CAPIS Global Recap – 10/31/2019
Asian Headlines Asian indices closed mixed post the interest move in the States with mainland China underperforming. IT names there lagged, doing the same in Japan despite the Nikkei up on the session. This after both Apple and Facebook reported good quarterly results. Official Manufacturing PMI was possibly the culprit in China with the reading…
Asian Headlines
Asian indices closed mixed post the interest move in the States with mainland China underperforming. IT names there lagged, doing the same in Japan despite the Nikkei up on the session. This after both Apple and Facebook reported good quarterly results. Official Manufacturing PMI was possibly the culprit in China with the reading of 49.3 light vs the 49.8 expected as it remains in contraction. Non-manufacturing also missed with smaller company Caixin readings expected Thursday night. At midnight EST, the China Commerce Ministry noted trade negotiations with the US were going well. Hong Kong pared their base rate to 2.00% (25bps cut). Post the close GDP was shown to be down 2.9% for the 3Q, well worse than the -.3% expected. Headlines noted they are now in a technical recession which it has not seen since 2009. HSBC pared their lending rate on the move.
The BoJ left their rates unchanged at -.10%, retaining asset purchases as-is. They reiterated low or even lower rates to prevent any momentum towards achieving price stability from being lost. Post the announcement GDP for the next several years along with CPI views were again pared.
Other headlines to note include:
- AAC Tech closed up 3.5% post the Apple results. The IT sector was up over 6% in Hong Kong today.
- Telecom services were strong on the mainland with commercial 5G expected to kick off tomorrow.
- Earnings in Japan post the close include Tokyo Electron, Takeda, Japan Tobacco, Keyence, Panasonic with a host of others out as well.
- Samsung closed flat after it earlier reported 3Q readings that showed a sizable drop YoY in their chip business. CAPEX spending remains strong with the firm noting DRAM and NAND bit growth should be stronger than expected.
- North Korea again lobbed two missiles into the Sea of Japan.
- The Financial Times said China is ending its plans to merge ChemChina and SinoChem. US concern over some of their holding was cited (Switzerland’s Syngenta) along with the melding of management. Instead, SinoChem will probably acquire just some of ChemChina’s assets.
European Headlines
European markets showed promise early on but moved lower on headlines an hour into the session out of China. A press story noted China does not think it can reach a full, long-term deal with President Trump. They are said to be demanding an end to tariffs before any phase 2 discussions. Further China is said to be unwilling to give in on big structural changes. With that said all markets are lower with only the sectors of Utilities, Travel, Food, and Telcos higher. Autos and Basic Resources lead lower. GDP for the region held steady in the 3Q with CPI doing the same.
Earnings are still front and center with several headlines to note:
- Fiat +8% is the lone winner in the auto space today with sizable losses elsewhere. Yesterday of course they and PSA (Peugeot) -12% agreed to merge on a 50/50 deal. Fiat shareholders are seen receiving a €5.5B special divi out of the deal with a Jefferies analyst noting that plays into his view that PSA is paying a 32% premium for FCA. Market participants no doubt agree that Fiat is getting the better of the deal as evidenced by the sharp drop in PSA shares today. Renault -3.3% as it is left out in the cold.
- Volkswagen -2% earlier reported better 3Q adj operating profit but pared its FY delivery target to inline with 2018. They cited lower demand which they admit took them by a bit of surprise.
- Air France flat saw op profit light vs estimates with a weakened outlook. They cited lower cargo transport demand with a lower demand in pricey last-minute bookings over the summer.
| Event | Survey | Actual | Prior | Revised | |||
| SK | 57) | Industrial Production SA MoM | Sep | 0.50% | 2.00% | -1.40% | -1.80% |
| SK | 58) | Industrial Production YoY | Sep | -1.90% | 0.40% | -2.90% | -3.30% |
| SK | 59) | Cyclical Leading Index Change | Sep | — | 0.1 | -0.1 | 0 |
| JN | 60) | Japan Buying Foreign Bonds | 25-Oct | — | -¥1018.5b | ¥536.1b | ¥513.8b |
| JN | 61) | Japan Buying Foreign Stocks | 25-Oct | — | ¥1.4b | ¥42.3b | ¥42.4b |
| JN | 62) | Foreign Buying Japan Bonds | 25-Oct | — | ¥26.0b | ¥127.2b | ¥127.4b |
| JN | 63) | Foreign Buying Japan Stocks | 25-Oct | — | ¥649.5b | ¥522.3b | ¥522.4b |
| JN | 64) | Industrial Production MoM | Sep P | 0.40% | 1.40% | -1.20% | — |
| JN | 65) | Industrial Production YoY | Sep P | -0.10% | 1.10% | -4.70% | — |
| UK | 66) | GfK Consumer Confidence | Oct | -13 | -14 | -12 | — |
| AU | 67) | Building Approvals MoM | Sep | 0.00% | 7.60% | -1.10% | -0.60% |
| AU | 68) | Building Approvals YoY | Sep | -25.70% | -19.00% | -21.50% | -21.10% |
| AU | 69) | Import Price Index QoQ | 3Q | 0.50% | 0.40% | 0.90% | — |
| AU | 70) | Export Price Index QoQ | 3Q | -0.50% | 1.30% | 3.80% | — |
| AU | 71) | Private Sector Credit MoM | Sep | 0.30% | 0.20% | 0.20% | — |
| AU | 72) | Private Sector Credit YoY | Sep | 2.70% | 2.70% | 2.90% | — |
| CH | 73) | Composite PMI | Oct | — | 52 | 53.1 | — |
| CH | 74) | Manufacturing PMI | Oct | 49.8 | 49.3 | 49.8 | — |
| CH | 75) | Non-manufacturing PMI | Oct | 53.6 | 52.8 | 53.7 | — |
| JN | 76) | BOJ Policy Balance Rate | 31-Oct | -0.10% | -0.10% | -0.10% | — |
| JN | 77) | BOJ 10-Yr Yield Target | 31-Oct | 0.00% | 0.00% | 0.00% | — |
| JN | 78) | BOJ CPI Current Forecast +2 | 4Q | — | 1.50% | 1.60% | — |
| JN | 79) | BOJ GDP Current Forecast +1 | 4Q | — | 0.70% | 0.90% | — |
| JN | 80) | BOJ CPI Current Forecast +1 | 4Q | — | 1.10% | 1.30% | — |
| JN | 81) | BOJ GDP Current Forecast | 4Q | — | 0.60% | 0.70% | — |
| JN | 82) | BOJ GDP Current Forecast +2 | 4Q | — | 1.00% | 1.10% | — |
| JN | 83) | Vehicle Production YoY | Aug | — | -2.20% | 11.80% | 11.70% |
| JN | 84) | Housing Starts YoY | Sep | -6.70% | -4.90% | -7.10% | — |
| JN | 85) | Annualized Housing Starts | Sep | 0.878m | 0.897m | 0.891m | — |
| JN | 86) | Construction Orders YoY | Sep | — | -6.80% | -25.90% | — |
| JN | 87) | Consumer Confidence Index | Oct | 35.3 | 36.2 | 35.6 | — |
| FI | 88) | House prices have new methodology, data not comparable | |||||
| NO | 89) | Credit Indicator Growth YoY | Sep | 5.50% | 5.80% | 5.50% | — |
| GE | 90) | Retail Sales MoM | Sep | 0.20% | 0.10% | 0.50% | -0.10% |
| GE | 91) | Retail Sales NSA YoY | Sep | 3.30% | 3.40% | 3.20% | 3.10% |
| FI | 92) | Trade Balance | Aug F | — | -245m | -240m | — |
| DE | 93) | Unemployment Rate SA | Sep | — | 3.10% | 3.10% | — |
| DE | 94) | Unemployment Rate Gross Rate | Sep | 3.80% | 3.70% | 3.80% | 3.70% |
| FR | 95) | CPI EU Harmonized MoM | Oct P | 0.10% | -0.10% | -0.40% | — |
| FR | 96) | CPI EU Harmonized YoY | Oct P | 1.10% | 0.90% | 1.10% | — |
| FR | 97) | CPI MoM | Oct P | 0.10% | -0.10% | -0.30% | — |
| FR | 98) | CPI YoY | Oct P | 0.90% | 0.70% | 0.90% | — |
| SP | 99) | GDP QoQ | 3Q P | 0.40% | 0.40% | 0.40% | — |
| SP | 100) | GDP YoY | 3Q P | 2.00% | 2.00% | 2.00% | — |
| HK | 101) | GDP YoY | 3Q A | -0.30% | -2.90% | 0.50% | — |
| HK | 102) | GDP SA QoQ | 3Q A | -0.60% | -3.20% | -0.40% | — |
| HK | 103) | Budget Balance HKD | Sep | — | -53.4b | -14.8b | — |
| NO | 104) | Norges Bank Daily FX Purchases | Nov | — | -700m | -700m | — |
| IC | 105) | Trade Balance | Sep F | — | -17548m | -17100m | — |
| IT | 106) | Unemployment Rate | Sep P | 9.60% | 9.90% | 9.50% | 9.60% |
| PO | 107) | CPI MoM | Oct P | — | 0.10% | 1.10% | — |
| PO | 108) | CPI YoY | Oct P | — | 0.00% | -0.10% | — |
| PO | 109) | CPI EU Harmonized MoM | Oct P | — | -0.30% | 1.40% | — |
| PO | 110) | CPI EU Harmonized YoY | Oct P | — | -0.10% | -0.30% | — |
| GR | 111) | Retail Sales YoY | Aug | — | 1.20% | -2.70% | -1.90% |
| IT | 112) | CPI EU Harmonized MoM | Oct P | 0.10% | 0.20% | 1.50% | 1.40% |
| IT | 113) | CPI NIC incl. tobacco MoM | Oct P | -0.10% | 0.00% | -0.50% | -0.60% |
| IT | 114) | CPI NIC incl. tobacco YoY | Oct P | 0.30% | 0.30% | 0.40% | 0.30% |
| IT | 115) | CPI EU Harmonized YoY | Oct P | 0.20% | 0.20% | 0.20% | — |
| BE | 116) | Unemployment Rate | Sep | — | 5.60% | 5.50% | — |
| EC | 117) | Unemployment Rate | Sep | 7.40% | 7.50% | 7.40% | 7.50% |
| EC | 118) | GDP SA QoQ | 3Q A | 0.10% | 0.20% | 0.20% | — |
| EC | 119) | GDP SA YoY | 3Q A | 1.10% | 1.10% | 1.20% | — |
| EC | 120) | CPI MoM | Oct P | 0.10% | 0.20% | 0.20% | — |
| EC | 121) | CPI Estimate YoY | Oct | 0.70% | 0.70% | 0.90% | 0.80% |
| EC | 122) | CPI Core YoY | Oct P | 1.00% | 1.10% | 1.00% | — |
| HK | 123) | Money Supply M1 HKD YoY | Sep | — | -3.50% | -4.40% | — |
| HK | 124) | Money Supply M2 HKD YoY | Sep | — | 1.90% | 1.80% | — |
| HK | 125) | Money Supply M3 HKD YoY | Sep | — | 1.80% | 1.90% | — |
| IN | 126) | Fiscal Deficit INR Crore | Sep | — | 97714 | 6235 | — |
| IT | 127) | GDP WDA YoY | 3Q P | 0.20% | 0.30% | -0.10% | 0.10% |
| IT | 128) | GDP WDA QoQ | 3Q P | 0.00% | 0.10% | 0.00% | 0.10% |
| IN | 129) | Eight Infrastructure Industries | Sep | — | -5.20% | -0.50% | — |