MLK Day Global Markets 1/21/2019
Asian Markets The markets focused upon macro data out of China. The nation’s FY ’18 GDP provided some interesting results. The 6.6% reading was the lowest since 2009. However, the final for the year is a touch better than the government’s target of c. 6.5%. Industrial production and retail sales provided further evidence the the…
The markets focused upon macro data out of China. The nation’s FY ’18 GDP provided some interesting results. The 6.6% reading was the lowest since 2009. However, the final for the year is a touch better than the government’s target of c. 6.5%. Industrial production and retail sales provided further evidence the the world’s second market largest economy may be faring better than feared. (All details below in our macro section below.)
This created general buying interest across the region. However, that was tempered as investors await further word regarding trade talks. Part of the caution is due to reports the U.S. will issue further restrictions upon Chinese telecoms doing business here. Also, sources allege intellectual property remains a sticking point. On the plus side, China is said to be offering a boost to imports of U.S. products by $1t over the next 6 years. S. Korea lagged as imports and exports slumped resulting in a trade deficit.
Overall, most sectors saw gains. Energy was the standout, advancing by c. 1.5%. The was the result of strong Chinese refining data during December. IT gained 1%. Utilities were out of favor and the real estate sector lagged, weighed upon by Chinese names. The rate of property investment during December slowed m/m.
Other Important Headlines
- Foxconn Tech gained despite reports the company has cut 50,000 seasonal jobs a month earlier than usual due to lower iPhone demand.
- Nissan CEO Saikawa stated his firm was not prepared for integration or stronger capital tie with Renault %.
- Chow Tai Fook and peers benefited from Tiffany’s results from Friday. The famous jeweler and VF Corp both indicate Chinese sales are improving.
- Shipping stocks continue to sail higher. The Nikkei reports Kawasaki Kisen is pondering the resumption of a dividend payment for the next FY. It has not paid a dividend in 4 years.
- Doosan Heavy and other Korean nuclear power plays powered up following a poll reflecting more than 50% of respondents favor nuclear power vs. the government’s plan to exit its usage.
The region’s markets have spent the day lower to one extent or the other. They had pared about half of the day’s 0.4% loss but suffered some mild selling following the IMF global growth outlook. The organization has reduced its forecast for 2019. It now sees the growth at 3.5%. It had forecast 3.7% back in October. Activity is fairly light due to the U.S. holiday and investors await U.K. PM May’s next steps regarding Brexit.
Snippets from the Region
- Henkel’s -8.2% trading update has not been well received. The company noted FY ’19 EPS and margins will decline. RBC projects estimates on “the Street” may need to come down as much as 10.0%.
- Sandvik +1.5% provided a reassuring trading update and pledged a dividend that was better than consensus.
- Orange -0.9% dismissed reports it will make a bid to acquire all of Euskaltel -1.9%.
On the Markets Agenda for Tonight
- The World Economic Forum commences in Davos. Both PM May and Pres. Trump will not attend due to their respective issues: Bexit and the U.S government shutdown.
- UBS will the primary earnings release.
- Macro Due includes UK jobs, earnings, public finances and German ZEW results.
|SK||Exports 20 Days YoY||Jan||—||-14.60%||1.00%||—|
|SK||Imports 20 Days YoY||Jan||—||-9.50%||2.20%||—|
|UK||Rightmove House Prices MoM||Jan||—||0.40%||-1.50%||—|
|UK||Rightmove House Prices YoY||Jan||—||0.40%||0.70%||—|
|CH||Retail Sales YoY||Dec||8.10%||8.20%||8.10%||—|
|CH||Retail Sales YTD YoY||Dec||9.00%||9.00%||9.10%||—|
|CH||Industrial Production YoY||Dec||5.30%||5.70%||5.40%||—|
|CH||Industrial Production YTD YoY||Dec||6.20%||6.20%||6.30%||—|
|CH||Fixed Assets Ex Rural YTD YoY||Dec||6.00%||5.90%||5.90%||—|
|CH||Property Investment YoY||Dec||—||9.50%||9.70%||—|
|CH||Surveyed Jobless Rate||Dec||—||4.90%||4.80%||—|
|CH||GDP SA QoQ||4Q||1.50%||1.50%||1.60%||—|
|CH||GDP YTD YoY||4Q||6.60%||6.60%||6.70%||—|
|JN||Convenience Store Sales YoY||Dec||—||1.20%||0.60%||—|
|CA||Bloomberg Nanos Confidence||18-Jan||—||54.5||54.5||—|
|AU||ANZ Roy Morgan Weekly Consumer Confidence Index||20-Jan||—||—||116.8||—|
|SK||GDP SA QoQ||4Q P||0.60%||—||0.60%||—|
|SK||GDP YoY||4Q P||2.70%||—||2.00%||—|
|JN||Tokyo Condominium Sales YoY||Dec||—||—||2.80%||—|
|JN||Supermarket Sales YoY||Dec||—||—||-2.50%||—|
|HK||CPI Composite YoY||Dec||2.50%||—||2.60%||—|
|UK||Claimant Count Rate||Dec||—||—||2.80%||—|
|UK||Jobless Claims Change||Dec||—||—||21.9k||—|
|UK||Average Weekly Earnings 3M/YoY||Nov||3.30%||—||3.30%||—|
|UK||Weekly Earnings ex Bonus 3M/YoY||Nov||3.30%||—||3.30%||—|
|UK||ILO Unemployment Rate 3Mths||Nov||4.10%||—||4.10%||—|
|UK||Employment Change 3M/3M||Nov||87k||—||79k||—|
|UK||Public Finances (PSNCR)||Dec||—||—||4.4b||—|
|UK||Central Government NCR||Dec||—||—||8.4b||—|
|UK||Public Sector Net Borrowing||Dec||1.1b||—||6.3b||—|
|UK||PSNB ex Banking Groups||Dec||1.9b||—||7.2b||—|
|GE||ZEW Survey Current Situation||Jan||43||—||45.3||—|
|GE||ZEW Survey Expectations||Jan||-18.5||—||-17.5||—|
|EC||ZEW Survey Expectations||Jan||—||—||-21||—|
|CA||Wholesale Trade Sales MoM||Nov||-0.30%||—||1.00%||—|
|CA||Manufacturing Sales MoM||Nov||-0.80%||—||-0.10%||—|
|US||Existing Home Sales||Dec||5.24m||—||5.32m||—|
|US||Existing Home Sales MoM||Dec||-1.50%||—||1.90%||—|