A very mixed reaction around the region following yesterday’s Fed minutes. Overall, there was no clear direction while Japan lagged and Hong Kong lead to the upside. The “Greenback” was generally weaker on back of the aforementioned Fed release.
Japan suffered due to the US$ decline as the ¥ once again traded stronger than the “century” mark. All major sectors in Japan retreated with the “best” performing sectors of basic materials and energy off by about 0.75%. While still hoping for a T-Mobile/Sprint merger, Softbank -4.6% announced it had completed its ¥250b buyback. July exports suffered the largest decline since 2009 of 14% vs. -13.7% estimated. Imports dropped 24.7% leaving a trade surplus of ¥ 513.5b.
It was key earnings that caused the Hong Kong to trade well. While Ping An’s +2.5% NI beat was due in part due to disposals, the figures still showed solid underlying trends and a lower overall tax rate. Tencent’s +5.2% Q2 profit and sales surpassed estimates thanks to strong mobile games adds and online advertising jumping by 60%. Lenovo +2.2% also beat and expects its Motorola smartphone business to make up for its declining computer unit. China Unicom’s +7.8% results appear to show performance has bottomed and a strong increase in 4G users will drive results growing forward. Mainland markets struggled following property price data for July that showed new home prices fell m/m in 16 of the 70 cities tracked. In June, prices declined in only 10 cities.
While the weaker US$ was also a problem for S. Korean exporters, gains in the Samsung Group moved the KOSPI higher. Samsung Life +5.4% plans to buy a 9.14% stake of Samsung Securities +3.5% from Samsung Fire & Marine +2.5% and an additional 8.02% shares from Samsung Securities itself. This drove Samsung Elec. +4.7% to an all time high.
Australia’s unemployment rate dropped in July to 5.7% from 5.8% as part time jobs surged amid a national election and census count. Treasury Wine +11.5% profits more than doubled as earnings from Asia outpaced those in its home market.
Europe has been trading up small since the open and pulled back from its highs of about 0.5%. Most sectors are green with basic resources ahead by over 2% followed by financials and industrials. Healthcare is the only sector in the red. Volumes are lower by 20.0%.
Nestle -1.0% is trading well despite organic sales growth lagging consensus (3.5% vs. 3.7% expected). CFO Roger stated its performance bottomed during Q2 and the company would meet its FY estimates.
A trifecta on earnings is blowing wind power generator Vestas +9.0% higher. Q2 revenues were stronger, the company raised its FY margin guidance and announced a share buyback.
The US$ strength has continued but the £ is especially stronger following better than expected U.K. retail sales which were well ahead of expectations in all readings.
Cisco is trading lower pre-market after announcing job cuts amounting to 7% of its total workforce. Wal-Mart raised forecasts. Fed Chair Yellen will be speaking at the annual Jackson Hole symposium today.
Market Prices and Macro Data
|FR||ILO Unemployment Rate||2Q||10.10%||9.90%||10.20%||—|
|FR||Mainland Unemp. Change 000s||2Q||-15k||-74k||-3k||-7k|
|FR||ILO Mainland Unemployment Rate||2Q||9.90%||9.60%||9.90%||—|
|JN||Machine Tool Orders YoY||Jul F||—||-19.70%||-19.60%||—|
|EC||ECB Current Account SA||Jun||—||28.2b||30.8b||31.8b|
|EC||Current Account NSA||Jun||—||37.6b||15.4b||16.5b|
|UK||Retail Sales Ex Auto Fuel MoM||Jul||0.30%||1.50%||-0.90%||—|
|UK||Retail Sales Ex Auto Fuel YoY||Jul||3.90%||5.40%||3.90%||—|
|UK||Retail Sales Inc Auto Fuel MoM||Jul||0.10%||1.40%||-0.90%||—|
|UK||Retail Sales Inc Auto Fuel YoY||Jul||4.20%||5.90%||4.30%||—|
|IT||Current Account Balance||Jun||—||-7185m||3189m||—|
|HK||Unemployment Rate SA||Jul||3.40%||3.40%||3.40%||—|
|HK||Composite Interest Rate||Jul||—||0.26%||0.26%||—|
|EC||Construction Output MoM||Jun||—||0.00%||-0.50%||0.00%|
|EC||Construction Output YoY||Jun||—||0.60%||-0.80%||-0.40%|
|EC||CPI YoY||Jul F||0.20%||0.20%||0.20%||0.10%|
|EC||CPI Core YoY||Jul F||0.90%||0.90%||0.90%||—|
|EC||ECB account of the monetary policy meeting|