CAPIS Global Markets 8/21/2019
Markets Overview The Asian markets held up very well despite the Italian worries that spurred yesterday’s sell off in Europe and the States. The majority of the key indices recorded minimal moves on the day. Most sectors were down with materials, utilities and energy off by 0.5% or more. Real estate and IT managed modest…
The Asian markets held up very well despite the Italian worries that spurred yesterday’s sell off in Europe and the States. The majority of the key indices recorded minimal moves on the day. Most sectors were down with materials, utilities and energy off by 0.5% or more. Real estate and IT managed modest advances.
Europe has been trading better since the open. While the markets are currently slightly off their highs, merger speculation in the auto space has helped. Also, Italian Pres. Mattarella is conducting talks to form a new coalition government as opposed to calling for new elections. All major sectors are green. Autos, energy, industrials, personal goods and tech are higher by more than 1.5%. However, autos have pared gains of more than 2%. Many others are improving more than 1%.
In the debt markets, Germany held a 30 year bond auction that results in yield of -0.11%. That is a new record low.
- The M&A mentioned above is regarding Fiat Chrysler +4.2% and Renault +5.0%. Il Sole is reporting the companies continue to have merger talks.
- Clayton’s favorite pallet company, Brambles -9.8% is cutting its FY outlook. The company notes slowing organic growth in European markets, rising costs and uncertainty due to the Chinese/U.S. trade talks.
- Xiaomi’s -5.0% Q2 NI is below consensus. The company is seeing slower smartphone demand in China. Sales are skewing towards lower margin products in that space.
- Sales at Hong Kong & China Gas -5.3% are also below expectations. The company is seeing downgrades from a number of brokers post the numbers.
- Alcon -1.8% results are viewed to be largely in line with expectations. The shares have had a nice advance into the numbers and is seeing some profit taking.
- China Vanke’s +1.4% H1 NP is better by 30.0% y/y.
On Our Side of the Pond
- Target is indicating to open at a record high. The retailer beat with EPS and is raising its FY EPS view. It now sees FY adj. EPS in the range of $5.90 to $6.20 vs. the prior guidance of $5.75 to $6.05.
- Royal Bank of Canada and Lowe’s also post EPS ahead of consensus.
- Pembina Pipeline is purchasing Kinder Morgan’s Canadian unit along with a portion of the Cochin Pipeline. The price tag is C$ 4.25b.
- Keep an eye on Apple suppliers. The tech giant is said to be close to securing a deal for advanced iPhone screens from Chinese listed BOE Tech.
- Reports allege Alibaba is delaying the HK IPO due until October citing the current political unrest in there.
- Fed Minutes due later today. We will see if they discussed a 100 basis points cut at the last meeting.
Markets & Macro
|SK||Exports 20 Days YoY||Aug||—||-13.30%||-13.60%||—|
|SK||Imports 20 Days YoY||Aug||—||-2.40%||-10.30%||—|
|AU||Bloomberg Aug. Australia Economic Survey (Table)|
|AU||Westpac Leading Index MoM||Jul||—||0.14%||-0.08%||-0.07%|
|AU||Skilled Vacancies MoM||Jul||—||0.40%||-0.60%||-0.20%|
|SK||Short-Term External Debt||2Q||—||$140.0b||$129.4b||—|
|JN||Supermarket Sales YoY||Jul||—||-7.10%||-0.50%||—|
|JN||Nationwide Dept Sales YoY||Jul||—||-2.90%||-0.90%||—|
|JN||Tokyo Dept Store Sales YoY||Jul||—||-2.70%||-1.30%||—|
|UK||Public Finances (PSNCR)||Jul||—||-13.5b||15.2b||—|
|UK||Central Government NCR||Jul||—||-8.1b||13.5b||—|
|UK||Public Sector Net Borrowing||Jul||-3.4b||-2.0b||6.5b||5.7b|
|UK||PSNB ex Banking Groups||Jul||-2.9b||-1.3b||7.2b||6.3b|
|US||MBA Mortgage Applications||16-Aug||—||-0.90%||21.70%||—|
|CA||CPI NSA MoM||Jul||0.20%||—||-0.20%||—|
|CA||Consumer Price Index||Jul||136.6||—||136.3||—|
|CA||CPI Core- Median YoY%||Jul||2.10%||—||2.20%||—|
|CA||CPI Core- Common YoY%||Jul||1.80%||—||1.80%||—|
|CA||CPI Core- Trim YoY%||Jul||2.00%||—||2.10%||—|