For the most part, the markets showed muted reaction to the outcome of yesterday’s Brexit “no deal” vote. The real driver for trading is the day’s Chinese macro data. February industrial production is short of consensus and hits a 17 year low. The February jobless rate rose from January’s reading. Chinese officials noted the impact of the Lunar New Year may carry over.
This caused the Chinese mainland markets to see solid declines. Japan had been trading to the upside but pulled back to score minimal losses. The rest of the region was mixed.
The technology sector settled lower by about 1% with real estate off by c. 0.7%. The energy sector gained 0.5% following crude’s surging due to the weekly U.S. inventory data.
Other Important Headlines
- Samsonite Intl +5.4% sees its FY earnings beating the highest estimate.
- China Unicom’s +3.3% earnings are also better than the range. The company’s strong data usage and subscriber growth are offsetting price reductions.
- Down Under, CBA -0.15% will not spin-off its wealth management and mortgage unit.
- Daiwa House +0.15% will take an ¥11.7b charge due to “an accounting disparity” at a Chinese affiliate.
Europe has been trading to the upside since the open. The markets are currently near their respective highs. Italy trades well with banks seeing significant buying interest. For starters, ECB member Couere stated “Italy was not a threat to the € and there is “no reason” the nation should remain in recession. Also, the Italian Cabinet is reportedly to roll out a new “bad load scheme” in the coming days.
Most sectors advance and the following are better by at least 1%: personal goods, media, energy, travel/leisure, telecoms and insurance. The Chinese concerns weigh upon basic resources with technology and chemicals lagging.
Brexit remains as muddled as ever. While Parliament narrowly voted against a “no deal” Brexit scenario, that still does NOT mean it can’t happen. March 29th is 15 days away.
- In its Capital Markets Day presentation, BATS +1.6% sees its near term revenue growth in the “upper half of 3-5%.”
- Generali +0.9% is another positive for Italian financials. The company’s OP beat consensus and overall aggressive targets were met. The life insurance unit saw strong inflows.
- Lufthansa’s -4.5% revenues are inline but ongoing fare competition weighed upon earnings. The airline is reducing its growth plans and is seeing some downgrades.
On Our Side of the Pond
- Late yesterday, a California court awarded a $31m talc related judgment against Johnson & Johnson.
- Following yesterday’s outage woes, Facebook is also allegedly facing a U.S. criminal investigation.
- GE warning FY adj. EPS will only reach 50c to 60c vs. consensus of 67c.
Markets and Macro
|JN||Japan Buying Foreign Bonds||8-Mar||—||¥245.7b||¥453.1b||¥456.1b|
|JN||Japan Buying Foreign Stocks||8-Mar||—||¥623.8b||-¥1.6b||—|
|JN||Foreign Buying Japan Bonds||8-Mar||—||¥459.1b||¥1025.8b||—|
|JN||Foreign Buying Japan Stocks||8-Mar||—||-¥1158.6b||-¥341.3b||-¥340.5b|
|AU||Consumer Inflation Expectation||Mar||—||4.10%||3.70%||—|
|UK||RICS House Price Balance||Feb||-24%||-28%||-22%||—|
|JN||Bloomberg March Japan Economic Survey (Table)|
|CH||Fixed Assets Ex Rural YTD YoY||Feb||6.10%||6.10%||5.90%||—|
|CH||Industrial Production YTD YoY||Feb||5.60%||5.30%||6.20%||—|
|CH||Retail Sales YTD YoY||Feb||8.20%||8.20%||9.00%||—|
|CH||Surveyed Jobless Rate||Feb||—||5.30%||4.90%||—|
|CH||Property Investment YTD YoY||Feb||—||11.60%||9.50%||—|
|IN||Wholesale Prices YoY||Feb||2.80%||2.93%||2.76%||—|
|GE||CPI MoM||Feb F||0.50%||0.40%||0.50%||—|
|GE||CPI YoY||Feb F||1.60%||1.50%||1.60%||—|
|GE||CPI EU Harmonized MoM||Feb F||0.50%||0.50%||0.50%||—|
|GE||CPI EU Harmonized YoY||Feb F||1.70%||1.70%||1.70%||—|
|FR||CPI EU Harmonized MoM||Feb F||0.10%||0.10%||0.10%||—|
|FR||CPI EU Harmonized YoY||Feb F||1.50%||1.60%||1.50%||—|
|FR||CPI MoM||Feb F||0.00%||0.00%||0.00%||—|
|FR||CPI YoY||Feb F||1.30%||1.30%||1.30%||—|
|FR||CPI Ex-Tobacco Index||Feb||102.68||102.73||102.67||—|
|SP||House transactions YoY||Jan||—||-0.20%||3.80%||—|
|HK||Industrial Production YoY||4Q||—||1.30%||1.20%||—|
|CA||New Housing Price Index MoM||Jan||0.00%||—||0.00%||—|
|US||Import Price Index MoM||Feb||0.30%||—||-0.50%||—|
|CA||New Housing Price Index YoY||Jan||0.00%||—||0.00%||—|
|US||Import Price Index ex Petroleum MoM||Feb||-0.10%||—||-0.70%||—|
|US||Import Price Index YoY||Feb||-1.50%||—||-1.70%||—|
|US||Export Price Index MoM||Feb||0.10%||—||-0.60%||—|
|US||Export Price Index YoY||Feb||—||—||-0.20%||—|
|US||Initial Jobless Claims||9-Mar||225k||—||223k||—|
|US||Bloomberg March United States Economic Survey|
|US||Bloomberg Consumer Comfort||10-Mar||—||—||62.1||—|
|US||New Home Sales MoM||Jan||0.20%||—||3.70%||—|
|US||New Home Sales||Jan||622k||—||621k||—|