04.23.2019 15 new posts under Morning Note (8), General (3), International Summary (3), and 1 more category

International Summary

News Trading Desk

International Summary

"CAPIS Global Recap – 12/3/2018"

posted by Clayton Duff on 12/03/2018 at 6:37 am

by Clayton Duff

12/03/2018 at 6:37 am

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.

Asian Headlines

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%.

European Headlines

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 6) Company Profits 3Q 14.00% 2.20% 17.90%
JN 7) Company Sales 3Q 6.00% 5.10%
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%
SZ 29) PMI Manufacturing Nov 56.4 57.7 57.4
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%

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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