^N225 - Nikkei 225
| Previous close | 22,451.86 |
| Open | 22,528.56 |
| Volume | 0 |
| Day's range | 22,466.26 - 22,649.85 |
| 52-week range | 18,948.58 - 22,698.79 |
| Avg. volume | 64,534 |
- Bloomberg
Stocks Extend Drop as Tech Leads Way; Dollar Falls: Markets Wrap
(Bloomberg) -- U.S. equities extended losses, led by shares of technology and industrial companies, even in the wake of mostly positive earnings this week. The dollar approached its weakest close since July and the pound drifted.“Markets are more forward looking, meaning that what happened in earnings season in the previous quarter has a temporary impact in the markets, but what is more important to know is the big trends,” said Juha Seppala, Director of Macro Asset Allocation Strategy for UBS Asset Management.Microsoft was the the biggest decliner in tech sector of the S&P 500, while Honeywell and Union Pacific led the industrials down. Consumer staples and real estate stocks topped gains. The Conference Board’s leading economic index fell. Drops in automakers and food shares weighed on the Stoxx Europe 600 Index after some less positive results.Treasuries pushed higher, while most sovereign bonds fell across Europe. Oil futures fluctuated. The lira gained after Turkey and the U.S. agreed Thursday to a temporary cease-fire plan for Syria. While sterling was range bound it was still poised for a third week of gains before U.K. Prime Minister Boris Johnson seeks parliamentary backing on Saturday for his Brexit deal.American earnings so far have been relatively upbeat, after Morgan Stanley on Thursday became the latest big bank to buck concerns about weak growth. Traders will also be mulling the data from China, which showed GDP slow to 6% in the third quarter, with limited pick-up from domestic demand, but factory output improve and retail sales hold up.Earlier in Asia, shares closed down in Shanghai after Chinese GDP rose by the least since the early 1990s last quarter. Benchmarks in Japan and South Korea gave up gains to finish lower.Here are the main movers in markets:\--With assistance from Todd White.To contact the reporter on this story: Claire Ballentine in New York at cballentine@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Weak Chinese Growth Figures Weigh on Asia Pacific Shares
China emphasized Thursday that the U.S. must remove tariffs in order for the two countries to reach a final agreement on trade, Ministry of Commerce spokesman Gao Feng said.
- Bloomberg
U.S. Stocks Approach Record Highs; Bonds Decline: Markets Wrap
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.U.S. stocks climbed toward all-time highs amid a spate of mostly positive earnings reports. Doubts over whether a Brexit deal can win approval whipsawed the pound.The S&P 500 fluctuated for most of Thursday around the 3,000 level, while disappointing results from IBM caused the Dow Jones Industrial Average to lag the other main equity benchmark indexes. Morgan Stanley became the latest big bank to defy expectations for weak growth. Netflix’s international performance impressed analysts.“There’s no doubt there’s been some deescalation of risk, global geopolitical economic risks relative to where we were two weeks ago,” said Michael Kushma, global fixed income chief investment officer at Morgan Stanley Investment Management. “But it may be just a false dawn. We don’t know yet. Our crystal ball is very cloudy at the moment.”“The environment doesn’t support higher equity prices,” said Jeremy Zirin, head of Americas equities at UBS Global Wealth Management. “To move higher, markets have to get comfortable that you’re going to see a re-acceleration of earnings growth next year.”Risk appetite was stoked across the board earlier as the U.K. and European Union said they had agreed on a new withdrawal plan, but it quickly ebbed when a key Northern Irish party said it won’t vote for the deal. The Stoxx Europe 600 Index erased its gain.With doubts swirling over the Brexit deal’s chances of success, investors are also grappling with a mixed bag earnings from major European companies.Earlier in Asia, stocks fell in Tokyo, Sydney and Seoul, rose in Hong Kong and were barely changed in Shanghai. Taiwan Semiconductor, the primary chip supplier to Apple, projected current-quarter revenue ahead of analysts’ estimates. The Australian dollar strengthened after the country’s jobless rate unexpectedly fell and full-time employment climbed.Here are some key events coming up this week:China releases third-quarter GDP, September industrial production and retail sales data on Friday.Here are the main movers in markets: To contact the reporters on this story: Claire Ballentine in New York at cballentine@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Stocks Decline; Retail Sales Miss Lifts Treasuries: Markets Wrap
(Bloomberg) -- U.S. stocks fell, led by energy and technology shares, as investors mulled earnings reports and the prospects of trade negotiations. Treasuries rose after retail sales unexpectedly declined.In earnings, Bank of America jumped after deal fees surged, continuing a string of strong bank results. Nexflix rose in after-hour trading on positive results. The dollar also edged lower after the retail sales report renewed expectations for an October rate cut by the Federal Reserve.“Earnings are not so bad that it causes any sort of violent market reaction,” said Jeff Mills, chief investment officer at Bryn Mawr Trust Co. “But I don’t think they’re going to surprise enough to the upside to be a catalyst for a breakout.”The S&P 500 briefly climbed from the lows of the day after President Donald Trump said a trade deal with China probably will not be signed until he meets with Chinese President Xi Jinping at the APEC summit next month in Chile.The Stoxx Europe 600 dropped, while benchmark indexes in Asia finished mostly higher, though most gauges trimmed the gains after China threatened to retaliate if the U.S. offered legislative support to pro-democracy protesters in Hong Kong. Stocks dipped in Shanghai and the yuan weakened.The pound strengthened amid signs European leaders are getting ready to gather in Brussels to clinch a deal that will see the U.K. part ways with the European Union.Elsewhere, Turkish stocks fell with the lira after the U.S. brought a criminal case against one of the nation’s largest banks, in what could be an escalation of Washington’s efforts to reprimand Ankara for its military incursion into northern Syria. Crude oil futures rose. Gold ticked higher.Here are some key events coming up this week:China releases third-quarter GDP, September industrial production and retail sales data on Friday.Here are the main movers in markets: \--With assistance from Robert Brand.To contact the reporters on this story: Claire Ballentine in New York at cballentine@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Asian Shares Rise as Upbeat Brexit News Offsets IMF’s Prediction of Lower Global Growth
Asian shares were supported on Wednesday after optimistic comments on Brexit from European negotiator Michel Barnier were backed up by reports that a draft legal text over the divorce was being drawn up.
- Bloomberg
Stocks Hit Four-Week High on Earnings; Pound Jumps: Markets Wrap
(Bloomberg) -- U.S. stocks touched four-week highs, led by health care and financial shares, as earnings season began in earnest. The pound strengthened as the U.K. and European Union moved closer to a Brexit deal.The Nasdaq Composite Index jumped more than 1.2%, while the S&P 500 topped 3,000 on an intraday basis for the first time in three weeks. Treasury yields rose amid the risk-on backdrop.“Things on the earnings front seem to have gotten off to a pretty decent start, interest rates -- although they’ve perked back up a little -- are still extremely low, and this trade deal and positive Brexit talk are good for world growth,” said Gary Bradshaw, a portfolio manager at Hodges Capital Management. “I like what we see, and the market’s obviously responding well to that.”In earnings news:Johnson & Johnson raised its sales and earnings forecast for the year.UnitedHealth beat profit estimates and raised its full-year outlook.JPMorgan’s third-quarter results beat estimates, sending its shares higher.Goldman Sachs reported investment bank revenue and earnings per share that undershot estimates, but its equities sales and trading was a beat.BlackRock said there was a decline in fixed income inflows from the previous quarter as clients moved some money back into equities.The pound strengthened and gilts fell after two EU officials said negotiators in Brussels are closing in on a draft Brexit deal that could lead to a breakthrough before the end of Tuesday. Crude oil fell for a second day and gold dropped.Japan’s equity gauge jumped as trading resumed after a long weekend during which President Donald Trump announced progress on an interim trade accord with China. Markets elsewhere in Asia were mixed. The Stoxx Europe 600 Index rose, with all 19 sectors advancing.Investors are closely analyzing earnings, given the global backdrop of slowing growth and a host of unpredictable macro risks. The International Monetary Fund made a fifth-straight cut to its 2019 global growth forecast, citing a broad deceleration across the world’s largest economies as trade tensions undermine the expansion.“The earnings reports that will be particularly noteworthy are those from companies that are tied directly to the economic cycle,” said Michael Geraghty, equity strategist at Cornerstone Capital Group.Meanwhile, the Turkish lira jumped and the country’s benchmark stock index rose after Trump imposed milder penalties over its military campaign in Syria than U.S. lawmakers had demanded.Here are some key events coming up this week:Wednesday brings a monetary policy decision in South Korea.U.S. retail sales are forecast to increase for a seventh straight month. Sales in the “control group” are also expected to rise. Consumer spending is carrying the weight of U.S. economic growth so the data will be monitored closely for any signs of slowing.China releases third-quarter GDP, September industrial production and retail sales data on Friday.Here are the main moves in market:To contact the reporters on this story: Claire Ballentine in New York at cballentine@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Financial Times
Singapore fund Temasek aims to lift ‘aspiring unicorns’
Singaporean state-backed fund Temasek Holdings is looking to boost its investment in “aspiring unicorns”, grabbing stakes in promising digital companies to secure high returns once they debut on the stock market. “I would expect even in the next six to 12 months, we’ll be doing a few more” investments in such companies in south-east Asia, Rohit Sipahimalani, who leads Temasek’s start-up focus as a joint head of the investment group, told Nikkei recently in an exclusive interview. In a strategy that defies the current trend towards greater scrutiny of start-ups and their profitability, Temasek last month acquired a stake in Social Bella, an Indonesian online beauty product retailer that is rapidly raising its profile in a country with a large youth population and a blossoming ecommerce sector.
- Financial Times
Philippine president struggles to sell his China pivot at home
A five-minute speedboat ride from Luzon, Grande Island is one of the closest white sand beach resorts to the Philippine capital of Manila. Last year, the local investors who hold the lease on the island agreed a deal with Sanya Group, a Chinese resort developer, who pledged to invest $298m to turn the 44-hectare island into Manila’s answer to the Maldives. The deal was formalised in April, on the sidelines of China’s Belt and Road summit in Beijing.
- Bloomberg
Trade Thaw Sends Stocks Surging and Street Says Rally Isn’t Over
(Bloomberg) -- Signs of progress in U.S.-China trade talks sent stocks to the biggest gain in a week and had Wall Street handicappers making odds on a bigger rally to come.The S&P 500 Index climbed to within 1.8% of a record after President Donald Trump said the two sides agreed to the outlines of a deal that could be signed as early as next month. The equity benchmark rose 1.1% Friday, closing off its session highs since several of the thorniest trade problems remain unresolved. Equities also got a boost from signs of progress in Brexit negotiations.At JPMorgan Chase & Co., strategists led by John Normand estimated there is 10% upside or more in the stock market under a “blue sky” scenario where agreements are reached in both cases, based on the way past geopolitical crises played out.Outstanding issues are likely to be resolved because a trade truce with China would strengthen Trump’s bid for next year’s re-election while both the U.K. and European economies are too weak for their leaders to accept a no-deal outcome, the strategists argue. They boosted the odds for an Oct. 31 Brexit deal from 5% to 50% amid news that U.K. prime minister Boris Johnson made a vital breakthrough in talks with Irish leader Leo Varadkar.Apple Inc., which sells millions of iPhones in China, rose to an all-time high. The Stoxx Europe 600 Index jumped the most since January. Crude oil surged following an explosion on an Iranian tanker and Pentagon plans to ramp up the deployment of U.S. forces to Saudi Arabia. Gilts tumbled and the pound had the biggest two-day gain in a decade.While the strategists admitted details on the trade situation are “too scarce to rethink forecasts,” they urged investors to start positioning for a favorable outcome. Further progress is likely to revive risk appetite from investors who have sought shelter in fixed income and low-volatility stocks.“There is still a peace dividend to be earned after this week’s moves,” the strategists wrote in a note. “Geopolitics created a growth slump and sank asset prices and bond yields, so less uncertainty should drive a growth revival and market reversals, as long as valuations and positions do not already reflect positive outcomes.”If history is of any guide, they say, investors should brace for a rotation into emerging markets, cyclical and value shares while preparing for losses in assets such as developed market bonds, U.S. dollar and Japanese yen.Investors embraced the progress on trade talks after conflicting headlines roiled markets this week, even if the accord falls short of a comprehensive agreement that would put an end to the trade war.“We could break through all-time highs if investors really perceive peace to this latest round,” said Diane Jaffee, senior portfolio manager at TCW, which oversees $200 billion. “Even though the market is rising today, there’s still a lot of skepticism embedded here. A lot, a lot, a lot.”Elsewhere, equities rallied throughout Asia, with shares in Hong Kong getting an extra lift as protesters discussed scaling back vandalism ahead of demonstrations this weekend.Here are the main moves in markets:StocksThe S&P 500 Index added 1.1% at the close of trading in New York.The Stoxx Europe 600 Index surged 2.3%.The MSCI Emerging Market Index climbed 1.8%.The Shanghai Composite Index climbed 0.9%.CurrenciesThe Bloomberg Dollar Spot Index dropped 0.5% to a two-month low.The euro increased 0.4% to $1.1046.The British pound jumped 1.8% to $1.2667.The offshore yuan climbed 0.4% to 7.0736 per dollar.The Japanese yen fell 0.4% to 108.43 per dollar.BondsThe yield on 10-year Treasuries gained nine basis points to 1.75%.Germany’s 10-year yield climbed three basis points to -0.45%.Britain’s 10-year yield jumped 12 basis points to 0.70%.CommoditiesWest Texas Intermediate crude gained 2.3% to $54.80 a barrel.Gold decreased 0.6% to $1,484.57 an ounce.\--With assistance from Sophie Caronello and Sarah Ponczek.To contact the reporters on this story: Vildana Hajric in New York at vhajric1@bloomberg.net;Lu Wang in New York at lwang8@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Brendan WalshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Asian Shares Boosted by Trade Talk Optimism
“Big day of negotiations with China. They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House,” Trump said in a tweet Thursday.
- Bloomberg
Stocks Climb as Investors Focus on Trade Talks: Markets Wrap
(Bloomberg) -- Stocks gained and Treasury yields jumped as investors kept a careful eye on the latest trade developments amid high-level meetings between American and Chinese officials. The pound surged on talk of a Brexit deal.Banks and automakers led the S&P 500 Index higher, though there were plenty of gyrations along the way after an overnight session that saw futures whipsawed by headlines giving conflicting signs of progress on the negotiations. The dollar fell, brushing off a weak inflation reading. Ten-year Treasury yields rose past 1.65% as bonds rallied globally. China’s yuan climbed the most in a month.Among the latest developments on trade:Both China and the U.S. signaled cautious optimism in securing a partial deal for a temporary truce on tariffsThe discussions extended into the afternoon ThursdayPresident Donald Trump said in a Twitter post that he plans to meet with Vice Premier Liu He on Friday, adding “They want to make a deal, but do I?”Markets have grown jittery against a backdrop of deteriorating economic data and fresh tensions between the U.S. and China in recent days, as they prepare for the first face-to-face talks between senior officials since July. Investor nerves were on full display Thursday as a series of headlines roiled markets, with traders attempting to digest reports on everything from the duration of the talks to the potential currency pact.“China trade talks are really dominating everything and we’ve seen how unpredictable they can be,” Chris Gaffney, president of world markets at TIAA, said by phone. “We’ve seen it move just back and forth so dramatically. I think everyone’s really going to have to wait until a deal gets actually done.”Elsewhere on Thursday, the Stoxx Europe 600 Index and the British pound extended gains after U.K. Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar said they could “see a pathway to a possible deal” on Brexit.Crude rose after OPEC Secretary-General Mohammad Barkindo said members and allies including Russia will do “whatever it takes” to prevent another oil slump as the global economy weakens.Asian shares ended the session mixed, with Japanese equities recouping their declines by the close, South Korea down and Hong Kong and Shanghai notching modest gains.Here are the main moves in markets:StocksThe S&P 500 Index rose 0.6% at the close of trading in New York.The Stoxx Europe 600 Index rose 0.7%.The MSCI Emerging Market Index increased 0.5%.The Nikkei-225 Stock Average added 0.5%CurrenciesThe Bloomberg Dollar Spot Index sank 0.4%.The euro gained 0.3% to $1.1006.The British pound advanced 2% to $1.2447.The offshore yuan increased 0.4% to 7.1108 per dollar.The Japanese yen weakened 0.4% to 107.95 per dollar.BondsThe yield on 10-year Treasuries rose eight basis points to 1.66%.Germany’s 10-year yield rose eight basis points to -0.47%.Britain’s 10-year yield jumped 13 basis points to 0.58%.CommoditiesWest Texas Intermediate crude gained 2.1% to $53.69 a barrel.Gold fell 0.8% to $1,493.83 an ounce.\--With assistance from Sybilla Gross, Christopher Anstey, Yakob Peterseil and Todd White.To contact the reporter on this story: Vildana Hajric in New York at vhajric1@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Brendan WalshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Asian Shares Finish Higher after Wild Ride
After the sharp break early in the session, Asian shares mounted a powerful comeback rally to turn higher for the day after the New York Times reported Wednesday evening stateside that U.S. President Donald Trump’s administration is set to grant licenses that would allow American firms to sell nonsensitive supplies to Huawei.
- Bloomberg
Stocks Gain on Hopes for Progress in Trade Talks: Markets Wrap
(Bloomberg) -- U.S. stocks advanced on optimism that the U.S. and China will make progress in trade talks this week despite some conflicting signals on the outlook. Treasury yields climbed.The S&P 500 Index ended the day up almost 1% in a rally fueled by speculation that China is still open to a partial deal with the U.S. But in a sign of how tenuous the new-found confidence is, stocks pared gains in the afternoon after a report that China sought to tamp down expectations for progress.Ten-year Treasury yields climbed past 1.55%. The Turkish currency and its stocks dropped after the country began a military offensive in Syria against Kurdish militants. The Stoxx Europe 600 Index advanced for the third day in four.While volume was subdued during the Yom Kippur holiday, equities traders were looking closely for signals about high-level U.S.-China trade talks that are set to resume in Washington on Thursday. While a broad agreement seems unlikely, China indicated it’s open to a limited deal, provided no more tariffs are imposed, according to an official. In return, Beijing would offer non-core concessions like purchases of agricultural products without giving in on major sticking points, the official said, without offering further details.“It’s encouraging to hear China say that they want to make some sort of small deal,” said Randy Frederick, a vice president of trading and derivatives who helps oversee $3.7 trillion in assets at Charles Schwab. “If we can get the two sides to agree to not raise tariffs any further than where they are, that would be positive.”Investors are also looking to gauge the next moves by major central banks. Traders of fed funds futures broadly maintained the amount of easing they expect from the Federal Reserve this year after Wednesday’s release of minutes from the latest meeting. They showed officials began debating how far their current interest-rate cutting campaign should extend even as they agreed to lower rates in response to growing risks to the U.S. economy.Elsewhere, the iShares MSCI Turkey ETF posted its worst three-day performance since March as the lira weakened to a four-month low. Benchmark equity gauges fell across Asia, except for those in Shanghai and Mumbai. Bond yields dropped in Greece after the region’s most-indebted country sold bills at negative yields. Gold held above $1,500 an ounce.The yuan climbed offshore for its biggest gain in almost a month, helped by trade optimism and a stronger-than-expected daily fixing. West Texas crude touched $53 a barrel before paring its advance.Here are some key events coming up this week:On Thursday, minutes from the European Central Bank’s most recent gathering are due.Chinese President Xi Jinping is scheduled to meet Indian Prime Minister Narendra Modi on Friday and Saturday for an informal summit.The U.S. releases a key measure of inflation on Thursday.Here are the main moves in markets:StocksThe S&P 500 Index rose 0.9% at the close of trading in New York.The Stoxx Europe 600 Index gained 0.4%.The MSCI Emerging Market Index slipped 0.1%.CurrenciesThe Bloomberg Dollar Spot Index was little changed.The euro rose 0.2% to $1.0973.The British pound slumped 0.1% to $1.2208.The Japanese yen depreciated 0.4% to 107.47 per dollar.BondsThe yield on 10-year Treasuries added five basis points to 1.58%.Britain’s 10-year yield climbed five basis points to 0.46%.Germany’s 10-year yield rose five basis points to -0.55%.CommoditiesWest Texas Intermediate crude climbed 0.1% to $52.66 a barrel.Gold gained 0.1% to $1,506.77 an ounce.\--With assistance from Cormac Mullen and Adam Haigh.To contact the reporters on this story: Vildana Hajric in New York at vhajric1@bloomberg.net;Robert Brand in Cape Town at rbrand9@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Brendan Walsh, Todd WhiteFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Futures Surge, China May Accept Interim Trade Deal, Don’t Expect The Trade War To End
The U.S. futures surge after reports China is willing to accept an interim trade deal if no more tariffs are imposed.
- FX Empire
Asian Shares Capped Amid Growing Uncertainty Over Trade Talks
Now, just one day before the start of trade talks, reports from China are saying the Chinese delegation may cut short its planned stay in Washington and depart on Friday, dimming hopes for a trade deal.
- Bloomberg
No Easy Bets on Halloween Event Spooking Markets
(Bloomberg) -- The Halloween deadline for Brexit has the qualities investors hate most in market events -- unpredictability and uncertainty.In a month when jitters already abound on global growth and trade, there’s still no deal in sight for the U.K. With Prime Minister Boris Johnson insisting the country plans to exit on Oct. 31 even as EU officials remain unconvinced by proposals put forth so far, it could all come down to the wire. So far, an extension and early general elections have high odds in strategists’ scenarios, which leaves traders of U.K. assets in a wait-and-see mode.Deal or no-deal, it appears U.K. stocks are not expected to come out as winners. Even if the two sides pull off the near-impossible feat of reaching an agreement before the deadline, the big winners would be euro-area stocks, JPMorgan strategists said earlier this week, partially because the exporter-heavy FTSE 100 would be penalized by the soaring pound.Should the U.K. leave the EU without a deal by Oct. 31, sterling may fall “through 1.15 or even 1.10” versus the dollar, levels not seen since 1985, Jefferies wrote in a note yesterday.Faced with extreme scenarios, Bank of America Merrill Lynch strategists recommend a volatility play. They forecast the pound will depreciate 15% against the dollar in case of a no-deal Brexit, while moving up 10% in case of a deal. In both situations, they expect European equities to move in the same direction as sterling, and the Euro Stoxx 50 to “realize more than the FX-dampened FTSE in the lead up to and following such Brexit scenarios.”In fact, the risk premium associated with U.K. equities has been rising much faster than that of the euro area since the referendum, and remains in upward trend.Credit Suisse economists shared their view on Monday that an extension of Article 50 is the most likely scenario, but the path to get there could require “increased stress” in the second half of October. They price the odds of a no-deal Brexit at 20% and see a 90% chance of a general election by the end of the year. This continuous political stress could weigh on sterling and U.K. assets, they say.In the end, prolonged uncertainty seems to be the most painful scenario, as it drags on the economy and makes planning difficult, with consequences for the job market as well. Although the unemployment rate is hovering near its lowest since the 70s, U.K. staffing companies warned yesterday that a lack of clarity around Britain’s departure from the European Union has continued to hurt hiring trends. No surprise then that U.K. business confidence has been sinking.That leaves U.K. stocks as a trade for the brave, or for the value hunter. Sustained worries about Brexit have already dragged the FTSE 100 to near its cheapest level relative to the Euro Stoxx 50 in 13 years, prompting strategists at Citi and Pictet to recommend the shares on valuation grounds.In the meantime, Euro Stoxx 50 futures are little changed ahead of the European open, while S&P 500 contracts are up 0.2%.SECTORS IN FOCUS TODAY:Watch European exporters given the deteriorating relations between China and the U.S. over the past 48 hours, with the U.S. cracking down on China over human rights and the National Basketball Association running afoul of Chinese sensibilities.Watch for luxury stocks as markets may position ahead of French luxury conglomerate LVMH reporting third-quarter sales after the close and may give a sense of how much the industry has been affected by the unrest in Hong Kong.COMMENT:“Markets have rallied in 3Q, but not on earnings prospects. Following the sharp cuts to EPS growth estimates, now at -4% y/y in Europe and -3% in the U.S., soft 3Q results may not come as a surprise to investors,” Barclays strategists write in a note. “However, the September market rebound to near ytd highs reduces the cushion, in our view, in particular for cyclicals.”NOTES FROM THE SELL SIDE:Following a sustained period of downgrades and de-rating for the U.K. pub and restaurant sector, there appears to be some confidence returning as reflected in an upturn in consolidation, which may continue to be a catalyst, Jefferies says, initiating on 6 stocks.While DNB, SEB and Nordea remain buy rated, the banks are not estimated to show any “superior outperformance” in the upcoming 3Q results, Handelsbanken says in note.COMPANY NEWS AND M&A:GAM Said to Halt Sales Talks With Suitors Including GeneraliCredit Suisse Weighs Return to U.S. Private Banking After ExitRenault Chairman Wants to Start Search for New CEO: FigaroBoostheat Paris IPO Priced at EU14/Share vs EU14-EU17 RangeDBV Technologies Prices $125M of Shares, Closing Seen Oct. 11Takeaway Third Quarter Orders 41.6 MlnKappahl 4Q Operating Profit Rises to SEK108 MlnCropEnergies 2Q Operating Profit EU28.6 Mln Vs. EU9.6 Mln Y/yBKW Acquired Germany’s LTB Leitungsbau; No Financial DetailsAMG Buys International Specialty Alloys Assets From KennametalBourbon: Takeover Offer Made by A Co. Owned by French BanksTECHNICAL OUTLOOK for Stoxx 600 index:Resistance at 395.1 (July high); 397.9 (June 2018 high)Support at 380.6 (50-DMA); 376.6 (200-DMA); 365.5 (50% Fibo)RSI: 41.6TECHNICAL OUTLOOK for Euro Stoxx 50 index:Resistance at 3,573 (July high); 3,596 (May 2018 high)Support at 3,436 (50-DMA); 3,403 (61.8% Fibo); 3,363 (200-DMA)RSI: 48.2MAIN RESEARCH AND RATING CHANGES:UPGRADES:Cellnex upgraded to outperform at MainFirst; PT 48 EurosDWS raised to overweight at JPMorgan; PT 34 eurosKBC Group raised to buy at Jefferies; PT 70 eurosVeolia raised to overweight at JPMorgan; PT 25.50 eurosDOWNGRADES:HSBC cut to underweight at Morgan Stanley; PT 540 penceInwido cut to hold at Handelsbanken; PT 56 kronorNetcompany cut to hold at ABG; PT 280 kronerINITIATIONS:4imprint rated new hold at HSBC; PT 2,875 penceAj Bell rated new sell at Liberum; PT 295 penceAscential rated new buy at HSBC; PT 460 penceAvast rated new buy at HSBC; PT 455 penceBenchmark Holdings rated new buy at HSBC; PT 61 penceBlue Cap rated new buy at GSC Research; PT 23 eurosBlue Prism rated new hold at HSBC; PT 1,100 penceDart Group rated new buy at HSBC; PT 1,050 penceDomino’s Pizza Group rated new underperform at JefferiesEquiniti rated new buy at HSBC; PT 295 penceGreene King reinstated hold at Jefferies; PT 850 penceHargreaves Lansdown re-initiated buy at Liberum; PT 2,125 penceIntegraFin rated new hold at Liberum; PT 390 penceJ D Wetherspoon reinstated hold at Jefferies; PT 1,590 penceKeywords Studios rated new buy at HSBC; PT 1,700 penceMarston’s reinstated underperform at Jefferies; PT 90 penceMitchells & Butlers reinstated buy at Jefferies; PT 530 penceNucleus Financial Group rated new hold at Liberum; PT 150 penceQuilter rated new buy at Liberum; PT 159 penceRWS Holdings rated new hold at HSBC; PT 600 penceRestaurant Group reinstated buy at Jefferies; PT 170 penceRicardo rated new hold at HSBC; PT 630 penceRobert Walters rated new buy at HSBC; PT 615 penceSThree rated new buy at HSBC; PT 350 penceSavills rated new hold at HSBC; PT 920 penceShareholder Value Beteiligungen rated new buy at GSC ResearchSophos rated new hold at HSBC; PT 435 penceMARKETS:MSCI Asia Pacific down 0.6%, Nikkei 225 down 0.6% S&P 500 down 1.6%, Dow down 1.2%, Nasdaq down 1.7%Euro up 0.02% at $1.0959Dollar Index down 0% at 99.13Yen down 0.08% at 107.18Brent down 0.4% at $58/bbl, WTI down 0.4% to $52.4/bblLME 3m Copper up 0.5% at $5703.5/MTGold spot up 0.1% at $1507.3/ozUS 10Yr yield up 1bp at 1.53% ECONOMIC DATA (All times CET):8am: (DE) Aug. Trade Balance ex Ships, prior 8.1b8am: (DE) Aug. Current Account (Seasonally Adjusted), prior 15.1b8:30am: (FR) Sept. Bank of France Ind. Sentiment, est. 99, prior 99To contact the reporter on this story: Michael Msika in London at mmsika4@bloomberg.netTo contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, Namitha JagadeeshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Stocks Finish at Lows as Trade Tensions Escalate: Markets Wrap
(Bloomberg) -- U.S. equities tumbled on concern tensions with China are escalating just days before high-level talks between officials from the world’s biggest economies.Chipmakers led the S&P 500 Index to a 1.6% loss and Chinese companies that trade in New York sank to the lowest since mid-August as the Trump administration put visa bans on Chinese officials linked to the mass detention of Muslims in Xinjiang province. That came after China said it strongly opposed a U.S. move to blacklist some of its technology firms and Bloomberg reported the White House is moving ahead with discussions about restricting capital flows to China.The flare-up overshadowed comments by Federal Reserve Chairman Jerome Powell that the central bank will seek to calm money markets while leaving his options open on interest rates weeks ahead of policy makers’ next meeting. Ten-year Treasury yields fell below 1.55% and the dollar rose.The escalation in tension between the U.S. and China comes just days before senior representatives will resume their effort to resolve a protectionist dispute that has roiled markets for more than a year. People’s Bank of China Governor Yi Gang will join Chinese Vice Premier Liu He at the talks in Washington and a report from China’s Global Times said that the full delegation is “one of the largest and broadest teams.”“China is still the overhang that’s going to be the most important,” JJ Kinahan, the chief market strategist at TD Ameritrade, said in an interview at Bloomberg’s New York headquarters. “Even though we have the talks this week, it seems hard to believe they’re going to come out on Friday afternoon and be like, ‘Alright, we’ve done it! It’s over!’”The Stoxx Europe 600 Index declined after two days of gains. The pound weakened after Boris Johnson told German Chancellor Angela Merkel a Brexit deal is essentially impossible if the EU demands Northern Ireland stay in the bloc’s customs union.Asian equity benchmarks had jumped from Tokyo and Seoul to Shanghai and Hong Kong, where trading showed little concern about ongoing unrest. The tech-heavy South Korean index led the regional advance after Samsung Electronics Co. earnings beat analyst estimates.Elsewhere, the dollar rose, shrugging off data that showed a measure of underlying U.S. producer prices posted the biggest monthly drop in more than four years. Turkey’s lira stabilized after tumbling Monday in wake of U.S. President Donald Trump’s threat to “destroy” the country’s economy if it acts in excess in a military operation targeting Kurdish forces in Syria. West Texas crude fell toward $52 a barrel.Here are some key events coming up this week:On Wednesday, minutes will be released from the last policy meeting of the Fed’s rate-setting committee.The account of the ECB’s last gathering is due Thursday.Chinese President Xi Jinping and Indian Prime Minister Narendra Modi reportedly will meet at an unofficial summit.The U.S. releases a key measure of inflation on Thursday.Here are the main moves in markets:StocksThe S&P 500 Index fell 1.6% at the close of trading in New York.The Stoxx Europe 600 Index sank 1.1%.The MSCI Asia Pacific Index increased 0.4%.The MSCI Emerging Market Index fell 0.2%.CurrenciesThe Bloomberg Dollar Spot Index rose 0.1%.The euro fell 0.2% to $1.0953.The British pound declined 0.6% to $1.2221.The Japanese yen strengthened 0.1% to 107.11 per dollar.BondsThe yield on 10-year Treasuries decreased three basis points to 1.53%.Germany’s 10-year yield dipped two basis points to -0.6%.Britain’s 10-year yield declined three basis points to 0.41%.CommoditiesGold increased 0.9% to $1,506.14 an ounce.West Texas Intermediate crude fell 0.8% to $52.32 a barrel.\--With assistance from Sybilla Gross, Andreea Papuc, Vassilis Karamanis, Samuel Potter and Todd White.To contact the reporters on this story: Sarah Ponczek in New York at sponczek2@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Brendan WalshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Financial Times
Mahathir: ‘We have to go to the Chinese’ for infrastructure
Accompanied by security agents in black suits, Malaysian prime minister Mahathir Mohamad walked into the conference room, smiling at everyone. Speaking at the Council on Foreign Relations in New York on September 26, Mr Mahathir shared his feelings on being prime minister again. “I was the only ‘dictator’ that resigned,” Mr Mahathir joked, referring to critics who labelled him a dictator when he first held office from 1981 to 2003.
- FX Empire
Asian Shares Boosted by Hopes of US-China ‘Mini-Deal’
U.S.-China trade talks are at the forefront, but investors are also monitoring the ongoing Brexit discussions and debating the degree of easing required from the Federal Reserve following the recent string of weakening U.S. activity indicators and the slowing in the labor market.
- Bloomberg
SoftBank’s Damage From Uber, WeWork Could Exceed $5 Billion
(Bloomberg) -- Masayoshi Son’s startups have had a rough few months, from a botched initial public offering by WeWork to a sharp decline in shares of Uber Technologies Inc. Now analysts are beginning to calculate that the damage for Son’s SoftBank Group Corp. will likely reach into the billions of dollars.Mitsubishi UFJ Morgan Stanley Securities Co. cut its profit estimate for SoftBank’s Vision Fund, its main investment vehicle, by 580 billion yen ($5.4 billion) to an operating loss of 367.6 billion yen for the September quarter, citing declines in the stock prices of Uber and Slack Technologies Inc. and the withdrawn WeWork IPO. Sanford C. Bernstein & Co. estimates that Vision Fund’s writedown alone could be as much as $5.93 billion, with another $1.24 billion drop for the portion of WeWork owned by SoftBank Group.Son is going through a particularly rocky stretch after repositioning SoftBank from a telecom operator into an investment conglomerate, with stakes in scores of startups around the world. He built a personal fortune of about $14 billion with strategic bets on companies such as China e-commerce giant Alibaba Group Holding Ltd. But the recent troubles have weighed on SoftBank’s shares, pushing them down about 30% from their peak earlier this year as investors grow skittish about startup valuations.“Profits in the [SoftBank Vision Fund] segment may still see considerable volatility ahead,” Mitsubishi UFJ analyst Hideaki Tanaka wrote.Uber’s share price drop was the main culprit for Vision Fund’s poor performance in the second quarter, Tanaka wrote. He also reduced SoftBank Group’s fiscal year operating profit to 1.01 trillion yen, from 1.59 trillion yen.SoftBank may book a $3.54 billion drop in the value of its Uber stake, a $750 million decline for Guardant Health Inc. and take a $350 million hit for Slack, according to Chris Lane, an analyst at Sanford C. Bernstein. Lane said the combined writedown for WeWork may be as much as $2.82 billion, assuming a slide in the company’s valuation to $15 billion from $24 billion, but remains uncertain. He said his estimates represent a worst-case scenario and may be offset by gains from other unlisted companies.In an interview with the Nikkei Business magazine, Son said he is unhappy with how far short his accomplishments to date have fallen of his goals.“The results still have a long way to go and that makes me embarrassed and impatient,” Son said. “I used to envy the scale of the markets in the U.S. and China, but now you see red-hot growth companies coming out of small markets like in Southeast Asia. There is just no excuse for entrepreneurs in Japan, myself included.”“It only just began and I feel there is tremendous potential there,” Son told Nikkei Business. The strategy is to invest in companies that share his vision of a world being reshaped by artificial intelligence, he said.SoftBank Gives ‘Very Public Lesson’ to Founders in WeWork OusterWeWork and Uber may be losing money now, but they will be substantially profitable in 10 years’ time, Son said in the interview. At a private retreat for portfolio companies late last month he had a different message: become profitable soon. At the gathering, held at the five-star Langham resort in Pasadena, California, Son also stressed the importance of good governance. Just days later, SoftBank led the ouster of WeWork’s controversial co-founder Adam Neumann.(Updates with Sanford C. Bernstein’s projections from second paragraph)To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net;Takahiko Hyuga in Tokyo at thyuga@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
U.S. Stocks Slump as China Trade Meeting Looms: Markets Wrap
(Bloomberg) -- U.S. equities declined as investors tried to gauge the outlook for a trade deal between China and the Trump administration. Treasuries slipped and the dollar gained.The S&P 500 Index ended the day about half a percentage point lower after bouncing between small gains and small losses in light volume. Sentiment got a boost on speculation that China is ready to do a deal, while pessimists focused on a report that senior Chinese officials have indicated the range of topics they’re willing to discuss at upcoming talks has narrowed considerably. After the close of New York markets, the U.S. placed eight Chinese technology companies on a blacklist because of alleged human-rights violations, a move that may add to tensions between the countries.In the wake of a slew of weak data and with protectionism portrayed as the main impediment to global growth, investor focus will return to foreign trade this week as Chinese Vice Premier Liu He and an entourage of officials head to Washington to resume talks with their U.S. counterparts. As economic indicators flash warnings, traders have ramped up bets for further Federal Reserve rate cuts. They’ll search for new clues on the policy path when minutes from the latest Fed meeting are released in coming days.“Given the high level of uncertainty that’s out there and the cross-currents -- the cross-currents being escalating geopolitical risks on the one hand and increased monetary easing on the part of the world’s global central banks -- it’s really difficult at this point to determine which force is going to gain the upper hand,” said Ed Campbell, a portfolio manager and managing director at QMA.The Stoxx Europe 600 index climbed as foodmaker and telecom companies advanced. The pound dipped as European leaders cast doubt on reaching a Brexit agreement in time for the U.K.’s Oct. 31 deadline. The dollar strengthened.Japanese equities closed little changed, while Shanghai markets are yet to re-open after holidays. Hong Kong was also shuttered for a holiday, leaving traders with limited options to respond -- or not -- to escalating violence in the city, where protesters set fires and vandalized train stations and banks over the weekend. The yuan dropped in offshore trading by the most since late September.Elsewhere, West Texas-grade oil steadied following its biggest weekly decline since July.Here are some key events coming up this week:Chinese Vice Premier Liu He visits Washington for trade talks with his U.S. counterparts.Fed Chair Jerome Powell speaks Tuesday on the final day of NABE’s annual conference in Denver; on the following day, minutes are released on the last policy meeting of the Fed’s rate-setting committee.Chinese President Xi Jinping and Indian Prime Minister Narendra Modi reportedly will meet at an unofficial summit.The U.S. releases a key measure of inflation on Thursday.Here are the main moves in markets:StocksThe S&P 500 Index slipped 0.5% at the close of trade in New York.The Stoxx Europe 600 Index climbed 0.7%.Japan’s Topix index was little changed.CurrenciesThe Bloomberg Dollar Spot Index rose 0.2%.The pound slipped 0.3% to $1.2296.The euro was little changed at $1.0975.The Japanese yen slipped 0.3% to 107.27 per dollar.The offshore yuan weakened 0.3% to 7.1312 per dollar.BondsThe yield on 10-year Treasuries rose three basis points to 1.56%.Germany’s 10-year yield rose one basis point to -0.58%.The U.K.’s 10-year yield rose one basis point to 0.45%.CommoditiesWest Texas Intermediate crude rose 0.2% to $52.92 a barrel.Gold fell 0.8% to $1,492.09 an ounce.Copper gained 0.5% to $2.574 a pound.\--With assistance from David Wilson, Cormac Mullen and Todd White.To contact the reporters on this story: Brendan Walsh in Austin at bwalsh8@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.netTo contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, ;Jeremy Herron at jherron8@bloomberg.net, Brendan WalshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Asia Shares Mixed as Muted Reaction to Jobs Report Gives Way to Renewed Trade Talks
A little more than two weeks ago, President Trump said he didn’t want a “partial deal” with Beijing. Bloomberg News reported over the weekend that Chinese officials are growing hesitant to pursue a broad trade deal with the U.S, according to people familiar with the matter. All this story does is highlight how difficult reaching a trade deal will be.
- Financial Times
China car start-up dodges Trump tariffs with AI and 3D printing
Angelo Yu is not afraid of Donald Trump. This year, Mr Yu’s auto start-up in south-western China is set to deliver its first vehicle to a US buyer, but he has not even bothered to check how much president Trump’s tariffs on Chinese goods might affect him. Pix Moving, Mr Yu’s company, is using artificial intelligence to design cars and convert the blueprints into instructions for 3D printers.
- Bloomberg
Stocks Rally on Fed Bets as Jobs Calm Growth Fears: Markets Wrap
(Bloomberg) -- U.S. stocks gained along with Treasuries after solid hiring data quelled recession fears without crushing the odds of future Federal Reserve easing. The dollar declined.The S&P 500 rose the most in seven weeks -- though still suffered its third weekly loss -- after payrolls slightly missed estimates for September, while August’s reading was revised upward. Traders trimmed their bets on the results, but the odds still favored a Fed rate cut this month. Chair Jerome Powell did little to change the speculation, saying Friday the economy “faces some risks” but is overall “in a good place.”Tech paced the advance, with Apple Inc. leading benchmark members amid reports of stronger-than-expected sales of its newest phone. The 10-year Treasury rate dropped for the seventh session in a row, and the dollar fell for a fourth straight day. West Texas oil rose toward $53 a barrel.“This one comes in pretty close to neutral in terms of the slowdown. It’s not encouraging, it doesn’t look like a re-acceleration in growth, but it also probably puts at bay some of the fears that have come in around the ISM manufacturing and ISM services numbers,” said Luke Tilley, chief economist at money manager Wilmington Trust Corp. in Delaware. “This should make people and investors comfortable that we still have enough job growth to keep consumer spending on the positive side.”Today’s job numbers followed a string of disappointing economic data this week that had fueled concerns a slowdown in manufacturing could spread to the consumer, and in turn ratcheted up bets that the Fed will reduce rates this month. The burst of rate-cut optimism helped snap a two-day losing streak that reached 3% in the S&P 500 Index Thursday.Elsewhere, European shares advanced along with the euro. India pulled the trigger on another rate cut on Friday, the fifth in the cycle so far. China remains closed for a holiday.Here are the main moves in markets:StocksThe S&P 500 Index rose 1.4%, the most since Aug. 16, at 4 p.m. New York time.The Nasdaq Composite Index gained 1.4%, while the Dow Jones Industrial Average advanced by 1.4%.The Stoxx Europe 600 Index increased 0.5%.The MSCI Emerging Market Index gained 0.3%.CurrenciesThe Bloomberg Dollar Spot Index fell 0.2%.The euro rose by 0.1% to $1.0980.The British pound slid 0.3% to $1.2295.The Japanese yen rose 0.1% to 106.87 per dollar.BondsThe yield on 10-year Treasuries fell two basis points to 1.51%.The yield on two-year Treasuries added two basis points to 1.41%.Germany’s 10-year yield advanced less than one basis point to -0.58%.Japan’s 10-year yield sank two basis points to -0.211%.CommoditiesWest Texas Intermediate crude fell 0.5% to $52.16 a barrel.Gold was steady at $1,513.90 an ounce.\--With assistance from Charlotte Ryan and Yakob Peterseil.To contact the reporters on this story: Randall Jensen in New York at rjensen18@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.netTo contact the editor responsible for this story: Jeremy Herron at jherron8@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Apple to Increase iPhone 11 Output by Up to 10%, Nikkei Reports
(Bloomberg) -- Apple Inc. has told suppliers to increase production of its latest iPhone 11 range by as much as 10% to meet stronger-than-expected sales of the new handsets, the Nikkei Asian Review reported, affirming resilient demand for the company’s most important gadget.The boost would add 7 million to 8 million units to what the Cupertino, Calif.-based company had initially planned on, the Nikkei cited anonymous sources as saying. Shares in Apple suppliers from Murata Manufacturing Co. and Alps Alpine Co. in Tokyo to AAC Technologies Holdings Inc. in Hong Kong climbed after the report. An Apple spokesperson in Japan declined to comment.Apple shares were up 2% to $225.16 at 9:38 a.m. in New York during pre-market trading.It is not unusual for Apple to gradually ramp up orders as it gauges demand after launch and builds up to the holiday shopping season. The U.S. company has stuck with a previous projection for sales of up to 75 million new iPhones in the second half, people familiar with the matter said, asking not to be identified discussing internal estimates.But Chief Executive Officer Tim Cook has telegraphed strong initial sales of his company’s most profitable product, spurring expectations that demand for the iPhone 11 will hold up despite global smartphone malaise. The CEO told French daily Les Echos on Friday he foresaw a new growth cycle in the market.Major improvements to the iPhone’s camera, including the addition of a new ultrawide lens for better architectural and tourist photos, alongside better battery life and improved durability may have resonated with consumers. And a decision to lower the iPhone 11’s starting price by $50, to $699, may also have drawn in more budget-conscious consumers in a weaker global economy.Read more: Apple Now Has the Best Smartphone Cameras: iPhone 11 Pro Review(Updates with shares in 3rd paragraph.)To contact the reporters on this story: Debby Wu in Taipei at dwu278@bloomberg.net;Vlad Savov in Tokyo at vsavov5@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
