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Markets Overview The risk off mode continued in the Asian markets with several core indices seeing losses of 2%.  However, Hong Kong bucked the trend.  With a little more than an hour to go in the trading session, headlines hit that authorities would use emergency powers to ban protesters from wearing face masks.  The announcement sparked the Hang Seng Index to rally, erasing the day’s losses which at that point were about 0.4%.  The general feeling is this was less severe than anticipated.  The mainland Chinese markets remain closed with S. Korea also observing a holiday. The majority of sectors end the day to the downside.  Materials are off c. 1% followed by healthcare, industrials and consumer discretionary.  Utilities is the only sector managing a small advance while real estate was down small. The European markets have at least halted the selling tide.  They dipped on the open but then managed a small uptick.  They have since waffled following various Markit Service and Composite PMI readings.  Given the poor manufacturing readings last week, it should come as no surprise the German and EU Composite readings are low.  The EU remains barely above 50 but Germany’s was further below 50 than…

Asian Headlines Asia wrapped up the last day of the quarter with most indices closing lower. With mainland China shut the balance of the week and next Monday for their National Day holiday, volume was surprisingly lower on the session, off over 40%.  Focus was on PMI readings out of China with the official reading beating estimates but still remaining in contraction.  On that Shanghai/Shenzhen both closed down ~1% on broad losses.  IT and Communication names led lower with Financials and Energy names also weaker. The Nikkei fared better but still was off with Energy name down over 3%.  Hong Kong finished up with Consumer Staples and Energy however leading on the day. Back to China, Manufacturing PMI of 49.8 was ahead of the 49.6 estimate and a hair above the prior reading of 49.5.  New orders though moved into expansion territory despite the   The Caixin reading, which uses a smaller sample and focuses on smaller firms, ticked up to 51.4, vs the 50.2 estimates and 50.4 prior result. This is the second month of expansion and the highest reading since February of last year.  Official Non-manufacturing PMI held steady at 53.7.   On the trade war front the US Treasury…

Global Markets The Greater Chinese markets traded lower following Friday’s report a Chinese agricultural delegation cancelled scheduled meetings in the States.  China’s Agricultural Minister downplayed the matter but investors still took it as an overall negative.  Additionally, the deputy level Sino-U.S. trade talks had no real information for traders to sink their teeth into.  Rate cut hopes gave Australia a small bid and India continues to move ahead following last week’s corporate tax news.  Japan was closed for the Autumnal Equinox. All the major sectors in Asia end the day lower to one extent or the other.  Real estate and healthcare end the day off c. 0.8%.  Financials and consumer staples led with modest declines. The European markets have been lower since the open.  Both German and Eurozone Markit manufacturing readings show additional erosion, falling further below the key 50 level.  Furthermore, both reading are below consensus.   The German result is a 10 yr. low and the Eurozone reading a 7 year low.  The Egyptian market saw heavy selling pressure yesterday due to local unrest.  It is lower again today but has pared losses.  The country is seeing a wave of protests against Pres. Sisi’s government.  Elsewhere on the political…

Asian Headlines Mainland China and South Korea outperformed on small gains today while losses elsewhere were subdued. Energy names of course pulled back on the Saudi news pertaining to renewed production with that sector down 4%.  Insurers slipped as well with scant moves in most sectors.  Focus was on weaker trade data for August in Japan even as their trade deficit shrunk as well as the BoJ meeting and today’s US Fed. Back in China Energy was lower while defensive names worked higher. Real Estate names finished better on hopes of less government curbs post easing of prices.  Talks between them and the US are expected to resume as well buoying sentiment.  The much-watched Power Consumption number rose 3.6% YoY in August.   Down Under, IT and Industrial names crept a bit higher. On the energy front Iran has supposedly sent a letter to the White House claiming they have no responsibility in Saturday’s refinery attack while Saudi Arabia prepares for a presser outlining proof they did.  TTN noted a story that China has expanded their investment into the Iranian oil complex to the tune of $290B which is netting them a 12% discount on their energy imports. AAC Tech rallied…

Asian Headlines Not a bad start to the week with mostly higher closes seen in the region.  Mainland China led with strong returns in IT and Communication names.  This was predicated on word Shanghai is demanding a quicker rollout of 5G.  Financials and Healthcare led in Japan while Communication names eased.  many companies curtailed business today ahead of Typhoon Faxai.  Both Hong Kong and Australia underperformed with each market closing flat on the session. In Hong Kong, with protests continuing, Health Care names saw weakness while Energy, Discretionary, and IT names closed up.  Chipmakers buoyed the Kospi. Over the weekend trade data was released in China with imports and exports both contracting.  The USD-quoted Trade Surplus finished at $34.84B, well light of the $44.30B expected.  Exports to the US fell 16% with the country upping imports from Australia by 32% YoY.   The other notable focus point today was the PBoC reserve requirement rate reduction for all their banks.  This RRR will go into effect next week with the level reduced by 50 bps to 13%.   TTN reported several headlines of interest including last week’s phone discussion between the country and the US involved China’s plan to purchase a “modest” amount…

Markets Overview Risk-off sentiment is seeping into the markets again.  Several factors are prompting investors to take a pause in recent buying.   For starters, headlines on Sino-U.S. trade talks indicate the two sides can’t even agree on a schedule for the next round of talks.  The Hong Kong and Macau Authority held a press conference about the continuing protests in Hong Kong.  Comments continued to deride the “radicals” and condemn foreign government provocation.  Additionally, there critical statements regarding the handling of the unrest by HK Chief Executive Lam’s administration.  Israel and Hezbollah continue to exchange fire along the border with Lebanon. However, the day’s most eye catching headlines pertain to Brexit.  This evening in London, Parliament will vote upon a measure blocking a No Deal Brexit.  In turn, PM Johnson threatens to call snap elections for Oct. 14 if passed.  He has emphatically stated, he will not ask for an extension to the U.K. departure date from the E.U. on Oct. 31st.   The £ has spent a fare portion of the morning trading below 1.20 for the first time in more than two years, building upon losses from yesterday. The risk off mode is prompting yields to fall in the debt…

Markets Overview Moves were subdued overnight in the Asian markets with mixed returns.  During the session, the US Federal Register confirmed US tariff rates will increase to 15% from 10% on $300B of Chinese goods.  As noted yesterday, China is continuing to boost domestic consumption with lower restrictions on car purchases being discussed.  This buoyed the auto sector overnight.  Shanghai and Shenzhen both saw slight weakness on the session with the Yuan still losing ground.  South Korea led the region.  The government plans to acquire KRW5.0T worth of materials and parts needed for 3 years as it looks to wean reliance upon Japan.  Japan’s exclusion of South Korea from their trusted-partner whitelist went into effect today. In China, Discretionary and IT names were up.  The same were up in Hong Kong with Consumer Staples also in the mix.  Real Estate and Communication names led on the Nikkei.  In the commodities space, oil is advancing post yesterday large API draw. As the political unrest continues in Hong Kong, China’s Public Security Minister instructed police to be vigilant against what they label as “terrorist activities” in the Guangdong province which borders Hong Kong. European markets have been trading in the red since…

Markets Overview It should come as no surprise Asia traded lower following all the trade headlines that prompted the markets in the West to sell-off on Friday.  The Mainland Chinese markets fared better then peers.   India was the standout with tax on foreign investors being scaled back.  Money moved to safety with the ¥ strengthening today, through 105 vs the dollar before paring the advance later. Geopolitics also kept investors on the back foot.  Iran has fired a new missile.  Iran showed at the G7 and met with Macron apparently with Pres. Trump’s blessing.  North Korea launched more missiles.  Hong Kong protesters were met with teargas and bullets as sensor-equipped lampposts were toppled in their anti-surveillance rally. All the major sectors end the day in the red.  Telcos and IT are lower by 1.5% followed by energy, utilities and real estate. Initially, Europe was adding to last week’s losses.  However, the markets have made some progress following supportive comments from Pres. Trump.   He claims Chinese representatives called over the weekend to resume trade talks.  He also spoke about Pres. Xi in glowing terms.  He also stated he does not want to impose tariffs on European autos.  Volumes are decidedly lower…

Markets Overview The Asian markets held up very well despite the Italian worries that spurred yesterday’s sell off in Europe and the States.  The majority of the key indices recorded minimal moves on the day.  Most sectors were down with materials, utilities and energy off by 0.5% or more.  Real estate and IT managed modest advances. Europe has been trading better since the open.  While the markets are currently slightly off their highs, merger speculation in the auto space has helped.  Also, Italian Pres. Mattarella is conducting talks to form a new coalition government as opposed to calling for new elections.  All major sectors are green.  Autos, energy, industrials, personal goods and tech are higher by more than 1.5%.  However, autos have pared gains of more than 2%.  Many others are improving more than 1%. In the debt markets, Germany held a 30 year bond auction that results in yield of -0.11%.  That is a new record low. Corporate Headlines The M&A mentioned above is regarding Fiat Chrysler +4.2% and Renault +5.0%.  Il Sole is reporting the companies continue to have merger talks. Clayton’s favorite pallet company, Brambles -9.8% is cutting its FY outlook.  The company notes slowing organic growth…

Markets Overview Asia had a solid start to the week.  Of course, the markets were provided a strong hand-off from the States on Friday.   There were were several factors which added to the enthusiasm which we will outline below.  Greater China led the way with Shenzhen the best performer.  All major sectors gained with most better by at least 1%.  Real estates ends the day higher more than 2%. Today’s Positives in Asia The PBoC announced interest rate reform measures.  Commencing tomorrow, new loans must be priced “mainly” in reference to a new benchmark, the LPR ( Loan Prime Rate).   The move is a measure to reduce leading rates for companies.  However, this was viewed to be a negative for banking stocks. After a conversation with Apple CEO Cook regarding tariffs, Pres. Trump stated Mr. Cook gave him much to ponder.  However, there are no changes to his current stance on Chinese trade talks.   Samsung. Elec. -0.7% was specifically discussed and that impacted the shares. While protests continue in Hong Kong, the general tone has been more peaceful. The European markets have been better since the open.   While off highs, they are maintaining a solid advance.  Following Friday’s story that…