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Markets Overview Asia saw a mix with the Greater Chinese markets making scant moves either way following yesterday’s strong gains.  The new mortgage reference rate (LPR) was set at 4.25% slightly below the recent 4.31% in the market.   Most of the rest of the major indices advance.   S. Korea had a solid day with Japan approving some additional tech products for export to the country.  This eases recent trade tensions between the two nations.  Most sectors gained.  IT and healthcare led exceeding advances 0.5%.  Financials and utilities gave minimal ground. Europe has spent most of the morning up small but is currently flat.  Italy has been lagging as the political situation remains troubled.  (It feels like that has been the case since the fall of the Roman Empire.)  Sectors are split.  Healthcare, food/beverages and personal goods lead with gains of c. 0.5%.  Off by about the same mark are telcos, autos and basic resources. Corporate Headlines CK Asset +0.8% following yesterday’s agreed bid for Greene King -0.6% at 850p per share.  Green surged about 50% yesterday on the news. BHP’s +0.15% H1 revenues are a touch light.  The company also warned of the implications due to the ongoing trade negotiations. …

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. …

Oh the power of the Tweet as global indices picked up post President Trump’s tariff delay/exclusion release.  While taking a dig that Ag products were not being purchased as implied Trump is not ramping up tariff rates post what appeared a solid call between US Trade Rep Lighthizer, Treasury Secretary Mnuchin, and Chinese Vice Premier Liu He.  Post the European close Trump said as much adding China wants to make a deal and the President wants to not weigh on Christmas shopping.  Those headlines saw indices tick higher and for the most part those gains were held into the close…(Hopefully the US retains the move up as well). Weighing on sentiment though police in Hong Kong have stormed the HK International Airport with clashes coming across the screens.   This after German ZEW readings disappointed.  However, by day’s end all but Retail, Travel, Food, and Personal Goods closed higher.  Basic Resources led by 2% with Energy up 1.7% as Brent rallied up nearly 5%. Ceconomy fell over 8% post its 3Q ebit loss.  The firm though retained their FY18/19 forecast even as sales for the quarter also disappointed. German sensor-maker Paragon collapsed 40% after its subsidiary Voltabox, which it owns 60%,…

Top Down Markets Most of the core Asian markets had a decent day managing to advance.   The mainland Chinese exchanges led the way with Pres. Trump making some promising if somewhat vague trade comments.  Hong Kong lagged throughout the day due to protests at Hong Kong International airport.  It moved 25 bps lower during the closing auction as headlines hit the tape.  Authorities announced all flights from the airport were cancelled.  Additionally, the protests were referred to as terrorism.  This unsettled the rest of the markets that remained open, as you will see.  Japan was closed of Mountain Day. Europe has a solid start with the Euro Stoxx 600 advancing by c. 1% and all sectors were green.   However, the markets started paring the advance on the Hong Kong headlines and are now in the red across the board.  Also, hurting sentiment is Chinese new CNY data for July.  They are CNY 1,060b vs. CNY $1,275b expected. With most of the core markets closed by the time the Hong Kong headlines hit, most Asian sectors end the day higher.  IT and consumer staples improved by c. 1%.  Utilities, real estate and basic resources lagged.   European sectors have seen a dramatic…

Markets Showing Some Signs of Stabilizing Rhetoric between the U.S. and China remains antagonistic.  The U.S. officially declares China a currency manipulator.  China asserts U.S. policies are protectionist, yada, yada, yada.   Initially, the markets traded lower across the board.   However, the PBoC helped alleviate some concerns by setting the Yuan reference price stronger than CNY 7/$.   Also, the nation announced a CNY denominated bond sale in Hong Kong. The Nikkei traded lower by about 3% shortly after the open.   It then made some steady progress erasing well over 2% of its losses.   This was prompted by a weakening ¥ which regained the 106 level and briefly breached 107.  This is one of the signs of weakening risk-off sentiment.  Shanghai ends the day paring about half of the day’s loss.  India trades well as do some of the peripheral markets that overlap with Europe. Australia slid more than 2% with the poor sentiment for the resource sector weighing.  The RBA is leaving its benchmark rate unchanged at 1%, as expected.  While Gov. Lowe indicates the central bank is prepared to lower rates, the tone was less dovish than some traders anticipated.  The “Aussie” generally strengthened over the course of the session. …

Asian Markets Following yesterday’s hawkish comments from Fed Chair Powell (You may have heard something about it.), most of the markets gave ground.  However, Japan was buoyed by key earnings.  Most sectors end the day in the red.  Materials and real estate are lower by more than 1%.  Telcos end up small with consumer discretionary steady. Important Headlines MUFG +2.8%: Revenues better by 9.9% and NI +24.1%.  While lending profit declined -7.5% y/y, Trading profits soared +79.0%. Nomura Holdings +9.0%:  A very strong Q1 report with Revenues up 18.7% while NI soars an astounding 969.0%.  Trading revenues rose 57.0% and investment banking activity +14.0% offsetting broker fee/commission decline of 14.0%. Daiwa Secs. +2.5%: Q1 revenues improve +3.5% but OP -44.0% and NI -13.3%.  It will buyback up to 3.19% of capital. Takeda Pharmaceutical +7.8%: Q1 Oper. Income reached ¥9.87b.  It indicates the Shire integration is going well.  The company cut its forecast of a FY loss outlook to ¥166b from prior outlook of ¥193b.  Bloomberg shows that is still below consensus but it is a wide range. Japan Tobacco -0.5%: Revenues dip 1.6% with OP +3.0% and NI +4.8%.  The company is cutting its FY OP outlook to ¥518b from…

Asian Headlines Asian markets ended generally higher on small gains today with South Korea recovering a bit of yesterday’s pullback.   In addition to the US/China meeting and earnings, focus was on the BoJ today with little in the way of headlines out of that meeting.  Gains were fairly broad with Utilities and Health Care leading in Japan while Softbank gave back yesterday’s gains.  Communication names though led in China while IT edged lower.  IT names also fell Down Under with Utilities again to the upside. The BoJ left interest rates as-is with the rate on excess reserves remaining at -.10%. They kept forward guidance pledging to keep extremely low rates until at least through next Spring.  They added they will not hesitate to ease further if need be.  Several GDP targets for the next few years were pared slightly with CPI unsurprisingly lowered a bit as well.  To the upside, corporate profits were noted as remaining at high levels with banks said to have a sufficient capital base.  The ¥ traded to the upside today.   On the economic front Industrial Production turned south in June, off 3.6% MoM, the largest decline since January of last year. In South Korea a…

Asian Markets Following yesterday’s ECB and US macro headlines, most of the region trades lower.   The mainland Chinese markets managed to reverse earlier losses.  The KOSPI settled lower for the third consecutive session.  N. Korea commented on yesterday’s missile test as a warning to “war mongering”  by their southern cousins. Most sectors end the day lower.  Telcos, consumer staples, consumer discretionary and IT were off by c. 0.5%.  Healthcare is the only sector that managed to gain, ending the day 0.4% better. Corporate Headlines Nissan Motors -3.2% trades lower again.  The results released after yesterday’s close were a bit worse than the Nikkei report from the previous day.  The company will make global job cuts of 12,500 while trimming overall production. Q1 at Fujitsu +9.8% is better than expected showing an unexpected profit.  The company says revenues improved significantly. MGM China’s +0.9% Q2 gross gambling revenues are a positive surprise with the new Cotai property performing well. Softbank +1.0% is launching its 2nd Vision Fund.  It has raised $108b with Apple among the investors. European Markets After a sluggish start, the region is now higher by c. 0.4%.  However, the Spanish and Italian markets are trading lower with political uncertainty…

Asian Markets Most of the region managed to gain to one extent or the other.  The markets were better bid on yesterday’s story the U.S. trade delegation would head to China.  The second major news was news breaking overnight Pres. Trump and congressional leaders reached a debt ceiling agreement.  That boosted the “Greenback” and a weakening ¥ caused Japan to lead.  One market that did not take part in gains was the Chinese STAR exchange.  In its 2nd day of trading 21 of the 25 names ended the day lower.  However, it should be noted they averaged gains of 140.0% yesterday. Most sectors end the day to the upside. IT led followed by industrials, utilities, consumer discretion and telcos.  All gained 0.5% or more.  Real estate is the only decliner of note, off 0.5%. Important Headlines Some of the IT gains were driven by yesterday’s meeting between Pres. Trump and U.S. technology company leaders.  Statements were interpreted to mean the President may be taking a less severe tact regarding Huawei. CNBC is reporting the DoJ may approve the Sprint/T-Mobile merger tomorrow.  This lifted Softbank +4.0%. With an hour to go in Hong Kong trading, BAIC +2.8% disclosed its had taken…

Asian Headlines Post better GDP, Industrial Production, and Retail sales readings for China local indices there led the region. IT names were strong with broad gains seen.  Hong Kong too closed up with the Health Care sector a notable gainer.  The Nikkei was closed for Marine Day.  To the downside both Australia and Korea finished down with IT and Communication names weighing in the former.  Note that tonight RBA minutes from the July meeting will be released Down Under. While the YoY reading met estimates and showed a slowing in growth the QoQ result for the 2Q GDP in China was a bit better.  Industrial Production results were strong with retail sales seeing gains from autos and online sales.  From late Friday post the headline numbers on the their trade balance Chinese exports of rare earths rose with 1H exports to the US down 2.6% YoY.  Imports though from the US fell just over 25% on a YoY basis.  On a more internal focus Aggregate Financing in June reached 2.26T Yuan, well ahead of the 1.9T estimate. The PBoC refrained again from open market ops but noted the planned 3rd phase of RRR cuts occurred, releasing CNY100B in funds for…