The majority of the region gains on word Chinese Premier Liu will come to the States Jan. 30th and 31st to resume trade talks. There were two markets that did not participate in the advance. India was weighed down by disappointing results from Tata Consulting -2.5%. Australia also dipped with financials and basic resources weighing upon the ASX200.
Overall, the majority of sectors ended the day higher. IT lead with a gain about c. 1% while health care is the only major group that suffered a downtick, albeit minor.
Plenty of Earnings and Updates
- Fast Retailing +6.2% shareholders were pleased with a 5.2% y/y increase in December sales. Performance in markets overseas more than offset weakness in Japan. The numbers were released after yesterday’s close.
- Also after yesterday’s close, TSMC’s +2.1% Q4 sales of NT$289.8b which was a smidge ahead of consensus. Overall, reassuring following the recent scares in the sector.
- Seven & I’s -1.9% Q3 OP of ¥104.6b vs. the ¥111.2b estimate.
- Anhui Conch Cement -1.9% sees 2018 NI jumping 80%-100% y/y citing rising product pricing and structural reform in the cement sector.
- LG Display ‘s +0.75% CEO sees sales of OLED screens boosting total revenue by 50% by 2020.
- Samsung Elec. +1.75% confirmed the announcement of the launch of its new Galaxy phone in San Francisco on Feb. 20.
- After the close, Infosys reported Q3 NI that was below the range according to Bloomberg. This was largely due to writedowns of the its holding in Skava. However, revenues beat, the company raised its FY revenue growth outlook and announced a buyback of c. $1.2b.
Europe has spent the first few hours of the session mostly to the upside with a high of c. 0.4% U.K. press reports allege the declaration of Article 50 (Brexit) may be delayed past March 29th. However, members of PM May’s cabinet have since stated this is not the case. The former caused a brief spike to equities while the latter has caused us to drift off. Interestingly, the £ has managed to maintain most of its advance on the story.
Sectors are currently evenly split. Cons. staples have led all session but have pared the advance currently trading around 0.5%. The auto sector has suffered all session and is off more than 1.5%. Details below!
- The auto sector weakness has been the result of a host of headlines. For starters, Kepler Chevreaux has released a negative note seeing a host of headwinds especially for the suppliers. Adding to woes: Geely Auto +0.9% cut its stake in Daimler -2.0% by more than ½. VW’s -2.4% Dec. sales -8.4% y/y. BMW -2.0% Dec. Sales -0.7% y/y and the company low to mid “1 digit” percent rage growth FY ’19, Renault -3.7% Chairman Ghosn is facing more charges in Japan.
- Sources claim Ab Inbev +3.2% is mulling an IPO for its Asian operations to unlock value and reduce debt.
On Our Side of the Pond
- The focus will remain upon D.C. and the budget impasse. Pres. Trump has called off talks stating they are pointless while cancelling his scheduled trip to Davos.
- Brazil has signaled it will not block the Boeing/Embraer merger.
- Peru has kept its benchmark rate at 1.75%, as expected.
Markets and Macro Data
|AU||AiG Perf of Construction Index||Dec||—||42.6||44.5||—|
|JN||Household Spending YoY||Nov||-0.10%||-0.60%||-0.30%||—|
|JN||BoP Current Account Balance||Nov P||¥566.3b||¥757.2b||¥1309.9b||—|
|JN||Trade Balance BoP Basis||Nov P||-¥612.6b||-¥559.1b||-¥321.7b||—|
|JN||BoP Current Account Adjusted||Nov P||¥1124.3b||¥1438.7b||¥1211.3b||—|
|JN||Bank Lending Incl Trusts YoY||Dec||2.10%||2.40%||2.10%||—|
|JN||Bank Lending Ex-Trusts YoY||Dec||—||2.50%||2.20%||—|
|AU||Retail Sales MoM||Nov||0.30%||0.40%||0.30%||—|
|JN||Eco Watchers Survey Current SA||Dec||50.7||48||51||—|
|JN||Eco Watchers Survey Outlook SA||Dec||51.4||48.5||52.2||—|
|FR||Bank of France Ind. Sentiment||Dec||100||103||101||—|
|SP||Industrial Output NSA YoY||Nov||—||-2.80%||3.60%||3.70%|
|SP||Industrial Output SA YoY||Nov||0.30%||-2.60%||0.80%||0.70%|
|SP||Industrial Production MoM||Nov||0.40%||-1.50%||1.20%||1.10%|
|SP||House transactions YoY||Nov||—||2.80%||15.80%||—|
|IT||Industrial Production MoM||Nov||-0.30%||-1.60%||0.10%||-0.10%|
|IT||Industrial Production WDA YoY||Nov||0.40%||-2.60%||1.00%||—|
|IT||Industrial Production NSA YoY||Nov||—||-2.60%||4.20%||—|
|UK||Visible Trade Balance GBP/Mn||Nov||-£11400m||-£12023m||-£11873m||-£11946m|
|UK||Trade Balance Non EU GBP/Mn||Nov||-£3775m||-£3925m||-£4251m||-£4318m|
|UK||Industrial Production MoM||Nov||0.20%||-0.40%||-0.60%||-0.50%|
|UK||Industrial Production YoY||Nov||-0.70%||-1.50%||-0.80%||-0.90%|
|UK||Manufacturing Production MoM||Nov||0.40%||-0.30%||-0.90%||-0.60%|
|UK||Manufacturing Production YoY||Nov||-0.70%||-1.10%||-1.00%||-0.70%|
|UK||Construction Output SA MoM||Nov||0.20%||0.60%||-0.20%||0.00%|
|UK||Construction Output SA YoY||Nov||2.60%||3.00%||3.80%||4.10%|
|UK||Monthly GDP 3M/3M Change||Nov||0.30%||0.30%||0.40%||—|
|UK||Index of Services MoM||Nov||0.10%||0.30%||0.20%||—|
|UK||Index of Services 3M/3M||Nov||0.20%||0.30%||0.30%||—|
|IN||Industrial Production YoY||Nov||3.60%||0.50%||8.10%||—|
|US||CPI Ex Food and Energy MoM||Dec||0.20%||—||0.20%||—|
|US||CPI Ex Food and Energy YoY||Dec||2.20%||—||2.20%||—|
|US||CPI Core Index SA||Dec||259.987||—||259.481||—|
|US||CPI Index NSA||Dec||251.074||—||252.038||—|
|US||Real Avg Weekly Earnings YoY||Dec||1.20%||—||0.50%||0.60%|
|US||Real Avg Hourly Earning YoY||Dec||—||—||0.80%||—|
|US||Bloomberg Jan. United States Economic Survey|