Analytics, 08 October 2019
Daily comment Oct 8
- Wall St opens lower following US capital restriction move against China
- China big-tech shares tumbled
- Samsung +2.4% on prelim. 3Q profit beat
- BA -1.4% on further delay of 737 Max return
- Brexit deal is impossible with Northern Ireland staying in customs union: UK PM
- German industrial production unexpectedly improved
- WTI -1.2%
Market movers:
- Alibaba (-2.6%), JD (-1.8%), Baidu (-2.6%): Companies under pressure following the reports White House is considering limits on pension funds investing in Chinese stocks.
- Samsung Electronics (+2.4% at close): Preliminary 3Q earnings came above estimate helped by strong smartphone demand. Company sees: Rev. - 5.3% y/y to Won62.0tn vs est. Won61.14tn. Op. profit -56% y/y to Won7.7tn vs est. Won6.9. (https://bloom.bg/2Mt5dhY)
- Microsoft (-0.3%): Jefferies upgraded stock rating to “buy” raising TP from $93 to $160 (17% upside) (https://on.mktw.net/2VkQ9Hs)
- Boeing (-1.4%): Disagreement between US and EU regulator could delay 737 Max return even further, WSJ reports. (https://on.wsj.com/2LVuz9o)
- Meanwhile, Southwest’ pilots sued Boeing over suspending 737 Max. (https://cnb.cx/2MqqQQ0)
Macro:
- US will consider restrictions of capital flow to China, including blacklist of several Chinese AI companies and preventing pension funds from investing in Chinese stocks. China warned US to withdraw the move, otherwise it would retaliate. (https://bloom.bg/31WzkVv)
- US PPI for Sep: -0.3% m/m vs est. +0.1% and +0.1% prior month. Core PPE: -0.3% m/m vs est. +0.2%. (Bloomberg)
- German IP for Aug: +0.3% m/m vs flat est. (Bloomberg)
- Boris Johnson told Angela Merkel a Brexit deal is impossible with EU demands over Northern Ireland border. (https://bloom.bg/2MlwzXm)
Commodities:
- WTI (-1.2%): Oil fell mostly on escalating US-China trade tensions ahead of talks this week.
- Bloomberg survey showed US crude inventories expanded by 1.95mn bls last week.
Coming up:
- On Tue (10/8): Fed Chairman Powell speaks on the final day of NABE’s annual conference in Denver at 1:50 PM (EST)
- On Wed (10/9): Minutes on the latest Fed’ meeting will be released
- On Thu (10/10): The US CPI data are due