Santander's UK profit fell 21% in the first quarter compared with Q1 of 2017, partly because of the collapse of construction company Carillion. Santander has reported pretax profit of £414 million, down from £525 million in Q1 of 2017.
Amazon's first-quarter earnings report is expected to show outstanding performance, but technical analyst Craig Johnson, CMT, cautions this might not significantly raise value because the good news has been priced in. The stock's chart shows a widening gap between the overall relative strength index and price, which suggests momentum is waning, Johnson says.
The yield on the 10-year US Treasury has surpassed 3% for the first time since 2014, driving down share prices of stalwarts such as Caterpillar and 3M. Both companies say high costs and weak demand might take a toll on profit, prompting speculation global economic growth might be nearing a peak.
The UK Debt Management Office plans to sell £106 billion in debt for 2018-19, instead of the £102.9 billion reported in its spring statement. The change is attributed to a decrease in contributions from National Savings & Investment and to a revision of the government's net cash requirement.
University of Chicago professor Douglas Diamond, an award-winning economist, has warned seeds of a financial crisis are being planted. Diamond says his research shows credit is again given too easily, replicating conditions ahead of the 2008 debacle.
China's struggle to get debt under control has received much publicity, but Chinese bonds are among top performers this year. The trend could continue as China opens its $12 trillion bond market to offshore investors.
China has a major stock market, but many large Chinese technology firms have gone public in the US, while smaller entities have faced headwinds from deleveraging. Chinese depositary receipts, which are exempt from corporate-governance rules, and efforts to open the mainland to foreign investment could help China repatriate companies worth as much as $1.4 trillion.
Technical analyst Steve Shobin says market movements are frequently more prescient than news headlines suggest. The fact that a sell-off is continuing and that usually stellar performers are stumbling, despite strong economic data, positive earnings reports and fairly benign geopolitical conditions, signals impending upheaval and a significant delay before the bull market resumes, Ron Insana writes.
Microsoft and other tech stocks are facing renewed selling pressure, surprising market participants who have been expecting a breakout to the upside, writes technical analyst Bruce Kamich, CMT. Microsoft has made four failed breakout attempts this year, and progressively lower highs since January suggest investors might want to reconsider long positions, Kamich writes.
A Federal Reserve proposal to replace pass-fail grades on stress tests with a capital, liquidity and governance risk-based rating system has banks seeking clarity as to which business lines are subject to the rating system. "That kind of clarity can inform the right kind of organizational tweaks to achieve the objective of proper governance while avoiding overlap," says Michael Alix of PwC.
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