Markets Over View
Following the reaction to yesterday’s news out of Hong Kong and corresponding sell-off, it is no surprise the Asian markets. Hong Kong saw the heaviest selling pressure. Japan returned from its three day weekend to trade lower with a stronger ¥ vs. Friday’s close weighing. The TOPIX losses erase the gains that had been made YTD. Singapore managed to trade to the upside following its own three day holiday.
Most of the Asian sectors end the day to the downside. In fact, energy was the only one to manage an uptick. Losses of 1% or greater occurred among telcos, consumer discretionary, real estate and financials to name a few.
The European markets are continuing to see selling pressure. Equities set new lows following ZEW readings for both Germany and the EU that are well below expectations. Also, once again outbound flights from Hong Kong International airport have been canceled.
The debt markets are seeing yields continuing to move lower. However, Italian yields are not taking part. A story that has been lost among some of the other global headlines is the political unrest in Italy. Post the local close, the Italian parliament will meet to determine when a confidence vote will be held for the current coalition. Commodities see gold higher c. 1% paring even stronger gains earlier in the day.
- Henkel -7.1%: Q2 EBIT is below expectations. The company now forecasts flat sales growth and a decline in EPS of c. 10.0%. It cites slowing sales in China for some personal goods along with slowing demand from the auto sector.
- Bridgestone -3.2% deflated following results from Friday. The company cut its FY OP from ¥410b to ¥375b which is below the Bloomberg range.
- Swiss Life -1.3%: Both H1 OP and NI are ahead of consensus. The shares were up small to flat but then dipped as Europe made new lows.
- Challenger +2.5% post results. The initial reaction was even stronger before paring the advance. Some of the initial surge was attributed to short selling. Company hit its prior revised target of norm. PBT of A$548.3m. It is seeing inflows in certain categories bucking market trend. Affirms FY20 outlook: norm. PBT A$500 to A$550m with a stable dividend.
On Our Side of the Pond
- Keep your eyes peeled for CBS/Viacom news as merger negotiations continue.
- Tencent Music Group is falling sharply in pre-market trading. Revenues of CNY 5.9b are a slight miss vs. CNY5.95b expected. Slowing ARPPU is worrisome which is slowing growth from 28.0% in the previous quarter to 16.5%.
- JD.com’s Q2 results and Q3 outlook are boosting the shares pre-market.
- Keep your eyes peeled for more fallout down in Argentina and the U.S. CPI is due.
Markets & Macro
|AU||ANZ Roy Morgan Weekly Consumer Confidence Index||11-Aug||—||115.5||115.8||—|
|AU||NAB Business Conditions||Jul||—||2||3||4|
|AU||NAB Business Confidence||Jul||—||4||2||—|
|CH||Foreign Direct Investment YoY CNY||Jul||—||8.70%||8.50%||—|
|SK||Money Supply L SA MoM||Jun||—||0.40%||0.30%||—|
|SK||Money Supply M2 SA MoM||Jun||—||0.70%||0.40%||—|
|SK||Bank Lending To Household Total||Jul||—||KR854.7t||KR848.9t||KR849.0t|
|JN||Tertiary Industry Index MoM||Jun||-0.10%||-0.10%||-0.20%||0.00%|
|GE||Wholesale Price Index YoY||Jul||—||0.10%||0.30%||—|
|GE||Wholesale Price Index MoM||Jul||—||-0.30%||-0.50%||—|
|GE||CPI MoM||Jul F||0.50%||0.50%||0.50%||—|
|GE||CPI YoY||Jul F||1.70%||1.70%||1.70%||—|
|GE||CPI EU Harmonized MoM||Jul F||0.40%||0.40%||0.40%||—|
|GE||CPI EU Harmonized YoY||Jul F||1.10%||1.10%||1.10%||—|
|JN||Machine Tool Orders YoY||Jul P||—||-33.00%||-37.90%||—|
|EC||SURVEY REPORT: Euro Area Economic Forecasts in Aug. 2019|
|SP||CPI Core MoM||Jul||—||-0.80%||0.20%||—|
|SP||CPI Core YoY||Jul||—||0.90%||0.90%||—|
|SP||CPI MoM||Jul F||-0.60%||-0.60%||-0.60%||—|
|SP||CPI YoY||Jul F||0.50%||0.50%||0.50%||—|
|SP||CPI EU Harmonised MoM||Jul F||-1.10%||-1.10%||-1.10%||—|
|SP||CPI EU Harmonised YoY||Jul F||0.70%||0.60%||0.70%||—|
|UK||SURVEY REPORT: U.K. Economic Forecasts in August 2019|
|UK||Claimant Count Rate||Jul||—||3.20%||3.20%||—|
|UK||Jobless Claims Change||Jul||—||28.0k||38.0k||31.4k|
|UK||Average Weekly Earnings 3M/YoY||Jun||3.70%||3.70%||3.40%||3.50%|
|UK||Weekly Earnings ex Bonus 3M/YoY||Jun||3.80%||3.90%||3.60%||—|
|UK||ILO Unemployment Rate 3Mths||Jun||3.80%||3.90%||3.80%||—|
|UK||Employment Change 3M/3M||Jun||60k||115k||28k||—|
|GE||ZEW Survey Current Situation||Aug||-6.3||-13.5||-1.1||—|
|GE||ZEW Survey Expectations||Aug||-28||-44.1||-24.5||—|
|EC||ZEW Survey Expectations||Aug||—||-43.6||-20.3||—|
|US||NFIB Small Business Optimism||Jul||104||104.7||103.3||—|
|US||CPI Ex Food and Energy MoM||Jul||0.20%||—||0.30%||—|
|US||CPI Ex Food and Energy YoY||Jul||2.10%||—||2.10%||—|
|US||CPI Core Index SA||Jul||263.302||—||262.803||—|
|US||CPI Index NSA||Jul||256.441||—||256.143||—|
|US||Real Avg Hourly Earning YoY||Jul||—||—||1.50%||—|
|US||Real Avg Weekly Earnings YoY||Jul||—||—||1.20%||—|