|Bid||23.59 x 20200|
|Ask||23.59 x 5000|
|Day's Range||23.20 - 23.31|
|52 Week Range||23.09 - 26.42|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.78%|
The Japanese yen (JYN), along with the US dollar, saw a sharp increase in demand as risk aversion gripped global markets. The yen is considered a safe haven in times of market sell-offs because of its current account surplus. In the week ended February 9, the yen (FXY) closed at 108.80 against the US dollar (UUP), appreciating by 1.2%. Japanese equity markets (EWJ) fell sharply, reacting to the global market sell-off, with the Nikkei 225 (JPXN) posting a loss of 8.1% in the week ended February 9.
The British pound (FXB) depreciated by 2.0% against the US dollar (UUP) in the week ended February 9. This fall comes as a surprise because the Bank of England, in its monetary policy statement and quarterly inflation report, sounded hawkish about the economy. The reason for the tepid performance of the British pound was weaker-than-expected economic data indicating lower industrial production and trade activity, and risk-off trading boosting demand for the US dollar.
Equity markets found no respite as global indexes struggled for a second straight week in the week ended February 9. Two days saw a 4% drop in indexes, leading to a huge surge in volatility in equity and bond markets around the world. The week started off with a drop in bond yields, whose rise was a key trigger for the recent market rout. The brief US government shutdown, which ended with the approval of the US budget, is likely to add to the US deficit and affect bond markets.
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The Bureau of Labor Statistics (or BLS) released the “Job Openings and Labor Turnover Survey” (or JOLTS) data for December on February 6. The JOLTS data comes from a monthly survey on job openings, number of new employees hired, number of employees who have quit or asked to leave, and other job separations. The JOLTS report gives insight into labor demand from industries.
The data provided a boost to inflation expectations and consequently to rate hike expectations. Higher interest rates in the United States make the country an attractive destination to park funds from overseas, increasing the US dollar’s value relative to other currencies. The latest boost to the dollar came after President Trump’s comments that the dollar would strengthen on the back of a growing US economy.
Stocks are suffering another bout of volatility on Thursday, with the Dow Jones Industrial Average falling to test the lows seen on Tuesday as bond yields keep drifting higher. Financial conditions remain easy. Keep an eye on these five charts as stocks endure the drama.
The Japanese yen (JYN) retracted against the US dollar last week as US dollar bulls tried to take control. A hawkish Federal Reserve along with a strong jobs report and wage growth gave some reason for the dollar bulls to cheer, and that resulted in a decrease in demand for the Japanese yen. For the week ended February 2, the Japanese yen (FXY) closed at 110.16 against the US dollar (UUP), depreciating 1.3%.
The euro was the best-performing currency among the G7 (Group of Seven) currencies. Most of them fell against the US dollar, which rebounded on the back of improved inflation expectations in the United States and a round of profit booking among currency traders. European equity markets (VGK), along with their global peers, moved lower last week.
Equity indexes around the globe fell last week, halting their multi-week gaining streak. The key reason was the rout in the equity market, fueled by concerns about rising interest rates that could increase borrowing costs. The Fed left interest rates unchanged at last week’s meeting, but a hawkish statement that followed the meeting made the markets realize the approaching hazard of rising rates.
Earlier in this series, we saw how Microsoft (MSFT) and its investors could benefit from the new tax reforms that could bring billions of dollars of cash parked overseas back into the United States. Since Microsoft generates slightly more than 50% of its overall revenues outside the United States, a strengthening or weakening US dollar (UUP) has a marked impact on Microsoft. A stronger-than-expected macro data and expectations of monetary policy tightening by the European Central Bank are providing stimulus to the euro.
IBM’s Strategic Imperatives segment refers to the company’s investments in cloud, analytics, mobile, social, and security technologies. The growth in this segment can be attributed to security business revenues, which skyrocketed 49%, cloud business revenues, which grew 20%, analytics, which grew 9%, and mobile business revenues, which grew 7%. In the last 12 months, Strategic Imperatives has brought in $36.5 billion in revenue, which is ~46.0% of the company’s overall revenue.
Earlier in the series, we discussed IBM’s (IBM) fiscal 4Q17 results, which marked the first time that the company reported revenue growth after 22 straight quarters of revenue decline. Europe (EFA), the Middle East, and Africa posted $7.2 billion, while Asia-Pacific posted ~$4.5 billion. While the Americas region posted 3% growth in its revenues, Europe and Asia-Pacific posted a decline of 1% and 2%, respectively.