Following yesterday’s ECB and US macro headlines, most of the region trades lower. The mainland Chinese markets managed to reverse earlier losses. The KOSPI settled lower for the third consecutive session. N. Korea commented on yesterday’s missile test as a warning to “war mongering” by their southern cousins.
Most sectors end the day lower. Telcos, consumer staples, consumer discretionary and IT were off by c. 0.5%. Healthcare is the only sector that managed to gain, ending the day 0.4% better.
- Nissan Motors -3.2% trades lower again. The results released after yesterday’s close were a bit worse than the Nikkei report from the previous day. The company will make global job cuts of 12,500 while trimming overall production.
- Q1 at Fujitsu +9.8% is better than expected showing an unexpected profit. The company says revenues improved significantly.
- MGM China’s +0.9% Q2 gross gambling revenues are a positive surprise with the new Cotai property performing well.
- Softbank +1.0% is launching its 2nd Vision Fund. It has raised $108b with Apple among the investors.
After a sluggish start, the region is now higher by c. 0.4%. However, the Spanish and Italian markets are trading lower with political uncertainty weighing. Spain’s PM Sanchez continues his struggle to form a government. Leaders of Italy’s coalition are meeting today to discuss their squabbles.
Sectors are seeing media and telcos higher by c. 2% with food & beverages improving by 1.5%. Retail is 1% with basic resources the next worst performer.
Plenty of High Profile Earnings Again
- Vodafone +8.9%: Q1 Organic Service revenue -0.2% and the company maintains its FY guidance. However, the day’s focus is its plan to split out its towers into a separate entity. The company is considering an IPO or minority stake sale.
- Vivendi +5.7%: H1 Sales of €7.35b improve 6.7% y/y and are ahead of consensus € 7.14b. Universal Music Group performance is strong as the company seeks to sell a minority stake.
- Michelin -3.0%: H1 Sales of €11.78b are inline. Oper. Income of €1.44b is a touch light. NI is well below at €844m vs. €978me. The company reiterates it FY guidance but sounds like tone on the conference call making people wary with the company lowering overall market forecast.
- Kering -6.5%: The stretch of strong results at Gucci appears to be waning. Q2 LFLs at the luxury unit are +12.7% but that lags consensus of +14.5%.
- Pearson +4.5%: The company’s strategic move to digital appears to be paying off. H1 adj. oper. profit of £144m is ahead of expectations: £136m. Cost savings are also making strong contributions to the bottom lines. The company is raising its FY EPS view. It now sees them at 57.5p to 63p. The previous range was 53.5p to 59p.
On Our Side of the Pond
- Intel’s Q2 revenues and earnings fell less than thought. The company is raising its Q3 EPS outlook. It officially announces the sale of its chip/modem unit to Apple.
- Amazon’s operating income is viewed to be disappointing.
- Both Alphabet, Starbucks and Twitter are rising following their releases.
- The House of Representatives passed the debt limit deal. It now moves to the Senate where it is also expected to be approved.
- The U.S. GDP will be focus on the marco front.
Have a good weekend!
Markets & Macro
|JN||Tokyo CPI YoY||Jul||1.00%||0.90%||1.10%||—|
|JN||Tokyo CPI Ex-Fresh Food YoY||Jul||0.80%||0.90%||0.90%||—|
|JN||Tokyo CPI Ex-Fresh Food, Energy YoY||Jul||0.70%||0.80%||0.80%||—|
|GE||Import Price Index MoM||Jun||-0.70%||-1.40%||-0.10%||—|
|GE||Import Price Index YoY||Jun||-1.30%||-2.00%||-0.20%||—|
|SP||Total Mortgage Lending YoY||May||—||18.80%||-2.50%||—|
|SP||House Mortgage Approvals YoY||May||—||11.20%||-0.10%||—|
|IT||Consumer Confidence Index||Jul||109.6||113.4||109.6||109.8|
|EC||ECB Survey of Professional Forecasters|
|IT||Hourly Wages YoY||Jun||—||0.70%||1.40%||—|
|IT||Hourly Wages MoM||Jun||—||0.10%||0.00%||—|
|US||Revisions: National Income and Accounts (GDP)|
|US||GDP Annualized QoQ||2Q A||1.80%||—||3.10%||—|
|US||Personal Consumption||2Q A||4.00%||—||0.90%||—|
|US||GDP Price Index||2Q A||2.00%||—||0.90%||—|
|US||Core PCE QoQ||2Q A||2.00%||—||1.20%||—|