CAPIS Global Markets 2/28/2019
Asian Markets The region traded lower with growth concerns and an abrupt end to the U.S.-N. Korean Summit. The early conclusion to the meeting was a huge negative for the KOPSI. It also didn’t help it was a net sell in today’s global MSCI rebalance. Most sectors traded lower with IT off more than 1%…
Asian Markets
The region traded lower with growth concerns and an abrupt end to the U.S.-N. Korean Summit. The early conclusion to the meeting was a huge negative for the KOPSI. It also didn’t help it was a net sell in today’s global MSCI rebalance. Most sectors traded lower with IT off more than 1% followed by telcos and real estate. Healthcare was the only group to gain.
Global macro fears were sparked by a number of important data points. China’s February Manufacturing PMI is below consensus and is the 3rd consecutive month in which the gauge is below the key 50 level. Some of the slowdown is due to the Lunar New Year during the month. Japanese data also showed slowing trends. The preliminary January industrial production results fell more than ancticipated and is the largest decline since January of last year. Retail sales also slumped more than thought. In S. Korea, the BoK left rates unchanged, as expected.
Other Important Headlines
- Sun Hung Kai Prop -2.2% and Rio Tinto +1.1% following yesterday’s results.
- In the Macau gaming sector, Galaxy Ent. -0.2% reported results. While FY Revenues are well short of expectations, EBITDA was inline while NI beat.
- After the close, Bharti Airtel announced a capital increase of $4.5b via a rights and bond issue.
European Markets
As a whole, Europe has been lower since the open. However, the markets are mixed. Italy and Spain outperform and the UK lags. The macro worries have basic resources lower more than 2%. They are being followed by industrials, utilities and personal goods. Media has led all session and is currently better by more than 0.5% followed retail, banks and food/bevies.
The commodity markets are generally lower due to the slowdown worries. However, gold is trading to the upside. This could be in part due to the tensions in Kashmir. On that front and a positive headline, Pakistan stated it will free the captured Indian polit tomorrow.
Important Snippets
- AB Inbev +5.0% is having a solid day. Earnings in Q4 are better by 10.0%. That is solid growth and also alleviates recent worries sparked by last week’s Kraft Heinz profit warning.
- British American Tobacco’s -1.6% results are inline. However, the company lowered its FY19 revenue target for “next generation products.” FD Stevens is stepping down and is being succeeded by Tadeu Marroco.
- Human resource giant Adecco -5.0% is struggling. The company is taking a goodwill impairment charge in Q4 citing weakness in Germany. This results in a Q4 loss for the company. Furthermore, January organic growth fell 2% y/y.
- Other earnings on the day include Engie -3.4%, ABB -3.0% and Zalando +22.7%.
- The media strength is being provided by Vivendi +4.2%. Reuters indicates both KKR and Tencent are interested in securing stakes in Universal Music Group. Additional, results at Mediaset Espana +0.8% helping the sector.
On Our Side of the Pond
- Results include HP, TD Bank and JD.Com.
- Wabco confirms it is conducting talks with ZF Friedrishshafen. This may lead to a bid from the German company.
- We await the U.S. jobless data and GDP.
On the Markets Agenda for Tonight
- Macro includes Australian home prices, S. Korean trade, Japanese CPI and a host of manufacturing PMI readings.
- Results include Linde, WPP, LSE and William Hill.
REMINDER: Global MSCI Rebalance on the close, MIND YOUR EYE!
Markets and Macro
| Event | Survey | Actual | Prior | Revised | ||
| SK | Industrial Production YoY | Jan | 1.20% | 0.10% | 1.60% | 0.70% |
| SK | Industrial Production SA MoM | Jan | 0.30% | 0.50% | -1.40% | -0.80% |
| SK | Cyclical Leading Index Change | Jan | — | -0.4 | -0.2 | — |
| JN | Industrial Production MoM | Jan P | -2.50% | -3.70% | -0.10% | — |
| JN | Industrial Production YoY | Jan P | 1.30% | 0.00% | -1.90% | — |
| JN | Retail Trade YoY | Jan | 1.40% | 0.60% | 1.30% | — |
| JN | Retail Sales MoM | Jan P | -0.80% | -2.30% | 0.90% | — |
| JN | Dept. Store, Supermarket Sales | Jan | -1.80% | -3.30% | -1.00% | — |
| JN | Japan Buying Foreign Bonds | 22-Feb | — | ¥1014.9b | ¥193.7b | ¥196.2b |
| JN | Japan Buying Foreign Stocks | 22-Feb | — | -¥200.4b | -¥59.1b | — |
| JN | Foreign Buying Japan Bonds | 22-Feb | — | ¥317.2b | ¥84.3b | — |
| JN | Foreign Buying Japan Stocks | 22-Feb | — | -¥15.2b | -¥52.9b | -¥53.3b |
| AU | Bloomberg Feb. Australia Economic Survey (Table) | |||||
| UK | GfK Consumer Confidence | Feb | -15 | -13 | -14 | — |
| UK | Lloyds Business Barometer | Feb | — | 4 | 19 | — |
| AU | Private Capital Expenditure | 4Q | 1.00% | 2.00% | -0.50% | 0.00% |
| AU | Private Sector Credit MoM | Jan | 0.30% | 0.20% | 0.20% | — |
| AU | Private Sector Credit YoY | Jan | 4.30% | 4.30% | 4.30% | 4.40% |
| SK | BoK 7-Day Repo Rate | 28-Feb | 1.75% | 1.75% | 1.75% | — |
| CH | Swift Global Payments CNY | Jan | — | 2.15% | 2.07% | — |
| CH | Composite PMI | Feb | — | 52.4 | 53.2 | — |
| CH | Non-manufacturing PMI | Feb | 54.5 | 54.3 | 54.7 | — |
| CH | Manufacturing PMI | Feb | 49.5 | 49.2 | 49.5 | — |
| JN | Vehicle Production YoY | Dec | — | -0.70% | 4.60% | — |
| JN | Housing Starts YoY | Jan | 10.30% | 1.10% | 2.10% | — |
| JN | Annualized Housing Starts | Jan | 0.954m | 0.872m | 0.961m | — |
| JN | Construction Orders YoY | Jan | — | 19.80% | — | — |
| GE | Import Price Index MoM | Jan | 0.20% | -0.20% | -1.30% | — |
| GE | Import Price Index YoY | Jan | 1.20% | 0.80% | 1.60% | — |
| UK | Nationwide House PX MoM | Feb | 0.00% | -0.10% | 0.30% | 0.20% |
| UK | Nationwide House Px NSA YoY | Feb | 0.30% | 0.40% | 0.10% | — |
| FR | PPI MoM | Jan | — | 0.10% | -1.10% | — |
| FR | PPI YoY | Jan | — | 1.40% | 1.20% | 1.30% |
| FR | Consumer Spending MoM | Jan | 1.10% | 1.20% | -1.50% | — |
| FR | Consumer Spending YoY | Jan | 0.80% | 1.00% | -2.30% | — |
| FR | CPI EU Harmonized MoM | Feb P | 0.30% | 0.10% | -0.60% | — |
| FR | CPI EU Harmonized YoY | Feb P | 1.70% | 1.50% | 1.40% | — |
| FR | CPI MoM | Feb P | 0.40% | 0.00% | -0.40% | — |
| FR | CPI YoY | Feb P | 1.50% | 1.30% | 1.20% | — |
| FR | GDP QoQ | 4Q P | 0.30% | 0.30% | 0.30% | — |
| FR | GDP YoY | 4Q P | 0.90% | 0.90% | 0.90% | — |
| GE | CPI Saxony MoM | Feb | — | 0.30% | -1.00% | — |
| GE | CPI Saxony YoY | Feb | — | 1.40% | 1.40% | — |
| SP | CPI MoM | Feb P | 0.30% | 0.20% | -1.30% | — |
| SP | CPI YoY | Feb P | 1.10% | 1.10% | 1.00% | — |
| SP | CPI EU Harmonised MoM | Feb P | 0.10% | 0.20% | -1.70% | — |
| SP | CPI EU Harmonised YoY | Feb P | 1.00% | 1.10% | 1.00% | — |
| HK | Budget Balance HKD | Jan | — | 49.1b | 86.8b | — |
| HK | Money Supply M1 HKD YoY | Jan | — | -5.20% | -2.60% | — |
| HK | Money Supply M2 HKD YoY | Jan | — | 1.40% | 3.60% | — |
| HK | Money Supply M3 HKD YoY | Jan | — | 1.50% | 3.70% | — |
| GE | CPI Brandenburg MoM | Feb | — | 0.60% | -0.50% | — |
| GE | CPI Brandenburg YoY | Feb | — | 1.60% | 1.30% | — |
| GE | CPI Hesse MoM | Feb | — | 0.50% | -1.00% | — |
| GE | CPI Hesse YoY | Feb | — | 1.10% | 0.90% | — |
| GE | CPI Bavaria MoM | Feb | — | 0.50% | -1.00% | — |
| GE | CPI Bavaria YoY | Feb | — | 1.70% | 1.70% | — |
| GE | CPI Baden Wuerttemberg MoM | Feb | — | 0.50% | -0.90% | — |
| GE | CPI Baden Wuerttemberg YoY | Feb | — | 1.70% | 1.60% | — |
| SP | Current Account Balance | Dec | — | 4.7b | 1.8b | — |
| GE | CPI North Rhine Westphalia MoM | Feb | — | 0.50% | -0.70% | — |
| GE | CPI North Rhine Westphalia YoY | Feb | — | 1.60% | 1.50% | — |
| IT | CPI EU Harmonized MoM | Feb P | -0.20% | -0.20% | -1.70% | — |
| IT | CPI NIC incl. tobacco MoM | Feb P | 0.20% | 0.20% | 0.10% | — |
| IT | CPI NIC incl. tobacco YoY | Feb P | 1.10% | 1.10% | 0.90% | — |
| IT | CPI EU Harmonized YoY | Feb P | 1.20% | 1.20% | 0.90% | — |
| CA | CFIB Business Barometer | Feb | — | 59 | 56.1 | — |
| IN | Eight Infrastructure Industries | Jan | — | 1.80% | 2.60% | 2.70% |
| IN | GDP YoY | 4Q | 6.70% | 6.60% | 7.10% | — |
| IN | GDP Annual Estimate YoY | 2019 | 7.20% | 7.00% | 6.70% | — |
| IN | GVA YoY | 4Q | 6.50% | 6.30% | 6.90% | — |
| GE | CPI MoM | Feb P | 0.40% | 0.50% | -0.80% | — |
| GE | CPI YoY | Feb P | 1.50% | 1.60% | 1.40% | — |
| GE | CPI EU Harmonized MoM | Feb P | 0.60% | 0.50% | -1.00% | — |
| GE | CPI EU Harmonized YoY | Feb P | 1.70% | 1.70% | 1.70% | — |
| CA | Current Account Balance | 4Q | -$13.25b | -$15.48b | -$10.34b | -$10.11b |
| US | BEA Releasing Initial 4Q GDP (Combining Initial/Second) | |||||
| US | Initial Jobless Claims | 23-Feb | 220k | 225k | 216k | 217k |
| US | Continuing Claims | 16-Feb | 1737k | 1805k | 1725k | 1726k |
| CA | Industrial Product Price MoM | Jan | 0.10% | -0.30% | -0.70% | -0.80% |
| CA | Raw Materials Price Index MoM | Jan | — | 3.80% | 3.80% | — |
| US | GDP Annualized QoQ | 4Q A | 2.20% | 2.60% | 3.40% | — |
| US | Personal Consumption | 4Q A | 3.00% | 2.80% | 3.50% | — |
| US | GDP Price Index | 4Q A | 1.70% | 1.80% | 1.80% | — |
| US | Core PCE QoQ | 4Q A | 1.60% | 1.70% | 1.60% | — |
| US | Chicago Purchasing Manager | Feb | 57.5 | — | 56.7 | — |
| US | Bloomberg Consumer Comfort | 24-Feb | — | — | 59.6 | — |
| US | Kansas City Fed Manf. Activity | Feb | 6 | — | 5 | — |