CAPIS Global Markets 7/31/2019
Asian Markets Core markets down across the board as the Sino-U.S. trade talks end early with no apparent progress made. China’s official July Manufacturing number was below the key 50 expansion level for the third consecutive month. Hong Kong only had a half day of trading. Authorities canceled the afternoon session with a tropical storm…
Asian Markets
Core markets down across the board as the Sino-U.S. trade talks end early with no apparent progress made. China’s official July Manufacturing number was below the key 50 expansion level for the third consecutive month. Hong Kong only had a half day of trading. Authorities canceled the afternoon session with a tropical storm in the region.
The majority of sectors end the day to the downside. Real estate is the worst performer lower by more than 1%. Consumer discretionary and telcos end off shy of that mark. Utilities and healthcare hold steady.
Earnings from the Region
- Samsung Elec. -2.6%: Q2 revenues are off 4% to KRW 56.1t with NI lower 54.0% to KRW 5.06t. The company did note increased memory chip demand. The US China trade talks and potential Japanese trade action cloud its outlook.
- Sony +5.3%: While revenues are 1.4% lower and NI -32.8%, OP improves by 18.4% crushing consensus.
- SMFG -1.0%: Q1 NI is lower by 5% y/y. The company saw increased NPL costs in conjunction with lower lending.
- A slew of Japanese companies released after the local close including MUFG, Japan Tobacco, Diawa Sec., Nomura and Takeda Pharmaceutical.
European Markets
For the most part, the markets have been trading sideways thus far. It is a heavy earnings day which is driving sector performance. They are fairly split. Construction gains by c. 1% with autos, retail and energy better c. 0.5%. Personal goods, basic resources and utilities are off c. 0.5%.
Earnings Snippets
- Credit Suisse +4.2%: Q2 Revenues CHF 5.58b vs. CHF 5.34b expected, NI CHF 937m vs. CHF 788m expected. Wealth management saw inflows of CHF 9.5b. Fixed income trading revenues +6% offsetting 1% decline in equities.
- BNP +3.6%: Q2 Revenues €11.2b NI €2.47b vs. €2.1be. Debt trading revenue increase of 9% positive surprise. Reassuring results overall.
- L’Oreal -3.9%: Q2 LFLs miss: +6.8% vs. 7.1%e. Does NOT see improvement in the U.S. cosmetics market during H2.
- Lloyds -4.6%: Q2 PTP miss of £1.3b vs. £1.76b expected. Takes PPI provision of £550m due to the sales scandal. NII also disappoints.
- Airbus +0.4%: Q2 adj. EBIT €1.98b beating estimates and up 72.0% y/y. Reiterates guidance of up to 890 aircraft deliveries, EBIT gain of 15.0% & FCF of €4b.
- Next +8.1%: Q2 sales are ahead of projections. Retails sales are off 4.2% but that is considerably better than the 10.6% decline anticipated. Online sales also beat, improving 12.0% vs. +9.68% expected. The company is raising its EPS growth projection to +5.2% from +3.4%.
Mind your eye with plenty more out there!
On Our Side of the Pond
- Apple’s Q4 sales guidance puts the bottom end of the range ($61b to $64b) at consensus.
- Conversely, AMD’s Q3 revenue guidance of $1.75b to $1.85b is below Street projections of $1.94b.
- GE’s Q2 adj. EPS are better than projections by 5 cents. The company is raising both its earnings and cash flow projections.
- Credit Suisse places block of Charter Communications: 3m shares at $389 per share.
- Slew more on the tape this morning.
- Of course, today’s FOMC decision is the real key. The market is anticipating a 25 bps reduction to the benchmark rate.
Markets & Macro
| Event | Survey | Actual | Prior | Revised | ||
| SK | Industrial Production SA MoM | Jun | 0.30% | 0.20% | -1.70% | -1.30% |
| SK | Industrial Production YoY | Jun | -2.00% | -2.90% | -0.20% | 0.20% |
| SK | Cyclical Leading Index Change | Jun | — | -0.2 | -0.2 | — |
| UK | GfK Consumer Confidence | Jul | -13 | -11 | -13 | — |
| UK | BRC Shop Price Index YoY | Jul | — | -0.10% | -0.10% | — |
| JN | Loans & Discounts Corp YoY | Jun | — | 2.73% | 3.24% | — |
| CH | Composite PMI | Jul | — | 53.1 | 53 | — |
| CH | Manufacturing PMI | Jul | 49.6 | 49.7 | 49.4 | — |
| CH | Non-manufacturing PMI | Jul | 54 | 53.7 | 54.2 | — |
| AU | CPI QoQ | 2Q | 0.50% | 0.60% | 0.00% | — |
| AU | CPI YoY | 2Q | 1.50% | 1.60% | 1.30% | — |
| AU | CPI Trimmed Mean QoQ | 2Q | 0.40% | 0.40% | 0.30% | — |
| AU | CPI Trimmed Mean YoY | 2Q | 1.50% | 1.60% | 1.60% | — |
| AU | CPI Weighted Median QoQ | 2Q | 0.40% | 0.40% | 0.10% | — |
| AU | CPI Weighted Median YoY | 2Q | 1.20% | 1.20% | 1.20% | 1.40% |
| AU | Private Sector Credit MoM | Jun | 0.30% | 0.10% | 0.20% | 0.10% |
| AU | Private Sector Credit YoY | Jun | 3.50% | 3.30% | 3.60% | — |
| JN | Vehicle Production YoY | May | — | 9.30% | 4.70% | — |
| JN | Housing Starts YoY | Jun | -2.20% | 0.30% | -8.70% | — |
| JN | Annualized Housing Starts | Jun | 0.900m | 0.922m | 0.900m | — |
| JN | Construction Orders YoY | Jun | — | -4.20% | -16.90% | — |
| JN | Consumer Confidence Index | Jul | 38.4 | 37.8 | 38.7 | — |
| IN | Bloomberg July India Economic Survey (Table) | |||||
| HK | Money Supply M1 HKD YoY | Jun | — | -5.70% | -5.90% | — |
| HK | Money Supply M2 HKD YoY | Jun | — | 3.50% | 2.80% | — |
| HK | Money Supply M3 HKD YoY | Jun | — | 3.50% | 2.80% | — |
| GE | Retail Sales MoM | Jun | 0.50% | 3.50% | -0.60% | -1.70% |
| GE | Retail Sales NSA YoY | Jun | 0.00% | -1.60% | 4.00% | 3.80% |
| UK | Nationwide House PX MoM | Jul | 0.20% | 0.30% | 0.10% | — |
| UK | Nationwide House Px NSA YoY | Jul | 0.10% | 0.30% | 0.50% | — |
| FR | CPI EU Harmonized MoM | Jul P | -0.30% | -0.20% | 0.30% | — |
| FR | CPI EU Harmonized YoY | Jul P | 1.20% | 1.30% | 1.40% | — |
| FR | CPI MoM | Jul P | -0.30% | -0.20% | 0.20% | — |
| FR | CPI YoY | Jul P | 1.10% | 1.10% | 1.20% | — |
| SP | GDP QoQ | 2Q P | 0.60% | 0.50% | 0.70% | — |
| SP | GDP YoY | 2Q P | 2.30% | 2.30% | 2.40% | — |
| GE | Unemployment Change (000’s) | Jul | 2.0k | 1.0k | -1.0k | 0.0k |
| GE | Unemployment Claims Rate SA | Jul | 5.00% | 5.00% | 5.00% | — |
| IT | Unemployment Rate | Jun P | 10.00% | 9.70% | 9.90% | 9.80% |
| SP | Current Account Balance | May | — | 2.7b | -0.4b | — |
| HK | GDP YoY | 2Q A | 1.50% | 0.60% | 0.60% | — |
| HK | GDP SA QoQ | 2Q A | 0.90% | -0.30% | 1.30% | — |
| HK | Budget Balance HKD | Jun | — | -10.5b | -10.0b | — |
| EC | Unemployment Rate | Jun | 7.50% | 7.50% | 7.50% | 7.60% |
| EC | GDP SA QoQ | 2Q A | 0.20% | 0.20% | 0.40% | — |
| EC | GDP SA YoY | 2Q A | 1.00% | 1.10% | 1.20% | — |
| EC | CPI Core YoY | Jul A | 1.00% | 0.90% | 1.10% | — |
| EC | CPI Estimate YoY | Jul | 1.10% | 1.10% | 1.30% | — |
| IT | CPI EU Harmonized YoY | Jul P | 0.50% | 0.40% | 0.80% | — |
| IT | CPI EU Harmonized MoM | Jul P | -1.70% | -1.70% | 0.10% | — |
| IT | CPI NIC incl. tobacco YoY | Jul P | 0.50% | 0.50% | 0.80% | 0.70% |
| IT | CPI NIC incl. tobacco MoM | Jul P | 0.10% | 0.10% | 0.20% | 0.10% |
| IT | GDP WDA YoY | 2Q P | -0.10% | 0.00% | -0.10% | — |
| IT | GDP WDA QoQ | 2Q P | -0.10% | 0.00% | 0.10% | — |
| US | MBA Mortgage Applications | 26-Jul | — | -1.40% | -1.90% | — |
| IN | Eight Infrastructure Industries | Jun | — | — | 5.10% | — |
| US | ADP Employment Change | Jul | 150k | — | 102k | — |
| US | Employment Cost Index | 2Q | 0.70% | — | 0.70% | — |
| CA | GDP MoM | May | 0.10% | — | 0.30% | — |
| CA | GDP YoY | May | 1.30% | — | 1.50% | — |
| CA | Industrial Product Price MoM | Jun | -0.20% | — | 0.10% | — |
| CA | Raw Materials Price Index MoM | Jun | -3.00% | — | -2.30% | — |
| US | MNI Chicago PMI | Jul | 51 | — | 49.7 | — |
| US | FOMC Rate Decision (Upper Bound) | 31-Jul | 2.25% | — | 2.50% | — |
| US | FOMC Rate Decision (Lower Bound) | 31-Jul | 2.00% | — | 2.25% | — |
| US | Interest Rate on Excess Reserves | 1-Aug | 2.10% | — | 2.35% | — |