FT : Higher oil prices help BP beat Q1 forecasts

Higher oil prices help BP beat Q1 forecasts


BP almost tripled its profits in the first three months of this year as the UK oil group benefited from higher oil prices to deliver better than-expected quarterly results.

Profits on an underlying replacement cost basis – the main measure watched by analysts – were $1.5bn.

This was up from $532m in the first quarter of 2016 and higher than the $1.26bn consensus forecast by analysts.

The results added to evidence of recovery in the sector after an 80 per cent increase in oil prices from the 12-year lows recorded early last year. ExxonMobil and Chevron, the two biggest US oil groups, both last week beat market expectations with sharply higher first quarter earnings.

BP’s operating cash flow increased strongly to $4.4bn, excluding expenses related to the Deepwater Horizon oil spill, from $3bn in the same period last year. This helped BP keep its dividend steady at 10 cents per share despite a series of recent acquisitions to replenish its oil and gas reserves.

Production rose 5 per cent in the quarter to 3.5m barrels per day as BP began to benefit from the first of several new projects due to come on stream in coming months.

Bob Dudley, BP chief executive said:

Our year has started well. BP is focused on the disciplined delivery of our plans. First quarter earnings and cash flow were robust. We have shown continued operational momentum – it was another strong quarter for the Downstream and the first of our seven new Upstream major projects has started up, with a further three near completion. We expect these to drive a material improvement in operating cash flow from the second half.

>>> Banco Popular could attract investment of up to EUR 6bn in capital raise; ha

Banco Popular could attract investment of up to EUR 6bn in capital raise; halts WiZink sale

Banco Popular [BME:POP] Chairman Emilio Saracho has attracted the interest of several investment funds ready to invest in a new macro capital increase, Cinco Dias reported, citing financial sources. Saracho was considering a capital increase below EUR 3bn, but now the figure could increase significantly, the paper said, to EUR 4bn, EUR 5bn or even EUR 6bn.
According to the Spanish-language paper, however, only after Popular clears its balance and eliminates doubts about its solvency will institutional investors enter its capital.
Saracho has decided not to sell for now the 49% Popular owns in the card business WiZink, Cinco Dias went on to say. The executive believes that the business is profitable and could double its profit this year to EUR 250m, the paper added.

>>> Pre-Market Indications

ML
**LONZA - RIGHTS BEGIN TRADING TODAY - ticker LONN1 SW
OCDO - Marks & Spencer, Ocado Said Eyeing Delivery Tie-Up (261).............+4%
ABERDEEN - Underlying EPS of 11.5p vs. BAML of 10.8p & cons of 10.7p (287)..+3%
TAKEAWAY - Q1 order growth of +47% (vs. +35% FY17e, BAMLe) (31.8)...........+3%
OPHR - signed Umbrella Agreement w the Govt of Equatorial Guinea......(88.5)+3%
DSM - 1Q sales of €2159mn, +7% vs. BofAML and +6% vs. consensus (66.98).....+2%
CAPITA - is close to selling it's Asset Services division for £700m (655)...+2%
BP - 1Q17 $1.5bn net income beats consensus and BofAML at $1.27bn (446.92)..+1%
ACTELION - will be removed from SMI on close (265.60)......................unch
IWG - Q1 trading statement all look in line with expectations (325)........unch
SMITHS GROUP - selling Interconnect’s Microwave Telecoms business for £85m.unch
BOVIS - trading in line, confident on full year plan (910)..................-1%
GALP - EBIT of €220m missed consensus by 3% (14.13).........................-1%
Just Eat - UK order growth of 17%, vs. BofAMLe at 20% (555).................-4%

CS
Autogrill -1% CS DOWNGRADE to UNDERPERFORM (Positives factored in)
AstraZeneca M/P FDA granted accelerated approval to AstraZeneca’s Imfinzi
BP +2-3% Adj net $1.5bn v street $1.2bn, very strong cash flow
Capita +2% May Raise GBP700M From Asset Services Unit Sale, S. Times
Cerved M/P Revenues 2.4% ahead, Adjusted EBITDA 1.1% ahead
DSM +1% EBITDA 3% ahead, beat came from performance materials
DSV +1-2% EBIT ahead, guidance raised
Dufry -2-3% Topline in line but EBITDA and cash flow weak
Fugro M/P Q1 revs €376.7 vs cons €352m, outlook FY17 unchanged
Galp -1% Q1 ebitda €419m vs cons €426.8m, net light
Geberit -1% Q1 revs 1% light, organic growth slightly light
Grandvision +1% Q1 sales inline, LFL 4.1% ahead of cons 3.3%
Inwit M/P Q1 Revs and EBITDA inline with consensus
IWG -1-2% Group revenues 2% light, Sales activity has improved
Jimmy Choo +2% Telegraph reports Coach considering takeover of Jimmy Choo
Just Eat -2% Q1 trading slightly light, reiterates guidance
Luxottica -1-2% Q1 net sales inline, reiterates FY guidance
Miners +1% Copper -1.15%, Brent -0.80%, Iron Ore +4.00%, China -0.40%
Oerlikon +2% Q1 Order intake 8% ahead, guidance raised
Peugeot -0.5% French new car sales fell -6% in April, Peugeot Group -5.3%
Renault -1% French new car sales fell -6% in April, Renault -8.3%
Smiths +0.5% Completed the sale of microwave telecom biz for EV of £85m

MF
*DSM-Sales 2.16b(2.05),Ebitda 345m(329.6),Outlook maintained.......+1%
*GEBERIT-Sales 737.1m(741),Adj Ebitda 218.9m(219.3),NI 153.4m......-1%
*DUFRY-Sales 1.71b(1.71),Ebitda 154.7m(160),Ebit -22.5m(-17.5).....-2%
*OERLIKON-Sales 608m(595.8),Ebit 39m(39),Ebitda 86m(80.43).........+2%
*METRO-Has no plan "B" if plan to split fails says CEO - FT........-0.5%
*MONTE PASCHI-Italy may have to put more than €6.6b into Paschi....-1%
*OCADO-M&S/OCADO-Consider delivery tie-up says the Telegraph.......+4%
*ASTRA-Durvalumab Wins FDA accelerated approval,6 weeks early......U/C
*DSV-Rev 18.2b(17.3),OP 1.13b(915.9),FY OP 4.3-4.6b(4.2-4.5b)......+1%
*AURELIUS-Rev 1.15b,Ebitda 293.2m,Op Ebitda 41.3m,50m b/back.......+2%
*T/TAILOR-Sales 218.9m(216.7),GM 53.1%(52),Ebitda 8.7m(8.7)........+0.5%
*P/VAC-Sales 136.9m(133),Ebit 21.4m(23.1),NI 14.8m(15.8),o/l +ve...+1%
*LUXOTTICA-Sales 2.38b(2.38),Comp Sales -3.5%,Confirms FY..........-1%
*ZALANDO-Read across from Just Eat,stk being called -2% pre-mkt....-0.5%

>>> What to look at today - 2nd of May 2017

Dow -0.13% S&P +0.17% Nasdaq +0.73% Russell +0.50%
Blue chips slowed down today, with the Dow posting a small loss, while the broader stock market continued its rally. A possible US government shutdown seems averted, with more talk of a vote by this week on a new healthcare bill. Despite some weaker than expected economic data, investors returned to risky assets in particular techs. Apple rose more than 2%, helping propel the NASDAQ to a new high just short of 6,100. Congress and the White House averted a government shutdown by agreeing to a bipartisan federal funding bill of around $1T over the weekend. The deal should be voted through by end of the week and would include an increase in defense and homeland security spending. UK PM May said today that the UK would not agree to any Brexit bill without having an agreement on trade post-Brexit first. Her words come after various EU officials have stated there will be no post-Brexit negotiations until the conditions of UK's exit from the union have reached an advanced stage. Asian equity markets traded mixed, tracking US indices. Kospi was among the top performers rising to record highs, while Australia saw declines on weakness in energy and metals stocks. Crude oil prices faltered overnight with Libya disclosing higher production and Kuwait also forecasting increased output in the medium term. China Caixin Manuf PMI came in below estimates at 50.3 V 51.3E, which was also its 7-month low. Slower increases in output and new orders were attributed to the decline, along with softer growth in new orders that forced manufacturers to cut payrolls at the fastest pace since January. Slowing growth was also felt in the prices components as the rate of input price inflation softened to a seven-month low. Recall over the weekend, China official manufacturing and non-manufacturing PMIs also hit 6-month lows.

Nikkei +0.56% Hang Seng -0.08% CSI -0.43% Shanghai -0.29%

Eur$ 1.0922 CNH 6.8959 CNY 6.8960 JPY 111.99 GBP 1.2902 CHF 0.9954 RUB 56.9362

S&P -0.08% EuroStoxx -0.20% Dax +0.008% SMI +0.12% FTSE +0.11%

Macro :
- China April Manufacturing PMI at 51.2; Est. 51.7
- Trump Says He Is Considering Breaking Up Wall Street Banks
- Fed’s Low-and-Slow Strategy Tested by Business-Spending Pickup
- If You Sell in May, How Long Should You Stay Away? Macro Man
- Germany’s Schaeuble Sees Greece on Track for May 22 Deal: Funke
- Pence Says Trump’s Tax Plan May Increase Deficit in ‘Short Term’
- May Promises No Increase in VAT, Hints at Other Tax Rises
- Airbnb Settles With San Francisco Over Short-Term Rental Law
- BITCOIN & ETHEREUM – CLIMB TO ALL-TIME HIGHS: Two of the world’s most popular digital currencies rose to records on Monday, with the Bitcoin price eclipsing the $1,400 level for the first time ever. Ethereum, the world’s second-largest digital token, climbed above $80 for the first time.

Keep an eye on :
- AC FP : Banyan Tree enters into definitive collaboration, subscription agreement with Accor
- AIR FP : Airbus to Build Helicopter Assembly Line in Shandong: Xinhua
- AIR FP : SpaceX Says Standing Down on Launch Today Due to Sensor Issue
- AI FP : Air Liquide to Cancel 1.5m Shares Bought in Buyback Program
- AZA IM : Alitalia Administrators to Seek Offers for Company: Messaggero
- AZA IM : Meridiana/Qatar Air May Be Interested in Alitalia: Messaggero
- AMZN US : Amazon Probed in Italy for $142m in Unpaid Taxes: La Repubblica
- AAPL US : Apple Asks CA to Change Proposed Self-Driving Car Testing Rules
- AZN LN : AstraZeneca’s Durvalumab Wins FDA Accelerated Approval
- AR4 GY : Aurelius 1Q Revenue EU1.15b
- CS FP : Axa Sees Positive Impact on Results From Higher Rates: Chairman
- BAYN GY : Bayer, J&J File With FDA to Seek New Xarelto Dose for VTE
- BMW GY : BMW CEO Says Next Self-Driving Car to Be Built in Bavaria: FAS
- BMPS IM : Italy May Have to Put More Than EU6.6b Into Paschi: Stampa
- BOSCH : Bosch to Sell Starter Motor/Generator Unit to China Co: FAZ
- BP/ LN : BP Studies Brazil Rounds as Operator or Partner, Alexander Says
- BB/ LN : U.K. Said to Plan GBP3b Bradford & Bingley Mortgage Auction: Sky
- CPI LN : Capita auction of asset services unit attracts GBP 700m bids from GTCR, CVC
- AFX GY : Zeiss, ASML Seek to Block Nikon Cameras From U.S. Market
- CO FP : Via Varejo stake sale to be postponed - O Estado de Sao Paulo
- CCH LN : Coca-Cola Bottling Company UNITED buys eight distribution territories, two factories from The Coca-Cola Co.
- DAI GY : Mercedes Recalling Some Vehicles in U.S. for Seat Belts: NHTSA
- DRX LN : Drax ‘Increasingly Investable,’ Double-Upgraded at Jefferies
- DSM NA : DSM 1Q Adjusted Ebitda 345 Million Euros, Beating Estimate
- DUFN VX : Dufry 1Q Org. Growth 7.2% vs 5.6% in 4Q, Boosted by U.S., U.K.
- FUR NA : Fugro 1Q Revenue EU376.7m
- GALP PL : Galp 1Q Adjusted Ebitda Misses Est.
- GEBN VX : Geberit 1Q Misses Estimates, Sees Favourable Construction in ’17
- GPRO US : GoPro Falls as Bullish Forecasts Fail to Convince Analysts
- ISP IM : Italy May Hold More Than 70% in Veneto Banks After Merger: Sole
- CHOO LN : Coach Said Considering Takeover of Jimmy Choo: Telegraph
- LIN GY : Praxair CEO Angel has $37M Parachute in Linde Deal: Spiegel
- LIN GY : Linde-Praxair Merger Talks Could Take Until June: Handelsblatt
- LUX IM : Luxottica 1Q Net Sales Meet Est., FY Outlook Confirmed
- LUX IM : Luxottica 1Q Rev. Soft, Improving Trends May Be Supportive: RBC
- MKS LN : Marks & Spencer, Ocado Said Eyeing Delivery Tie-Up: Telegraph
- OCDO LN : Marks & Spencer, Ocado Said Eyeing Delivery Tie-Up: Telegraph
- OERL SW : Oerlikon Raises Full-Year Guidance as 1Q Orders Jump 21%
- OHL SM : OHL Reaches Agreement With Unions Over Job Cuts: Filing
- PLT IM : Parmalat Buys Dairy Cos. in U.S. for ~$130m Enterprise Value
- UG FP : French New Car Registrations Fell 6% in April to 171,879
- POM FP : Plastic Omnium Aims to Double Chinese Sales by 2021: Investir
- RNO FP : French New Car Registrations Fell 6% in April to 171,879
- RNO FP : Nissan N. America Recalling Certain LEAF, Sentra Vehicles: NHTSA
- RKET GY : Rocket Internet Plans Fintech, Insurance Businesses
- S32 LN : South32 Sensible to Agree Deal on Arizona Zinc Project, RBC Says
- SAP GY : Siemens, SAP Sign MoUs to Aid Saudi Digitalization: Reuters
- SDRL NO : Seadrill to Sell 3 Jack-Ups for $225m to Shelf Drilling
- SIE GY : Siemens, SAP Sign MoUs to Aid Saudi Digitalization: Reuters
- STM FP : Semiconductor Stocks Fall Amid Intel Data Center Revenue Miss
- SZU GY : Swiss to Discuss Sugar Tax in Parliament in Coming Weeks: SamW
- TCG LN : Thomas Cook to Buy Kuoni’s Destination Mgmt Specialists Network
- TWTR US : CEO Dorsey bought 574K at $16.62 on 4/28 - CEO's stake now totals just over 16M shares
- UBSG VX : UBS, BNP, RBS Said to Get Subpoenas in U.S. Treasuries Probe
- VOW3 GY : VW Triples Electric-Car Budget to $9.8b for New Auto Era
- VOW3 GY : VW Open to Widen JV for EV Charger Network: Automobilwoche

>>> Europe : Brokers Upgrades & Downgrades - 2nd of May 2017

>>> Up
*Altitude Group Raised to Buy at WH Ireland, PT 80p
*CNH Industrial Raised to Neutral at JPMorgan, PT $10
*Ingenico Group Raised to Buy at HSBC, PT EU105
*Kion Raised to Buy at SocGen, PT EU79
*Munich Re Raised to Buy at Bankhaus Lampe, PT EU205
*Qiagen Raised to Add at AlphaValue
*UBS Raised to Hold at Kepler Cheuvreux, PT CHF17.80

>>> Down
*Amer Sports Cut to Neutral at Citi, PT EU22.50
*Autogrill Cut to Underperform at Credit Suisse
*DIA Cut to Outperform at Raymond James
*Gemalto Cut to Hold at Berenberg, PT EU50
*Hannover Re Cut to Hold at Bankhaus Lampe
*Hexpol Cut to Hold at Kepler Cheuvreux, PT SEK102
*Inwit Cut to Neutral at MainFirst, PT EU5.30
*Kuka Cut to Neutral at Macquarie
*Luxottica Cut to Hold at Fidentiis Equities, PT EU52.50
*MTU Aero Cut to Hold at HSBC, PT EU133
*Nobia Cut to Hold at Danske Bank, PT SEK100

>>> initiation


>>> Call
>> Sector
*EURO-AREA BANKS RAISED TO OVERWEIGHT AT BERNSTEIN
--> Euro-Area Banks Raised to Overweight vs Underweight at Bernstein
>> Stock
*CREDIT AGRICOLE, ING ADDED TO BERNSTEIN RECOMMENDED PORTFOLIO
*CREDIT AGRICOLE, ING ADDED TO BERNSTEIN RECOMMENDED PORTFOLIO
*NORDEA, INTESA, SOCGEN REMOVED FROM BERNSTEIN PORTFOLIO

>>> Asian Update

Asia Mid-Session Market Update: China Caixin Manufacturing PMI echoes slowdown of official prints; RBA on hold with a more upbeat tone

***US Session Highlights***
- Blue chips slowed down today, with the Dow posting a small loss, while the broader stock market continued its rally. A possible US government shutdown seems averted, with more talk of a vote by this week on a new healthcare bill. Despite some weaker than expected economic data, investors returned to risky assets in particular techs. Apple rose more than 2%, helping propel the NASDAQ to a new high just short of 6,100. Congress and the White House averted a government shutdown by agreeing to a bipartisan federal funding bill of around $1T over the weekend. The deal should be voted through by end of the week and would include an increase in defense and homeland security spending. UK PM May said today that the UK would not agree to any Brexit bill without having an agreement on trade post-Brexit first. Her words come after various EU officials have stated there will be no post-Brexit negotiations until the conditions of UK's exit from the union have reached an advanced stage.

***US markets on close: Dow -0.1%, S&P500 +0.2%, Nasdaq +0.7%***
- Best Sector in S&P500: Technology
- Worst Sector in S&P500: Telecommunications
- Biggest gainers: MAC +3.6%; LRCX +3.0%; ALXN +2.9%
- Biggest losers: AMG -5.9%; NWL -3.6%; BBBY -3.4%
- At the close: VIX 10.11 (-7bps); Treasuries: 2-yr 1.28% (-0.4bps), 10-yr 2.32% (-0.4bps), 30-yr 3.01% (-0.4bps)

***US movers afterhours***
- ANGI: IAC's HomeAdvisor confirms to combine with Angie's List; shareholders can elect to receive one ANGI Homeservices share or $8.50/shr in cash; +41.4% afterhours
- LMNX: Reports Q1 $0.28 v $0.08e, R$77.8M v $74.0Me; Guides Q2 Rev $74-79M v $75.3Me; +16.2% afterhours
- THC: Reports Q1 -$0.52 v -$0.53e, R$4.81B v $4.85Be; announces agreement with Humana- Guides Q2 -$0.20 to -$0.10 v -$0.05e, R$4.85-5.05B v $4.89Be, adj EBITDA $550-600M; +13.7% afterhours
- APTS: Reports Q1 FFO $0.36 v $0.34e, R$66.6M v $55.5Me; affirms FY17 FFO $1.40-1.48 v $1.47e, R$285-315M v $234Me (prior $1.40-1.48 v $1.48e; +7.9% afterhours
- CYH: Reports Q1 $0.08 v $0.06e, R$4.49B v $4.34Be; +3.4% afterhours
- AMD: Reports Q1 -$0.04 v -$0.05e, R$984M v $983Me; -11.2% afterhours

***Key economic data***
- (CN) CHINA APR CAIXIN PMI MANUFACTURING: 50.3 V 51.3E; 7-month low; 10th straight month of expansion
- (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50% (AS EXPECTED)
- (JP) JAPAN APR SERVICES PMI: 52.2 V 52.9 PRIOR; COMPOSITE PMI: 52.9 PRIOR
- (JP) JAPAN APR MONETARY BASE Y/Y: 19.8% V 20.3% PRIOR; MONETARY BASE END OF PERIOD: ¥462.2T V ¥447.3T PRIOR
- (JP) Bank of Japan (BOJ) March 15th Policy Meeting Minutes: Members agreed to closely examine consumer price trend
- (KR) SOUTH KOREA APR CPI M/M: -0.1% V 0.1%E; Y/Y: 1.9% V 2.1%E; CORE Y/Y: 1.3% V 1.3%E
- (KR) SOUTH KOREA APR PMI MANUFACTURING: 49.4 V 48.4 PRIOR

***Asia Session Notable Observations, Speakers and Press***
- Asian equity markets traded mixed, tracking US indices. Kospi was among the top performers rising to record highs, while Australia saw declines on weakness in energy and metals stocks. Crude oil prices faltered overnight with Libya disclosing higher production and Kuwait also forecasting increased output in the medium term. In FX, dollar majors traded in narrow rangers. AUD/USD was most volatile, sliding after a disappointing China Caixin Manufacturing PMI before lifting to its highs after an upbeat RBA policy statement.
- China Caixin Manuf PMI came in below estimates at 50.3 V 51.3E, which was also its 7-month low. Slower increases in output and new orders were attributed to the decline, along with softer growth in new orders that forced manufacturers to cut payrolls at the fastest pace since January. Slowing growth was also felt in the prices components as the rate of input price inflation softened to a seven-month low. Recall over the weekend, China official manufacturing and non-manufacturing PMIs also hit 6-month lows.
- RBA decision saw rates remain at 1.50% as widely expected, but the policy statement was surprisingly more upbeat after last month's dour assessment of employment. RBA noted improvement in global growth boosting demand for Australian exports, noted employment was now a bit stronger, forecast growth reaching 3% level over next few years, and also anticipating further increase in underlying inflation. AUD/USD rose some 20pips on the RBA statement while the yield on Australia 3-year ticked up 1bps.

China
- (CN) China foreign exchange trade system (CFETS): Started a trading platform for credit-default swaps today - Chinese press
- (CN) Despite slowing profit growth among China's top banks in Q1, their NPL ratios have also trended down - Chinese press
- (CN) China Securities Regulatory Commission (CSRC) approves IPO applications for 10 companies; Will be allowed to raise combined CNY5.8B - Chinese press

Japan
- (JP) Japan Fin Min Aso: Output gap is improving; Jobless rate has fallen below 3% - press
- (JP) Japan Center for Economic Research (JCER): Japan Mar GDP estimated at -1.3% m/m; First contraction in 3 months - Nikkei

Australia/New Zealand
- (NZ) According to Realestate.co.nz, number of homes available for sale in Auckland has hit a 5-year high, even as many other regions see record lows - NZ press

Korea
- (KR) Moody's: Geopolitical risk for Korea has broadened on rise in risk of conflict on Korean peninsula
- (KR) China-Korea border town of Dandong said to be "urgently" recruiting Korean-Chinese interpreters in the event of "emergency situation" in North Korea - Korean press
- (KR) Korea's Kospi rises over 1% above 2,225, above its record close

***Asian Equity Indices/Futures (00:00ET)***
- Nikkei +0.7%, Hang Seng +0.3%, Shanghai Composite -0.2%, ASX200 -0.5%, Kospi +0.8%
- Equity Futures: S&P500 -0.1%; Nasdaq flat, Dax +0.2%, FTSE100 +0.5%

***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.0895-1.0920; JPY 111.75-112.00; AUD 0.7520-0.7550; NZD 0.6900-0.6935
- June Gold +0.2% at 1,258/oz; June Crude Oil -0.2% at $48.75/brl; July Copper -1.2% at $2.63/lb
- SLV iShares Silver Trust ETF daily holdings rise to 10,308 tonnes from 10,1273 tonnes prior
- (CN) PBOC SETS YUAN MID POINT AT 6.8956V 6.8931 PRIOR; Weakest Yuan fix since Apr 11th
- (CN) PBOC skips open market operations v injection CNY80B prior in 7-day, 14-day and 28-day reverse repos; First skip after 9 straight injections; Drains net CNY70B

***Asia equities notable movers***
- Yamaha, 7951.JP, +16%, earnings
- Belle International Holdings, 1880.HK, +15.6%, privatization
- BYD, 285.HK, +8.4%, earnings
- Hyundai Motor, 005380.KR, +4.9%, broker note
- Japan Display, 6740.JP, -5.7%, revises outlook
- KEPCO, 052690.KR, -3.8%, earnings
- Pilbara Minerals, PLS.AU, +16.9%, signs financing agreement
- MG Unit, MGC.AU, -12.1%, trading update
- Woolworths WOW.AU +1.2%, Reports Q3
- ANZ ANZ.AU -2.2%, Reports H1

>>> US Close Dow -0.13% S&P +0.17% Nasdaq +0.73% Russell +0.50%

Closing Market Summary: Tech Stocks Rally on Monday

The stock market opened the week on a positive note with the top-weighted technology (+0.9%) and financials (+0.5%) sectors pacing the advance. The S&P 500 (+0.2%) traded within a ten-point range, settling near its opening level after challenging its all-time closing high (2,395.96). Meanwhile, the Nasdaq (+0.7%) outperformed, ending the session convincingly higher, while the Dow (-0.1%) posted a small loss.

Investors received several headlines from the nation's capital on Monday. The first was news of an agreement between congressional leaders that, if approved, will keep the government funded through September. The deal, which puts fears of a government shutdown on hold, sent the S&P 500 into positive territory at the opening bell. 

However, the next headline, which was a statement from President Trump, resulted in a small sell-off in the early-afternoon session. Mr. Trump said that he may favor breaking up the nation's biggest banks, which briefly sent the financial sector lower. However, stocks recovered shortly thereafter as the headline provided little new information; President Trump has mentioned reinstating Glass-Steagall prior to today's announcement.

Lastly, Mr. Trump said that he was open to raising the federal tax on gasoline in order to finance his infrastructure package. This news had a minimal impact on today's activities, however, it's worth noting as the Trump administration will likely continue playing with different tax ideas to supplement the president's tax reform package.

In the end, news from the nation's capital came and went, but the real driver behind today's victory was large-cap names like Apple (AAPL 146.60, +2.95), Amazon (AMZN 948.43, +23.44), Microsoft (MSFT 69.41, +0.95), Alphabet (GOOGL 932.82, +8.30), and Facebook (FB 152.46, +2.21). The five names settled with gains between 0.9% (Alphabet) and 2.5% (Amazon) and carried the top-weighted technology sector to the top of the day's leaderboard.

The heavily-weighted financial sector also played a big part in today's positive performance, pairing with the technology group to carry the broader market. The two sectors that comprise around 35.0% of the broader market watered-down the effects of bearish countercyclical groups like consumer staples (-0.5%), utilities (-0.7%), and telecom services (-0.8%).

Crude oil weighed on the energy sector (-0.2%), finishing its trading day 0.9% lower at $48.86/bbl. However, outside of real estate (+0.6%), the remaining sectors--industrials, consumer discretionary, materials, and health care--finished relatively flat, settling within 0.3% of their unchanged marks.

In the bond market, Treasuries settled lower across the board, however, selling pressure was not distributed equally across the yield curve. The 10-yr yield (2.32%) finished four basis points higher while the 2-yr yield (1.29%) added only two basis points. 

It's worth noting that today's trading volume was relatively light. Market were closed across Europe and most of Asia in observance of Labor Day. 874.2 million shares changed hands at the NYSE floor (50-day simple moving average: 1.09 billion).

On the data front, investors received several economic reports on Monday, including March Personal Income and Personal Spending, the April ISM Index, and March Construction Spending:

  • March personal income rose 0.2%, which is below the consensus of 0.3%. Meanwhile, March personal spending was unchanged (consensus 0.1%). February Personal Income was revised to 0.3% (from 0.4%) while February Personal Spending was revised to 0.0% (from 0.1%). Separately, PCE prices for March declined by 0.2% (consensus N/A) while Core PCE prices ticked down by 0.1% (consensus 0.0%).
    • The key takeaway from the report is that it showed a deceleration in both the PCE Price Index and the core PCE Price Index year-over-year. That will temper concerns about the Fed being behind the curve in fighting inflation and it will quiet concerns about the Fed needing to be more aggressive in tightening monetary policy than is currently projected.
  • The ISM Index for April declined to 54.8 from an unrevised reading of 57.2 in March while the consensus expected a downtick to 56.5.
    • The key takeaway from the report is that the manufacturing sector registered growth for the eighth consecutive month, albeit at a slower pace from recent months which featured the highest reading for the index in February (57.7) since August 2014.
  • The Construction Spending report for March showed a decrease of 0.2% while the consensus expected an increase of 0.4%. The prior month's reading was revised to 1.8% from 0.8%.
    • The key takeaway from the report is that the headline disappointment for March was more than offset by the upward revision to February, meaning the March miss wasn't a true miss.

Tomorrow, investors will not receive any economic reports, but April auto and truck sales will be released throughout the day. 

  • Nasdaq Composite +13.2% YTD
  • S&P 500 +6.7% YTD
  • Dow Jones Industrial Average +5.8% YTD
  • Russell 2000 +3.7% YTD