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08.19.2019 17 new International Summary posts under Morning Note (9) and International Summary (8)

International Summary

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International Summary

"CAPIS Global Markets 1/22/2019"

posted by Matthew Kiselica on 01/22/2019 at 7:02 am

by Matthew Kiselica

01/22/2019 at 7:02 am

Yesterday’s Market

If you missed, the Asian markets traded to the upside while Europe was down small.   Here is yesterday’s recap.

Asian Markets Today

There were several factors which caused the region to trade lower.   The markets had a negative bias following yesterday’s cut to global growth forecasts by the IMF.   Selling increased following a meeting between Chinese Pres. Xi and other of the nation’s top leaders.  After the meeting, Pres. Xi made a pledge to “maintain stability.”  This comment along with the meeting fanned growth/slowdown worries.  The icing on the cake is Chinese criticism of reports the U.S. is seeking the extradition of Huawei’s CFO.

The majority of sectors ended the day lower.  IT, materials and energy gave way by c. 1%.  Among healthcare names, Chinese pharma companies traded lower due to a government pledge to reduce prescription prices.  Utilities managed to hold steady.

Other Important Headlines

  • Despite seeing FY ’18 earnings higher 123% to 132%, Petrochina traded lower.  Credit Suisse cut its EPS outlook and Huatai Financial cut its PT on the shares by 40%.
  • Sources allege, Takeda Pharma +0.25% is mulling the sale of up to $3b in emerging market assets.  This would be to reduce the debt burden following the Shire acquisition.
  • Both Tencent -1.2% and Netease failed to make the cut on China’s latest list of approved online games.
  • Naver -0.75% has elected to forego entry into the Korean online banking sector.
  • S. Korea continues to see strong tourist data.  Visitors rose rose 16.8% y/y to 1,324,119 during December.  Chinese visitors increased 25.2% y/y while those from Japan surged 33.5% y/y.
  • OTHER MACRO NEWS: The BoJ is in the midst of its two day policy meeting.  S. Korean Q4 GDP rose more than anticipated q/q.

European Markets

Europe started to the downside but managed to erase the losses after c. 2 hours.  However, the markets have given back that advance following German ZEW confidence readings which were sharply below expectations.  Sectors are evenly split in terms of performance.  Banks are off more than 1% with miners and energy of about that mark.  They have pared some of the day’s losses.  Travel/leisure is better by c. 1% with media and retail better by more than 0.5%.

Brexit

Late yesterday, PM May presented her “what is next” for Brexit case to Parliament.  She says it is not a foregone conclusion Article 50 will be delayed.  However, many are criticizing the updated agenda saying “Plan B sounds much like Plan A.”   Labour (not a typo) Party leader Corbyn is taking steps to trigger a 2nd referendum!  So the story remains as opaque as ever.

Important Snippets

  • UBS -4.0% is providing a scare to the financial sector.  The bank suffered $12.8b in outflows during Q4 at it wealth and asset manager units.  Adding to worries, CEO Ermotti notes Q1 is murky and the bank is unable to provide guidance.
  • Hugo Boss +4.9% leads the retail sector.  The company’s Q4 sales rose 6% which is the fastest growth the company has seen in 4 years.
  • EasyJet’s +6.3% Q1 results have provided relief to the discount airline sector following Ryanair’s +3.9% disappointing results from last week.  EasyJet notes Q1 revenues are better by 14.0% and forward sales are “robust.”

On Our Side of the Pond

  • The earnings rollout continues with Schlumberger, Johnson & Johnson and IBM among those due to report today.
  • Up in Canada, Barrick Gold noted Q4 gold production of 1.26m and total FY ’18 production was inline with guidance.

Markets and Macro

Markets Snapshot

Event Survey Actual Prior Revised
SK PPI YoY Dec 1.00% 1.60% 1.50%
AU ANZ Roy Morgan Weekly Consumer Confidence Index 20-Jan 115.7 116.8
SK GDP SA QoQ 4Q P 0.60% 1.00% 0.60%
SK GDP YoY 4Q P 2.70% 3.10% 2.00%
JN Tokyo Condominium Sales YoY Dec 15.20% 2.80%
JN Supermarket Sales YoY Dec -0.70% -2.50%
HK CPI Composite YoY Dec 2.50% 2.50% 2.60%
SP Trade Balance Nov -2569m -3837m
UK Claimant Count Rate Dec 2.80% 2.80%
UK Jobless Claims Change Dec 20.8k 21.9k 24.8k
UK Average Weekly Earnings 3M/YoY Nov 3.30% 3.40% 3.30%
UK Weekly Earnings ex Bonus 3M/YoY Nov 3.30% 3.30% 3.30%
UK ILO Unemployment Rate 3Mths Nov 4.10% 4.00% 4.10%
UK Employment Change 3M/3M Nov 87k 141k 79k
UK Public Finances (PSNCR) Dec 21.3b 4.4b 2.7b
UK Central Government NCR Dec 18.2b 8.4b 6.7b
UK Public Sector Net Borrowing Dec 1.1b 2.1b 6.3b
UK PSNB ex Banking Groups Dec 1.9b 3.0b 7.2b 7.1b
GE ZEW Survey Current Situation Jan 43 27.6 45.3
GE ZEW Survey Expectations Jan -18.5 -15 -17.5
EC ZEW Survey Expectations Jan -20.9 -21
CA Wholesale Trade Sales MoM Nov -0.30% 1.00%
CA Manufacturing Sales MoM Nov -1.00% -0.10%
US Existing Home Sales Dec 5.24m 5.32m
US Existing Home Sales MoM Dec -1.50% 1.90%

About the Author

Matthew Kiselica headshot
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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