Most of the region managed to gain to one extent or the other. The markets were better bid on yesterday’s story the U.S. trade delegation would head to China. The second major news was news breaking overnight Pres. Trump and congressional leaders reached a debt ceiling agreement. That boosted the “Greenback” and a weakening ¥ caused Japan to lead. One market that did not take part in gains was the Chinese STAR exchange. In its 2nd day of trading 21 of the 25 names ended the day lower. However, it should be noted they averaged gains of 140.0% yesterday.
Most sectors end the day to the upside. IT led followed by industrials, utilities, consumer discretion and telcos. All gained 0.5% or more. Real estate is the only decliner of note, off 0.5%.
- Some of the IT gains were driven by yesterday’s meeting between Pres. Trump and U.S. technology company leaders. Statements were interpreted to mean the President may be taking a less severe tact regarding Huawei.
- CNBC is reporting the DoJ may approve the Sprint/T-Mobile merger tomorrow. This lifted Softbank +4.0%.
- With an hour to go in Hong Kong trading, BAIC +2.8% disclosed its had taken a 5% stake in Daimler +4.8%.
Europe has been trading to the upside since the open and is currently near highs. In addition to the same themes that boosted Asia, there are a number of high profile results providing additional updraft to the markets which we will address below.
The bulk of sectors are advancing. Autos are driving higher by more than 4%. Basic resouces and chemicals are improving by 2%. Banks, industrials, tech and energy are better by at least 1%. Retail is the only sector showing any decline worth noting, curently lower c. 0.4%.
It’s official, Boris Johnson is the U.K.’s new Prime Minister. This should make for some rather lively Brexit debates in the coming weeks.
- While Continental +6.1% lowered its outlook, investors are relieved. Its prior guidance was deemed to be unrealistic and hence the reason the shares have fallen 20.0% during the past few month. Also, among autos parts makers, Faurecia +10.5% confirmed its outlook.
- Q2 earnings at UBS +2.7% are the highest for the quarter since 2010. While earnings at the investment bank fell 23.0%, they were ahead of consensus. The Global Wealth Management unit saw outflows of $2b. The banks cited large tax related outflows in the States.
- Revenues at AMS +5.9% for Q2 are ahead of expectations: $415.2m vs. $404.7me. Perhaps more importantly, the chipmaker sees Q2 revenues in the range of $600 to $640m which is ahead of the range.
- Hermes -0.2% has posted results that are generally cited to be solid across the board. However, the shares are seeing some muted profit taking. The shares have risen by 40.0% this year.
On Our Side of the Pond
- Last night, Pres. Trump announced a bipartisan deal that would suspend the debt ceiling for two years and permit increased spending.
- Reports say Apple is set in advanced talks to purchase Intel’s smartphone-modem chip unit.
- Harley Davidson is cutting its FY motorcycle shipment view.
- Coca-Cola is forecasting FY organic revenue growth of 5% vs. its previous outlook of +4% and consensus of 4.9%.
- Plenty more on the tape this morning including Biogen, Fifth Third, Lockheed and United Technologies this morning. Canadian National and Visa after the close.
Markets & Macro
|AU||ANZ Roy Morgan Weekly Consumer Confidence Index||21-Jul||—||116.3||115.8||115.9|
|JN||Supermarket Sales YoY||Jun||—||-0.50%||-0.70%||—|
|JN||Nationwide Dept Sales YoY||Jun||—||-0.90%||-0.80%||—|
|JN||Tokyo Dept Store Sales YoY||Jun||—||-1.30%||-1.60%||—|
|JN||Machine Tool Orders YoY||Jun F||—||-37.90%||-38.00%||—|
|UK||CBI Trends Total Orders||Jul||-15||-34||-15||—|
|UK||CBI Trends Selling Prices||Jul||—||12||4||—|
|UK||CBI Business Optimism||Jul||-20||-32||-13||—|
|US||FHFA House Price Index MoM||May||0.40%||—||0.40%||—|
|US||Richmond Fed Manufact. Index||Jul||5||—||3||—|
|EC||Consumer Confidence||Jul A||-7.1||—||-7.2||—|
|US||Existing Home Sales||Jun||5.32m||—||5.34m||—|
|US||Existing Home Sales MoM||Jun||-0.40%||—||2.50%||—|