09.23.2022 11 new Morning Note posts under Morning Note (10) and CAPIS Insights (1)

International Summary

News Trading Desk

International Summary

"TGIF Global Markets 3/8/2019"

posted by CAPIS on 03/08/2019 at 6:45 am


03/08/2019 at 6:45 am

Risk-Off Markets

The markets are in a top-down risk off mode due to Chinese trade below expectations.  Both exports and imports slumped during February (All figures in macro section).  Even accounting for the Lunar New Year, it is poor results.  This underscores global growth concerns and impact of the trade battle.  Perhaps a silver lining is this will encourage China to be  even more willing to reach a deal with the U.S.

This is probably no surprise and certainly no help to today’s sentiment, the Brookings Institute published a paper claiming China has overstated its GDP its data for years.

Adding to macro slowdown woes, German Factory orders unexpectedly declined during January.   One supportive data point is Q4 Japanese GDP above expectations.

Asian Markets

All the major indices suffered major declines with the China markets leading the way lower.  It didn’t help that Citic Secs. made a sell call on PICC Group A shs -10.0%following its 400% increase since the November Shanghai Listing.  Hong Kong had the Hang Seng rebalance on today’s close.  All major sectors ended the day in the red.  Miners and financials gave ground by c. 3%.  They were followed by losses of 2% or more include industrials, consumer discretionary, real estate and energy.

European Markets

After the initial dip, Europe attempted a brief rally about an hour into the session but then moved to the lows.   Adding to the overall sell sentiment in Finland, PM Sipila and his government will step down.  The best that can be said is the markets are slightly of their lows.

Most sectors are to the downside.  Basic resources and autos have been the worst group all morning and are currently off more than 2%.  Travel/leisure, banks, industrials, insurance and energy are off at least 1%.   REITs and developers have been a strong pocket of strength.  Quite a few are among the leaders in the Euro Stoxx 600.  Defensives are relative outperformers with telecoms better by 0.5% and utilities flat.

Important Corporate Snippets

  • China Gas +2.7% was a standout despite a placing in the shares today.
  • Great Wall Motor’s -5.3% Feb. sales rose 18.3% y/y but fell 38.0% m/m.
  • After the close, it was announced Omron will replace Pioneer in the Nikkei 225.
  • Investors are not pleased to see EssilorLuxottica -6.0% has delayed its investor day.  The company has stuck to its 3.5% to 5.0% growth target for the year and 5 year merger synergies.  However, the company is pushing back its presentation to provide further detail regarding the merger of the eyecare companies.
  • Bodycote’s +7.5% FY18 revenues are a touch better and EPS beat: 55.9 vs. 53.3p.  The company has declared a special dividend and made upbeat comments regarding to the start to FY19.
  • Sources allege Deutsche Bk -1.1% and Commerzbank -0.6% conducting further merger talks.  The report notes this is due to pressure from the government coupled with continued struggles for each enity.

On Our Side of the Pond

  • Costco is trading up pre-market following a solid EPS beat and improved margins.
  • Big Lots also beat and announced a sizeable share buyback.
  • The payroll data will be the focus on the macro front.

Markets and Macro

Markets Snapshot

Event Survey Actual Prior Revised
SK BoP Current Account Balance Jan $2772.3m $4819.3m
SK BoP Goods Balance Jan $5609.5m $6529.4m
JN Household Spending YoY Jan -0.50% 2.00% 0.10%
JN GDP SA QoQ 4Q F 0.40% 0.50% 0.30%
JN GDP Annualized SA QoQ 4Q F 1.70% 1.90% 1.40%
JN GDP Nominal SA QoQ 4Q F 0.30% 0.40% 0.30%
JN GDP Deflator YoY 4Q F -0.30% -0.30% -0.30%
JN GDP Private Consumption QoQ 4Q F 0.60% 0.40% 0.60%
JN GDP Business Spending QoQ 4Q F 2.70% 2.70% 2.40%
JN BoP Current Account Balance Jan ¥161.0b ¥600.4b ¥452.8b
JN Trade Balance BoP Basis Jan P -¥1133.1b -¥964.8b ¥216.2b
JN BoP Current Account Adjusted Jan P ¥1385.3b ¥1833.0b ¥1562.3b ¥1633.4b
JN Bank Lending Incl Trusts YoY Feb 2.30% 2.40%
JN Bank Lending Ex-Trusts YoY Feb 2.40% 2.40%
CH Trade Balance CNY Feb 250.00b 34.46b 271.16b
CH Exports YoY CNY Feb 6.60% -16.60% 13.90%
CH Imports YoY CNY Feb 6.20% -0.30% 2.90%
CH Trade Balance Feb $26.20b $4.12b $39.16b
CH Exports YoY Feb -5.00% -20.70% 9.10%
CH Imports YoY Feb -0.60% -5.20% -1.50%
JN Bankruptcies YoY Feb -4.53% 4.88%
JN Eco Watchers Survey Current SA Feb 46.2 47.5 45.6
JN Eco Watchers Survey Outlook SA Feb 49.8 48.9 49.4
IT Bank of Italy Report on Balance-Sheet Aggregates
GE Factory Orders MoM Jan 0.50% -2.60% -1.60% 0.90%
GE Factory Orders WDA YoY Jan -3.20% -3.90% -7.00% -4.50%
FR Trade Balance Jan -4941m -4195m -4653m -3570m
FR Current Account Balance Jan 0.9b -1.1b -0.1b
FR Industrial Production MoM Jan 0.10% 1.30% 0.80% 0.00%
FR Industrial Production YoY Jan 0.50% 1.70% -1.40% -2.50%
FR Manufacturing Production MoM Jan -0.20% 1.00% 1.00% 0.40%
FR Manufacturing Production YoY Jan -0.20% 0.90% -1.00% -2.00%
SP Industrial Output NSA YoY Jan 1.80% -4.20%
SP Industrial Output SA YoY Jan -1.60% 2.40% -6.20% -5.90%
SP Industrial Production MoM Jan 1.60% 3.40% -1.40% -1.20%
SP INE House Price Index QoQ 4Q 0.40% 2.20%
SP INE House Price Index YoY 4Q 6.60% 7.20%
IT Industrial Production MoM Jan 0.20% 1.70% -0.80% -0.70%
IT Industrial Production WDA YoY Jan -3.00% -0.80% -5.50%
IT Industrial Production NSA YoY Jan -0.90% -2.50%
IT PPI MoM Jan 0.00% -0.60%
IT PPI YoY Jan 4.40% 5.20%
CA Housing Starts Feb 205.0k 208.0k 207.9k
CA Net Change in Employment Feb 1.2k 66.8k
US Housing Starts Jan 1195k 1078k
CA Unemployment Rate Feb 5.80% 5.80%
US Housing Starts MoM Jan 10.90% -11.20%
US Building Permits Jan 1287k 1326k
CA Hourly Wage Rate Permanent Employees YoY Feb 1.70% 1.80%
CA Participation Rate Feb 65.6 65.6
US Building Permits MoM Jan -2.90% 0.30%
US Change in Nonfarm Payrolls Feb 180k 304k
CA Full Time Employment Change Feb 0.8 30.9
CA Part Time Employment Change Feb -5.7 36
US Two-Month Payroll Net Revision Feb
US Change in Private Payrolls Feb 170k 296k
CA Capacity Utilization Rate 4Q 82.00% 82.60%
US Change in Manufact. Payrolls Feb 12k 13k
US Unemployment Rate Feb 3.90% 4.00%
US Average Hourly Earnings MoM Feb 0.30% 0.10%
US Average Hourly Earnings YoY Feb 3.30% 3.20%
US Average Weekly Hours All Employees Feb 34.5 34.5
US Labor Force Participation Rate Feb 63.20% 63.20%
US Underemployment Rate Feb 8.10%

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