Slight gains were seen in the few open markets today with the Nikkei inching higher on Real Estate and Energy names. Australia saw the IT and Industrials sectors finish with gains of over 2% as Discretionary names and Materials finished better by over a percent. South Korea remains shut but will reopen tomorrow. The Aussie Dollar fell overnight with RBA Gov Lowe noting he sees the interest rate outlook balanced which is opposed to the prior view of a likely increase. PM Abe noted job growth was what was important as he added the BoJ had yet to achieve its ever-elusive 2% inflation target.
Softbank -2.7% fell despite 3Q profit up 19% YoY. Sales grew 5% with markets disappointed that the forecast and dividend remained unchanged. Founder M. Son spoke that he feels the company is highly undervalued, 59% in fact, when accounting for the value of its telco unit, Alibaba holdings, Sprint and Yahoo Japan. His hopes are that the buyback of stock fueled by funds from their telco unit IPO will close the gap.
Toyota fell .7% after paring FY NI by a fair amount. The stock recovered from earlier lows even after the firm reported 3Q NI at ¥180.9B vs the ¥587.8B estimate. Of interest, that includes a loss of ¥395B in unrealized equity losses. The firm upped its FY expectations for vehicle sales and retained its op profit estimate.
Furniture retailer Nitori fell just over a percent as they pared plans for new store openings in China. Some current stores are underperforming and could be shut with problems associated with training new staff forcing the company to pull back from the target of 100 stores in China by 2022.
A day after rallying on a government report that was less onerous than expected Commonwealth Bank of Australia fell 1.4% Wednesday. NI fell with tighter profit margins and the weak housing market weighing. Funds set aside to cover fines for AML violations and other misdeeds also were a hit.
Little in the way of moves either way in Europe today with indices currently flattish. Tech names are to the upside as Banks and Basic Resources are also better. Germany’s DAX is underperforming after Factory Order fell 7% YoY in December, twice the slowdown vs the revised November reading. Consumer goods shipments fell while capital goods remained strong.
The UK is looking into pushing back its Brexit divorce to May 24th from the end of March. Considerations are being looked at that include keeping the Irish border open with cameras and GPS systems tracking vehicles along designated routes. Also on the economic front an ECB official noted he does not see TLTRO operations taking place next month as they do not want to give the impression of helping specific lenders.
The EU has blocked the deal between Siemens -.7% and Alstom +4.6% on antitrust issues concerning their monopoly in signaling systems and high-speed trains. Additionally the Competition Commissioner said the two have not worked to allay concerns by offloading units that possibly could have gotten the deal approved. The two companies argued future competition from China in signaling in Europe was reasoning to allow for the deal but officials did not buy it. The EU replied Chinese peers were not presently in the European space and would not be in the near future.
With 4Q revenue somewhat ahead of estimates Daimler -3.3% said it sees only a slight growth in revenue and ebit for the year. That, coupled with a lower than expected dividend, is seeing shares repel back from the 140 day. Comments from the CEO include a collaboration with Tesla to electrify the Sprinter van and further cooperation with Geely on projects.
AMS +9% is an outperformer today after falling sharply yesterday. The stock has recovered all of Tuesday’s losses and is up vs Monday’s close. 3D software company Dassault Systems +9% is sharply higher on better Fy views and encouraging free cash flow. The company recently won a bid along with Airbus -.2% to build a new fighter jet.
|GE||26)||Factory Orders MoM||Dec||0.30%||-1.60%||-1.00%||-0.20%|
|GE||27)||Factory Orders WDA YoY||Dec||-6.70%||-7.00%||-4.30%||-3.40%|
|GE||28)||Markit Germany Construction PMI||Jan||—||50.7||53.3||—|
|IC||29)||7-Day Term Deposit Rate||6-Feb||—||4.50%||4.50%||—|
|IC||30)||Trade Balance||Jan P||—||4600||-10967||—|