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Asian Markets Following yesterday’s disappointing U.S. sales data, the region traded lower.  However, there are other reasons the markets saw selling pressure.  Rumors indicate both parties still have significant hurdles to overcome to reach a Sino-U.S. trade accord.  (More on this later.)  Macro concerns also raised their head again.  Both Chinese CPI and PPI fell short of consensus.  The PPI slowed for the 5th consecutive month during January. The selling was widespread and all the major sectors ended the day to the downside.  Losses of 1% or more were experienced in real estate, financials, telcos, real estate and materials.  Macau gaming stocks were out of favor.  Chinese actions to reign in shadow banking activity especially pertaining to foreign currency transactions are a major concern. Other Important Headlines Coca Cola Bottling Japan -8.9% suffered an even worse drubbing than its parent following results. Kubota’s -7.0% FY results for OP and NI are light of its own projections by 7.2% and 4.4%, respectively Dai-Ichi Life -4.7% increased it FY sales outlook but they remained a touch below consensus. Lotte Shopping’s -1.8% Q4 OP is KRW 90.28b, missing the lowest analysts estimate. BAIC Motor -3.2% sees FY 2018 NP higher 95% y/y citing growth of…

European indices managed decent gains with broad sector strength.  Basic Resources, Travel, Tech, Food, and Financials all saw gains of a percent or more.  Indices closed not too far off of highs with volume off just over 15% on the day.  As the US pulled back from early post-open highs European indices gave back little from their better levels. The better sentiment related to US trade talks with China led to solid gains today in the luxury space.  Richemont rose 4.8% with Kering up 3%. Heineken chugged 6% higher with FY revs, including organic beer volumes, and earnings seen up on the year. EDF shook off earlier weakness to close up 1.8% on headlines that the French gov is looking to purchase the balance of shares it does not own and take the name private.  The move could allow the firm to continue to pare dependence on nuclear reactors with the government pushing it more towards renewables. As highlighted earlier, Osram +14% rallied with headlines that firms Bain and Carlyle may be teaming up to bid for the firm. Osram did confirm they are in talks. Heavy economic releases are expected in China including FDI, New Yuan Loans, and trade data…

Asian Headlines Energy names led lower with losses of over 2% as Discretionary, Material, and Real Estate names also dipped at least 2% on the Nikkei. All sectors were lower but the index was supported by massive gains in Softbank Group.  Conversely Australia closed higher on broad gains with solid gains in Financials, Health Care, and Energy names. The Kospi closed flat on the session with the Kosdaq up nicely after being shut since last Friday.  And speaking of South Korea press there have reported the country will up by 8% it defense cost sharing with the US.  A contribution of roughly 1.0T Won is expected. Post its announcement to repurchase 10% of its shares Softbank Group rallied 18%.   Additionally their Vision Fund reported they liquidated its position in Nvidia reaping nearly ¥400B.  The firm will also utilize ¥700B of funds raised in the IPO to pay down debt. Japanese chemicals fell after Asahi Kasei -4.8% cut their FY forecast citing slowdown in China.  Specifically petrochemicals were a focus along with automakers and smartphones. Mitsubishi Chemicals slipped 6.1% after it disappointed on earnings.  Performance chemicals and petrochemicals saw lowered profit with scheduled maintenance weighing.  Higher fixed costs for display films was…

Asian Headlines Australia’s central bank was in focus today, leaving their cash rate target unchanged at 1.5%.  Light inflation was still a concern with lower oil prices again targeted but should gradually pick-up.  For 2019 they see underlying inflation running around 2.00%, moving to 2.25% next year. Wage growth continues to lag leading to weak household consumption but unemployment continues to decline.  To the upside business investment is on the increase as is spending for public infrastructure.   The AUD$ moved higher on the day but has pared some gains. PMI Services in the country held steady at 51.0 with retail sales contracting slightly.  Banks there rallied with the government not cracking down as hard as expected in relation to years of probes covering bank charges to sales of inappropriate products.  The 76 recommendations by the Royal Commission did not include a forced split between banks and wealth management/financial advice units.  Westpac rallied 7.4% with Commonwealth Bank of Australia up 4.7%. Australia & New Zealand Bank rose 6.5%.   Not all was rosy in the financial space with mortgage brokers lower after trailing commissions were banned.  Mortgage Choice ended down 25% with Australian Finance Group off 30%.   In the building space James Hardie…

Asian Markets Asia was mixed with the markets generally awaiting a slew of important items including today’s FOMC meeting and tomorrow’s Sino-U.S. trade talks.  S. Korea outpeformed.  The Finance Ministry is considering a reduction to a transaction tax charged on equity trades.  Sectors were mixed with minimal moves, overall.  Consumer staples, consumer discretionary, utilities and healthcare gave way by c. 0.5%. Real estate improved by more than 0.5% with miners ahead by about that mark. Important Headlines Apple suppliers were mixed following its results out after the U.S. close.  Overall, they are reassuring following recent worries.  Chip suppliers rallied but display sunk.  That was also due to LG Display -3.7% seeing pressure on panel/screens this year. China Life -1.9% suffered multiple downgrades following yesterday’s outlook cut.  The company now sees FY ’18 NI down 50 to 70%! After yesterday’s close, Daiwa Sec. -6.5% revealed a 47.0% decline in OP. On the macro side of things, Japan’s December retail sales beat expectations as did Australia’s Q4 CPI.   S. Korean department store sales continued to fall in December but at a much slower rate than November. After today’s close there were a slew of earnings out across the region.  Those include Advantest, Canon,…

A mostly better finish to the session with London and the Swiss market slightly lower.  The ECB meeting was in focus with rates left as-is as forward guidance was reiterated.  They did highlight that risked were to the downside as opposed to a previously balanced view. With current discussions centered around more favorable trade parameters for the US Draghi was quick to highlight protectionism was the reason for the higher risk assessment.  Rate views were retained with current levels seen through summer of this year.  The central bank is encouraged on rising inflation with cost pressures on the upswing in the labor market.   On the economic release front, EU PMI readings remained at expansionary levels but missed estimates and fell from prior levels.  Specifically, Germany saw Manufacturing PMI move under the 50 level, well under the 51.5 expected/seen previously. Services PMI encouragingly moved higher. The sector skew was to the upside with Tech and Auto up over 2% on the session.  Insurers saw gains as well with the balance of sectors seeing subdued moves.  Nearly 400 of the Stoxx 600 names saw gains with volumes up 16%. Leading the tech space STMicro +10% rallied on inline 4Q revs with NI…

Yesterday’s Market If you missed, the Asian markets traded to the upside while Europe was down small.   Here is yesterday’s recap. Asian Markets Today There were several factors which caused the region to trade lower.   The markets had a negative bias following yesterday’s cut to global growth forecasts by the IMF.   Selling increased following a meeting between Chinese Pres. Xi and other of the nation’s top leaders.  After the meeting, Pres. Xi made a pledge to “maintain stability.”  This comment along with the meeting fanned growth/slowdown worries.  The icing on the cake is Chinese criticism of reports the U.S. is seeking the extradition of Huawei’s CFO. The majority of sectors ended the day lower.  IT, materials and energy gave way by c. 1%.  Among healthcare names, Chinese pharma companies traded lower due to a government pledge to reduce prescription prices.  Utilities managed to hold steady. Other Important Headlines Despite seeing FY ’18 earnings higher 123% to 132%, Petrochina traded lower.  Credit Suisse cut its EPS outlook and Huatai Financial cut its PT on the shares by 40%. Sources allege, Takeda Pharma +0.25% is mulling the sale of up to $3b in emerging market assets.  This would be to reduce the debt…

Little change to indices today with most markets seeing slight losses.  Sweden and Switzerland managed small gains with the recent run both in the States and internationally getting long in the tooth.  On a sector-basis Food names led with Construction and Basic Resources also higher.  Energy lagged with a pullback in oil prices as the Dollar moves higher. As PM May and MP’s discuss the future of Brexit the array of potential directions is becoming more complicated.  Options include another confidence vote and whether a new PM should be seated.  New elections are also being considered along with whether a new or amended plan should be tried with the EU.  Obviously an extension to Article 50 being enacted is being discussed along with whether an referendum to citizens should be held.  Today word was released a referendum could be a year-long process. In the Chemical space Akzo Nobel rallied 1.8% on the announcement of €2B to be returned to shareholders soon.  That is part of a €6.5B package to be returned post their unit sale. The European broadcasting space saw sizable losses today with BofAML downgrading several names on weakening in the region.  They note slowing TV consumption with a…

After the better open European indices moved back to PDC levels before moving back to near morning highs.  Italy outperformed as banks led on lower NPL’s and the minimal impact from ECB Bad-loan actions.  Further, positive earnings in the space on our side of the pond helped as well.  The UK FTSE fell with the Pound holding steady today with weakness in Consumer Staples and Energy names.  The 10 year GILT fell today, pushing the yield to 1.306%. Gains were broad with 416 of the 600 names in the Stoxx 600 higher on volume 5% higher.  The banking sector for the region rallied 2.51% with Insurers up 1.38% and Financials better by 1.07%. Post the close the UK Times reported EU officials are looking into the delay of Brexit until next year with France and Germany reported to be willing to extend discussions.  PM May’s confidence vote is still scheduled for this afternoon. Deutsche Bank rallied 8.4% on headlines that ECB regulators are in favor on the bank merging with a European rival rather than local peer Commerzbank +7.4%.  German regs are more keen to a merger between the two, hoping for one strong bank to support the country’s exporters.…

European indices hit lows just post midday, again rebounding on a move higher in the States. While off of highs most indices finished again to the upside while Italy and Sweden were a hair lower.  Banks finished down small post the JPM news with Media joining the sector for small losses.  Healthcare and Tech names finished up a percent with volume down 5% on the day. Later today the UK Parliament will vote on PM May’s Brexit plan with headlines hitting that the EU will not alter its agreement in the deal.  The Pound has fallen throughout the day, currently knocking on the 1.27 level. Swiss Re fell 1.5% post noting natural and man-made disasters resulted in $1B in fourth quarter claims.  For the year, the number hit nearly $3B with California fires accounting for $375M.  Industry-wide, insured losses for last year hit $81B. Shareholders in BooHoo -9% shed a tear today after the firm pared slightly its FY adj core op profit view. Revenue growth expectations were upped to 43-45% from the prior 38-43%. Sweden’s Millicom Intl Cellular rallied 7% after Liberty Latam America confirms they are in talks. From earlier: William Hill -2.9%, GVC Holdings -2.8%, Paddy Power…