Asian Headlines

Asian indices kicked off the last month of the year to the upside.  After Friday’s expanded official Manufacturing PMI reading that moved back into expansion, if only by a slight amount, yesterday saw the Caixin reading improve as well.  That buoyed sentiment both locally and globally with the mainland though up small.  With violence again ramping up gains in Hong Kong were capped at less than .40% on the Hang Seng. Japan outperformed with the Nikkei up a percent, led by gains in Materials, Health Care, and Discretionary names.

China’s Manu PMI reading moved to 50.2 in November, ahead of the 49.5 estimate and better vs the 49.3 prior reading.  For six months the reading remained in contraction.  Reading components production, new orders, and new export orders all rallied.  The Caixin reading expanded at its quickest rate in nearly 3 years as November makes the 4th consecutive month of expansion.  Production was strong with new export orders up for the second month.

On the trade front little was noted with the US celebrating Thanksgiving.  The Global Times chimed in stating China’s top goal is the removal of existing tariffs while Axios said a deal is now “stalled” due to the passing of the HK bill.  They stated a deal will occur by the end of this year adding they see President Trump delaying tariffs on tap for this month.

Specific to listings in China the CSRC is expected to approve A-shares listings of IPO’s at a ‘steady pace’.  And back to Hong Kong it’s no surprise that HK’s Financial Chief said retail sales declines will be “enormous”.  He said a record deficit for 2019/2020 is expected which would be the first in 15 years.  November gaming revenues out of Macau were off 8.5% YoY, slightly better than the 9% loss expected.

South Korea continued to see weak trade with Exports off 14.3% in November, the 1st double digit slowdown in ~10 years. Imports fell 13%.  Their Manufacturing PMI reading though ticked up to 49.4 vs the prior 48.4 result.

In Japan, while Capital Spending worked higher Manufacturing PMI continued to lag in November, remaining in contraction.  Also, the gov appear to be working on a stimulus package with trillions of ¥ to go towards public works. On the equity front Nissan +1.4% and Mitsubishi Motors +1.2% are expected to announce a new entity soon that is geared towards advanced automotive technologies and increased vehicle efficiency.

Tomorrow, the RBA meets with rates expected to remain unchanged.

European Headlines

European indices worked higher over the first hour but have given up much of those gains on still uninspiring PMI data.  The Stoxx 600 is back to flat on the session with both the FTSE 100 and DAX holding onto small gains.  While EU PMI climbed a hair the UK saw a reading of 48.9 vs the previous 48.3 result. Germany’s November PMI reading finished at 44.1, just above the expected/prior reading of 43.8.   While not into expansion territory some stabilization appears to be occurring.

On the sector front, Basic Resources led with gains of less than a percent, followed by Energy and Personal Goods.  The bias is to the downside with most sectors off.  Utilities are weaker by over a percent.  Turnover on the day is off ~10% ahead of US traders heading back into work.

In individual stock news Lufthansa is up with a news report stating Qatar Airways may be interested in pursuing a partnership or taking a stake in the firm.  Additionally, a trade union cancelled a planned strike against the company post talks.

Ted Baker is off 10% on concern of overstated inventory.  The firm said inventory needs to be pared to the tune of £25M.