The CAPIS International Trading Desk wishes peace to the Bush family today as they mourn the loss of President George Herbert Walker Bush. We thank him for the many decades of service to our country from his time in action in World War II through his presidency and support of the country after.
President Bush’s funeral service will be this Wednesday with US markets shut for trading.
It has been a top down day today with strong gains worldwide post this weekend’s G20 meeting. Headlines out the last several days include President Xi stating he plans more market-based reforms along with working to protect intellectual property. This helped in Friday trading. WTO reform was on the table this weekend but one of the main headlines out concerned President Trump opting to not up tariffs on China to 25% that were planned to take effect January 1st. Instead the rate will remain at 10% with China pledging to purchase more good from the US. Per a tweet, China has seemingly agreed to lift tariffs on US-made vehicles with European vehicles benefiting today.
Oil is higher with West Texas crude up over 4%, trading into the $53’s. Friday, an OPEC advisory panel noted a 1.3M barrel per day cut would balance the market. Canada said they will enact a 325K bpd cut in production to curtail supply starting in January and will keep the cut active until ~35M barrels in storage have been shipped. By spring the excess is expected to be pared down with the cuts to move to 95k bpd and remain there over the balance of the year. Today, a press report out stated China resumed US crude imports in November. Keep an eye on headlines Thursday as the cartel gathers for their semi-annual meeting.
In mainland China Consumer Staples, IT, and Discretionary names led. Gaming names led in Hong Kong after Macau Gaming Revs for November rose 8.5% YoY. Galaxy finished up 10% with Sands China up 12%. Caixin Manufacturing PMI for November rose slightly to 50.2 from the 50.1 prior and estimate reading.
Japan’s Manufacturing PMI picked up to 52.2 in November, ahead of the 51.8 prior reading with vehicle sales slowing somewhat but still strong with a 8.3% growth reading in November. There energy names led with IT and Industrials producing solid returns as well.
South Korea closed better as well despite the country’s Manu PMI for November moving into contraction with a 48.6 reading vs the prior 51.0 result. To the upside non-performing loans fell to under 1% which is the 1st time in 10 years per local press. To note, Samsung rose 3.4%, erasing Friday’s selloff on the gov’s semiconductor outlook.
Down Under Graincorp rallied 26% after a consortium of investors offered A$2.4B, or A$10.42 a share, for control. The stock closed at A$9.25 a share. Steel producer BlueScope Steel finished up 12% post announcing they will repurchase up to A$250M of shares while reaffirming 1H FY19 guidance. Tonight, the RBA will meet with expectations that their Cash rate target will be left unchanged at 1.5%.
Gains in Europe are widespread today with indices off of early highs ahead of the US open. All sectors are up if not flat with Basic Resources seeing gains of nearly 5%. Autos are second with gains as a cut in import tariffs will certainly benefit the space, especially as European vehicles outsell US domestics there. Nearly 500 names in the Stoxx 600 are to the upside with volume up ~10%.
Manufacturing PMI readings in region are generally better today with the EZ as a whole up 51.8 vs 51.5 estimate and 51.5 prior reading. Germany too beat with the UK at 53.1 vs the 51.1 prior read. France and Spain also beat with Italy falling to a 4 year low.
Back to the UK it is appearing more likely the parliamentary vote on the 11th will lead to a no vote with another Brexit referendum becoming more of a possibility. Labour is threatening a no confidence and forcing a general election.
After earlier strength Glaxosmithkline is off 4% after announcing they are purchasing the US’ Tesaro for $5.1B in cash. Earlier the company said they will offload their Indian consumer unit Horlicks to Unilever +.5% for €3.3B.
Deutsche Bank’s +3.7% CEO is today stating the firm is not in risk of a takeover with no raids taking place of the weekend.
In individual names STMicro is up 7% with their CEO making positive comments as the stock tries to work off of recent lows.
In the auto space: Daimler +5.4%, BMW +5.9%, VW +3.8%.
|AU||1)||AiG Perf of Mfg Index||Nov||—||51.3||58.3||—|
|AU||2)||CBA Australia PMI Mfg||Nov F||—||54.6||54.5||—|
|AU||3)||CoreLogic House Px MoM||Nov||—||-0.90%||-0.60%||—|
|JN||4)||Capital Spending YoY||3Q||8.50%||4.50%||12.80%||—|
|JN||5)||Capital Spending Ex Software||3Q||10.70%||2.50%||14.00%||—|
|JN||8)||Loans & Discounts Corp YoY||Oct||—||3.30%||3.53%||—|
|AU||9)||Melbourne Institute Inflation MoM||Nov||—||0.00%||0.10%||—|
|AU||10)||Melbourne Institute Inflation YoY||Nov||—||1.60%||1.90%||—|
|JN||11)||Nikkei Japan PMI Mfg||Nov F||—||52.2||51.8||—|
|SK||12)||Nikkei South Korea PMI Mfg||Nov||—||48.6||51||—|
|AU||13)||ANZ Job Advertisements MoM||Nov||—||-0.30%||0.20%||0.30%|
|AU||14)||Inventories SA QoQ||3Q||0.40%||0.00%||0.60%||0.70%|
|AU||15)||Company Operating Profit QoQ||3Q||2.80%||1.90%||2.00%||2.40%|
|AU||16)||Building Approvals MoM||Oct||-1.50%||-1.50%||3.30%||5.50%|
|AU||17)||Building Approvals YoY||Oct||-14.00%||-13.40%||-14.10%||-12.80%|
|CH||18)||Caixin China PMI Mfg||Nov||50.1||50.2||50.1||—|
|IN||19)||Nikkei India PMI Mfg||Nov||—||54||53.1||—|
|JN||20)||Vehicle Sales YoY||Nov||—||8.30%||13.00%||—|
|AU||21)||Commodity Index SDR YoY||Nov||—||14.90%||13.10%||14.90%|
|AU||22)||Commodity Index AUD||Nov||—||122.1||121.7||123.7|
|IR||23)||Investec Manufacturing PMI Ireland||Nov||—||55.4||54.9||—|
|SW||24)||Swedbank/Silf PMI Manufacturing||Nov||54.5||56.7||55||—|
|NE||25)||NEVI Netherlands Manufacturing PMI||Nov||—||56.1||57.1||—|
|NO||26)||DNB/NIMA PMI Manufacturing||Nov||56||56.1||56||—|
|SP||27)||Markit Spain Manufacturing PMI||Nov||51.5||52.6||51.8||—|
|SZ||28)||Retail Sales Real YoY||Oct||-0.60%||0.80%||-2.70%||-2.50%|
|IT||30)||Markit/ADACI Italy Manufacturing PMI||Nov||48.9||48.6||49.2||—|
|FR||31)||Markit France Manufacturing PMI||Nov F||50.7||50.8||50.7||—|
|GE||32)||Markit/BME Germany Manufacturing PMI||Nov F||51.6||51.8||51.6||—|
|GR||33)||Markit Greece Manufacturing PMI||Nov||—||54||53.1||—|
|EC||34)||Markit Eurozone Manufacturing PMI||Nov F||51.5||51.8||51.5||—|
|SZ||35)||Total Sight Deposits CHF||30-Nov||—||576.9b||577.3b||—|
|SZ||36)||Domestic Sight Deposits CHF||30-Nov||—||472.0b||472.7b||—|
|UK||37)||Markit UK PMI Manufacturing SA||Nov||51.7||53.1||51.1||—|
|DE||38)||Danish PMI Survey||Nov||—||58.2||67.1||66.8|
|IC||39)||Current Account Balance||3Q||—||—||2b||—|
|IT||40)||New Car Registrations YoY||Nov||—||—||-7.42%||—|