Major US stock indexes finished trading without a single dynamic, as shares of consumer companies and banks fell after disappointing retail sales data raised concerns about retailers' future profits and increased the likelihood of lower interest rates. However, growth in technology stocks and optimism about trade negotiations between China and the United States supported the market.

The Commerce Department reported that retail sales fell 1.2% in December, after rising 0.1% in November. Economists had expected sales to grow by 0.2%, which corresponds to the growth reported in the previous month. An unexpected decline in retail sales occurred, despite a noticeable increase in sales of autos and parts, which grew by 1.0% in December, after rising by 0.7% in November. Excluding the increase in car sales, retail sales fell another -1.8% in December after a steady increase in November. Sales at gas stations contributed to the decline amid falling gasoline prices, which fell by 5.1% in December, after falling by 4.4% in November.

In addition, Fed spokesperson Lael Brainard told CNBC that the December drop in US retail sales caught my attention. “Downside risks to GDP growth have definitely increased,” Brainard said, adding that she should wait some time before making another decision regarding interest rates.

Meanwhile, trade negotiations between representatives of the United States and China continued in Beijing. According to the South China Morning Post, China and the United States said they are far apart in terms of monitoring China’s structural reform actions, but the United States can cancel 10 percent tariffs -

Most of the components of DOW finished trading in the red (17 out of 30). The Coca-Cola Co. shares turned out to be an outsider. (KO, -8.01%). The leader of growth were shares of Cisco Systems Inc. (CSCO; + 2.34%).

Most sectors of the S & P recorded an increase. The health sector grew the most (+ 0.6%). The largest decline was shown by the consumer goods sector (-0.5%).

At the time of closing:

Dow 25,438.58 -104.69 -0.41%

S & P 500 2,745.68  -7.35 -0.27%

Nasdaq 100 7,426.96 +6.58 +0.09%

Statistics Canada reported the New Housing Price Index (NHPI) was unchanged m-o-m in December for the fifth consecutive month. 

Economists had forecast the NHPI to be flat m-o-m in December. 

According to the report, new house prices were lower or flat in 17 of the 27 census metropolitan areas (CMAs). Regina (-0.4 percent m-o-m) posted the largest decrease due to lower negotiated selling prices and promotions to stimulate sales. At the same time, the largest price increases were recorded in Ottawa (+0.4 percent m-o-m) and Sherbrooke (+0.4 percent m-o-m), with market conditions listed as the primary reason for a gain in the former and higher construction costs for the latter.

In y-o-y terms, NHPI was unchanged in December, as in the previous month.

Statistics Canada released its Monthly Survey of Manufacturing, which showed that the Canadian manufacturing sales fell 1.3 percent m-o-m in December to CAD56.38 billion, following a revised 1.7 percent m-o-m drop in November (originally a 1.4 percent m-o-m decline). 

Economists had anticipated an increase of 0.2 percent m-o-m for December. 

According to the survey, sales dropped in 12 of 21 industries led by declines in the petroleum and coal product industry (-10.4 percent m-o-m) and food manufacturing (-2.3 percent m-o-m). However, these decreases were partially offset by gains in the primary metal (+3.0 percent m-o-m), aerospace product and parts (+4.2 percent m-o-m) and non-metallic mineral product (+6.1 percent m-o-m) industries.

Overall, sales of durable goods rose 0.6 percent m-o-m in December, while sales of non-durable goods tumbled 3.4 percent m-o-m.

The Commerce Department announced the sales at U.S. retailers fell 1.2 percent m-o-m in December, following a revised 0.1 percent m-o-m advance in November (originally a gain of 0.2 percent m-o-m). That was the biggest monthly drop since September 2009.

Economists had expected total sales would increase 0.2 percent m-o-m in December. 

The December decline came despite a notable surge in sales by motor vehicles and parts dealers (+1.0 percent m-o-m).

Excluding auto, retail sales also dropped 1.8 percent m-o-m after a revised flat m-o-m performance in the previous month (originally a gain of 0.2 percent m-o-m), missing economists’ forecast for a 0.1 percent m-o-m advance. 

Meanwhile, closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, and are used in GDP calculations, fell 1.7 percent m-o-m in December, following a revised 1.0 percent m-o-m advance in October (originally a 0.9 percent m-o-m increase). 

In y-o-y terms, the U.S. retail sales rose 2.3 percent in December, decelerating growth pace from November’s revised increase of 4.1 percent (originally a 4.2 percent gain).

U.S. stock-index rose on Wednesday, as the release of disappointing retail sales statistics offset optimism around ongoing U.S.-China trade talks.

Global Stocks:

The Labor Department reported the U.S. producer-price index (PPI) inched down 0.1 percent m-o-m in January 2019 after a revised 0.1 m-o-m decrease in December 2018 (originally a 0.2 percent m-o-m drop). 

For the 12 months through January, the PPI surged 2.0 percent compared to a 2.5 percent jump recorded in the prior month. 

Economists had forecast the headline PPI would increase 0.1 percent m-o-m last month and 2.1 percent over the past 12 months. 

According to the report, the January decline in the final demand index can be traced to a 0.8-percent decrease in prices for final demand goods. In contrast, the index for final demand services increased 0.3 percent.

Excluding volatile prices for food and energy, the PPI rose 0.3 percent m-o-m and 2.6 percent over 12 months, exceeding economists’ forecasts for gains of 0.2 percent m-o-m and 2.5 percent y-o-y.

(company / ticker / price / change ($/%) / volume)

The data from the Labor Department revealed the number of applications for unemployment benefits unexpectedly rose last week, a sign of possible residual effects of the partial government shutdown. 

According to the report, the initial claims for unemployment benefits increased 4,000 to 239,000 for the week ended February 9. 

Economists had expected 225,000 new claims last week. 

Claims for the prior week were revised upwardly to 235,000 from the initial estimate of 234,000.

Meanwhile, the four-week moving average of claims rose 6,750 to 231,750, the highest level since late January 2018.

Exxon Mobil (XOM) upgraded to Outperform from Underperform at Macquarie; target $83

Cisco Systems (CSCO) reported Q2 FY 2019 earnings of $0.73 per share (versus $0.63 in Q2 FY 2018), beating analysts’ consensus estimate of $0.72.

The company’s quarterly revenues amounted to $12.446 bln (+4.7% y/y), generally in line with analysts’ consensus estimate of $12.434 bln.

CSCO rose to $49.60 (+4.42%) in pre-market trading.

Coca-Cola Co (KO) reported Q4 FY 2018 earnings of $0.43 per share (versus $0.39 in Q4 FY 2017), in line with analysts’ consensus estimate.

The company’s quarterly revenues amounted to $7.100 bln (-5.5% y/y), generally in line with analysts’ consensus estimate of $7.096 bln.

The company also issues guidance for Q1, projecting revenues of +6-7% to approximately $8.08-8.15 bln (versus analysts’ consensus estimate of $7.74 bln).

For FY 2019, it forecast EPS of (1%) - 1% to approximately $2.06-2.10 (versus analysts’ consensus estimate of $2.22) and revenues of +3-4% to approximately $32.9-33.2 bln (versus analysts’ consensus estimate of $33.51 bln).

KO fell to $48.00 (-3.60%) in pre-market trading.

Reuters reported, citing Xinhua news agency, that China's state council said on Thursday it aims to reduce private firms' financing costs to reasonable and stable levels and improve their ability to raise funds through various measures, including issuing bonds.

“The private economy plays an irreplaceable role in stabilising growth, promoting innovation, increasing employment, and improving people’s According to the cabinet, recent policy measures have achieved some results, but some private firms still struggle to receive funding, and financing costs remain high for them.

Efforts will be made to improve monetary policy transmission mechanisms to make banks more willing to lend to private firms, which are considered riskier than state-backed firms, the cabinet said. 

The government will also encourage financial institutions to increase investment in debt issued by private firms and improve the effectiveness of the central bank’s targeted reserve requirement ratio (RRR) cuts for banks to help private companies.

To free up more funds for lending, particularly to vulnerable smaller firms, the People’s Bank of China (PBoC) has cut RRR (the amount that banks need to set aside as reserves) five times over the past year.

Further reserve reductions are expected in coming quarters, alongside tax cuts and increased infrastructure spending to support a slowing economy hurt by a trade war with the U.S.

Regulators will speed up approvals for private firms’ initial public offerings and refinancing activities, and allow such firms to issue convertible bonds, the cabinet added.

A "small number" of Irish firms are likely to see their credit ratings downgraded if neighbouring Britain, Ireland's largest trade partner, exit the European Union (EU) in March without a deal, S&P Global said on Thursday.

The agency noted it still expected the UK to leave the EU with a deal but said the risks that it doesn't were growing. 

"A no-deal Brexit would have negative credit implications and place increased pressure on Irish issuers," S&P said. "However, we would only envisage rating actions for a small number of issuers, where rating performance is already somewhat challenged."

According to the agency, the agriculture sector would be hardest hit by a no-deal Brexit while banks were unlikely to see many "near-term" rating moves, and a downgrade of the Irish sovereign was not its "base-case" in such a scenario.

S&P currently rates more than 50 companies in Ireland as well as the government.

• Sees significant risk of early elections, probably after European vote
• Does not see any major factor impacting Italy's sovereign rating downward or upward over outlook period
• Estimates country's deficit/GDP ratio at 2.5 pct in 2019 and 2020

According to the report from Hellenic Statistical Authority, the CPI in January 2019 compared with January 2018, increased by 0.4%. In January 2018, the annual rate of change of the CPI was -0.2%.

The CPI in January 2019 compared with December 2018, decreased by 1.8%. In January 2018, the monthly rate of change of the CPI was -1.6%.

The average CPI for the twelve - month period from February 2018 to January 2019, compared with the corresponding index for the period February 2017 to January 2018 increased by 0.7%. The annual rate of change of the average CPI between the twelve - month period February 2017 to January 2018 in comparison to the period February 2016 to January 2017 was 1.0%.

Results of a survey among 1,500 companies with business ties to Britain show that for German companies, additional charges caused by tariff bureaucracy are considered the highest risk factor, German Chambers of Commerce and Industry (DIHK) said in statement.

It said only one in five surveyed companies said their business in Britain was going well, while 70% expected it to worsen in 2019.

Statistical office of the European Union said, the number of employed persons increased by 0.3% in the euro area and by 0.2% in the EU28 in the fourth quarter of 2018, compared with the previous quarter. In the third quarter of 2018, employment had grown by 0.2% in both the euro area and in the EU28.

Compared with the same quarter of the previous year, employment increased by 1.2% in both the euro area and the EU28 in the fourth quarter of 2018, after +1.3% and +1.2% respectively in the third quarter of 2018.

Over the whole year 2018, employment rose by 1.4% in the euro area and by 1.3% in the EU28, based on unadjusted quarterly data. The annual growth rate for 2017 was +1.6% for both the euro area and the EU28.

According to the report from Eurostat, seasonally adjusted GDP rose by 0.2% in both the euro area (EA19) and the EU28 during the fourth quarter of 2018, compared with the previous quarter.

In the third quarter of 2018, GDP had grown by 0.2% in the euro area and by 0.3% in the EU28. Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.2% in the euro area and by 1.4% in the EU28 in the fourth quarter of 2018, after +1.6% and +1.8% respectively in the third quarter.

Over the whole year 2018, GDP rose by 1.8% in the euro area and by 1.9% in the EU28, based on seasonally and calendar adjusted quarterly data. The annual growth rate for 2017 was +2.4% for both the euro area and the EU28.

• if Brexit deal is done, around one quarter-point rate hike a year is reasonable central case

• in no-deal Brexit scenario, an easing or extended pause in monetary policy more likely to be appropriate than tightening

• degree of future monetary tightening will in part depend on how large sterling’s appreciation after a Brexit deal is

• signs of economic slowdown in early 2019 means a lot needs to go right for this forecast to come to pass

• I can probably wait for evidence of growth stabilising, inflation pressure rising before considering rate hike

• Impetus from domestic economy remains strong

• Private consumption likely to continue doing well

• Indicators point to subdued development of exports in the coming months

• Construction boom is likely to continue given increase in orders

Chinese Vice Premier was due to hold trade talks with Hammond this weekend

• German economy is likely to achieve growth of around 1%

• No OPEC+ output proposals in light of Venezuela crisis

Investors can expect the "best" returns from Asian stocks in the first half of 2019 as negative sentiment from last year subsides, a J.P. Morgan strategist said.

"We're expecting more upside in the first half ... I think the best part of the returns you'll have in Asian equities will be in the first half," Mixo Das, Asia equity strategist at J.P. Morgan, told.

"At we get more clarity on the U.S.-China trade deal, China's growth bottoming out at some time in [the first] half, and the U.S. economy averting a recession in 2019 — all these things essentially will reinforce that risks are coming down and that's why equities are going to be going higher in the first half," he added.

But growth in company earnings could weaken in the second half of the year, partly due to disruptions on the trade front, which has started to hit economic activity worldwide, said Das.

British lawmakers are certain to back a proposed Brexit agreement if it does not include the backstop, a controversial Irish border arrangement, British foreign minister Jeremy Hunt told.

The British parliament will vote later on Thursday on Prime Minister Theresa May’s plan for an agreement with the European Union on the terms of its withdrawal from the bloc.

“I agree that in December it was difficult to spot a solution. Now, however, it is clear that the parliament will support the divorce deal in the current shape, with one exception - the backstop,” Hunt said.

Koji Fujiwara, chairman of the Japanese Bankers Association, told a regular news conference:

• Bank of Japan must be mindful of the demerits of prolonged negative rate policy

• Bank of Japan should cautiously take steps to make room for future monetary easing

• Suggests Bank of Japan to adopt a target range for prices, instead of a 2% target

Last Friday, it was reported that the US is mulling three car tariff options, including 10% levy, on the EU.

According to the report from Insee, the unemployment rate in France decreased by 0.3% at 8.8% of active population at the end of 2018. It was the lowest level since the first quarter of 2009. Unemployment was expected to remain at 9,1%.

On average in Q4 2018, the average ILO unemployment rate in metropolitan France and the overseas departments (excluding Mayotte) stood at 8.8% of the labour force, its lowest level since early 2009. It decreased by 0.3 percentage points quarter on quarter, after being stable in Q3 2018.

In metropolitan France, the number of unemployed decreased by 90,000 in Q4 2018 to 2.5 million people; the unemployment rate stood at 8.5 % of the labour force. The unemployment rate strongly decreased among youths (-1.7 points). It also decreased for persons aged 25 to 49 (-0.2 points) and was stable for those aged 50 and over.

Over a year, the unemployment rate in metropolitan France decreased by 0.1%, but fell markedly among youth (-1.8 points), in particular among young men (-2.8 points).

The Federal Statistical Office said, the Producer and Import Price Index fell in January 2019 by 0.7% compared with the previous month, reaching 101.7 points (December 2015 = 100). This decline is due in particular to lower prices for petroleum products. Economists had expected a 0.4% decrease.

Compared with January 2018, the price level of the whole range of domestic and imported products fell by 0.5%. Economists had expected a 0.2% decrease.

The fall in the producer price index compared with the previous month was mainly due to lower prices for mineral oil products. Scrap was also cheaper. By contrast, rising prices were observed for watches.

Lower prices compared to December 2018 were registered in the import price index, in particular for petroleum products, pharmaceutical specialties and crude oil and natural gas. The same applies to non-ferrous metals and products made from them as well as to metal products. Price increases, however, showed vegetables and potatoes.

According to the report from Federal Statistical Office (Destatis), the selling prices in wholesale trade increased by 1.1% in January 2019 from the corresponding month of the preceding year.

In December 2018 and in November 2018 the annual rates of change had been +2.5% and +3.5%, respectively.

Destatis also said, from December 2018 to January 2019 the index fell by 0.7%.

The Federal Statistical Office (Destatis) said, in the fourth quarter of 2018, the gross domestic product (GDP) remained nearly at the previous quarter's level after adjustment for price, seasonal and calendar variations. Economists had expected a 0.1% increase. For the whole year of 2018, this was an increase of 1.4% (calendar adjusted: 1.5%). Hence growth was slightly smaller than reported in January.

The quarter-on-quarter comparison (price, seasonally and calendar adjusted) reveals that positive contributions mainly came from domestic demand. Gross fixed capital formation, especially in construction but also in machinery and equipment, increased markedly compared with the third quarter of 2018. While household final consumption expenditure increased slightly, general government final consumption expenditure was markedly up at the end of the year. However, development of foreign trade did not make a positive contribution to growth in the fourth quarter. According to provisional calculations, exports and imports of goods and services increased nearly at the same rate in the quarter-on-quarter comparison.

Measured by unadjusted figures, economic growth slowed down year on year. The price adjusted GDP rose by 0.9% (calendar adjusted: 0.6%) in the fourth quarter of 2018, following increases of 1.1% (also calendar adjusted) in the third quarter of 2018, 2.3% (calendar adjusted: 2.0%) in the second quarter of 2018 and 1.4% in the first quarter of 2018 (calendar adjusted: 2.1%).

According to the report from Customs General Administration of China, China's trade surplus declined to $39.16 billion in January. Analysts expecting trade surplus to have narrowed in January to $33.5 billion from $57.06 billion in December.

China’s January dollar-denominated exports rose 9.1% from a year earlier, while imports dropped 1.5%. Analysts had expected both exports and imports to fall for a second straight month, but cautioned the trend could be distorted by the timing of the long Lunar New Year holidays, which fell in early February this year.

Exports had been forecast to decline 3.2%, after a 4.4% drop in December. Imports were expected to have dropped 10%, after declining 7.6% in the preceding month.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1432 (4149)

$1.1399 (779)

$1.1373 (701)

Price at time of writing this review: $1.1276

Support levels (open interest**, contracts):

$1.1252 (3064)

$1.1228 (5493)

$1.1199 (5829)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date March, 8 is 98393 contracts (according to data from February, 13) with the maximum number of contracts with strike price $1,1700 (6202);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3067 (3950)

$1.3009 (665)

$1.2948 (398)

Price at time of writing this review: $1.2865

Support levels (open interest**, contracts):

$1.2822 (1085)

$1.2786 (942)

$1.2763 (1210)

Comments:

- Overall open interest on the CALL options with the expiration date March, 8 is 41754 contracts, with the maximum number of contracts with strike price $1,3000 (3950);

- Overall open interest on the PUT options with the expiration date March, 8 is 28725 contracts, with the maximum number of contracts with strike price $1,2300 (1791);

- The ratio of PUT/CALL was 0.69 versus 0.69 from the previous trading day according to data from February, 13

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.