CAPIS Global Markets 6/25/2019
Asian Markets Most of the region traded lower in part due to U.S.-Iranian tensions. Adding to selling pressure for the Chinese markets was the additional worries of reports several Chinese banks are being investigated for N. Korean sanction violations by the U.S. Financials join in the worries related to the U.S. that are already weighing…
Most of the region traded lower in part due to U.S.-Iranian tensions. Adding to selling pressure for the Chinese markets was the additional worries of reports several Chinese banks are being investigated for N. Korean sanction violations by the U.S. Financials join in the worries related to the U.S. that are already weighing upon Chinese IT and telco names. More on this in the headlines section. India outpeformed on local buying following two days of losses.
The vast majority of the major sectors traded lower weighed down by Chinese names. Financials, telcos, IT and consumer discretionary gave ground by 0.5% or more. Energy and materials were flattish. Among material names gold miners outperformed due to the rise in the precious metal along with continued M&A stories in the sector.
- The Washington Post reports a judge ruled China Merchants Bank -7.7% and other Chinese lenders are violating N. Korean sanctions. For its part, China Merchants says it complies with all regulations on the matter. Shanghai Pudong Dev. Bank -3.1% is also allegedly involved.
- Nissan Motor’s -0.3% AGM saw Renault -1.0% receive larger representation on the board. The Japanese automaker is seeking to mend the relationship with the French company. Overall, the board changes are an attempt to limit the influence of one individual. This follows the allegations against former Chair Ghosn.
- Troubled Japan Display -9.0% saw two more potential investors step away from its bailout plan.
- Fosun Intl -0.2% following yesterday’s word it is contemplating a stake in Russian gold miner GV Gold.
The region started to the downside and pared the losses. The markets lost steam at the flat line and are currently down small.
Following yesterday’s sanctions imposed upon Iran’s Supreme Leader Khamenei and eight military commanders, Iran has said the door for diplomacy has been shut. Ayatollah Khamenei referred to the measures as “outrageous and idiotic.”
Safe-haven assets continue to catch bids. The commodity markets are seeing gold post further gains above $1,400. The yield on the 10 yr. German Bund has set a record low of -0.33%. Bitcoin also is maintaining its advance.
- Today’s top stocks are Cap Gemini +7.1% and Altran Tech +21.8%. This follows the merger announced after yesterday’s close. Cap Gemini will pay €14 per share. It is forecasting significant increases to EPS in the coming years as a result of the deal.
- Publicis +0.3% is seeing the departure of Chief Creative Officer Nick Law to Apple for an undisclosed role.
- KPN -2.5% also has an executive leaving. CEO Ibarra is leaving the company after spending less than two years at his post.
On Our Side of the Pond
- This morning’s top story is a megadeal in the pharmaceutical sector. Abbvie will pay Allergan shareholders 0.866 Abbvie shares along with $120.30 per share. That values the deal at c. $63b.
- FedEx is filing a law suit against the U.S. Commerce Dept. The company claims the current export laws especially related to sanctions make it impossible to conduct its global business. The company reports after today’s close.
- Lennar’s revenues and EPS are ahead of consensus. EPS are better than the highest estimate.
- A number of Fed members will be speaking today. Top of the list is Fed Chair Powell who will discuss outlook and policy.
Markets & Macro
|AU||ANZ Roy Morgan Weekly Consumer Confidence Index||23-Jun||—||114.3||114.2||—|
|JN||PPI Services YoY||May||1.00%||0.80%||0.90%||1.00%|
|FR||Production Outlook Indicator||Jun||5||3||4||—|
|FR||Own-Company Production Outlook||Jun||13||8||13||12|
|HK||Trade Balance HKD||May||-36.8b||-34.7b||-35.1b||—|
|UK||CBI Retailing Reported Sales||Jun||-5||-42||-27||—|
|UK||CBI Total Dist. Reported Sales||Jun||-10||-22||-20||—|
|CA||Wholesale Trade Sales MoM||Apr||0.20%||—||1.40%||—|
|US||FHFA House Price Index MoM||Apr||0.20%||—||0.10%||—|
|US||S&P CoreLogic CS 20-City MoM SA||Apr||0.10%||—||0.09%||—|
|US||S&P CoreLogic CS 20-City YoY NSA||Apr||2.50%||—||2.68%||—|
|US||S&P CoreLogic CS 20-City NSA Index||Apr||215.61||—||214.09||—|
|US||S&P CoreLogic CS US HPI YoY NSA||Apr||3.50%||—||3.72%||—|
|US||S&P CoreLogic CS US HPI NSA Index||Apr||—||—||206.23||—|
|US||Richmond Fed Manufact. Index||Jun||2||—||5||—|
|US||Revisions: Retail Sales|
|US||New Home Sales||May||684k||—||673k||—|
|US||New Home Sales MoM||May||1.60%||—||-6.90%||—|
|US||Conf. Board Consumer Confidence||Jun||131||—||134.1||—|
|US||Conf. Board Present Situation||Jun||—||—||175.2||—|
|US||Conf. Board Expectations||Jun||—||—||106.6||—|