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11.12.2019 11 new Morning Note posts under Morning Note (9), General (1), International Summary (1)

International Summary

News Trading Desk

International Summary

"CAPIS Global Recap – 8/15/2019"

posted by Clayton Duff on 08/15/2019 at 6:56 am

by Clayton Duff

08/15/2019 at 6:56 am

Asian Headlines

Asian indices closed mixed with with Australia underperforming as Energy and IT names closed ~5% lower.  Energy and Consumer goods weighed in Japan as the Nikkei was the second worst performer in the region.  The mainland closed better, up small, with most sectors seeing slight gains. South Korea was shut.  Apart from Australia most markets were able to shake off early weakness post the US session to end better than the open.

Apart from the usual suspects, China reported Home Prices up .59% MoM, a slight slowdown from the previous uptick of .66%. The PBoC injected CNY400B today via a MLF which offset the CNY383B which matured today.  Also, the Yuan midpoint reference was upped today to 7.0268, stronger than the 7.0312 seen prior. Headlines out of Hong Kong concerning protests were less so allowing for a small rebound there today.  But note, after the close the country lowered their GDP view for the year, reducing expected growth to essentially flat.  Previously growth of 2-3% was expected but the continuing demonstrations have weighed.  They confirmed HK$19.1B of stimulus will be instituted including giving non-college students HK$2500.  It was announced the stimulus moves were not related to the protests….right.  To note, the military continues to amass vehicles and troops in a further bid to quell protests without drawing international ire with violent oppression. Trump did comment on the protests today noting that while talks are going well China needs to work humanely with HK before a deal is reached.  He did say tariffs were hurting the country but that China was devaluing the Yuan to essentially for them.  In Japan, Industrial Production readings were a hair better then previously seen but still showing contraction.  Down under, employment growth was strong in July, up 41.1k, with strong gains in both full time and part time employment.

Ahead of Alibaba earnings today Tencent closed off 2.8%, ahead of earlier weakness. Post the close Wednesday the firm saw revenues light of estimates with 2Q NI of 24.14B Yuan though ahead of the 21.10B estimate.  Also reporting, Lenovo fell 6% on inline revenues even as 1Q NI of $162M beat the $152.2M estimate.  The firm was able to retake the PC crown from HP, now accounting for 25% of the world’s PC market.  Strong orders from India were cited.

Woodside Petroleum fell 6.7% after 1H NI fell 23%.  The firm cited the impact from Tropical Cyclone Veronica along with maintenance and expansion costs.  After the close JPM upped the name to Neutral.

European Headlines

After a slightly better start and holding in for the first two hours market are again to the downside. Indices pulled back with a Chinese gov committee noting the country will take countermeasures against the US.  China said the US is violating an agreement between Trump and Xi reached at the G-20 meeting in Osaka earlier in the summer.  However, post lunch a Foreign Ministry spokesperson said the leaders are hopeful the US can meet them half way on trade issues.  On this, only Utilities, Food, and Personal Goods are up while the balance of sectors are lower, led by Basic Resources, Energy, and Chemical names. Only 103 names are higher on the Stoxx 600 with volume though off 24%.

Norway resisted the global push to east, instead keeping their deposit rate at 1.25% which was expected. They noted that while global risks remain their economy is performing better.  The country did say though underlying inflation was a bit weaker than forecasts but added the policy rate would most likely be increased later in the year. In the UK, Labour leader Corbyn has said to have circulated a letter urging support in toppling PM Johnson.  The Pound is stronger with continued gains seen after Retail Sales there beat estimates. Italy is shut today.

Earnings too continue to be released with AP Moeller Maersk flat as 2Q revs missed.  Ebitda was ahead and the firm confirmed FY views while noting synergies on mergers have been quick.  CEO Skou hopes to be invited to meet President Trump when he is in Denmark in early September adding he wants to talk up free trade.

To the upside Carlsberg +3.9% retained their FY view after a strong 1H on solid Asian biz.  Further, the company will start a DKK2B stock buyback.  Jefferies said another guidance increase could come later.

Vestas Wind -3.6% saw 2Q revs miss with the high end of the ebit margin range curtailed.

Ahead in the States, Cisco is indicating down over $4 post yesterday’s paring of revenue growth while Alibaba is up post noting better revs and eps.  The firm will purchase Netease’s Kaola for $2B.

Event Survey Actual Prior Revised
AU 61) Consumer Inflation Expectation Aug 3.50% 3.20%
JN 62) Bloomberg Aug. Japan Economic Survey (Table)
CH 63) New Home Prices MoM Jul 0.59% 0.66%
AU 64) Employment Change Jul 14.0k 41.1k 0.5k -2.3k
AU 65) Unemployment Rate Jul 5.20% 5.20% 5.20%
AU 66) Full Time Employment Change Jul 34.5k 21.1k 21.0k
AU 67) Part Time Employment Change Jul 6.7k -20.6k -23.3k
AU 68) Participation Rate Jul 66.00% 66.10% 66.00%
AU 69) RBA FX Transactions Market Jul A$837m A$1478m
AU 70) RBA FX Transactions Government Jul -A$961m -A$1546m
AU 71) RBA FX Transactions Other Jul -A$4377m A$3845m
NE 72) Retail Sales YoY Jun 0.10% 4.40% 4.30%
NE 73) Unemployment Rate Jul 3.40% 3.40%
JN 74) Industrial Production MoM Jun F -3.30% -3.60%
JN 75) Industrial Production YoY Jun F -3.80% -4.10%
FI 76) Current Account Balance Jun 0.79b 0.32b 0.63b
JN 77) Capacity Utilization MoM Jun -2.60% 1.70%
NO 78) Consumer Confidence 3Q 17.1 12.8 13.9
DE 79) PPI MoM Jul 0.50% -0.80%
DE 80) PPI YoY Jul -2.20% -2.50%
NO 81) Trade Balance NOK Jul 6.5b 5.2b 5.6b
SW 82) Prospera Swedish Inflation Expectations Survey
SZ 83) Producer & Import Prices MoM Jul -0.20% -0.10% -0.50%
SZ 84) Producer & Import Prices YoY Jul -1.70% -1.70% -1.40%
NO 85) Deposit Rates 15-Aug 1.25% 1.25% 1.25%
UK 86) Retail Sales Ex Auto Fuel MoM Jul -0.20% 0.20% 0.90% 0.80%
UK 87) Retail Sales Ex Auto Fuel YoY Jul 2.30% 2.90% 3.60%
UK 88) Retail Sales Inc Auto Fuel MoM Jul -0.20% 0.20% 1.00% 0.90%
UK 89) Retail Sales Inc Auto Fuel YoY Jul 2.50% 3.30% 3.80%
IR 90) Trade Balance Jun 4226m 6501m 6259m

 

About the Author

Clayton Duff headshot
ClaytonDuffFVP,Senior International Trader

Clayton Duff joined the firm in 2008. He has worked in the industry since 1994 and held various trading and sales positions before CAPIS, including four years as a trader for First Southwest. He earned his bachelor’s degree from the University of Texas Arlington. Clayton maintains Series 3,...

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