05.23.2019 15 new Morning Note posts under Morning Note (10) and International Summary (5)

International Summary

News Trading Desk

International Summary

"CAPIS Global Recap – 12/5/2018 A Solemn Wednesday"

posted by Clayton Duff on 12/05/2018 at 6:51 am

by Clayton Duff

12/05/2018 at 6:51 am

Asian Headlines

Fortunately losses in Asia were more contained than in the States with indices there shaking off early lows.  Energy names continued to lag as did Financials but at a considerably smaller impact than in the US.  Caixin Service PMI readings were a much-needed relief, coming in at 53.8 vs the 50.7 estimate and 50.8 prior reading. The PMI reading in Hong Kong continued to slip, at 47.1 vs the prior 48.6.  Service PMI in Japan held steady while GDP in the 3Q Down Under rose only .3% vs the +.6% QoQ reading expected.

Markets were somewhat relived by comments from WH Adviser Navarro as he stated it was too early to lose faith on trade talks and that is important to get it right.  That was followed by China’s Commerce Ministry noting negotiations were pushing forward and were confident of trade talk results. They added agreed upon items would be implemented ASAP. (US soy and LNG imports are on that list). President Trump tweeted either a REAL DEAL with China will be completed or no deal with major tariffs to follow.

Real Estate names were lower but could have been considerably worse post comments from CK Asset executive director Chiu who noted HK home prices could collapse 25-30% this year if the trade war further worsens their economy.  He also noted salaries have not kept pace with property price increases.  CK Asset Holdings -.7%, Kerry Properties -1.3%.  SCMP said the market in China could see a year of recession, this after November figures disappointed.  China Evergrande saw November sales down 29% with Country Garden off 16% YoY.

  • Orix -.3% will purchase Japan’s Cornes for ¥40B, this after announcing they will buy NTI Connect.
  • 88% of shareholders agreed with Takeda’s +1.1% plan to purchase Shire.
  • The BoJ upped their JGB purchases in the 10-25 year range to ¥200B from ¥180B.
  • Investors are disappointed BAIC Motor -11.3% may see Daimler increase their stake to 65% from the current 49% as the the trade war sends firms to operate locally in Asia.

European Headlines

After opening lower indices in Europe have pared early losses but like Asia still remain lower on the session. Most sectors lag with Basic Resources off 1.5% while Energy, Construction, Media, and Industrials round out losers of a percent or more.  Travel and Retail are managing slight gains.   On the SXXP just under 200 names are up with volume flat on the session despite the US shut today in honor of President George HW Bush’s memorial service.

Markit Services PMI readings for the region are out with inline readings to small gains seen in many locales.   The UK though disappointed with a 50.4 reading vs the 52.5 expectation and 52.2 prior result.   New car registrations fell 3% after a like pullback last month.

  • Bayer +1.2% at their Capital markets day said they see sales up 4% and earnings before interest, taxes, and depreciation up 9% through 2022.   Stock buyback were called a “fantastic investment” with pharmaceutical R&D seen at 17% of sales.
  • Transportation firm Stagecoach is ponying up gains of 13% today after their upped their FY eps view. RBC said the firm is optimizing their overall portfolio, not just their rail unit that reported strong performance.
  • VW +.8% told President Trump they are considering using Ford’s capacity in the States to build vehicles with consideration concerning building another plant in the US.  To the downside the firm said in a Tokyo press report that from August 2012 to June 2018 showed 7.5% of their vehicles had invalid test data.

Event Survey Actual Prior Revised
SK 20) Foreign Reserves Nov $402.99b $402.75b
AU 21) AiG Perf of Services Index Nov 55.1 51.1
AU 22) CBA Australia PMI Services Nov F 53.7 52.6
AU 23) CBA Australia PMI Composite Nov F 53.9 52.9
JN 24) Nikkei Japan PMI Services Nov 52.3 52.4
JN 25) Nikkei Japan PMI Composite Nov 52.4 52.5
HK 26) Nikkei Hong Kong PMI Nov 47.1 48.6
AU 27) GDP SA QoQ 3Q 0.60% 0.30% 0.90%
AU 28) GDP YoY 3Q 3.30% 2.80% 3.40% 3.10%
CH 29) Caixin China PMI Composite Nov 51.9 50.5
CH 30) Caixin China PMI Services Nov 50.7 53.8 50.8
IN 31) Nikkei India PMI Services Nov 53.7 52.2
IN 32) Nikkei India PMI Composite Nov 54.5 53
SW 33) Maklarstatistik Swedish Housing Price Data
IR 34) Investec Services PMI Ireland Nov 57.1 57.2
IR 35) Investec Composite PMI Ireland Nov 56.6 56.1
NO 36) Current Account Balance 3Q 91.8b 80.9b 79.1b
SW 37) Swedbank/Silf PMI Services Nov 62.2 56.3 56.4
SP 38) Industrial Output NSA YoY Oct 3.60% -2.80% -3.00%
SP 39) Industrial Output SA YoY Oct -0.30% 0.80% -0.10% -0.20%
SP 40) Industrial Production MoM Oct 0.50% 1.20% -0.70%
SP 41) Markit Spain Services PMI Nov 53.9 54 54
SP 42) Markit Spain Composite PMI Nov 53.3 53.9 53.7
SW 43) Private Sector Production MoM Oct 0.20% 1.10% 0.20% 0.40%
SW 44) Private Sector Production YoY Oct 2.40% 4.60% 2.00% 2.70%
SW 45) Industry Production Value YoY Oct 3.60% 2.20% 2.70%
SW 46) Service Production Value YoY Oct 5.90% 2.40% 3.60%
SW 47) Industrial Orders MoM Oct 1.00% 0.00% 0.60%
SW 48) Industrial Orders NSA YoY Oct 3.10% -0.40% 0.40%
IT 49) Markit/ADACI Italy Services PMI Nov 49.3 50.3 49.2
IT 50) Markit/ADACI Italy Composite PMI Nov 49.1 49.3 49.3
FR 51) Markit France Services PMI Nov F 55 55.1 55
FR 52) Markit France Composite PMI Nov F 54 54.2 54
GE 53) Markit Germany Services PMI Nov F 53.3 53.3 53.3
GE 54) Markit/BME Germany Composite PMI Nov F 52.2 52.3 52.2
UK 55) New Car Registrations YoY Nov -3.00% -2.90%
IN 56) RBI Repurchase Rate 5-Dec 6.50% 6.50% 6.50%
IN 57) RBI Reverse Repo Rate 5-Dec 6.25% 6.25% 6.25%
IN 58) RBI Cash Reserve Ratio 5-Dec 4.00% 4.00% 4.00%
EC 59) Markit Eurozone Services PMI Nov F 53.1 53.4 53.1
EC 60) Markit Eurozone Composite PMI Nov F 52.4 52.7 52.4
UK 61) Markit/CIPS UK Services PMI Nov 52.5 50.4 52.2
UK 62) Markit/CIPS UK Composite PMI Nov 52.1 50.7 52.1
UK 63) Official Reserves Changes Nov $534m $843m
EC 64) Retail Sales MoM Oct 0.20% 0.30% 0.00% -0.50%
EC 65) Retail Sales YoY Oct 2.00% 1.70% 0.80% 0.30%
NO 66) Norway House Price Report for November
IR 67) Industrial Production MoM Oct 0.00% 2.10% 2.90%
IR 68) Industrial Production YoY Oct 5.50% 6.70% 7.40%

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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