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12.10.2018 19 new posts under International Summary (9), Morning Note (9), CAPIS Headlines (1)

International Summary

News Trading Desk

International Summary

"CAPIS Global Markets 11/19/2018"

posted by Matthew Kiselica on 11/19/2018 at 10:45 am

by Matthew Kiselica

11/19/2018 at 10:45 am

Asian Markets

Despite chatter from V.P. Pence criticizing Chinese trade practices, most of the markets managed to advance.  Tech names saw a rebound.  Chinese developers surged due to reports Chinese banks were looking to lower mortgage rates.  Most other sectors across the region also traded well.

Other Important Headlines

  • The story generating the most buzz came out after the local close.  Reports indicated Nissan Motors Chairman Ghosn would be arrested for violating various Japanese financial laws.  A brief period later, the company announced he was indeed put in handcuffs.  He allegedly has been using company funds for personal use and been under reporting his income.  They will seek to remove him from the board.
  • Hitachi -1.5% is holding talks to acquire ABB’s % power unit, either in whole or part.  The division has a valuation of c. $13b.
  • Japan Tobacco +0.1% is seeing a 35.1% decline in domestic sales volume due to higher taxes on tobacco products.
  • MS&D +0.9% suffered a c. 39.0% decline to H1 NI.  However, the company see FY earnings ahead of consensus and will pay out a higher dividend than anticipated.
  • Following last week’s results, Citibank is downgrading Japan Display -8.2% to a sell.
  • Chinese holdings of U.S. Treasuries are that their lowest level in a year.  The nation is attempting to support the yuan or at least that is China’s spin on the matter.  The holdings for September are $1.15t vs. August’s $1.17t.
  • Japan’s exports recovered during October but lagged consensus.  However, imports for the period were a strong beat of estimates.
  • After the close, China declared Chalco’s A shares will be suspended tomorrow.  Regulators are reviewing the company’s asset plan.

European Markets

Europe had a good start experiencing a gain of c. 0.7%.  However, the Wall Street Journal alleged Apple is reducing orders for a number of iPhone models.  This created selling pressure taking the markets off the highs.  With Apple weighing on the U.S. markets, tech is off c. 2% and the region closed at the lows.  Financials, personal goods, financials and energy are lower by 1% or more.   Telecom remained to the upside all session.

U.K. PM May remains defiant and committed to her Brexit deal.  She is appealing to business leaders for support.  At present, 42 members of Parliament are calling for a “no-confidence” vote.  48 are required to trigger the event.

Important Headlines

  • Renault -8.4% tumbles on the Chairman Ghosn arrest.  It did pare some of the heavier losses.
  • Luigi Gubitosi will become the next CEO of Telecom Italia +4.0%.  He is expected to proceed with the various measures Elliott Management wants to the company to follow and unlock value.
  • Swatch -3.8% and peers are seeing pressure due to comments from Bk of America.  After a recent tour through China, the broker sees weak Chinese watch demand.
  • In testimony to the Danish parliament, Howard Wilkinson declared Danske Bk %-1.0 was willing to compensate him if he refrained from bringing the money laundering scandal to light.

On Our Side of the Pond

  • JD.com -3.5% following results.  Revenues fell shy of consensus despite a strong beat on the EPS line.
  • Blackrock -0.4% is considering obtaining a mutual fund license in China.
  • Apple -3.7% following the Wall Street Journal report highlighted above.
  • Mexico is closed for Revolution Day.

On the Markets’ Agenda for Tonight

  • Local reaction to the Nissan/Renault/Ghosn and Apple stories.
  • The RBA releases the latest rate meeting minutes and Germany PPI.

Markets and Macro

Markets Snapshot

Event Survey Actual Prior Revised
JN Trade Balance Oct -¥70.0b -¥449.3b ¥139.6b ¥131.3b
JN Trade Balance Adjusted Oct -¥48.3b -¥302.7b -¥238.9b -¥141.5b
JN Exports YoY Oct 8.90% 8.20% -1.20% -1.30%
JN Imports YoY Oct 14.10% 19.90% 7.00%
UK Rightmove House Prices MoM Nov -1.70% 1.00%
UK Rightmove House Prices YoY Nov -0.20% 0.90%

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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