Asian markets kicked off the week mostly lower with South Korea underperforming the region. Names in the semiconductor space suffered with the tiff between them and Japan continuing. The Nikkei though held in well, off small on the day, with Softbank +3.9% up strong. The firm is investing big in Indonesia with further action expected. The tech space in Japan was generally weaker today while Real Estate names led lower both in Hong Kong and on the mainland. Speaking of Hong Kong, clashes with protesters and the government continued with China noting they support CE Lam and the suspension of the extradition bill. However, post the white paper essentially offering the use of the mainland’s military China urged HK to quell the protests and punish those involved in violence. To the upside, Australia ticked a bit higher on strength in IT and Communication names. On the economic front official PMI readings are due in China tomorrow, this after Industrial Profits disappointed Friday. Trade talks are reported to continue between the US and China Tuesday and Wednesday. The BoJ meets Tuesday and Wednesday as well.
Automation-component maker Keyence fell 4.4% on disappointing earnings from Friday. Amid trade tensions manufacturers are reticent to expand production despite some growth seen in the States.
Ssangyong Motors slipped 8% in SK with R&D and marketing costs pushing the firm to a 2Q loss.
Despite threats of reduced exports of rare earth materials by China, Australia’s Lynas fell 2.3% after reporting disappointing 4Q revenues. Demand from China was noted as remaining soft. On the lower prices the firm said it was limiting sales of neodymium and preseodymium and would instead build its inventory. The firm is also in a quabble with Malaysia concerning a license renewal.
Post the close, China Life said they expect 1H NI to be higher by 115-135% YoY. Upward moves in their domestic stock market buoyed investment returns leading to the uptick in NI.
Moves in Europe are slight with the bias to the downside. The UK though is the outlier and is higher on the day on broad strength. Efforts are underway to negotiate a better deal with the EU but the view is a stance on the Irish backstop will prevent that. With that said the UK’s Trade Minister said a Free Trade Agreement with the US is now a main priority. The Pound continues lower, plumbing levels not seen since early 2017.
Sector-wise, most are to the upside led by gains in Telcos and Financials. Autos lag with weakness in the banking sector. Turnover on the Stoxx 600 is currently down 2%.
Heineken -5.7% said 1H organic beer volumes were up only 3.1% vs the 3.6% expected rise leading to a 1H adj op profit that missed estimates. Poor weather in Europe was cited for sales weakness with higher aluminum costs weighing as well.
Sanofi +2.5% upped their FY19 view on a stronger 2Q. This despite taking a $2B charge related to its hemophilia drug Electate as competition crimped sales. Novartis -1% is lower after missing a primary endpoint for its heart drug Paragon.
On a deal to buy Refinitive from Thomson Reuters and Blackstone, the LSE is up 15%. The move gives the LSE further inroads into the US as it owns Tradeweb, Redi, and Eikon.
Bad news at Sports Direct -8.6% keeps a coming with a tax bill of $750M adding to the loss of their CFO and weakness at their House of Fraser unit. The tax bill came from Belgium and is going to arbitration over it. No dividend is expected this year but the company still plans to repurchase £30M in shares.
|JN||1)||Retail Sales YoY||Jun||0.20%||0.50%||1.20%||1.30%|
|JN||2)||Retail Sales MoM||Jun||-0.30%||0.00%||0.30%||0.40%|
|JN||3)||Dept. Store, Supermarket Sales YoY||Jun||-0.60%||-0.50%||-0.50%||—|
|IR||4)||Bank of Ireland Economic Pulse||Jul||—||82.8||90.7||—|
|SP||7)||CPI MoM||Jul P||-0.70%||-0.60%||-0.10%||—|
|SP||8)||CPI YoY||Jul P||0.60%||0.50%||0.40%||—|
|SP||9)||CPI EU Harmonised MoM||Jul P||-1.20%||-1.10%||-0.10%||—|
|SP||10)||CPI EU Harmonised YoY||Jul P||0.60%||0.70%||0.60%||—|
|SP||11)||Retail Sales YoY||Jun||—||0.30%||3.10%||—|
|SP||12)||Retail Sales SA YoY||Jun||2.70%||2.40%||2.40%||2.60%|
|SZ||13)||Total Sight Deposits CHF||26-Jul||—||581.2b||579.5b||—|
|SZ||14)||Domestic Sight Deposits CHF||26-Jul||—||477.1b||477.5b||—|
|AS||15)||Bank Austria Manufacturing PMI||Jul||—||47||47.5||—|
|UK||18)||Net Consumer Credit||Jun||0.9b||1.0b||0.8b||0.9b|
|UK||19)||Consumer Credit YoY||Jun||—||5.50%||5.60%||5.70%|
|UK||20)||Net Lending Sec. on Dwellings||Jun||3.5b||3.7b||3.1b||2.9b|
|UK||22)||Money Supply M4 MoM||Jun||—||0.10%||-0.10%||—|
|UK||23)||M4 Money Supply YoY||Jun||—||2.30%||2.20%||2.10%|
|UK||24)||M4 Ex IOFCs 3M Annualised||Jun||—||2.50%||2.80%||2.70%|