09.30.2022 11 new Morning Note posts under Morning Note (10) and CAPIS Insights (1)

International Summary

News Trading Desk

International Summary

"CAPIS Global Markets 1/03/2018"

posted by CAPIS on 01/03/2019 at 6:14 am


01/03/2019 at 6:14 am

Asian Markets

Most of the markets gave way with a profit warning from Apple setting the day’s tone.  Most sectors fell with IT off more than 1%.  Financials and real estate managed modest gains.  Australia bucked the trend with energy and materials providing gains but most sectors gained.  Mainland China held up on a relative basis in anticipation of easing by the PBoC ahead of the Chinese New Year.  Japan remains closed.

Apple was the Key

The tech giant is cutting its revenue outlook citing a precipitous drop in Chinese demand.  Our basket of Apple suppliers excluding Japanese names fell by 2%.  Key names include: Samsung Elec. -3.0%, SK Hynix -4.8%, Hon Hai -1.7% and TSMC -1.8%.

Other Important Market News

  • Bank of Korea Gov. Lee noted both external risks and internal slowing investment are increasing growth risks both globally and internally.
  • On a related note, most currencies hit lows with the “Aussie” hitting 10 year lows.  Conversely, the ¥ is stronger trading better than 108.  Around the local open, the currency was trading with a 104 handle before paring the advance.  It has been referred to as a flash crash.
  • The real estate sector gains were driven by a sector upgrade at Citigroup.  The broker believes home prices will bottom this quarter with “valuations” “near trough levels.”  Top picks include SHK Prop. +2.9% and Henderson Land +1.2%.
  • China’s Jangho Grp -3.3% is launching a bid for Australian medical center operator, Helius Ltd +7.8%.  The A$3.25 offer is a c. 33.0% premium to yesterday’s close.  Jangho already owns 15.0% of the company and Healius management is reviewing the offer making no formal recommendation at this time.
  • The Whoopsey Award of the Day goes to Cathay Pacific -1.4%.  The airline sold first and business class tickets between Dan Nang Vietnam and New York for $675.  The tickets would normally fetch about $16,000.00.  The company will honor the lower prices.

European Markets

Europe has been trading lower since the open.  The best that can be said at this point is the markets are off their respective lows.  Technology is lower by more than 3% with Apple suppliers in the region clobbered by c. 10.0%!  Most of the other sectors are also lower.  Defensives outperform with telecoms and consumer staples up small.

Snippets from the Region

  • While cutting its FY PTP estimates, Next +4.2% provided reassuring Christmas sales date following a sluggish start in November.
  • A Handelsblatt article mentions Alibaba may have Zalando +3.2% in its takeover cross-hairs.

On Our Side of the Pond

  • Apple is down c. 8% pre-market.
  • The partial government shutdown remains in place as both side continue to debate the budget and border wall.
  • Keep an eye on Baidu and  China has ordered they temporarily shutter a number of new services operating on their websites.

Markets and Macro

Markets Snapshot

Event Survey Actual Prior Revised
SP Unemployment MoM Net (‘000s) Dec -55 -50.6 -1.8
HK Retail Sales Value YoY Nov 4.50% 1.40% 5.90% 6.00%
HK Retail Sales Volume YoY Nov 4.60% 1.20% 5.20% 5.30%
EC M3 Money Supply YoY Nov 3.80% 3.70% 3.90%
GE CPI Brandenburg MoM Dec 0.30% -0.10%
GE CPI Brandenburg YoY Dec 1.60% 1.80%
UK Markit/CIPS UK Construction PMI Dec 52.9 52.8 53.4
US MBA Mortgage Applications 28-Dec -8.50% -1.40%
US Challenger Job Cuts YoY Dec 51.50%
US ADP Employment Change Dec 180k 179k
US Initial Jobless Claims 29-Dec 220k 216k
US Continuing Claims 22-Dec 1689k 1701k
US Bloomberg Consumer Comfort 30-Dec 59.4
US Construction spending data postponed by govt shutdown
US ISM Manufacturing Dec 57.5 59.3
US ISM Employment Dec 58.4
US ISM Prices Paid Dec 57.7 60.7
US ISM New Orders Dec 62.1

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