Wall Street made record highs again as driven by stronger-than-expected US retail sales. Earnings results from Costco also beat expectations. Gains in shares were, however, limited by disappointing Eurozone IP and US President Obama signaled unsuccessful deal to end sequester. DJIA climbed +0.04% to end the day at 14455.28 while the S&P 500 index added +0.13% to 1554.52. In the commodity sector, oil prices plunged with the front-month WTI crude contract slipped to as low as 91.91 before ending the day largely unchanged at 92.52. The Brent crude contract plummeted for a 4th consecutive day to 107.91, the lowest level in 3 weeks, before settling at 108.52, down -1.03%. In the commodity sector, gold slipped after failing to re-test 1600.
The market was boosted by Costco Wholesale Corp.'s quarterly result in which net income gained around +38% to US$547M, driven by a tax benefit on a dividend paid to an employee retirement program. Meanwhile, US retail sales climbed +1.1% m/m in February after adding +0.1% a month ago. The strong-than-expected result indicated that consumers have not been adversely affected by tax hikes and high gasoline prices. Excluding autos, retail sales rose +1.0% m/m in February, following a +0.2% gained in January. However, market sentiment was, however, contained by Eurozone's industrial production which fell -0.4% m/m in January, compared with a upwardly revised +0.9% gain in December. On annual basis, IP fell -1.3% after a revised -1.7% drop in December.
On oil inventory, the DOE/EIA reported that total crude oil and petroleum products stocks declined -5.58 mmb to 1080.79 mmb in the week ended March 8. Crude stockpile increased +2.62 mmb to 388.96 mmb as inventory soared in 3 out of 5 PADDs. Cushing stock added -1.53 mmb to 49.32mmb. Utilization rate was down -1.20% to 81.0%.
Gasoline inventory dipped -3.57 mmb to 224.31 mmb although demand rose +3.14% to 8.63M bpd. Production added +4.04% to 8.95M bpd while imports climbed +20.17% to 0.73M bpd. Distillate inventory added +0.08 mmb to 120.44 mmb although demand plunged -13.2% to 3.35M bpd. Imports soared +126.79% to 0.25M bpd while production fell -2.16% to 4.16M bpd during the week.
The RBNZ is expected to leave the OCR unchanged at 2.5%. The pause would likely continue until next year. The SNB would also leave the 3-month LIBOR rate at 0-0.25% and policymakers would also pledge to maintain the EURCHF floor at 1.20.
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