T3’s Take 3: The Big Hawk Is Still Flying!
1) The Hawk Trade Rages on
Today, Fed Vice Chairman Stanley Fischer said he believes that productivity growth will rebound, keeping traders confident that the Fed will raise rates again this year.
This helped boost the popular long dollar/short gold trade.
The dollar rose by 1.1% against the yen and 0.4% against the euro, while gold fell -2.0%.
The junior gold miners ETF (GDXJ), which has more than doubled this year, took the brunt of the damage today with a -4.9 decline.
2) Shifty Markets
Aside from the ugliness in gold, stocks remain range-bound as traders await the return of volatility.
The S&P 500 fell -0.2% to 2176.12, making today the 37th straight trading day without a 1% move in the S&P 500.
Market volatility is as low as it's been since November 2014.
Banks were strong courtesy of the hawkish Fed talk and prospect of rising rates, while utilities and retailers were weak.
The important biotech sector was down, but no major damage was done.
3) Apple Stung on Tax Beef
Today, the European Commission found that Ireland gave Apple (AAPL) an illegal “selective tax treatment.”
Apple has been ordered to repay 13 billion euros ($14.5 billion) plus interest, though Ireland will appeal the ruling.
Apple traded as low as $103.50 in premarket trading, and it finished at $106.00, down -0.8%.
The verdict also impacted the shares of other tech names that use Ireland as a tax haven, namely Google (GOOGL) and Facebook (FB).
Wednesday's Trading Calendar
US Economics (Time Zone: EDT)
03:15 Fed's Rosengren to Address Financial Conference in Beijing
03:15 Fed's Evans Speaks on Economy and Policy in Beijing
07:00 MBA Mortgage Applications (Aug 26): -2.10%
08:00 Fed's Kashkari Speaks on Fed Structure in St. Paul
08:15 ADP Employment Change (Aug): exp. 175k, prior 179k
09:45 Chicago Purchasing Manager (Aug): exp. 54, prior 55.8
10:00 Pending Home Sales MoM (Jul): exp. 0.70%, prior 0.20%
10:00 Pending Home Sales NSA YoY (Jul): exp. 2.20%, prior 0.30%
10:30 DOE U.S. Crude Oil Inventories (8/26): exp. 1300k, prior 2501k
10:30 DOE Cushing OK Crude Inventory (8/26): exp. 400k, prior 375k
10:30 DOE U.S. Gasoline Inventories (8/26): exp. -1000k, prior 36k
10:30 DOE U.S. Distillate Inventory (8/26): exp. -125k, prior 122k
10:30 DOE U.S. Refinery Utilization (8/26): exp. -0.50%, prior -1.00%
10:30 DOE Crude Oil Implied Demand (8/26): prior 16833
10:30 DOE Gasoline Implied Demand (8/26): prior 10113.4
10:30 DOE Distillate Implied Demand (8/26): prior 5055.6
Global Economics
02:00 EUR German Retail Sales m/m
03:55 EUR German Unemployment Change
05:00 EUR CPI Flash Estimate
08:30 CAD GDP m/m
21:00 CNY Manufacturing PMI
21:30 AUD Private Capital Expenditures
21:30 AUD Retail Sales
21:45 CNY Caixin Manufacturing PMI
Earnings
Before Open:
None of significance
After Close:
Five Below (FIVE)
Salesforce.com (CRM)
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