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"CAPIS Global Markets 2/12/2019"

posted by Matthew Kiselica on 02/12/2019 at 12:53 pm

by Matthew Kiselica

02/12/2019 at 12:53 pm

Asian Markets

The core Asian markets had a solid day especially Japan which need to play catch up following yesterday’s holiday.  Peripherals lagged.  Continued trade talk optimism is being given additional by a tentative budget/border agreement in the States.  The majority of sectors finished the day to the upside.  Healthcare led followed by gains of at least 1% among industrials, consumer discretionary, materials and IT.  Real estate was the only laggard of note giving ground by c. 0.3%.

The BoJ is reducing JBG purchases in the 10 to 25 yr. maturity range.  The central bank is doing so to halt falling yields.  Ironically, today marks the 2o year anniversary of its extensive quantitative easy policy (CNBC).

Other Headlines from the Region

  • The healthcare gains were primarily drive by Chinese pharmaceutical companies.  China is pledging various incentives for companies to develop cancer and rare disease treatments.
  • Toshiba -5.9% confirmed yesterday’s Nikkei report the company needed to cut it OP outlook.
  • NCSoft’s -4.2% NI and OP are below the range of estimates.   Revenues are below consensus but at least within the range.  The company’s newer game offerings have lagged projections.
  • Geely Auto’s +4.4% January sales rose 2%, beating estimates in both wholesale and retail numbers. CICC and Morgan Stanley both raised their respective price targets.
  • Renesas Elec. % traded limit up following results which were reassuring despite the company noting weaker sales and OP Q/Q.  The company’s OP for FY ’18 reached ¥10.1b vs. the its own forecast ¥2.5b.
  • After the close, Nissan Motors cut is profit forecasts noting slower U.S. and Chinese sales.

European Markets

Europe has spent the entire session to the upside generally higher about 0.6% for most of the day.  The markets saw most sectors trade to the upside.   Autos ended the day better by c. 3% with chemical better c. 1.5% followed by retail.   Travel/leisure was off about 1% due to results and stronger energy markets.

The Brexit saga continues with PM May once again speaking to Parliament.  But that isn’t the day’s only political intrigue.  Spain’s parliament debates the currency budget proposal.  If it is rejected, that would lead to new elections.  Stay tuned….

Important Snippets from the Region

  • Along with trade hopes, Michelin +13.0% drove the gains for the auto sector.  Q4 at Clayton’s favorite tire manufacturer saw improved cost savings while volumes held up better than feared.  Both OP and FCF beat expectations.  The company expects earnings to grow in the current fiscal year.   Elsewhere in the sector, Renault % underperformed due to the Nissan comments highlighted in the Asian section.
  • Thyssenkrupp’s  -2.0% FY ’19 is off to a weak start and FCF is negative.  While order intake showed improvement, their are doubts it will trickle down to the bottom line.

On Tonight’s Agenda for the Markets

  • After today’s close, KDDI announced a tender off for 49% of Kabu.com.
  • Both Sweden and New Zealand have rate decisions and the UK will post CPI.
  • Earnings due include Heineken, Sands China, Deutsche Boerse, Akzo Nobel, Barrick Gold, Teva Pharma and KEPCO to name a few.

Markets and Macro

Markets Snapshot

Event Survey Actual Prior Revised
AU ANZ Roy Morgan Weekly Consumer Confidence Index 10-Feb 114.1 118.1
JN Money Stock M2 YoY Jan 2.40% 2.40% 2.40%
JN Money Stock M3 YoY Jan 2.10% 2.10% 2.10%
AU Home Loans MoM Dec -2.00% -6.10% -0.90%
AU Owner-Occupier Loan Value MoM Dec -5.30% -1.40% -1.90%
AU NAB Business Conditions Jan 7 2 3
AU NAB Business Confidence Jan 4 3
JN Tertiary Industry Index MoM Dec -0.10% -0.30% -0.30% -0.40%
JN Machine Tool Orders YoY Jan P -18.80% -18.30%
SP House transactions YoY Dec 3.80% 2.80%
US NFIB Small Business Optimism Jan 103 101.2 104.4 104.4
IN CPI YoY Jan 2.50% 2.05% 2.19% 2.11%
IN Industrial Production YoY Dec 1.60% 2.40% 0.50% 0.30%
US JOLTS Job Openings Dec 6846 7335 6888 7166
SK Unemployment rate SA Jan 3.80% 3.80%
AU Westpac Consumer Conf Index Feb 99.6
AU Westpac Consumer Conf SA MoM Feb -4.70%
JN PPI YoY Jan 1.00% 1.50%
JN PPI MoM Jan -0.20% -0.60%
US Revisions: Producer Price Index
CH Aggregate Financing CNY Jan 3300.0b 1589.8b
CH Foreign Direct Investment YoY CNY Jan 24.90%
CH Money Supply M0 YoY Jan 8.40% 3.60%
CH Money Supply M1 YoY Jan 1.80% 1.50%
CH New Yuan Loans CNY Jan 3000.0b 1080.0b
CH Money Supply M2 YoY Jan 8.20% 8.10%
UK CPIH YoY Jan 1.90% 2.00%
UK CPI MoM Jan -0.70% 0.20%
UK CPI YoY Jan 1.90% 2.10%
UK CPI Core YoY Jan 1.90% 1.90%
UK Retail Price Index Jan 283.2 285.6
UK RPI MoM Jan -0.80% 0.40%
UK RPI YoY Jan 2.60% 2.70%
UK RPI Ex Mort Int.Payments (YoY) Jan 2.60% 2.70%
UK PPI Input NSA MoM Jan 0.20% -1.00%
UK PPI Input NSA YoY Jan 3.80% 3.70%
UK PPI Output NSA MoM Jan 0.00% -0.30%
UK PPI Output NSA YoY Jan 2.20% 2.50%
UK PPI Output Core NSA MoM Jan 0.20% 0.20%
UK PPI Output Core NSA YoY Jan 2.30% 2.50%
UK House Price Index YoY Jan 2.50% 2.80%
EC Industrial Production SA MoM Dec -0.40% -1.70%
EC Industrial Production WDA YoY Dec -3.30% -3.30%
US MBA Mortgage Applications 8-Feb -2.50%
CA Teranet/National Bank HPI MoM Jan -0.30%
CA Teranet/National Bank HP Index Jan 224.07
CA Teranet/National Bank HPI YoY Jan 2.50%
US CPI MoM Jan 0.10% -0.10% 0.00%
US CPI Ex Food and Energy MoM Jan 0.20% 0.20%
US CPI YoY Jan 1.50% 1.90%
US CPI Ex Food and Energy YoY Jan 2.10% 2.20%
US CPI Core Index SA Jan 260.574 260.027 260.078
US CPI Index NSA Jan 251.617 251.233
US Real Avg Weekly Earnings YoY Jan 1.20% 1.40%
US Real Avg Hourly Earning YoY Jan 1.10% 1.30%
US Monthly Budget Statement Dec -$11.0b -$204.9b

About the Author

MatthewKiselicaFVP,Manager of International Trading

Matthew Kiselica joined CAPIS in 2010 and has over twenty-five years of industry experience. Prior to CAPIS, he was vice president of Cazenove’s global sales trading desk in New York. Matthew is a board member for the National Psoriasis Foundation. He earned his bachelor’s degrees in fina...

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