Following the strong U.S. gains, the region posted solid gains. Word PM May has been able to hammer out a last minute Brexit deal gave the markets additional momentum. More on this in the European section. For the second consecutive session, Australia lagged.
Australia continues to see weaker economic data. Various housing related statistics all declined during January. NAB confidence results also show weakening sentiment.
All major sectors gained and many end the day better more than 1%. Those include industrials, IT, telcos, real estate and healthcare.
Other Important Headlines
- Morgan Stanley is bullish on both the Chinese and Emerging Markets by year end. The broker sees the MSCI Emerging Markets Index higher by 8%.
- Hon Hai +1.1% Chair Gou was adamant his firm has not violated agreements with Apple. This follows word Apple has filed a patent infringement suit against subsidiary FIH Mobile +1.0%.
- ISS is recommending two of Elliott’s nominees for Hyundai Motor’s +3.5% board. However, the shareholder advisory agency is not in favor Elliott’s dividend proposal.
- Bernstein estimates Macau gaming revenues are down 5% m/m as of March 10th.
- Contemporary Amperex Tech +3.5% traded well following word it is negotiating with Tesla to supply batteries for its model 3 cars assembled near Shanghai.
- After the close, Ping An reported NI that is better than Bloomberg consensus.
The aforementioned Brexit deal has been the markets’ primary focus. PM May flew to Germany late yesterday and hammered out the latest version of this crucial issue with the EU’s Juncker. The Irish “backstop” is one of the key matters that has been addressed. Shortly after 7AM Eastern, U.K. Attorney General Cox issued an unfavourable (not a typo) ruling on the agreement. Members of Parliament are now scrambling to review ahead of a vote scheduled for this evening. Stay tuned!
After initial gap to highs, the region had pared the advance. However, the market moved into the red on the opinion of Mr. Cox. The U.K. lagged all session due to currency effects but outperforms. Initially, the currency markets were seeing a stronger £. However, those gains have been erased and Stirling is now lower.
Prior to the headlines, most sectors were to the upside. However, that has changed dramatically. Most are now lower with losses of c. 0.5% among telecoms, energy, basic resources and banks. Financials, utilities and retail are up small.
Snippets from the Region
- After the Japanese markets had closed, Renault +0.1%, Nissan +1.0% and Mitsubishi +1.0% held their press conference regarding the strategic alliance. A new operating board is being established that will meet monthly and be chaired by Renault Chairman Senard. The key responsibilities will be to streamline operational cooperation and prevent the transgressions alleged against former Chair Ghosn. Mr. Senard says the agreement does not address cross-shareholdings.
- VW’s -1.2% results show a number of issues: margin slippage, negative Chinese comments and the company says will need to see a stronger H2 to meet forecasts. It also is facing another EU diesel probe.
On Our Side of the Pond
- Boeing continues to see further bans on flights with the 737 Max aircraft. Singapore and Australia are among the nation’s taking action. Lion Air is considering switching order to Airbus +0.15%. The FAA foresees mandating changes for the aircraft next month but says it is airworthy.
- The results and outlook at ADT miss expectations.
- General Mills subsidiary Pillsbury has ordered a flour recall due to possible salmonella contamination.
- Apple sets new product reveal for April 25th.
- The U.S. has ordered all remaining diplomats to leave Venezuela.
Markets and Macro
|AU||ANZ Roy Morgan Weekly Consumer Confidence Index||10-Mar||—||109.5||114.8||—|
|JN||BSI Large All Industry QoQ||1Q||—||-1.7||4.3||—|
|JN||BSI Large Manufacturing QoQ||1Q||—||-7.3||5.5||—|
|AU||NAB Business Conditions||Feb||—||4||7||—|
|AU||NAB Business Confidence||Feb||—||2||4||—|
|AU||Home Loans MoM||Jan||-2.00%||-1.20%||-8.20%||-8.00%|
|AU||Owner-Occupier Loan Value MoM||Jan||0.00%||-1.30%||-6.40%||-5.30%|
|FR||Private Sector Payrolls QoQ||4Q F||0.10%||0.30%||0.10%||—|
|UK||Visible Trade Balance GBP/Mn||Jan||-£12200m||-£13084m||-£12102m||-£12686m|
|UK||Trade Balance Non EU GBP/Mn||Jan||-£3800m||-£4977m||-£3642m||-£4369m|
|UK||Industrial Production MoM||Jan||0.20%||0.60%||-0.50%||—|
|UK||Industrial Production YoY||Jan||-1.30%||-0.90%||-0.90%||—|
|UK||Manufacturing Production MoM||Jan||0.20%||0.80%||-0.70%||—|
|UK||Manufacturing Production YoY||Jan||-1.90%||-1.10%||-2.10%||—|
|UK||Construction Output SA MoM||Jan||0.80%||2.80%||-2.80%||—|
|UK||Construction Output SA YoY||Jan||-0.20%||1.80%||-2.40%||—|
|UK||Monthly GDP 3M/3M Change||Jan||0.20%||0.20%||0.20%||—|
|UK||Index of Services MoM||Jan||0.20%||0.30%||-0.20%||—|
|UK||Index of Services 3M/3M||Jan||0.50%||0.50%||0.40%||—|
|US||NFIB Small Business Optimism||Feb||102.5||101.7||101.2||—|
|IN||Industrial Production YoY||Jan||2.10%||—||2.40%||—|
|US||CPI Ex Food and Energy MoM||Feb||0.20%||—||0.20%||—|
|US||CPI Ex Food and Energy YoY||Feb||2.20%||—||2.20%||—|
|US||CPI Core Index SA||Feb||261.193||—||260.701||—|
|US||CPI Index NSA||Feb||252.837||—||251.712||—|
|US||Real Avg Weekly Earnings YoY||Feb||—||—||1.90%||—|
|US||Real Avg Hourly Earning YoY||Feb||—||—||1.70%||1.60%|