Once again, the region saw mixed trading with minimal moves across the markets. Naturally, investors are cautious ahead of today’s FOMC meeting. Also, reports allege China is becoming more contentious in trade talks.
Most sectors traded lower. Utilities were off c. 1% with losses seen among energy and telcos of roughly 0.5%. Real estate improved by c. 0.5% with Japanese names once again seeing solid demand.
Thailand left rates unchanged in a unanimous decision.
Other Important Headlines
- Samsung Elec. +0.3% warns of a “difficult year” foreseeing a decline to smartphone sales. The shares spent most of the session lower before seeing a small bounce into the close.
- Nintendo -3.2%, Sony -3.4% and other video gaming related names gave ground with Google declaring its intent to enter the space. It is creating a video streaming service called Stadia.
- Xiaomi’s -4.6% quarterly NI is ahead of expectations. However, its Q4 shipments are lower by 25.0% y/y. Nomura cut its rating to Neutral while Citigroup reduced its price target to HK$15 from HK$16.
- In the agri-science space, Nufarm -24.0% issued a profit warning. The company sees its FY19 EBITDA range below consensus. It notes a slow start to the year in parts of Australia and Europe.
- The Nikkei reports FamilyMart Uny’s +0.3% Fy19 Core OP will increase by 20.0% y/y.
- There are a slew of Chinese earnings due following today’s close. They include Tencent, China Mobile, CK Hutchison, CNOOC, Geely Auto and Petrochina. Mind your eye.
The region has spent the session to the downside and the markets are currently beat their lows of the day. The DAX is the worst performing index and you will see why in the snippets below.
Most sectors are lower. Autos and basic resources are in the red close to 2% but that is an improvement. Telcos have been better by c. 0.5% for most of the session. A few other defensives are up small.
The commodities markets see sharp declines to iron ore prices. A Brazilian court has ruled Vale may resume operations s at its Brucutu mine.
- Bayer -12.3% is the worst performer in the Euro Stoxx 600. This is a response to the California court decision declaring the Round Up product causes cancer.
- BMW -4.6% accelerated to the down side following a profit warning. The company projects PTP will fall more than 10% in FY19. It also sees margin erosion and sees the potential for even further reductions subject to market conditions.
- The Euro Stoxx 600 best performer is Inmarsat +17.5%. The company confirms it has received a private equity consortium bid. Talks continue and nothing has been agreed at this point. The cash offer is said to be $7.21 per share.
On Our Side of the Pond
- FedEx is trading lower pre-market. Q3 results are below expectations and the company is reducing its FY EPS outlook below consensus. It notes weak activity in foreign markets.
- Conversely, General Mills is trading well post results. Q3 EPS are well ahead of estimates, margins are better the company raised its EPS outlook.
- The EU is fining Google €1.49b over advertising contracts.
- Of course, the FOMC meeting looms. No changes to rates are expected. Most importantly, the central bank is expected to signal just one rate hike this year.
Welcome to Spring!
Markets and Macro
|AU||Westpac Leading Index MoM||Feb||—||0.00%||-0.01%||0.06%|
|AU||Skilled Vacancies MoM||Feb||—||-0.90%||1.30%||-0.50%|
|JN||Machine Tool Orders YoY||Feb F||—||-29.30%||-29.30%||—|
|JN||Convenience Store Sales YoY||Feb||—||2.00%||0.80%||—|
|UK||CPI Core YoY||Feb||1.90%||1.80%||1.90%||—|
|UK||Retail Price Index||Feb||285.1||285||283||—|
|UK||RPI Ex Mort Int.Payments (YoY)||Feb||2.50%||2.40%||2.50%||—|
|UK||PPI Input NSA MoM||Feb||0.60%||0.60%||-0.10%||-0.30%|
|UK||PPI Input NSA YoY||Feb||4.10%||3.70%||2.90%||2.60%|
|UK||PPI Output NSA MoM||Feb||0.10%||0.10%||0.00%||—|
|UK||PPI Output NSA YoY||Feb||2.20%||2.20%||2.10%||—|
|UK||PPI Output Core NSA MoM||Feb||0.20%||0.10%||0.40%||—|
|UK||PPI Output Core NSA YoY||Feb||2.30%||2.20%||2.40%||—|
|UK||House Price Index YoY||Jan||2.40%||1.70%||2.50%||2.20%|
|UK||CBI Trends Total Orders||Mar||5||1||6||—|
|UK||CBI Trends Selling Prices||Mar||—||7||22||—|
|US||MBA Mortgage Applications||15-Mar||—||1.60%||2.30%||—|
|US||FOMC Rate Decision (Upper Bound)||20-Mar||2.50%||—||2.50%||—|
|US||FOMC Rate Decision (Lower Bound)||20-Mar||2.25%||—||2.25%||—|
|US||Interest Rate on Excess Reserves||21-Mar||2.40%||—||2.40%||—|