01.18.2019 25 new posts under International Summary (15), Morning Note (9), Compliance Docs. (1)

International Summary

News Trading Desk

International Summary

"CAPIS Global Recap – 5/16/2018"

posted by Clayton Duff on 05/16/2018 at 6:42 am

by Clayton Duff

05/16/2018 at 6:42 am

Asian Headlines

Flat to lower returns seen today in Asia with Japanese GDP results disappointing.  Telcos, Utilities, and RE names weighed there while Financials and Telcos pulled down the Shanghai.  Utilities also joined RE names Down Under to the downside with the market there up slightly on the session.  Sentiment was again dampened with North Korea cancelling talks with their neighbors while threatening to nix the meeting between President Trump and Kim.  US/SK military drills were cited with NK giving mixed signals now on their nuclear ambitions.

GDP on a quarter over quarter basis slipped .2% in the 1Q in Japan with business spending moving lower as well.  That is the 1st drop in 6 quarters.  Industrial Production for March though held in, finishing slightly ahead of February’s results.  In individual names most banks finished somewhat higher today apart from MUFJ -2.4% which fell post yesterday’s disappointing FY NI view and weaker-than-expected stock buyback announcement.  To the upside electronics retailer Kitamura rallied 20% as they see FY op profit tripling.  Japan Display rose 2.1% despite a larger FY loss seen.  FY18 sales are seen up 10-20% with a smaller ¥142B restructuring cost booked.   Dai-ichi Life rose 1.9% despite missing FY views as the market was impressed with plans to repurchase 3.33% of outstanding shares.

In Hong Kong personal item and food names led with Energy registering some gains while gaming names weakened.  China reported new home prices up .6% MoM in April, a bit better than March’s advance.  Starbucks said they will look to triple revenues in China over the next five ear as they ramp up store openings. Plans are to open a new store every 15 hours over the next 4 years.  Plans are to have 6k mainland stores vs the prior view of 5k by 2021.  Tencent closed down small ahead of results posted after the close.  1Q NI of 23.29B Yuan was booked, well ahead of the 17.42B Yuan expected. Revenue was better as well with 1Q online game revenue rising 26%.  Smartphone game revenues were up 68% YoY.  On the news their biggest shareholder Naspers rallied.

European Headlines

European indices are mixed with Germany managing a small gain. Italy underperforms despite word Five-Star and League are working on a coalition government. Mining and steel names lead today with Chemis providing a boost as well.  Banks are broadly weaker with some sizable losses seen. Germany’s inflation readings held steady as did Italy’s.

The IEA said demand growth in the 2H of the year for oil will slow due to higher prices. They see demand now for the year at 1.4M bpd from the prior view of 1.5M. Of interest, non-OPEC oil supply growth grew to 1.87M bpd from 1.8M. OECD inventories are currently running about 1M barrels under the 5 year avg. Back to Italy the two named parties above are said to be seeking €250B in Italian debt loan forgiveness.  Plans are to erase a prior pension reform that upped the retirement age and end sanctions against Russia.  The idea of the two parties leaders alternating as PM’s over the 5 year term is also be discussed.

Burberry +2.6% announced inline comp YoY sales with better operating profit. The firm said they will repurchase £150M worth of shares and is still on tract to reach cumulative cost savings of £100M.  Leather goods were cited as the key growth driver.

Chugging higher today, Alstom +4.7% reported FY numbers ahead of estimates. Ebit margin for next year is seen ~7% with their marriage to Siemens +.9% seen wrapping up by the end of the year.  Last week remember Alstom said they were exiting their energy business, handing the reigns over to the JV partner GE.

With gambling in the US news this week Paddy Power +6.1% today confirmed they are in talks with FanDuel.    With sports betting appearing to be on tap Paddy is looking to merge their US ops with FanDuel to take advantage of the change.

Homebuilder Crest Nicholson -11% said flatter pricing will weigh on FY margins prompting them to cut views.  Operating margins are seen near 18% which is on the bottom end of their prior 18-20% view. Price growth in the sector is seen curtailed by slowing second-hand sales.

Event Survey Actual Prior Revised
SK 51) Unemployment rate SA Apr 3.90% 3.80% 4.00%
JN 52) GDP SA QoQ 1Q P 0.00% -0.20% 0.40% 0.10%
JN 53) GDP Annualized SA QoQ 1Q P -0.10% -0.60% 1.60% 0.60%
JN 54) GDP Nominal SA QoQ 1Q P 0.10% -0.40% 0.30% 0.10%
JN 55) GDP Deflator YoY 1Q P 0.30% 0.50% 0.10% 0.00%
JN 56) GDP Private Consumption QoQ 1Q P 0.00% 0.00% 0.50% 0.20%
JN 57) GDP Business Spending QoQ 1Q P 0.40% -0.10% 1.00% 0.60%
AU 58) Westpac Consumer Conf Index May 101.8 102.4
AU 59) Westpac Consumer Conf SA MoM May -0.60% -0.60%
AU 60) Wage Price Index QoQ 1Q 0.60% 0.50% 0.60% 0.50%
AU 61) Wage Price Index YoY 1Q 2.10% 2.10% 2.10%
CH 62) New Home Prices MoM Apr 0.57% 0.42%
SW 63) Maklarstatistik Swedish Housing Price Data
NE 64) Retail Sales YoY Mar 3.60% 2.60% 2.80%
JN 65) Industrial Production MoM Mar F 1.40% 1.20%
JN 66) Industrial Production YoY Mar F 2.40% 2.20%
JN 67) Capacity Utilization MoM Mar 0.50% 1.30% 3.30%
GE 68) CPI MoM Apr F 0.00% 0.00% 0.00%
GE 69) CPI YoY Apr F 1.60% 1.60% 1.60%
GE 70) CPI EU Harmonized MoM Apr F -0.10% -0.10% -0.10%
GE 71) CPI EU Harmonized YoY Apr F 1.40% 1.40% 1.40%
AS 72) CPI MoM Apr 0.20% 0.60%
AS 73) CPI YoY Apr 1.80% 1.90%
SW 74) Valueguard Swedish Housing-Price Data
SW 75) Industry Capacity 1Q 90.60% 90.60% 91.00%
IT 76) Industrial Sales WDA YoY Mar 3.60% 3.40% 2.70%
IT 77) Industrial Sales MoM Mar 0.80% 0.50% 0.00%
IT 78) Industrial Orders NSA YoY Mar 2.60% 3.40% 2.80%
IT 79) Industrial Orders MoM Mar 0.50% -0.60% -0.80%
IC 80) 7-Day Term Deposit Rate 16-May 4.25% 4.25%
EC 81) CPI Core YoY Apr F 0.70% 0.70% 0.70%
EC 82) CPI YoY Apr F 1.20% 1.20% 1.30%
EC 83) CPI MoM Apr 0.30% 0.30% 1.00%
MB 84) CPI EU Harmonized MoM Apr 2.60% 0.90%
MB 85) CPI EU Harmonized YoY Apr 1.40% 1.30%
IT 86) CPI EU Harmonized YoY Apr F 0.60% 0.60% 0.60%
IT 87) CPI FOI Index Ex Tobacco Apr 101.7 101.7
IT 88) Istat Head, Lower House Speaker Present Istat Annual Report
CC 89) CPI Harmonized YoY Apr -0.30% -0.40%
CC 90) CPI Harmonized MoM Apr 1.10% 0.90%
IR 91) Trade Balance Mar 4029m 3988m 3959m
BE 92) Trade Balance Mar -41.3m

About the Author

ClaytonDuffFVP,Senior International Trader

Clayton Duff joined the firm in 2008. He has worked in the industry since 1994 and held various trading and sales positions before CAPIS, including four years as a trader for First Southwest. He earned his bachelor’s degree from the University of Texas Arlington. Clayton maintains Series 3,...

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