CAPIS FOMC Day Global Markets 1 30 2019
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…
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, ICICI, LG Chem and POSCO.
European Markets
Europe has been mixed most of the session but has shown improvement since the open especially as some of the U.S. earnings have come across the tape. The EU markets have also seen a slew of earnings this morning. Currently, most sectors have improved. Personal goods and basic resources stand out with gains exceeeing 1.5%. Lagging all morning have been telecoms off c. 0.5% followed by industrials and healthcare.
The commodity markets are generally stronger. Iron ore continues to advance on Vale’s woes due to the terrible dam burst in Brazil. Gold remains above $1,300 and will have its 4th consecutive monthly advance for the first time since 2016.
The Day’s Important Snippets
- LVMH +6.9% is providing the boost to personal goods and specifically the luxury goods sector. It is seeing better demand in China and for leather goods. FY revenues reached a record €46.8b up 10.0% y/y. Q4 Organic revenues are up 10.0% excluding a one-off. Recurring operating revenue earnings improved 21.0% with margin also better to 21.4%.
- Siemens -1.2% Q1 NP €1.12b vs. EUR 1.15be, down 49.0% y/y. Taxes are higher than anticipated and the company believes demand for power turbines is falling.
- EPS at Novartis -1.0% missed expectations: Q4 core EPS $1.25 vs. $1.26e. Q4. Sales are $13.27b which is inline with expectations. The company provides an improved outlook but pricing pressures are noted for the current FY. The company still sees the Alcon spin-off occurring in H1 of this year.
On Our Side of the Pond
- Apple is trading up pre-market following the results out after yesterday’s close.
- There are plenty of other earnings out or due today including Boeing, McDonalds, Alibaba, AT&T, Microsoft, Tesla and Facebook.
- Of course, the FOMC decision is the most important item of the day.
Markets and Macro
| Event | Survey | Actual | Prior | Revised | ||
| SK | Business Survey Manufacturing | Feb | — | 65 | 71 | — |
| SK | Business Survey Non-Manufacturing | Feb | — | 70 | 72 | — |
| AU | ANZ Roy Morgan Weekly Consumer Confidence Index | 27-Jan | — | 116.5 | 115.7 | — |
| JN | Retail Trade YoY | Dec | 1.00% | 1.30% | 1.40% | — |
| JN | Retail Sales MoM | Dec P | 0.40% | 0.90% | -1.00% | -1.10% |
| JN | Dept. Store, Supermarket Sales | Dec | -1.10% | -1.00% | -2.20% | — |
| UK | BRC Shop Price Index YoY | Jan | — | 0.40% | 0.30% | — |
| AU | CPI QoQ | 4Q | 0.40% | 0.50% | 0.40% | — |
| AU | CPI YoY | 4Q | 1.70% | 1.80% | 1.90% | — |
| AU | CPI Trimmed Mean QoQ | 4Q | 0.40% | 0.40% | 0.40% | — |
| AU | CPI Trimmed Mean YoY | 4Q | 1.80% | 1.80% | 1.80% | — |
| AU | CPI Weighted Median QoQ | 4Q | 0.50% | 0.40% | 0.30% | 0.40% |
| AU | CPI Weighted Median YoY | 4Q | 1.70% | 1.70% | 1.70% | 1.80% |
| SK | Department Store Sales YoY | Dec | — | -0.70% | -3.90% | — |
| SK | Discount Store Sales YoY | Dec | — | -3.60% | -2.80% | — |
| JN | Consumer Confidence Index | Jan | 42.4 | 41.9 | 42.7 | — |
| FR | GDP QoQ | 4Q A | 0.20% | 0.30% | 0.30% | — |
| FR | GDP YoY | 4Q A | 0.90% | 0.90% | 1.40% | 1.30% |
| GE | Import Price Index MoM | Dec | -0.80% | -1.30% | -1.00% | — |
| GE | Import Price Index YoY | Dec | 2.10% | 1.60% | 3.10% | — |
| GE | GfK Consumer Confidence | Feb | 10.3 | 10.8 | 10.4 | 10.5 |
| FR | PPI MoM | Dec | — | -1.10% | 0.40% | 0.30% |
| FR | PPI YoY | Dec | — | 1.20% | 2.60% | — |
| FR | Consumer Spending MoM | Dec | -0.30% | -1.50% | -0.30% | -0.10% |
| FR | Consumer Spending YoY | Dec | -0.70% | -2.30% | -2.00% | -1.50% |
| SP | Total Mortgage Lending YoY | Nov | — | 12.80% | 13.90% | — |
| SP | House Mortgage Approvals YoY | Nov | — | 14.20% | 20.40% | — |
| SP | Retail Sales YoY | Dec | — | 0.00% | 1.50% | — |
| SP | Retail Sales SA YoY | Dec | — | 0.80% | 1.40% | 1.10% |
| HK | Retail Sales Value YoY | Dec | 1.40% | 0.10% | 1.40% | — |
| HK | Retail Sales Volume YoY | Dec | 2.50% | 0.20% | 1.20% | — |
| IT | Consumer Confidence Index | Jan | 112.8 | 114 | 113.1 | 113.2 |
| IT | Manufacturing Confidence | Jan | 103 | 102.1 | 103.6 | 103.4 |
| IT | Economic Sentiment | Jan | — | 99.2 | 99.8 | 99.7 |
| UK | Net Consumer Credit | Dec | 0.8b | 0.7b | 0.9b | 1.0b |
| UK | Net Lending Sec. on Dwellings | Dec | 3.6b | 4.1b | 3.5b | 3.6b |
| UK | Mortgage Approvals | Dec | 63.1k | 63.8k | 63.7k | 64.0k |
| UK | Money Supply M4 MoM | Dec | — | 0.40% | 0.00% | 0.10% |
| UK | M4 Money Supply YoY | Dec | — | 2.00% | 0.80% | — |
| UK | M4 Ex IOFCs 3M Annualised | Dec | — | 4.30% | 1.70% | 2.10% |
| EC | Economic Confidence | Jan | 106.8 | 106.2 | 107.3 | 107.4 |
| EC | Business Climate Indicator | Jan | 0.77 | 0.69 | 0.82 | 0.86 |
| EC | Industrial Confidence | Jan | 0.5 | 0.5 | 1.1 | 2.3 |
| EC | Services Confidence | Jan | 11.5 | 11 | 12 | 12.2 |
| EC | Consumer Confidence | Jan F | -7.9 | -7.9 | -7.9 | — |
| US | MBA Mortgage Applications | 25-Jan | — | -3.00% | -2.70% | — |
| GE | CPI MoM | Jan P | -0.80% | — | 0.10% | — |
| GE | CPI YoY | Jan P | 1.60% | — | 1.70% | — |
| GE | CPI EU Harmonized MoM | Jan P | -1.00% | — | 0.30% | — |
| GE | CPI EU Harmonized YoY | Jan P | 1.80% | — | 1.70% | — |
| GE | Jan. state CPI data delayed to Feb. 21 due to base year change | |||||
| US | ADP Employment Change | Jan | 181k | — | 271k | — |
| US | Pending Home Sales MoM | Dec | 0.50% | — | -0.70% | — |
| US | Pending Home Sales NSA YoY | Dec | -7.00% | — | -7.70% | — |
| US | FOMC Rate Decision (Upper Bound) | 30-Jan | 2.50% | — | 2.50% | — |
| US | FOMC Rate Decision (Lower Bound) | 30-Jan | 2.25% | — | 2.25% | — |