0.4 percent, to 2,263.69 and the Nasdaq Composite fell 0.28 percent, to 5,540.08. Rail shares were among the day’s big gainers. Railroad CSX Corp jumped 23.4 percent after a source said CP Rail CEO Hunter Harrison, who steps down on Jan. 31, is in advanced talks to team up with a former Pershing Square Capital partner to shake up CSX. Union Pacific was up 2.4 percent after a better-than-expected quarterly net profit.
In Bond Markets Japanese government bond prices edged higher on Friday as a regular debt-buying operation by the Bank of Japan helped offset pressure from an overnight fall in U.S. Treasuries. March 10-year JGB futures gained 0.15 point to 150.24. The benchmark 10-year JGB yield fell 1 basis point to 0.060 percent, pulling away from a one-month high of 0.075 percent struck the previous day. The 10-year U.S. Treasury yield fell 0.2 percent to 2.4646, after spiking to as high as 2.496 on Thursday.
Economic Calendar
10:30 GMT+0 UK Retail Sales m/m
14:30 GMT+0 CAD CPI m/m
14:30 GMT+0 CAD Core Retail Sales m/m
US Equity Upgrades
BASIC ENERGY (BAS) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK
CAPITAL PRODUCT (CPLP) UPGRADED TO BUY FROM HOLD AT EVERCORE ISI
CSX (CSX) UPGRADED TO OUTPERFORM FROM SECTOR PERFORM AT SCOTIABANK
CSX (CSX) UPGRADED TO OVERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY
CUMMINS (CMI) UPGRADED TO BUY FROM NEUTRAL AT LONGBOW
DEVON ENERGY (DVN) UPGRADED TO NEUTRAL FROM SELL AT UBS
DIEBOLD (DBD) UPGRADED TO OUTPERFORM FROM IN-LINE AT IMPERIAL CAPITAL
EDISON INTERNATIONAL (EIX) UPGRADED TO BUY FROM HOLD AT EVERCORE ISI
FIRST NBC BANK (FNBC) UPGRADED TO MARKET PERFORM FROM UNDERPERFORM AT FBR CAPITAL
GENUINE PARTS (GPC) UPGRADED TO NEUTRAL FROM SELL AT GOLDMAN
HILTON (HLT) UPGRADED TO OUTPERFORM FROM MARKET PERFORM AT BERNSTEIN
HILTON GRAND VACATIONS (HGV) UPGRADED TO BUY FROM NEUTRAL AT GOLDMAN
HP INC. (HPQ) UPGRADED TO BUY FROM NEUTRAL AT UBS
MARRIOTT (MAR) UPGRADED TO CONVICTION BUY FROM BUY AT GOLDMAN
MOBILEYE (MBLY) UPGRADED TO BUY FROM NEUTRAL AT GOLDMAN
NATIONAL OILWELL (NOV) UPGRADED TO BUY FROM HOLD AT SOCIETE GENERALE
NETFLIX (NFLX) UPGRADED TO NEUTRAL FROM UNDERPERFORM AT MACQUARIE
PACCAR (PCAR) UPGRADED TO NEUTRAL FROM UNDERPERFORM AT LONGBOW
PANERA BREAD (PNRA) UPGRADED TO BUY FROM NEUTRAL AT GOLDMAN
PRECISION DRILLING (PDS) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK
SOUTHWESTERN ENERGY (SWN) UPGRADED TO NEUTRAL FROM SELL AT UBS
TENARIS (TS) UPGRADED TO NEUTRAL FROM UNDERWEIGHT AT JPMORGAN
TESLA (TSLA) UPGRADED TO OVERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY
VERIZON (VZ) UPGRADED TO BUY FROM HOLD AT HSBC
US Equity Downgrades
AARON’S (AAN) DOWNGRADED TO MARKET PERFORM FROM STRONG BUY AT RAYMOND JAMES
AK STEEL (AKS) DOWNGRADED TO SELL FROM NEUTRAL AT CITI
ASML (ASML) DOWNGRADED TO NEUTRAL FROM BUY AT CITI
AUTOLIV (ALV) DOWNGRADED TO HOLD FROM BUY AT JEFFERIES
BAKER HUGHES (BHI) DOWNGRADED TO HOLD FROM BUY AT SOCIETE GENERALE
BLOOMIN’ BRANDS (BLMN) DOWNGRADED TO NEUTRAL FROM BUY AT GOLDMAN
CELLCOM ISRAEL (CEL) DOWNGRADED TO EQUAL WEIGHT FROM OVERWEIGHT AT BARCLAYS
CERNER (CERN) DOWNGRADED TO EQUAL WEIGHT FROM OVERWEIGHT AT BARCLAYS
COCA-COLA (KO) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT WELLS FARGO
COMMERCIAL METALS (CMC) DOWNGRADED TO NEUTRAL FROM BUY AT CITI
COVANTA (CVA) DOWNGRADED TO EQUAL WEIGHT FROM OVERWEIGHT AT BARCLAYS
DEAN FOODS (DF) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT BERNSTEIN
DOLLAR TREE (DLTR) DOWNGRADED TO BUY FROM CONVICTION BUY AT GOLDMAN
EP ENERGY (EPE) DOWNGRADED TO SELL FROM NEUTRAL AT UBS
ERICSSON (ERIC) DOWNGRADED TO SELL FROM NEUTRAL AT GOLDMAN
EXXON MOBIL (XOM) DOWNGRADED TO SELL FROM NEUTRAL AT UBS
GNC HOLDINGS (GNC) DOWNGRADED TO SELL FROM NEUTRAL AT GOLDMAN
GREENBRIER (GBX) DOWNGRADED TO SELL FROM UNDERPERFORM AT CLSA
HOST HOTELS (HST) DOWNGRADED TO SELL FROM NEUTRAL AT GOLDMAN
KATE SPADE (KATE) DOWNGRADED TO NEUTRAL FROM BUY AT BOFA/MERRILL
NETSCOUT (NTCT) DOWNGRADED TO SECTOR PERFORM FROM OUTPERFORM AT RBC CAPITAL
NEWPARK RESOURCES (NR) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT COWEN
PATTERSON-UTI (PTEN) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT COWEN
ROYAL CARIBBEAN (RCL) DOWNGRADED TO SELL FROM NEUTRAL AT GOLDMAN
RPC, INC. (RES) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT COWEN
SPROUTS FARMERS MARKETS (SFM) DOWNGRADED TO NEUTRAL FROM BUY AT GOLDMAN
TAHOE RESOURCES (TAHO) DOWNGRADED TO NEUTRAL FROM OUTPERFORMER AT CIBC
TARGET (TGT) DOWNGRADED TO SELL FROM NEUTRAL AT GOLDMAN
TESCO (TESO) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT COWEN
TRANSENTERIX (TRXC) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT RAYMOND JAMES
U.S. STEEL (X) DOWNGRADED TO NEUTRAL FROM BUY AT CITI
VITAMIN SHOPPE (VSI) DOWNGRADED TO SELL FROM NEUTRAL AT GOLDMAN
US Equity Initiations
AAR CORP. (AIR) INITIATED WITH A BUY AT SUNTRUST
AEROJET ROCKETDYNE (AJRD) INITIATED WITH A BUY AT SUNTRUST
ASTRONICS (ATRO) INITIATED WITH A HOLD AT SUNTRUST
BARNES GROUP (B) INITIATED WITH A HOLD AT SUNTRUST
BROOKFIELD (BAM) INITIATED WITH A BUY AT CITI
CHARTER (CHTR) INITIATED WITH A HOLD AT HSBC
CHECK-CAP (CHEK) INITIATED WITH A BUY AT RODMAN & RENSHAW
CURTISS-WRIGHT (CW) INITIATED WITH A HOLD AT SUNTRUST
ESTERLINE (ESL) INITIATED WITH A BUY AT SUNTRUST
FLIR SYSTEMS (FLIR) INITIATED WITH A HOLD AT SUNTRUST
HEICO (HEI) INITIATED WITH A BUY AT SUNTRUST
INFINERA (INFN) INITIATED WITH A NEUTRAL AT PIPER JAFFRAY
KLX INC. (KLXI) INITIATED WITH A BUY AT SUNTRUST
KRATOS DEFENSE (KTOS) INITIATED WITH A BUY AT SUNTRUST
LULULEMON (LULU) INITIATED WITH AN UNDERPERFORM AT CLSA
MOOG (MOG.A) INITIATED WITH A HOLD AT SUNTRUST
NIKE (NKE) INITIATED WITH AN UNDERPERFORM AT CLSA
ORBITAL ATK (OA) INITIATED WITH A BUY AT SUNTRUST
UNDER ARMOUR (UAA) INITIATED WITH A BUY AT CLSA
WOODWARD (WWD) INITIATED WITH A HOLD AT SUNTRUST