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08.21.2019 18 new Morning Note posts under Morning Note (10) and International Summary (8)

International Summary

News Trading Desk

International Summary

"CAPIS Global Markets 7/31/2019"

posted by Matthew Kiselica on 07/31/2019 at 6:54 am

by Matthew Kiselica

07/31/2019 at 6:54 am

Asian Markets

Core markets down across the board as the Sino-U.S. trade talks end early with no apparent progress made.  China’s official July Manufacturing number was below the key 50 expansion level for the third consecutive month.  Hong Kong only had a half day of trading.  Authorities canceled the afternoon session with a tropical storm in the region.

The majority of sectors end the day to the downside.  Real estate is the worst performer lower by more than 1%.  Consumer discretionary and telcos end off shy of that mark.  Utilities and healthcare hold steady.

Earnings from the Region

  • Samsung Elec. -2.6%: Q2 revenues are off 4% to KRW 56.1t with NI lower 54.0% to KRW 5.06t.  The company did note increased memory chip demand.  The US China trade talks and potential Japanese trade action cloud its outlook.
  • Sony +5.3%: While revenues are 1.4% lower and NI -32.8%, OP improves by 18.4% crushing consensus.
  • SMFG -1.0%: Q1 NI is lower by 5% y/y.  The company saw increased NPL costs in conjunction with lower lending.
  • A slew of Japanese companies released after the local close including MUFG, Japan Tobacco, Diawa Sec., Nomura and Takeda Pharmaceutical.

European Markets

For the most part, the markets have been trading sideways thus far.  It is a heavy earnings day which is driving sector performance.  They are fairly split.  Construction gains by c. 1% with autos, retail and energy better c. 0.5%.  Personal goods, basic resources and utilities are off c. 0.5%.

Earnings Snippets

  • Credit Suisse +4.2%: Q2 Revenues CHF 5.58b vs. CHF 5.34b expected, NI CHF 937m vs. CHF 788m expected.  Wealth management saw inflows of CHF 9.5b.  Fixed income trading revenues +6% offsetting 1% decline in equities.
  • BNP +3.6%: Q2 Revenues €11.2b NI €2.47b vs. €2.1be.  Debt trading revenue increase of 9% positive surprise.  Reassuring results overall.
  • L’Oreal -3.9%: Q2 LFLs miss: +6.8% vs. 7.1%e.  Does NOT see improvement in the U.S. cosmetics market during H2.
  • Lloyds -4.6%: Q2 PTP miss of £1.3b vs. £1.76b expected.  Takes PPI provision of £550m due to the sales scandal.  NII also disappoints.
  • Airbus +0.4%: Q2 adj. EBIT  €1.98b beating estimates and up 72.0% y/y.  Reiterates guidance of up to 890 aircraft deliveries, EBIT gain of 15.0% & FCF of €4b.
  • Next +8.1%: Q2 sales are ahead of projections.  Retails sales are off 4.2% but that is considerably better than the 10.6% decline anticipated.  Online sales also beat, improving 12.0% vs. +9.68% expected.  The company is raising its EPS growth projection to +5.2% from +3.4%.

Mind your eye with plenty more out there!

On Our Side of the Pond

  • Apple’s Q4 sales guidance puts the bottom end of the range ($61b to $64b) at consensus.
  • Conversely, AMD’s Q3 revenue guidance of $1.75b to $1.85b is below Street projections of $1.94b.
  • GE’s Q2 adj. EPS are better than projections by 5 cents.  The company is raising both its earnings and cash flow projections.
  • Credit Suisse places block of Charter Communications: 3m shares at $389 per share.
  • Slew more on the tape this morning.
  • Of course, today’s FOMC decision is the real key.  The market is anticipating a 25 bps reduction to the benchmark rate.

Markets & Macro

Markets Snapshot

Event Survey Actual Prior Revised
SK Industrial Production SA MoM Jun 0.30% 0.20% -1.70% -1.30%
SK Industrial Production YoY Jun -2.00% -2.90% -0.20% 0.20%
SK Cyclical Leading Index Change Jun -0.2 -0.2
UK GfK Consumer Confidence Jul -13 -11 -13
UK BRC Shop Price Index YoY Jul -0.10% -0.10%
JN Loans & Discounts Corp YoY Jun 2.73% 3.24%
CH Composite PMI Jul 53.1 53
CH Manufacturing PMI Jul 49.6 49.7 49.4
CH Non-manufacturing PMI Jul 54 53.7 54.2
AU CPI QoQ 2Q 0.50% 0.60% 0.00%
AU CPI YoY 2Q 1.50% 1.60% 1.30%
AU CPI Trimmed Mean QoQ 2Q 0.40% 0.40% 0.30%
AU CPI Trimmed Mean YoY 2Q 1.50% 1.60% 1.60%
AU CPI Weighted Median QoQ 2Q 0.40% 0.40% 0.10%
AU CPI Weighted Median YoY 2Q 1.20% 1.20% 1.20% 1.40%
AU Private Sector Credit MoM Jun 0.30% 0.10% 0.20% 0.10%
AU Private Sector Credit YoY Jun 3.50% 3.30% 3.60%
JN Vehicle Production YoY May 9.30% 4.70%
JN Housing Starts YoY Jun -2.20% 0.30% -8.70%
JN Annualized Housing Starts Jun 0.900m 0.922m 0.900m
JN Construction Orders YoY Jun -4.20% -16.90%
JN Consumer Confidence Index Jul 38.4 37.8 38.7
IN Bloomberg July India Economic Survey (Table)
HK Money Supply M1 HKD YoY Jun -5.70% -5.90%
HK Money Supply M2 HKD YoY Jun 3.50% 2.80%
HK Money Supply M3 HKD YoY Jun 3.50% 2.80%
GE Retail Sales MoM Jun 0.50% 3.50% -0.60% -1.70%
GE Retail Sales NSA YoY Jun 0.00% -1.60% 4.00% 3.80%
UK Nationwide House PX MoM Jul 0.20% 0.30% 0.10%
UK Nationwide House Px NSA YoY Jul 0.10% 0.30% 0.50%
FR CPI EU Harmonized MoM Jul P -0.30% -0.20% 0.30%
FR CPI EU Harmonized YoY Jul P 1.20% 1.30% 1.40%
FR CPI MoM Jul P -0.30% -0.20% 0.20%
FR CPI YoY Jul P 1.10% 1.10% 1.20%
SP GDP QoQ 2Q P 0.60% 0.50% 0.70%
SP GDP YoY 2Q P 2.30% 2.30% 2.40%
GE Unemployment Change (000’s) Jul 2.0k 1.0k -1.0k 0.0k
GE Unemployment Claims Rate SA Jul 5.00% 5.00% 5.00%
IT Unemployment Rate Jun P 10.00% 9.70% 9.90% 9.80%
SP Current Account Balance May 2.7b -0.4b
HK GDP YoY 2Q A 1.50% 0.60% 0.60%
HK GDP SA QoQ 2Q A 0.90% -0.30% 1.30%
HK Budget Balance HKD Jun -10.5b -10.0b
EC Unemployment Rate Jun 7.50% 7.50% 7.50% 7.60%
EC GDP SA QoQ 2Q A 0.20% 0.20% 0.40%
EC GDP SA YoY 2Q A 1.00% 1.10% 1.20%
EC CPI Core YoY Jul A 1.00% 0.90% 1.10%
EC CPI Estimate YoY Jul 1.10% 1.10% 1.30%
IT CPI EU Harmonized YoY Jul P 0.50% 0.40% 0.80%
IT CPI EU Harmonized MoM Jul P -1.70% -1.70% 0.10%
IT CPI NIC incl. tobacco YoY Jul P 0.50% 0.50% 0.80% 0.70%
IT CPI NIC incl. tobacco MoM Jul P 0.10% 0.10% 0.20% 0.10%
IT GDP WDA YoY 2Q P -0.10% 0.00% -0.10%
IT GDP WDA QoQ 2Q P -0.10% 0.00% 0.10%
US MBA Mortgage Applications 26-Jul -1.40% -1.90%
IN Eight Infrastructure Industries Jun 5.10%
US ADP Employment Change Jul 150k 102k
US Employment Cost Index 2Q 0.70% 0.70%
CA GDP MoM May 0.10% 0.30%
CA GDP YoY May 1.30% 1.50%
CA Industrial Product Price MoM Jun -0.20% 0.10%
CA Raw Materials Price Index MoM Jun -3.00% -2.30%
US MNI Chicago PMI Jul 51 49.7
US FOMC Rate Decision (Upper Bound) 31-Jul 2.25% 2.50%
US FOMC Rate Decision (Lower Bound) 31-Jul 2.00% 2.25%
US Interest Rate on Excess Reserves 1-Aug 2.10% 2.35%

About the Author

Matthew Kiselica headshot
MatthewKiselicaFVP,Manager of International Trading

Matthew Kiselica joined CAPIS in 2010 and has over twenty-five years of industry experience. Prior to CAPIS, he was vice president of Cazenove’s global sales trading desk in New York. Matthew is a board member for the National Psoriasis Foundation. He earned his bachelor’s degrees in fina...

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