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02.15.2019 19 new International Summary posts under Morning Note (10), International Summary (8), General (1)

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International Summary

"MLK Day Global Markets 1/21/2019"

posted by Matthew Kiselica on 01/21/2019 at 11:05 am

by Matthew Kiselica

01/21/2019 at 11:05 am

Markets SnapshotAsian Markets

The markets focused upon macro data out of China.  The nation’s FY ’18 GDP provided some interesting results.  The 6.6% reading was the lowest since 2009.  However, the final for the year is a touch better than the government’s target of c. 6.5%.  Industrial production and retail sales provided further evidence the the world’s second market largest economy may be faring better than feared.   (All details below in our macro section below.)

This created general buying interest across the region.   However, that was tempered as investors await further word regarding trade talks.  Part of the caution is due to reports the U.S. will issue further restrictions upon Chinese telecoms doing business here.   Also, sources allege intellectual property remains a sticking point.  On the plus side, China is said to be offering a boost to imports of U.S. products by $1t over the next 6 years.  S. Korea lagged as imports and exports slumped resulting in a trade deficit.

Overall,  most sectors saw gains.  Energy was the standout, advancing by c. 1.5%.  The was the result of strong Chinese refining data during December.  IT gained 1%.  Utilities were out of favor and the real estate sector lagged, weighed upon by Chinese names.  The rate of property investment during December slowed m/m.

Other Important Headlines

  • Foxconn Tech gained despite reports the company has cut 50,000 seasonal jobs a month earlier than usual due to lower iPhone demand.
  • Nissan CEO Saikawa stated his firm was not prepared for integration or stronger capital tie with Renault %.
  • Chow Tai Fook and peers benefited from Tiffany’s results from Friday.  The famous jeweler and VF Corp both indicate Chinese sales are improving.
  • Shipping stocks continue to sail higher.  The Nikkei reports Kawasaki Kisen is pondering the resumption of a dividend payment for the next FY.  It has not paid a dividend in 4 years.
  • Doosan Heavy and other Korean nuclear power plays powered up following a poll reflecting more than 50% of respondents favor nuclear power vs. the government’s plan to exit its usage.

European Markets

The region’s markets have spent the day lower to one extent or the other.   They had pared about half of the day’s 0.4% loss but suffered some mild selling following the IMF global growth outlook.  The organization has reduced its forecast for 2019.  It now sees the growth at 3.5%.  It had forecast 3.7% back in October.  Activity is fairly light due to the U.S. holiday and investors await U.K. PM May’s next steps regarding Brexit.

 

Snippets from the Region

  • Henkel’s -8.2% trading update has not been well received.  The company noted FY ’19 EPS and margins will decline.  RBC projects estimates on “the Street” may need to come down as much as 10.0%.
  • Sandvik +1.5% provided a reassuring trading update and pledged a dividend that was better than consensus.
  • Orange -0.9% dismissed reports it will make a bid to acquire all of Euskaltel -1.9%.

On the Markets Agenda for Tonight

  • The World Economic Forum commences in Davos.  Both PM May and Pres. Trump will not attend due to their respective issues: Bexit and the U.S government shutdown.
  • UBS will the primary earnings release.
  • Macro Due includes UK jobs, earnings, public finances and German ZEW results.

Macro

Event Survey Actual Prior Revised
SK Exports 20 Days YoY Jan -14.60% 1.00%
SK Imports 20 Days YoY Jan -9.50% 2.20%
UK Rightmove House Prices MoM Jan 0.40% -1.50%
UK Rightmove House Prices YoY Jan 0.40% 0.70%
CH Retail Sales YoY Dec 8.10% 8.20% 8.10%
CH Retail Sales YTD YoY Dec 9.00% 9.00% 9.10%
CH Industrial Production YoY Dec 5.30% 5.70% 5.40%
CH Industrial Production YTD YoY Dec 6.20% 6.20% 6.30%
CH Fixed Assets Ex Rural YTD YoY Dec 6.00% 5.90% 5.90%
CH Property Investment YoY Dec 9.50% 9.70%
CH Surveyed Jobless Rate Dec 4.90% 4.80%
CH GDP YoY 4Q 6.40% 6.40% 6.50%
CH GDP SA QoQ 4Q 1.50% 1.50% 1.60%
CH GDP YTD YoY 4Q 6.60% 6.60% 6.70%
JN Convenience Store Sales YoY Dec 1.20% 0.60%
GE PPI MoM Dec -0.10% -0.40% 0.10%
GE PPI YoY Dec 2.90% 2.70% 3.30%
CA Bloomberg Nanos Confidence 18-Jan 54.5 54.5
SK PPI YoY Dec 1.60%
AU ANZ Roy Morgan Weekly Consumer Confidence Index 20-Jan 116.8
SK GDP SA QoQ 4Q P 0.60% 0.60%
SK GDP YoY 4Q P 2.70% 2.00%
JN Tokyo Condominium Sales YoY Dec 2.80%
JN Supermarket Sales YoY Dec -2.50%
HK CPI Composite YoY Dec 2.50% 2.60%
SP Trade Balance Nov -3837m
UK Claimant Count Rate Dec 2.80%
UK Jobless Claims Change Dec 21.9k
UK Average Weekly Earnings 3M/YoY Nov 3.30% 3.30%
UK Weekly Earnings ex Bonus 3M/YoY Nov 3.30% 3.30%
UK ILO Unemployment Rate 3Mths Nov 4.10% 4.10%
UK Employment Change 3M/3M Nov 87k 79k
UK Public Finances (PSNCR) Dec 4.4b
UK Central Government NCR Dec 8.4b
UK Public Sector Net Borrowing Dec 1.1b 6.3b
UK PSNB ex Banking Groups Dec 1.9b 7.2b
GE ZEW Survey Current Situation Jan 43 45.3
GE ZEW Survey Expectations Jan -18.5 -17.5
EC ZEW Survey Expectations Jan -21
CA Wholesale Trade Sales MoM Nov -0.30% 1.00%
CA Manufacturing Sales MoM Nov -0.80% -0.10%
US Existing Home Sales Dec 5.24m 5.32m
US Existing Home Sales MoM Dec -1.50% 1.90%

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...

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