New!
01.18.2019 25 new posts under International Summary (15), Morning Note (9), Compliance Docs. (1)

International Summary

News Trading Desk

International Summary

"CAPIS Global Markets 1/08/2019"

posted by Matthew Kiselica on 01/08/2019 at 6:47 am

by Matthew Kiselica

01/08/2019 at 6:47 am

Asian Markets

Varied performance across the region as the markets await word regarding the Sino-U.S. trade talks.  Comments thus far indicate an agreement can be reached by the March 1st “trade war truce” deadline.  However, there has been nothing concrete for investors to seek their teeth into.   There were a number of key corporate results which impacted and we will those below address below.

Correspondingly, sectors were also mixed.  Telcos, utilities and health care had gains of c. 0.5% or a touch better.  Consumer staples were off about the same.

Important Headlines

  • Samsung Elec. -1.7% spent most of the session to the down side following its Q4 results and outlook.  The company’s Q4 OP was only KRW 10.8t vs. consensus of KRW 13.8t.  Revenues also missed, falling 11% to KRW 59t vs. KRW 63.6t expected.  The coup de grace was the company indicating the start of FY ’19 will continue to see weakness.
  • LG Elec.’s -3.6% also disappointed the market.  The consumer electronics maker suffered a 7% decline to sales with Q4 earnings only KRW 75.3b.  The was well below estimates of KRW 387m.
  • Geely Auto % drove the auto sector lower after forecasting FY ’19 sales will be flat.  There were multiple broker price target and estimates cuts along with ratings agency responses.  In addition to the Chinese producers, this has repercussions for the global auto makers looking to ramp up sales in China.
  • Also in China, Evergrande’s -3.1% FY ’19 prompted profit taking in among real estate names.  The company sees “modest sales growth” this year.  The sector has been in favor the past few sessions on positive broker commentary.
  • According to the FT, Softbank +1.9% has elected to forego taking a controlling stake in WeWork.  Instead, it will invest $2b vs. the initial indications of $16b.  The article alleges key investors questioned the merits of the larger investment.

 

European Markets

The region opened higher following word the Italian government would guarantee any new debt issued by troubled Banca Caribe.  This helped investors overlook German industrial output which unexpectedly declined during November.  The markets moved to their highs following word from the Chinese Commerce Ministry they would issue statement regarding the trade talks.   That hit the tape about 6 AM Eastern but at present nothing has been disseminated and no time has been set for the commentary.   Stay tuned…..

With the exception of telcos, all major sectors are higher.  Retail is better by more than 2%.  A host of sectors are higher by at least 1% including industrials, media, tech, travel/leisure, personal goods and insurance.

Corporate Snippets

  • An Indian court has ruled that Bayer’s +2.15% Monsanto unit’s patent on genetically modified cotton seeds is valid.
  • William Morrison’s -3.0% Christmas sales lagged consensus.  9 week sale during the period ex-petrol only advanced 3.6% with the market looking for a 4% gain.   Morrison’s noted customers opted for discount providers and the lack of clarity regarding Brexit is making consumers cautious.
  • Embattled Renault +2.0% Chairman Ghosn has made his first public statements in court today following his arrest for corruption charges in Japan.  He stated the allegations made by Nissan are erroneous and his lawyers are petitioning for his release.

On Our Side of the Pond

  • President Trump will address the nation this evening to discuss the budget and his demand for the border wall.
  • Due to the government shutdown, trade balance data due today will be postponed.

Markets and Macro

Markets Snapshot

Event Survey Actual Prior Revised
AU ANZ Roy Morgan Weekly Consumer Confidence Index 6-Jan 115.2 117.8
SK BoP Current Account Balance Nov $5063.4m $9190.3m
SK BoP Goods Balance Nov $7974m $10997m
AU Trade Balance Nov A$2175m A$1925m A$2316m A$2013m
AU ANZ Job Advertisements MoM Dec 0.00% -0.30% -0.40%
AU Foreign Reserves Dec A$76.3b A$66.0b
JN Consumer Confidence Index Dec 42.8 42.7 42.9
GE Industrial Production SA MoM Nov 0.30% -1.90% -0.50% -0.80%
GE Industrial Production WDA YoY Nov -0.80% -4.70% 1.60% 0.50%
FR Trade Balance Nov -4946m -5099m -4052m -4055m
FR Current Account Balance Nov -2.8b -0.7b -0.3b
UK Halifax House Prices MoM Dec 0.50% 2.20% -1.40% -1.20%
UK Halifax House Price 3Mths/Year Dec 0.40% 1.30% 0.30%
EC Consumer Confidence Dec F -6.2 -6.2 -6.2
EC Economic Confidence Dec 108.2 107.3 109.5
EC Business Climate Indicator Dec 1 0.82 1.09 1.04
EC Industrial Confidence Dec 3 1.1 3.4
EC Services Confidence Dec 12.3 12 13.3 13.4
US NFIB Small Business Optimism Dec 103 104.4 104.8
CA Int’l Merchandise Trade Nov -2.15b -1.17b
US Trade balance data postponed by government shutdown
US JOLTS Job Openings Nov 7050 7079
US Consumer Credit Nov $17.500b $25.384b

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...

Subscribe to Stay Informed

Stay informed by subscribing to information that matters to you. We'll email you when we post new content you want to see.


DISCLAIMER

This communication is for informational purposes only and is solely intended for use by institutional investors. Use of this communication by others, including retail investors, is prohibited. No statement herein is to be construed as a recommendation to purchase or sell a security, or to provide investment advice. Certain products, including options and futures, may involve substantial risk and are not suitable for all investors. While the information and opinions presented in this material have been obtained or derived from sources believed by Capital Institutional Services, Inc. (CAPIS) to be reliable, CAPIS makes no representations concerning its accuracy or completeness, and accepts no liability for loss arising from the use of this material.