Lackluster trading with mixed performance across the region and also within countries. For example, Chinese and Japanese markets saw varied moves across their related indices. As a result, sectors were also mixed. Real estate, healthcare and consumer discretionary improve about 1%. Materials saw profit taking and gave way c. 1% while utilities end the day off c. 0.5%.
- Sony +9.3% is one of the day’s stars. This was in response to yesterday’s report activest investor Thirdpoint is building a stake in the company.
- Gree Appliance +10.0% is limit up. Its parent company intends to sell a 15.0% stake. The general commentary is this will improve corporate structure and operational efficiency.
- Wynn Resorts is conducting talks to acquire Crown Resorts +19.7%. The deal is said to put a valuation on Crown of c. A$10b and is A$14.75 per share. That is c. 26.0% premium to yesterday’s close and will put quite a few shrimp on the bar-b.
- The Chinese auto sector had a number of important headlines. Byd’s +1.2% new energy vehicle sales improve by 116.0% y/y during March. Total sales are 8.5% higher. Geely Auto’s +0.9% are 3% to the upside and the company saw a double upgrade at BoAML. The sales increases buck the trend for the industry. The Passenger Care Assoc. says overall sales for the month are lower by 12.0% y/y.
- After the local close, Japan’s Ministry of Finance confirmed a Nikkei report the government will reduce its stake of Japan Post Holding. The government currently holds c. 57.0% and will place roughly $12b worth of stock, possibly by September. The nation will retain a stake exceeding 1/3 which is required by law.
After a sluggish start, the region moved to highs on Brexit headlines which we will outline below. The markets are slowing fading from the day’s highs and is now flat. Pres. Trump has tweeted about more tariffs (see Airbus below). Banks are higher c. 1% being followed by insurance, healthcare, telecoms and energy. Technology creates the biggest drag off more than 0.5%. Travel/leisure, industrials, travel/leisure and autos weighing.
The Brexit news is a BBC report stating German Chancellor would be willing to put a 5 year time limit on the Irish backstop. This has not been confirmed. PM May is scheduled to meet with Chanc. Merkel and French Pres. Macron today. She will make her case for another delay to her nation’s withdrawal from the EU. An emergency EU meeting is schedule for tomorrow in Brussels. Another item said to be on the meeting’s agenda, is a joint EU/Chinese statement regarding the US tariff actions.
There is other news on the political front. Israel holds elections in a hotly, contested race. If reelected, PM Natanyahu would hold the office for a record 5th term. In Turkey, Pres. Erdogan’s party is demanding a rerun of the Istanbul mayoral elections.
- Airbus -1.7% suffers with Pres. Trump directing his cross-hairs at the company. He is threatening to impose tariffs c. $11b on European goods because of subsidies for the plane maker.
- The Novartis -1.4% spin-off of Alcon +6.0% occurs today in Switzerland. The shares will also commence trading on the NYSE.
- The shares of Debenhams are halted. Talks with Sports Direct +2.4% has concluded without a deal. This leaves the troubled retailer with few options to resolve its credit woes.
- The demand for Aramco’s $1ob USD denominated bond is now said to exceed $100b.
On Our Side of the Pond
- CEOs of various pharmacies and health care management companies present on Capitol Hill today.
- Earnings due this morning include Shaw Comm. with Levi Strauss due after the close.
- Not much on the macro front but the JOLTS data is due and API crude data after the close.
Markets and Macro
|UK||BRC Sales Like-For-Like YoY||Mar||-0.80%||-1.10%||-0.10%||—|
|AU||ANZ Roy Morgan Weekly Consumer Confidence Index||7-Apr||—||113.2||114.7||—|
|AU||Home Loans MoM||Feb||0.50%||0.80%||-1.20%||-0.80%|
|AU||Owner-Occupier Loan Value MoM||Feb||1.00%||3.40%||-1.30%||-0.90%|
|IT||Istat Publishes Revisions to GDP, Deficit, Debt for 2018, 2017|
|IT||Retail Sales MoM||Feb||-0.20%||0.10%||0.50%||0.60%|
|IT||Retail Sales YoY||Feb||—||0.90%||1.30%||1.20%|
|US||NFIB Small Business Optimism||Mar||102||101.8||101.7||—|
|US||JOLTS Job Openings||Feb||7550||—||7581||—|