CAPIS Global Recap – 9/9/2019
Asian Headlines Not a bad start to the week with mostly higher closes seen in the region. Mainland China led with strong returns in IT and Communication names. This was predicated on word Shanghai is demanding a quicker rollout of 5G. Financials and Healthcare led in Japan while Communication names eased. many companies curtailed business…
Asian Headlines
Not a bad start to the week with mostly higher closes seen in the region. Mainland China led with strong returns in IT and Communication names. This was predicated on word Shanghai is demanding a quicker rollout of 5G. Financials and Healthcare led in Japan while Communication names eased. many companies curtailed business today ahead of Typhoon Faxai. Both Hong Kong and Australia underperformed with each market closing flat on the session. In Hong Kong, with protests continuing, Health Care names saw weakness while Energy, Discretionary, and IT names closed up. Chipmakers buoyed the Kospi.
Over the weekend trade data was released in China with imports and exports both contracting. The USD-quoted Trade Surplus finished at $34.84B, well light of the $44.30B expected. Exports to the US fell 16% with the country upping imports from Australia by 32% YoY. The other notable focus point today was the PBoC reserve requirement rate reduction for all their banks. This RRR will go into effect next week with the level reduced by 50 bps to 13%. TTN reported several headlines of interest including last week’s phone discussion between the country and the US involved China’s plan to purchase a “modest” amount of US ag products in exchange for the US pushing back the Oct 1st tariffs and easing export restriction on Huawei. Stay tuned for further tweets to get the skinny on that outcome. Also, a story titled “A Forensic Examination of China’s National Account” has been submitted to the Brookings Papers on Economic Activity which outlines that China has padded their GDP by an average of 2% from 2008 through 2016.
- Nissan -.2% will soon get another CEO after last week the current CEO, Hiroto Saikawa, admitted he was overpaid by ten of millions of Yen.
- Hon Hai fell .4% with a firm called China Labor Watch reporting Foxconn and Apple allowed for harsh working conditions in its plants that produce iPhones. Apple admitted that Foxconn broke labor laws by employing more temporary workers than allowed. Up to 10% of temp workers, called dispatch workers, is allowed but Foxconn had plants employing up to 50% of their employees with dispatch workers.
- The PBoC is said to be considering cutting the medium term lending facility rate later this month with the bank today not rolling over the entire maturing amount of CNY176.5B.
European Headlines
Little change in markets today in Europe with indices up small on the session thus far. Autos and Banks lead with gains of over a percent with Energy and Insurers posting sold returns as well. The balance of sectors are up/down on more tepid moves with Food names the weakest.
The ECB meets this week with the Deposit Facility Rate expected to be cut even more. Today though UK economic releases are in focus with the Pound strengthening on said releases. As noted below July results for Industrial and Manufacturing Production, Construction output, and trade surpassed expectations, if even by a little. The £ strength is weighing on the FTSE.
On the Brexit front Amber Rudd left Tory cabinet this week will no longer head up the Work and Pensions department. Rudd is frustrated over Boris’ purge of rebel Tories and how he is handling Brexit adding Johnson does not want a deal with the EU. He continues to push to prevent a Brexit extension but the courts may alter that.
- AstraZeneca is off 2% despite positive results from its small-cell lung cancer drug Imfinzi.
- Air France -9% disappointed markets with their August passenger traffic growth of 2.1%. EasyJet -2.2% said they are interested in the assets of bankrupt Aigle Azur.
- London-listed Intu Properties +11% is up on word Orion Capital could acquire the shopping-center owner. Also in the space Spain’s Lar Espana RE +9% gains with Vukile said to be looking at a €700M bid.
| CH | 1) | Foreign Reserves | Aug | $3100.00b | $3107.18b | $3103.70b | — |
| CH | 2) | Trade Balance | Aug | $44.30b | $34.84b | $45.06b | $44.58b |
| CH | 3) | Exports YoY | Aug | 2.20% | -1.00% | 3.30% | — |
| CH | 4) | Imports YoY | Aug | -6.40% | -5.60% | -5.60% | -5.30% |
| CH | 5) | Exports YoY CNY | Aug | 6.30% | 2.60% | 10.30% | — |
| CH | 6) | Imports YoY CNY | Aug | -3.10% | -2.60% | 0.40% | — |
| CH | 7) | Trade Balance CNY | Aug | 299.30b | 239.60b | 310.26b | — |
| JN | 8) | BoP Current Account Balance | Jul | ¥2046.0b | ¥1999.9b | ¥1211.2b | — |
| JN | 9) | BoP Current Account Adjusted | Jul | ¥1700.6b | ¥1647.1b | ¥1941.9b | — |
| JN | 10) | Trade Balance BoP Basis | Jul | -¥24.0b | -¥74.5b | ¥759.3b | — |
| JN | 11) | GDP SA QoQ | 2Q F | 0.30% | 0.30% | 0.40% | — |
| JN | 12) | GDP Annualized SA QoQ | 2Q F | 1.30% | 1.30% | 1.80% | — |
| JN | 13) | GDP Nominal SA QoQ | 2Q F | 0.30% | 0.30% | 0.40% | — |
| JN | 14) | GDP Deflator YoY | 2Q F | 0.40% | 0.40% | 0.40% | — |
| JN | 15) | GDP Private Consumption QoQ | 2Q F | 0.60% | 0.60% | 0.60% | — |
| JN | 16) | GDP Business Spending QoQ | 2Q F | 0.70% | 0.20% | 1.50% | — |
| JN | 17) | Bank Lending Incl Trusts YoY | Aug | — | 2.10% | 2.30% | — |
| JN | 18) | Bank Lending Ex-Trusts YoY | Aug | — | 2.20% | 2.50% | 2.40% |
| IR | 19) | Ulster Bank Ireland Construction PMI | Aug | — | 53.7 | 51.4 | — |
| AU | 20) | Home Loans MoM | Jul | 1.50% | 4.20% | 0.40% | 0.60% |
| AU | 21) | Investment Lending | Jul | 1.50% | 4.70% | 0.50% | 0.90% |
| AU | 22) | Owner-Occupier Loan Value MoM | Jul | 1.00% | 5.30% | 2.40% | 4.10% |
| NE | 23) | Manufacturing Production MoM | Jul | — | 0.50% | -0.80% | -1.20% |
| NE | 24) | Manufacturing Production YoY | Jul | — | -0.20% | -2.20% | -2.70% |
| NE | 25) | Industrial Sales YoY | Jul | — | -6.60% | -10.20% | -9.80% |
| JN | 26) | Bankruptcies YoY | Aug | — | -2.30% | 14.24% | — |
| JN | 27) | Eco Watchers Survey Current SA | Aug | 41 | 42.8 | 41.2 | — |
| JN | 28) | Eco Watchers Survey Outlook SA | Aug | 43.9 | 39.7 | 44.3 | — |
| SZ | 29) | Unemployment Rate | Aug | 2.10% | 2.10% | 2.10% | — |
| SZ | 30) | Unemployment Rate SA | Aug | 2.30% | 2.30% | 2.30% | — |
| DE | 31) | Trade Balance ex Ships | Jul | — | 8.1b | 7.4b | 6.7b |
| DE | 32) | Current Account (Seasonally Adjusted) | Jul | — | 15.1b | 15.2b | 15.6b |
| GE | 33) | Trade Balance | Jul | 17.4b | 21.4b | 16.8b | 16.6b |
| GE | 34) | Current Account Balance | Jul | 16.4b | 22.1b | 20.6b | 20.9b |
| GE | 35) | Exports SA MoM | Jul | -0.50% | 0.70% | -0.10% | — |
| GE | 36) | Imports SA MoM | Jul | -0.30% | -1.50% | 0.50% | 0.70% |
| NO | 37) | GDP (MoM) | Jul | — | 1.00% | -0.20% | — |
| NO | 38) | GDP Mainland (MoM) | Jul | 0.30% | 1.00% | 0.20% | — |
| FR | 39) | Bank of France Ind. Sentiment | Aug | 96 | 99 | 95 | 96 |
| SW | 40) | SEB Sweden Housing-Price Indicator | |||||
| EC | 41) | SURVEY REPORT: Euro Area Economic Forecasts in Sep. 2019 | |||||
| GE | 42) | SURVEY REPORT: Germany Economic Forecasts in Sept. 2019 | |||||
| FR | 43) | SURVEY REPORT: France Economic Forecasts in Sept. 2019 | |||||
| IT | 44) | SURVEY REPORT: Italy Economic Forecasts in Sept. 2019 | |||||
| SP | 45) | SURVEY REPORT: Spain Economic Forecasts in Sept. 2019 | |||||
| PO | 46) | SURVEY: Portugal’s Economy to Expand 1.7% in 2019; Prior… | |||||
| SZ | 47) | Total Sight Deposits CHF | 6-Sep | — | 591.6b | 591.6b | — |
| SZ | 48) | Domestic Sight Deposits CHF | 6-Sep | — | 477.0b | 475.5b | — |
| UK | 49) | Monthly GDP (3M/3M) | Jul | -0.10% | 0.00% | -0.20% | — |
| EC | 50) | Sentix Investor Confidence | Sep | -13.4 | -11.1 | -13.7 | — |
| UK | 51) | Monthly GDP (MoM) | Jul | 0.10% | 0.30% | 0.00% | — |
| UK | 52) | Industrial Production MoM | Jul | -0.30% | 0.10% | -0.10% | — |
| UK | 53) | Industrial Production YoY | Jul | -1.10% | -0.90% | -0.60% | — |
| UK | 54) | Manufacturing Production MoM | Jul | -0.30% | 0.30% | -0.20% | — |
| UK | 55) | Manufacturing Production YoY | Jul | -1.20% | -0.60% | -1.40% | — |
| UK | 56) | Construction Output MoM | Jul | 0.20% | 0.50% | -0.70% | — |
| UK | 57) | Construction Output YoY | Jul | 0.10% | 0.30% | -0.20% | — |
| UK | 58) | Index of Services MoM | Jul | 0.10% | 0.30% | 0.00% | — |
| UK | 59) | Index of Services 3M/3M | Jul | 0.10% | 0.20% | 0.10% | — |
| UK | 60) | Visible Trade Balance GBP/Mn | Jul | -£9500m | -£9144m | -£7009m | -£8920m |
| UK | 61) | Trade Balance Non EU GBP/Mn | Jul | -£3000m | -£1932m | -£186m | -£1771m |
| UK | 62) | Trade Balance GBP/Mn | Jul | -£1500m | -£219m | £1779m | -£132m |
| GR | 63) | Industrial Production YoY | Jul | — | -2.10% | 0.30% | — |
| PO | 64) | Trade Balance | Jul | — | -1751m | -1833m | -1906m |