Asian Markets

A reversal in fortune compared to yesterday.  The markets responded to stimulus pledges in the China.   Those came from a number of government entities including the PBoC and Ministry of Finance.  Those actions included “tax cuts on a larger scale” especially for small businesses and the manufacturing sector.  There were also comments pertaining to “supportive regulatory policies.”  To that end, the first half of the 1% reserve ratio cut announced last week became effective today.

This prompted the markets to rally.   Even Japan which had to play catch-down following yesterday’s holiday, erased initial losses to end the day with a solid gain.  All the major sectors advanced.  IT improved by more 2% with financials, telcos, consumer staples, real estate, materials and energy gaining  by at least 1%.

Other Important Headlines

• S. Korean auto stocks were driven higher with SK Securities making positive comments.
• Investors gobbled up Nintendo % shares following the Barron’s article saying Apple should purchase the economy.
• Chow Tai Food % suffered a 6.0% y/y decline in Hong Kong/Macau same store sales.
• China Life % following the FY ’18 Premium sales announced after yesterday’s close.

European Markets

Europe had a solid start hitting highs with a 0.9% gain shortly after the open.  However, from there the markets have steadily been pulling back.  For starters, the U.K. holds the Brexit vote in Parliament today.  Debate and procedures will last all day with the vote scheduled to occur at 2PM Eastern.  PM May’s measure is expected to fail by a wide margin.  What the market is closely watching is what action will the legislature dictate from here.   Taking the last of the bid out of the market were JP Morgan results.  Not only were there a number of revenue misses, the bank see net interest income flat while costs will increase.

Sectors are fairly split;.  Industrials and financials are up less than 0.5%.  Telecoms are off 1% with travel and leisure, media, banks and retail lower by c. 0.5%.  The banking center has created a fair portion of the drag which is no surprise given the JPM disappointment.  Mining stocks and autos are also well off there respective highs.

Stock Snippets

• Gaming names are under pressure following following a ruling by the U.S. DoJ.   It reversed an earlier decision stating only online sports betting was illegal.  Yesterday, it indicated all online betting was against the law.
• Peugeot’s-flat- FY ’18 auto sales reached a record 3.98m increasing 6.8% y/y.  However, sales in China fell 32.2% y/y.
• Deutsche Post -2.4% had been outperforming on reports postage rates would be increased during April.  However, German regulators indicated the increase would not exceed 4.8%.   This is less than had been anticipated and the company has called that increase insufficient.

Markets and Macro