09.30.2022 11 new Morning Note posts under Morning Note (10) and CAPIS Insights (1)

International Summary

News Trading Desk

International Summary

"CAPIS Global Markets 3/4/2019"

posted by CAPIS on 03/04/2019 at 6:44 am


03/04/2019 at 6:44 am

Asian Markets

The region’s markets had a solid day on word China and the U.S. continue to move make progress on trade talks.  The trade chatter says China is offering to lower tariffs on a number of U.S. goods including agricultural and autos.  In turn, the U.S. is said to be willing to remove or significantly reduce the tariffs imposed last year.

The Shanghai Composite closed above 3,000 for the first time since June.  S. Korea lagged following its lowest Manuf. PMI reading since June of 2015.  The key autos there were also weak (More on this below).  All major sectors traded to the upside.  Real estate and healthcare gained c. 1.5%.  Tobacco stocks lagged and see Japan Tobacco below.

After the close, China announced it will reduce its VAT on manufacturing products by 3 percentage points.  Morgan Stanley estimates this will equate to roughly 0.6% of GDP.

Important Headlines

  • Another plus for the Chinese markets are further detail of listing and IPO rules for the new Shanghai technology board.  This is an attempt to stem some of the Chinese company U.S. listings in recent years.
  • BoJ Gov. Kuroda sees the 2% inflation target as “difficult to reach” by the end of FY20.
  • Both Rakuten +6.3% and Softbank +2.4% traded well with Lyft filing for its IPO.
  • Japan Tobacco -1.2% suffered following the Canadian appeals court ruling upholding a C$15b class action suit decision.
  • Hyundai Motor -3.6% and Kia Motors -3.0% are facing fears of a car fire related recall in the States.
  • China Tower’s -2.2% FY NI is higher by 36.0% y/y.  That is inline with consensus.
  • Citing employee shortages, Seven & I Holdings -2.2% is considering shortening store hours.
  • Local press reports indicate LG Elec. +1.0% is looking to sell its water treatments units.

European Markets

Europe has been higher since the open.  After outperforming at the tailend of last week, Italy and Spain lag.  The majority of sectors are to the upside.  Media leads better by 1% followed by personal goods, basic resources, industrials, construction and energy.  Utilities and email are down small.

The commodity markets are seeing crude higher.   Friday’s U.S. rig count fell to its lowest count since last May.  Additionally, OPEC+ production declined in February.

Snippets from the Region

  • Nordea -3.5% is the latest Scandinavian bank being implicated in the Baltic money laundering scandal.  A Finnish media outlet is preparing to broadcast a detailed report today.
  • Ahold Delhaize -2.4% and peers with U.S. exposure suffer following a WSJ article indicating Amazon will rollout “dozens of grocery stores” in the U.S.
  • Competition concerns are weighing upon Novo Nordisk -1.2%Eli Lilly intends to market a less costly version of its Humalog insulin treatment.
  • Reuters indicates Fresenius Medical -2.5% is mulling a plan that will focus upon in-home dialysis vs. clinical operations.
  • Both Geely Auto -1.7% and Tata Motors +1.6% are said to have interest in CNH Industrial’s +1.0% trucking unit.
  • The Daily Mail +4.6% will pay a special dividend to shareholders along with distributing a stake in publisher Euromoney -4.3%.

On Our Side of the Pond

  • Vale CEO Schvartsman is taking a “temporary leave” with Eduardo Bartolomeo to step in on an interim basis.
  • Venezuelan opposition leader Guaido intends to return to the nation today.
  • Salesforce reports after the close.

On the Markets Agenda for Tonight

Markets Snapshot

  • China’s People’s National Congress commences.  Investors will be following closely for market impacting initiatives and policy including growth forecasts.
  • Macro includes: Rate decision by the RBA, Caixin Chinese Composite and Services PMIs, S. Korean CPI, Various European Markit Composite and Services readings, EC Retail Sales.
  • Earnings include Wharf Real Estate, KB Financials, Ashtead Group.   Retail will be in focus in the States with both Ross and Target due.

Markets and Macro

Event Survey Actual Prior Revised
AU ANZ Job Advertisements MoM Feb -0.90% -1.70% -1.80%
JN Monetary Base YoY Feb 4.60% 4.70%
JN Monetary Base End of period Feb ¥497.3t ¥500.2t
AU Melbourne Institute Inflation MoM Feb 0.10% -0.10%
AU Melbourne Institute Inflation YoY Feb 1.70% 1.50%
SK Nikkei South Korea PMI Mfg Feb 47.2 48.3
AU Company Operating Profit QoQ 4Q 3.00% 0.80% 1.90% 1.20%
AU Inventories SA QoQ 4Q 0.30% -0.20% 0.00% -0.10%
AU Building Approvals MoM Jan 1.00% 2.50% -8.40% -8.10%
AU Building Approvals YoY Jan -28.90% -28.60% -22.50% -22.00%
SP Unemployment MoM Net (‘000s) Feb 3.3 83.5
EC Sentix Investor Confidence Mar -3.1 -2.2 -3.7
UK Markit/CIPS UK Construction PMI Feb 50.5 49.5 50.6
EC PPI MoM Jan 0.30% 0.40% -0.80%
EC PPI YoY Jan 2.90% 3.00% 3.00%
CA MLI Leading Indicator MoM Jan -0.30%
CA Bloomberg Nanos Confidence 1-Mar 54.4
US Construction Spending MoM Dec 0.20% 0.80%

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