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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

"Black Friday Global Markets 11/23/2018"

posted by Matthew Kiselica on 11/23/2018 at 8:34 am

by Matthew Kiselica

11/23/2018 at 8:34 am

Asian Markets

Most of the region traded lower.  However, volumes were low following the U.S. Thanksgiving holiday and given Japan and India were closed.  The Chinese markets suffered heavy selling pressure on trade concerns.  The Wall Street Journal reported the U.S. is asking allies to refrain from purchasing telecommunications equipment from Huawei Technologies.   Australia traded higher for the second consecutive session with Goldman noting the risk of a recession Down Under are small.  All the major sectors ended the day lower. Basic resources and miners were the hardest hit falling by a touch more than 1.0%.

Important Headlines

  • ZTE and suppliers to Huawei traded lower on the story noted above.
  • Chinese rail stocks initially chugged higher before paring gains.  The high speed rail unit of state owned China Railway Corp. will list during H1 of next year, according “sources.”  The report indicates the deal will be in the neighborhood of c. $4.3b
  • After yesterday’s close, Nissan officially dismissed Mr. Ghosn from the board.  The company indicates it wishes to maintain and strengthen the alliance with Renault.
  • Bernstein sees top miners including BHP and Rio Tinto cutting iron ore shipments 6.4% y/y during Q4.

European Markets

Europe spent the first half of the day to the upside.  However, the region fell into the red as crude tumbles in the energy markets.  Saudi Arabia’s Energy Minister, Khalid Al-Falih stated production this month will surpass last month’s 10.7m barrels per day.  Gasoline and natural gas are also experiencing multiple percentage point declines.

As a result energy and basic resources are lower by more than 2%.  Telecoms have traded well all session and remain better by more than 0.5%.  Media and travel are up by about that mark.

Brexit remains front and center.  PM May is reaching out to the populace to garner support for her Brexit deal.  She made an appeal on the BBC both on radio and the “tele.”  She will meet again with EU Pres. Juncker this weekend.

Several Markit PMI readings from the region including German and Eurozone manufacturing fell short of expectations.  They are also at the lowest levels since 2016.  German GDP was inline while exports are weaker than expected and imports stronger.  The GDP result is the first contraction since Q2 of 2014.  As a result, the € has been better offered all morning.

Snippets from the Region

  • Ericsson and Nokia trade higher thanks to the Huawei story.
  • A German court is ordering VW to pay the full price of a Golf model to an owner due to the diesel scandal.
  • Porsche will institute measures to increase its operating profit by $6.8b over the next 8 years.
  • Gea Group sees its FY operating cash flow lower than previously projected.  Adding insult to injury, the company notes FY ’19 is shaping to be a “deteriorating macroeconomic environment.”
  • Virgin Atlantic is mulling a bid for Flybe.
  • The EU is launching an anti-trust investigation regarding airline ticket sales by Amadeus and Sabre.

On Our Side of the Pond

  • Leading up to Black Friday, retailers saw strong online demand.
  • United Tech’s bid for Rockwell received Chinese approval.
  • Canada’s October CPI rose 2.4% y/y vs. 2.2% expected.

On the Markets Agenda to Start Next Week

  • Brexit will continue to generate headlines and people will await to see what happens with PM May’s meeting in Brussels and the EU Brexit meeting.
  • The G-20 meeting will commence Buenos Aires on Monday.  The meeting between Pres. Trump and Chinese Prem. Xi will be the focal point.  There were reports yesterday Pres. Trump will meet the heads of German auto makers prior to the G-20 events.
  • Mexican voters will head to the polls to weigh in on a massive infrastructure bill.
  • Australia and Taiwan hold regional elections.
  • Earnings due include L’Occitane and Curaleaf Holdings.
  • Macro due includes Hong Kong trade data and German IFO readings
  • Of course, Monday is Cyber Monday!

Have a Great Weekend!

Markets and Macro

Markets Snapshot

Event Survey Actual Prior Revised Relevance
JN Nikkei Japan PMI Mfg Nov P 52.9 90
JN Leading Index CI Sep F 103.9 58.427
JN Coincident Index Sep F 114.6 34.8315
SK Department Store Sales YoY Oct 4.70% 52.9412
SK Discount Store Sales YoY Oct 8.10% 47.0588
HK Exports YoY Oct 9.50% 4.50% 86.3636
HK Imports YoY Oct 9.50% 4.80% 59.0909
HK Trade Balance HKD Oct -47.7b -47.7b 50
GE IFO Business Climate Nov 102.3 102.8 98.3607
GE IFO Expectations Nov 99.2 99.8 83.6066
GE IFO Current Assessment Nov 105.3 105.9 80.3279
UK UK Finance Loans for Housing Oct 38200 38505 54.023
US Chicago Fed Nat Activity Index Oct 0.17 64.0625
CA Bloomberg Nanos Confidence 23-Nov 56.6 16.2791
US Dallas Fed Manf. Activity Nov 25 29.4 64.8438

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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