Mail

^N225 - Nikkei 225

Osaka - Osaka Delayed price. Currency in JPY

20,596.92

-80.30 (-0.39%)

As of 11:35AM JST. Market open.

Stock chart is not supported by your current browser

Previous close	20,677.22
Open	20,489.97
Volume	0

Day's range	20,482.62 - 20,623.73
52-week range	18,948.58 - 24,448.07
Avg. volume	60,923

Bloomberg
Stocks Mixed on Low Volumes; Treasuries Slip: Markets Wrap
(Bloomberg) -- Stocks in Asia were mixed on low volumes as investors assessed the latest news on trade talks and awaited more clues on monetary policy. Treasury yields ticked higher after retreating Tuesday.Japanese and Australian equities fell, while shares fluctuated in Hong Kong and China, and rose in South Korea. U.S. futures saw modest gains. Earlier, the S&P 500 Index closed lower as U.S. President Donald Trump showed no urgency to resolve trade friction with China and renewed his call for a “big” Federal Reserve rate cut. The yen slipped and the dollar was little changed.Just a day after markets cheered progress on trade negotiations, investors took a more cautious approach. Trump’s top economic adviser, Larry Kudlow, speaks with business leaders this week amid concerns about a recession, the trade war and whipsawing markets. Fed minutes are due Wednesday and though they’re outdated given recent market turmoil and likely to be overshadowed by Jerome Powell’s address at Jackson Hole, they may provide clarity on the economic outlook that would push officials to keep lowering rates.“The global economy is slowing, monetary policy has limits and we’re likely not going to pivot soon enough to fiscal policy,” Mark Kiesel, chief investment officer of global credit at Pacific Investment Management Co., told Bloomberg TV. “The reality is that risks have increased a lot.”Elsewhere, oil fluctuated and gold dipped. Italian bonds jumped on Tuesday as Prime Minister Giuseppe Conte resigned, with the prospect of an alternative coalition still on the table.Here are some notable events coming up:Minutes of the Fed’s July meeting will provide details on the discussions leading to the first interest-rate cut in a decade when they are released on Wednesday.Germany will sell a 30-year bond at a 0% coupon for the first time on Wednesday, in a flurry of debt sales in the next two weeks offering negative rates.Thursday brings the Bank Indonesia rate decision and press conference with Governor Perry Warjiyo.Flash PMIs are due for the euro area on Thursday.Kansas City Federal Reserve Bank hosts its annual central banking symposium in Jackson Hole, Wyoming, starting Thursday. Fed Chairman Jerome Powell will give remarks on Friday.Here are the main moves in markets:StocksFutures on the S&P 500 added 0.2% to 10:52 a.m. in Hong Kong. The underlying gauge fell 0.8% Tuesday.Japan’s Topix index declined 0.8%.The Shanghai Composite was little changed.Hong Kong’s Hang Seng was flat.South Korea’s Kospi index rose 0.2%.Australia’s S&P/ASX 200 Index lost 1%.CurrenciesThe yen was at 106.47 per dollar, down 0.2%.The offshore yuan rose 0.1% to 7.0611 per dollar.The Bloomberg Dollar Spot Index was flat.The euro bought $1.1099, little changed.BondsThe yield on 10-year Treasuries rose two basis points to 1.57%.Australia’s 10-year yield declined two basis points to 0.92%.CommoditiesWest Texas Intermediate crude rose 0.3% to $56.32 a barrel.Gold dipped 0.2% to $1,504 an ounce.\--With assistance from Rita Nazareth and Sarah Ponczek.To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.netTo contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Andreea PapucFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Bloomberg
Stocks Decline With Dollar as Treasuries Advance: Markets Wrap
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Stocks fell and Treasuries climbed as investors assessed the latest news on trade talks and awaited more clues on monetary policy.The S&P 500 Index halted a three-day rally after U.S. Secretary of State Michael Pompeo told CNBC that Huawei Technologies Co. isn’t the only Chinese company that poses risks. He also sees the U.S. and China continuing their talks -- at least by phone -- over the next week or 10 days. Later Tuesday, President Donald Trump said he’s not ready to make a deal with China and cited the need for a “big” Federal Reserve rate cut. Benchmark 10-year yields slumped while the dollar dropped from this year’s high. Italian bonds jumped as Prime Minister Giuseppe Conte resigned.Just a day after markets cheered progress on trade negotiations, investors took a more cautious approach. Trump’s top economic adviser, Larry Kudlow, speaks with business leaders this week amid concerns about a recession, the trade war and whipsawing markets. Pacific Investment Management Co. has reduced its positions in government debt on bets that a breakthrough in U.S.-China trade talks could trigger a violent sell-off, the Financial Times reported. Traders are also gearing up for a keynote speech from Fed Chairman Jerome Powell at the Jackson Hole symposium Friday.“It’s kind of a choppy environment,” Dan Skelly, head of equity model portfolios at Morgan Stanley Wealth Management, said in a phone interview. “The liquidity in August is going to be pretty poor, so that certainly in my view caps the potential upside, but it does raise the risk that you do have a more pronounced sell-off at some point.”Read: JPMorgan’s Kolanovic Sees Pivot Back to Stocks by End of AugustWall Street watchdogs handpicked by Trump eased the Volcker Rule’s controversial ban on banks making speculative investments, wrapping up a top deregulatory priority that’s long been sought by the financial industry. Still, bank stocks joined broader market losses.In corporate news, Home Depot Inc. surged after its results broadly cleared investor expectations -- or at least, were no worse than expected by Wall Street. Beyond Meat Inc. jumped after JPMorgan upgraded the stock to overweight from neutral. Baidu Inc. soared after the China-based Internet company unexpectedly reported revenue growth in its June quarter. Kohl’s Corp. fell on sales that fell short of expectations.Here are some notable events coming up:Minutes of the Fed’s July meeting will provide details on the discussions leading to the first interest-rate cut in a decade when they are released on Wednesday.Thursday brings the Bank Indonesia rate decision and press conference with Governor Perry Warjiyo.Flash PMIs are due for the euro area on Thursday.Kansas City Federal Reserve Bank hosts its annual central banking symposium in Jackson Hole, Wyoming, starting Thursday. Fed Chairman Jerome Powell will give remarks on Friday.Here are the main moves in markets:StocksThe S&P 500 fell 0.8% to 2,900.51 as of 4 p.m. New York time.The Stoxx Europe 600 Index decreased 0.7%.The MSCI Asia Pacific Index rose 0.6%.CurrenciesThe Bloomberg Dollar Spot Index declined 0.3%.The euro rose 0.2% to $1.1102.The Japanese yen increased 0.4% to 106.21 per dollar.BondsThe yield on 10-year Treasuries slid six basis points to 1.55%.Germany’s 10-year yield fell four basis points to -0.69%.Britain’s 10-year yield dropped two basis points to 0.452%.CommoditiesThe Bloomberg Commodity Index was little changed.West Texas Intermediate crude climbed 0.2% to $56.34 a barrel.Gold increased 0.3% to $1,516.70 an ounce.\--With assistance from Sybilla Gross, Andreea Papuc, Todd White and Laura Curtis.To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Rita NazarethFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Bloomberg
Inverted Yield Curve: Is It Time to Worry Yet?
(Bloomberg) -- Last year, U.S. 10-year yields weren’t low enough to really boost the equity market’s appeal. This summer, the inversion of the yield curve is suddenly triggering worries of a U.S. recession, while bund yields are deep into negative territory as Germany seems heading for an economic downturn. Yet there’s few signs of panic among equity traders.Many in the market agree that a U.S. recession isn’t imminent. UBS strategists see the inverted yield curve more as “a statement on lackluster growth in the rest of the world,” and suggest a slowdown would take some time to materialize.One interesting point they note is that European equities seem to have been more vulnerable than U.S. stocks to the gyration of the U.S. 10-year bond yield over the past six months.The U.S. 10-year yield has only fallen below 1.6% on two previous occasions: mid-2012 and mid-2016. According to Citi strategist Jonathan Stubbs, it has worked well as a buy signal for European equities both times, with the DAX returning 23% on average over the next 12 months, the CAC 24%, and the FTSE 17%. Of course, with Fed cuts, ECB QE and trade concerns, things may be different this time, he says.So, should we be worried? Not yet, according to JPMorgan strategists including Mislav Matejka. Over the past six historical episodes, yield-curve inversion preceded recessions by 17 months on average, while the equity market peaked about 11 months after the inversion, they write. Even if the risk of a downturn next year is increasing, much can happen in the meantime. They still expect equities to make all-time highs into the first half of 2020 and see the current pull-back not lasting beyond early September as the ECB will start quantitative easing and the second Fed rate cut might be bigger than the first.The bounce in the U.S. 10-year yield over the past couple of days may have also provided some relief. Indeed, Bank of America technical analysts note that extreme momentum has pushed the monthly Relative Strength Index (RSI) of the U.S. 10- and 30-year bonds into their fourth and fifth-most overbought level ever. This may signal an imminent “key low” or “pivot low.”And not all is bad about negative yields anyway. The more bond yields move deep into negative territory, the more stocks are seen by many as the only attractive asset. Why buy a bond on which you’re guaranteed to lose money while you can buy stocks with lofty dividend yields of 5% or more?True, if held until maturity, government bond yields don’t look appealing. But on an absolute-return basis, some long-duration securities beat stocks. Notably this year, Austria’s 100-year note has delivered investors as much as an 80% return so far. Granted, the timing must be right and liquidity could be an issue.Finally, let’s not forget about another silver lining. With Germany facing the danger of a recession, the government has signaled it stands ready to inject stimulus if things turn sour. Since the bund curve has turned negative across all maturities, financing those fiscal measures in the long-term is even more appealing.In the meantime, Euro Stoxx 50 futures are trading little changed ahead of the open, while S&P 500 contracts are up 0.2%.SECTORS IN FOCUS TODAY:Watch the dollar after President Trump called for the Federal Reserve to cut rates by at least a full percentage point in order to weaken the U.S. currency. Fed Chairman Powell is expected to signal the potential for another cut on Friday, though some of his colleagues are not convinced.Watch the pound and U.K. stocks after U.K. Prime Minister Boris Johnson reiterated the country will be ready to leave the European Union without a deal by the current deadline at the end of October and is planning a September publicity blitz to prepare the public for a so-called hard Brexit. Meanwhile, the Labour party is gearing up for an election.COMMENT:“The flattening of the yield curve was pretty extreme and not what we would naturally expect with the Fed cutting rates, as news should generally affect near-term pricing more than the pricing of bonds maturing in 2040," Emiel Van Den Heiligenberg, head of asset allocation at LGIM, writes in a note. "We therefore aren’t convinced the current situation is sustainable, as the more the curve flattens, the more vocal some members of the Federal Open Market Committee will be in calling for rapid rate cuts.”NOTES FROM THE SELL SIDE:Peel Hunt initiates Playtech with an add rating, as the broker says that although the company is a “strategic muddle,” there is a will to sort out its issues which are “now exposed to daylight.”Jefferies says the biggest potential Brexit risks to the paper & pulp sector are goods-trade disruptions across U.K.-Europe borders as well as a potential macro slowdown next year in those markets. Mondi is seen as least exposed to U.K., SCA has the most U.K. sales exposure while DS Smith will see biggest FX sensitivity to earnings as a co. reporting in GBP with most profits coming from outside the U.K.European insurers have been surprisingly strong in the past 12 months but falling investment yields turns Bankhaus Lampe more cautious on the sector in a note downgrading its rating on Zurich to sell. Separately, Jefferies upgraded its rating on Zurich to buy.COMPANY NEWS AND M&A:BHP Gives Investors Bonanza Returns And a Trade Spat Warning (1)BHP CEO Says Top Miner Can Still Profit In Any Global DownturnBain, Carlyle Said to Weigh Raising Osram Bid to Counter AMSCasino Identifies New Asset Diposals Worth EU2bBNY Mellon, Societe Generale to Join German Cum-Ex Trial (1)Pandora Second Quarter Revenue 1.3% Above EstimatesBasilea Narrows FY Operating Loss View, Midpoint Wider Than Est.Seadrill Ltd 2Q Adjusted Ebitda Beats Highest Est.South Korea May Fine Audi, Porsche over Alleged Emission-RiggingColoplast Chairman Lars Rasmussen Sells Shares Using OptionsAmbea Second-Quarter Net Sales Beat Highest EstimateAnglo American Pledges $30m for Peru Projects to End ProtestsGreene King Banishes Brexit Blues With Some Help From Hong KongCarige Calls Investor Meeting to Back $1 Billion Rescue PlanTECHNICAL OUTLOOK for Stoxx 600 index:Resistance at 374.5 (61.8% Fibo); ~386 (uptrend); 395.1 (July high)Support at 370.9 (200-DMA); 365.5 (50% Fibo, May low)RSI: 45.5TECHNICAL OUTLOOK for Euro Stoxx 50 index:Resistance at ~3,400 (uptrend) 3,403 (61.8% Fibo); 3,443 (50-DMA)Support at 3,249 (June/August low); 3,301 (200-DMA)RSI: 46.8MAIN RESEARCH AND RATING CHANGES:UPGRADES:Alstria Office upgraded to overweight at JPMorgan; PT 18 EurosAntofagasta upgraded to neutral at Goldman; PT 8.50 PoundsFLSmidth upgraded to overweight at JPMorgan; PT 360 KronerGlencore upgraded to neutral at Goldman; PT 2.20 PoundsHumana upgraded to buy at Handelsbanken; PT 57 KronorZurich Ins. upgraded to buy at Jefferies; PT 380 FrancsDOWNGRADES:Continental cut to hold at Deutsche Bank; PT Set to 120 EurosGreene King cut to equal-weight at Morgan StanleyMetrovacesa downgraded to sell at Goldman; PT 8.12 EurosProximus downgraded to sell at Goldman; PT 21 EurosRentokil downgraded to sector perform at RBC; PT 4.70 PoundsRepsol downgraded to underweight at Barclays; PT 16 EurosZurich Ins. downgraded to sell at Bankhaus LampeINITIATIONS:Addiko rated new buy at Goldman; PT 27 EurosOlvi Oyj rated new buy at SEB Equities; PT 41 EurosPlaytech rated new add at Peel Hunt; PT 4.25 PoundsStobart rated new outperform at MacquarieMARKETS:MSCI Asia Pacific up 1%, Nikkei 225 up 0.5% S&P 500 up 1.2%, Dow up 1%, Nasdaq up 1.4%Euro up 0.05% at $1.1084Dollar Index down 0.01% at 98.34Yen up 0.11% at 106.52Brent up 0.1% at $59.8/bbl, WTI little changed at $56.2/bblLME 3m Copper down 0.1% at $5768/MTGold spot up 0.1% at $1497.4/ozUS 10Yr yield down 2bps at 1.59% ECONOMIC DATA (All times CET):11am: (EC) June Construction Output MoM, prior -0.3%11am: (EC) June Construction Output YoY, prior 2.0%12pm: (UK) Aug. CBI Trends Total Orders, est. -25, prior -3412pm: (UK) Aug. CBI Trends Selling Prices, prior 12To contact the reporters on this story: Michael Msika in London at mmsika4@bloomberg.net;Jan-Patrick Barnert in Frankfurt at jbarnert3@bloomberg.netTo contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, Jon MenonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
FX Empire
Asian Stocks Riding Wall Street’s Coattails Higher; PBOC Offers Some Relief
Basically, the move by the Bit’s another way for companies to get cheaper money, which should be a positive for the economy and China’s stock market. In theory, the MLF rate could follow U.S. rates, which means if the Fed cuts rates, MLF rates will follow lower.
Bloomberg
Stocks Rally on Trade as Dollar Rises to 2019 High: Markets Wrap
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Stocks climbed after the Trump administration signaled progress on trade negotiations and speculation grew that major central banks will shore up their economies. The dollar rose to this year’s high.The S&P 500 Index gained for a third day, led by chipmakers, as U.S. Commerce Secretary Wilbur Ross said the nation will delay restrictions imposed on some business operations of China’s Huawei Technologies Co. The Treasury market was unfazed by President Donald Trump’s call for the central bank to cut rates by “at least 100 basis points.” Bunds tumbled as Germany was said to be preparing fiscal stimulus measures. Oil rallied as a drone attack in Saudi Arabia highlighted simmering Middle East tension. Gold fell.In corporate news, Walt Disney Co. erased gains and was little changed at the close after a MarketWatch report cited a whistleblower who said the company had materially overstated revenue for years. Baidu Inc. surged in after-hours trading after quarterly revenue beat analysts’ estimates.The week started on a positive note as the news on Huawei was seen as encouraging for the long-awaited trade pact between the world’s two largest economies. Still, the company said the temporary relief doesn’t change the fact that it’s been treated “unjustly.” The announcement of a reprieve followed a tweet from Trump over the weekend indicating the U.S. was “doing very well with China, and talking,” but suggesting he wasn’t ready to sign a deal.“It’s kind of like a drunken walk,” said Paul Nolte, a money manager at Kingsview Asset Management in Chicago. “There’s no rhyme or reason from day to day as to what’s happening with trade, and trade is really what’s driving the markets. And there’s no way to handicap it. There is no glide path, there is no, ‘Here’s what happening.’ It’s a random walk.”Trump’s top economic adviser, Larry Kudlow, will speak with business leaders this week amid concerns about the rising odds for a recession, the trade war and whipsawing markets. Federal Reserve Bank of Boston President Eric Rosengren pushed back against further rate cuts, arguing he’s not convinced that slowing trade and global growth will significantly dent the economy. Investors awaited Fed Chairman Jerome Powell’s remarks about the challenges for monetary policy at the Jackson Hole symposium Friday.Blue-chip U.S. companies are likely to see a surge in demand for their bonds as the rising amount of negative-yielding debt globally forces more overseas investors to seek higher returns in dollar assets, according to Bank of America Corp. “There is a wall of new money being forced into the global corporate bond market,” strategists led by Hans Mikkelsen wrote in an Aug. 16 note.Here are some notable events coming up:Minutes of the Fed’s July meeting will provide details on the discussions leading to the first interest-rate cut in a decade when they are released on Wednesday.Thursday brings the Bank Indonesia rate decision and press conference with Governor Perry Warjiyo.Flash PMIs are due for the euro area on Thursday.Kansas City Federal Reserve Bank hosts its annual central banking symposium in Jackson Hole, Wyoming, starting Thursday. Fed Chairman Jerome Powell will give remarks on Friday.Here are the main moves in markets:StocksThe S&P 500 rose 1.2% to 2,923.65 at 4 p.m. in New York.The Stoxx Europe 600 Index increased 1.1%.The MSCI Asia Pacific Index climbed 0.9%.CurrenciesThe Bloomberg Dollar Spot Index gained 0.3%.The euro decreased 0.1% to $1.1078.The Japanese yen dipped 0.3% to 106.65 per dollar.BondsThe yield on 10-year Treasuries rose five basis points to 1.60%.Germany’s 10-year yield jumped four basis points to -0.65%.Britain’s 10-year yield climbed less than one basis point to 0.47%.CommoditiesWest Texas Intermediate crude increased 2.4% to $56.21 a barrel.Gold for December delivery fell 0.8% to $1,511.60 an ounce; the spot price dropped below $1,500.\--With assistance from Adam Haigh, Todd White and Laura Curtis.To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Rita NazarethFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
FX Empire
Stocks Ready to Jump Again, but Is Downtrend Over?
Stocks retraced some of their recent declines on Friday, as investors’ sentiment improved following bouncing off the short-term support level, economic data releases. The S&P; 500 index continues to trade within a consolidation. Is this a bottoming pattern or just a flat correction before another leg down?
FX Empire
Asia Pacific Shares Jump Amid Easing Fears of Global Recession
Buyers are responding to a recovery in U.S. Treasury yields, which may be serving as a sign that talk of a U.S. recession may have been overblown.
Bloomberg
Would ECB Buying Equities Really Be a Good Idea?
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Just when the market is looking for a positive catalyst to revive its rally, the European Central Bank’s Olli Rehn seems to think it’s a good move to float the idea of equity purchases as a means of stimulus. But a number of investors and strategists aren’t too thrilled and warn of the risk of artificially overvalued assets.In an interview with the Wall Street Journal last week, Rehn said that it was better for the ECB to overshoot than undershoot market expectations when it comes to new support measures, and didn’t rule out adding equities to the central bank’s stimulus program.“I hope the ECB won’t start buying stocks,” said Roelof Salomons, chief strategist at Kempen Capital Management. “Buying stocks is great for investors but it won’t move the needle -- it will create a bubble instead. The ECB has already made a mistake with bond purchases."The rationale behind possible stock purchases is to stimulate household consumption and help European companies raise capital at higher prices to finance investment, according to Laurent Douillet, a Bloomberg Intelligence strategist. Yet, simply buying equities won’t push European firms to boost their capex plans, says Kempen’s Salomons. For that to happen, countries like France and Italy need to implement reforms while Germany needs to increase government spending, he says.If the ECB were to start buying stocks, it wouldn’t be the first central bank to engage in such extraordinary measure. The Bank of Japan has been buying exchange-traded funds since 2010 and now dominates the nation’s ETF industry, spurring concerns among money managers about an equity overhang.“I am a bit skeptical,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg in Frankfurt. “Equity buying by a central bank has not worked in Japan. And for the euro zone, the wealth effect should be quite limited."At last July’s meeting, ECB policy makers committed to review a swathe of options including interest-rate cuts and renewed quantitative easing. Meanwhile, European equity funds have seen almost non-stop outflows since March 2018, having lost about $87 billion this year alone, according to Bank of America and EPFR Global.While Rehn may be considering launching stock purchases, the majority of the ECB’s governing council would oppose such a move, says Peter Schaffrik, a global macro strategist at RBC Capital Markets. “I am at this stage not even really thinking about the risks of this scenario as I just don’t think this is a realistic option, it’s a red herring."However, it’s important to note that many strategists and investors had also doubted that the ECB would ever start its 2.6 trillion-euro ($2.9 trillion) bond-buying program to stimulate growth.And some support such a move. Rick Rieder, BlackRock’s chief investment officer for global fixed income, said in April that the ECB should consider buying stocks as a form of additional stimulus as debt costs in Europe are much lower and equity is “too expensive.”“It’s a conflict between investors and economists,” says Kempen’s Salomons. “Markets love shorter-term gains even if those come with long-term concerns. You don’t want to be in the ECB’s shoes.”In the meantime, Euro Stoxx 50 futures are up 0.5% ahead of the open, while S&P 500 futures are rising 0.6%.SECTORS IN FOCUS TODAY:Watch German stocks after the government hinted that the country could add about 50 billion euros of spending, putting a number on the possible stimulus for the first time while also indicating nothing was imminent on that front.Watch Italian equities ahead of a confidence vote in the government on Tuesday. The League and Five Star appear to be beyond healing, with the latter moving to distance itself from Deputy Prime Minister and League leader Matteo Salvini.Watch trade-sensitive stocks as the rollercoaster that is keeping up with the state of U.S.-China trade talks begins with a degree of positivity. U.S. President Donald Trump tweeted his team is “doing very well with China, and talking!”COMMENT:“Investors have fled equities in favor of bond and money market funds at a record rate this year,” Bernstein strategists write in a note. “This low level of investor sentiment provides a cushion for the market so we are not bearish despite worsening macro data. At the very least, this makes this August very different from the last Chinese devaluation of August 2015 when investors had been buying in the prior six months.”NOTES FROM THE SELL SIDE:Jefferies says EON’s earnings outlook continues to appear subdued, although these challenges are now better understood by the market. Broker lifts rating to hold from underperform.Citi raises X5 Retail to buy, and sees co. delivering growth in an environment where growth is becoming more rare. Says “conservatively” models 7.6% Ebitda margin this year, up from previous 7.3%.The U.K. buy-to-let market remains in “decent health” and there’s significant upside for the likes of Charter Court, OneSavings Bank and Paragon Banking, Peel Hunt writes in a note boosting price targets on all three firms. Paragon (buy, PT 580p) is top pick, Charter Court kept at buy (PT 400p), OneSavings also buy (PT 470p).Morgan Stanley initiates Colruyt at equal-weight, seeing free cash generation as able to provide some support to the shares even if risk/reward remains skewed toward the downside.COMPANY NEWS AND M&A:DSV Completes Acquisition of Panalpina; Sees DKK2,200M SynergiesDassault Systemes Says Medidata Stockholders Approve PurchaseGrand City Properties 1H FFO Up 7%; Confirms 2019 GuidanceBpost CEO Van Gerven to Leave Co. in Feb.: De StandaardLundin Norway Makes Small Oil Find South of Edvard Grieg: NPDMitie Set to Sell Stake in Gather & Gather in GBP90M Deal: SkyVapiano CEO Everke to Resign From Office Effective Aug. 31TECHNICAL OUTLOOK for Stoxx 600 index:Resistance at 370.8 (200-DMA); 374.5 (61.8% Fibo); ~386 (uptrend); 395.1 (July high)Support at 365.5 (50% Fibo, May low); 356.5 (38.2% Fibo)RSI: 39.2TECHNICAL OUTLOOK for Euro Stoxx 50 index:Resistance at ~3,400 (uptrend) 3,403 (61.8% Fibo); 3,444 (50-DMA)Support at 3,249 (June/August low); 3,300 (200-DMA)RSI: 41.5MAIN RESEARCH AND RATING CHANGES:UPGRADES:CNH Industrial upgraded to overweight at Morgan StanleyEON upgraded to hold at Jefferies; PT 7.80 EurosHumana upgraded to buy at ABG; PT 55 KronorNovozymes raised to neutral at JPMorgan; Price Target 275 KronerRatos upgraded to hold at SEB Equities; PT 18 KronorScout24 Upgraded to Buy at Kepler Cheuvreux; PT 57.50 EurosX5 Retail GDRs upgraded to buy at CitiDOWNGRADES:Paragon GmbH & Co KGaA cut to hold at Bankhaus LampeTechnogym downgraded to hold at BerenbergINITIATIONS:Colruyt rated new equal-weight at Morgan Stanley; PT 43.40 EurosMARKETS:MSCI Asia Pacific up 0.4%, Nikkei 225 up 0.8% S&P 500 up 1.4%, Dow up 1.2%, Nasdaq up 1.7%Euro down 0.01% at $1.1089Dollar Index up 0.08% at 98.22Yen down 0.01% at 106.39Brent up 1.2% at $59.3/bbl, WTI up 1% to $55.4/bblLME 3m Copper up 0.3% at $5763/MTGold spot down 0.5% at $1506/ozUS 10Yr yield up 3bps at 1.58% ECONOMIC DATA (All times CET):10am: (IT) June Current Account Balance, prior 2.6b10am: (EC) June ECB Current Account SA, prior 29.7b11am: (EC) July CPI Core YoY, est. 0.9%, prior 0.9%11am: (EC) July CPI MoM, est. -0.4%, prior 0.2%11am: (EC) July CPI YoY, est. 1.1%, prior 1.3%\--With assistance from Michael Msika.To contact the reporter on this story: Ksenia Galouchko in London at kgalouchko1@bloomberg.netTo contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, Jon MenonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
FX Empire
A Light Day on the Calendar Leaves Geopolitics and Monetary Policy in Focus
It’s “risk-on” in the early part of the Asian session. With economic data on the lighter side, the markets will likely respond further to last week’s stats.
Bloomberg
Stocks Rise, Treasuries Fall on Stimulus Bets: Markets Wrap
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.U.S. stocks rose for a second day as investors got a reprieve from trade posturing and speculation mounted that European officials will bolster stimulus if growth in the region continues to sputter. Treasuries nudged lower, lifting yields from multiyear lows.The S&P 500 jumped more than 1%, notching its 13th straight session with an intraday move of that magnitude as August volatility persisted. The index lost 1% in the five days for a third straight drop. Bulls got ammunition when on a report Germany would engage in deficit spending in the event of a recession. A day earlier, a European Central Bank official said monetary stimulus would be greater than investors anticipated. Germany’s Dax surged and the region’s bonds retreated.In the U.S., chipmakers paced Friday’s advance after Nvidia Corp.’s after quarterly sales and profit beat estimates. Banks also rose as the yield curve steepened, with two-year rates slipping and 10-years turning higher. Deere & Co. rebounded even after cutting guidance, blaming in part the trade war for undermining sales. In Asia, shares in Hong Kong rallied, Chinese stocks edged higher and Korean equities fell.The prospect for strong European stimulus bolstered confidence that the U.S. economy would be spared some of the ill-effects of the slowdown in that region. Investors remained on edge over trade after a week of back-and-forth headlines delivered wild swings in the equity and bond markets. With traders gunning for more rate cuts from the Federal Reserve, chair Jerome Powell may give a hint of his thinking when he speaks Aug. 23 at the annual central bankers retreat in Jackson Hole, Wyoming.“The Fed, in order to keep this expansion going, needs to provide additional accommodation,” Tiffany Wilding, U.S. economist at Pacific Investment Management Co., told Bloomberg TV. “Whether they are able to arrest the downturn -- there is some question around that. Ultimately we think that they will be able to.”Here are the main moves in markets:StocksThe S&P 500 Index gained 1.45% as of 4 p.m. New York time.The Dow Jones Industrial Average rose 1.2%.The Stoxx Europe 600 Index rose 1.2%.The Shanghai Composite Index climbed 0.3%.The MSCI Emerging Market Index increased 0.7%, trimming the week’s loss to 1.1%.CurrenciesThe Bloomberg Dollar Spot Index rose 0.1%, pushing its weekly advance to 0.5%.The euro fell 0.1% to $1.1092.The British pound jumped 0.5% to $1.2146.The onshore yuan dipped 0.1% to 7.04 per dollar.The Japanese yen declined 0.2% to 106.34 per dollar.BondsThe yield on 10-year Treasuries rose two basis points to 1.5454%.The yield on two-year Treasuries fell one basis point to 1.48%.Germany’s 10-year yield rose three one basis points to -0.685%.Britain’s 10-year yield climbed six basis points to 0.466%.CommoditiesWest Texas Intermediate crude rose 0.6% to $54.76 a barrel.Iron ore climbed 0.3% to $86.75 per metric ton.Gold futures decreased 0.6% to $1,522.60 an ounce.\--With assistance from Nancy Moran, Adam Haigh and Yakob Peterseil.To contact the reporters on this story: Jeremy Herron in New York at jherron8@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, ;Christopher Anstey at canstey@bloomberg.net, Namitha JagadeeshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
FX Empire
Asia Markets Mixed; Focus Remains on Treasury Yields
Some investors may have been lulled into believing that recession is imminent and guaranteed, but that’s not the case with this inversion indicator. Research shows the stock market could rally for 15 months after the inversion, and recession may not start until 22 months after the first signal is flashed.
Bloomberg
Stocks Rise, Treasuries Surge in Volatile Day: Markets Wrap
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.U.S. stocks finished the day higher after getting whipsawed throughout the session as Treasury yields plummeted to levels unseen in years amid concerns about the prospect of a global recession.The S&P 500 swung more than 1% from its high to low for a 12th straight day in volume more than a third above its 30-day average before finally ending the day up. Treasuries also suffered whiplash. The 10-year Treasury yield slid below 1.5% for the first time in three years, while the 30-year dropped under 2% for the first time. Trade headlines set investors on edge, though volatility has gripped markets for most of August since Donald Trump escalated his spat with China.Walmart’s strong results and retail sales that topped estimates did give bulls ammunition. But big declines weighed on indexes as Tapestry Inc. tumbled more than 20% on poor sales and General Electric sank more than 10% on accusations of financial fraud. Cisco Systems fell the most in two years after blaming a slowing global economy for a weak outlook.The trade war still hung over markets, with discordant headlines sending risk assets on a wild ride throughout the day. Stocks sold off after China said it would retaliate against fresh tariffs before bouncing back after official comments struck a more conciliatory tone. President Donald Trump added to concern by saying any deal with China must be “on our terms.”“We’re getting a lot of mixed signals on the trade war. There are messages from both the U.S. and China, sometimes they’re tougher messages and sometimes they’re less tough messages. It’s hard to sort out,” said Janet Johnston, portfolio manager at TrimTabs Asset Management.European assets took a jolt when a top official at the European Central Bank said stimulus measures would exceed investor expectations next month, according to a Dow Jones report. The common currency turned lower against the the dollar and stocks erased losses before finishing lower.The morning volatility continued a bout of turmoil sparked two weeks ago when Trump escalated his trade war with China. The uncertainty the rising tensions caused and growing signs of a slowing global economy inverted a key version of the U.S. Treasury yield curve for the first time in 12 years, exacerbating the flight from risk assets.“It’s a tough week with markets as volatile as they are,” said John Roe, the head of multi-asset funds at Legal & General. “Fundamentals are playing a central role but it’s not helped by trade war politics. Markets seemed calmer today after Trump’s more positive tone yesterday, but now China’s upping the rhetoric and it’s becoming a case of he said-Xi said.”Here are the main moves in markets:StocksThe S&P 500 Index rose 0.3% at 4 p.m. New York time.The Dow Jones Industrial Average rose 0.5%.The Nasdaq 100 was little changed.The Stoxx Europe 600 Index dropped 0.3%.The MSCI Asia Pacific Index declined 0.7%.CurrenciesThe Bloomberg Dollar Spot Index was steady.The euro fell 0.2% to $1.1112.The British pound gained 0.4% to $1.2110.The Japanese yen fell 0.1% to 106.00 per dollar.BondsThe yield on 10-year Treasuries decreased seven basis points to 1.51%.The two-year yield fell 10 basis points to 1.48%.Germany’s 10-year yield dipped six basis points to -0.713%.CommoditiesGold futures rose 0.4% at $1,533.20 an ounce.West Texas Intermediate crude declined 1.1% to $54.64 a barrel.\--With assistance from Adam Haigh, Joanna Ossinger, Ksenia Galouchko, Laura Curtis and Jeremy Herron.To contact the reporter on this story: Sarah Ponczek in New York at sponczek2@bloomberg.netTo contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Todd White, Randall JensenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Bloomberg
Bargain Hunters Drive Up Trading Volume in Japanese Stocks
(Bloomberg) -- A declining equity market isn’t usually taken positively by investors but traders of Japanese stocks see recent strong volumes as a sign of support.Over the past month, trading value rose on each day the Topix index lost more than 1%, except for once on Aug. 5. The benchmark stock gauge recorded a gain of over 1% only once during the same period, and volume fell.“Bargain hunters are coming into the market whenever the Nikkei 225 breaks below the 20,500 mark,” said Makoto Hattori, an executive officer at Marusan Securities Co. in Tokyo. “Levels near 20,100, where the price-to-book ratio becomes 1, is considered rock bottom.”The Topix declined 1% Thursday, pushing its loss to 5.2% for the month so far. The Nikkei 225 dropped 1.2% to close at 20,405.65. The total daily value of transactions on the first section of the Tokyo Stock Exchange has averaged over 2.3 trillion yen ($21.8 billion) in August, up from 1.9 trillion over the previous two months.The pick-up in trading is particularly notable given the Obon festival in Japan this week and the typical summer holiday season in other major markets.The surge in volumes amid sliding stock prices is “symbolic” as it represents a new reality for Japanese equities, according to Hiroshi Matsumoto, head of Japan investment at Pictet Asset Management Ltd. “A lot of retail investors are wanting to buy especially, but only when there’s a dip in prices.”To contact the reporters on this story: Min Jeong Lee in Tokyo at mlee754@bloomberg.net;Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.netTo contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Kurt Schussler, Naoto HosodaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
FX Empire
Aussie Employment Numbers Impress Ahead of a Busy Day of Stats
As fears of a global recession rise, today’s stats could add to the doom and gloom. The UK and U.S retail sales figures will be the key drivers
FX Empire
China Stats Disappoint ahead of German GDP and UK Inflation Figures
It’s all eyes on Germany’s GDP numbers and UK inflation figures. A greater than forecasted contraction in the Germany economy will test the EUR…
Financial Times
Indonesia and India seek Olympic glory with rival bids
Indonesian officials can almost see it now: in 2032, the world’s best athletes will converge on the archipelago for the first Olympics in south-east Asia, giving the country the ideal opportunity to showcase itself as an economic powerhouse. After successfully hosting the 2018 Asian Games, President Joko “Jokowi” Widodo revealed Indonesia’s intention to stage the biggest international sporting event. The most formidable rival might be India, which has expressed its determination to bid and could make a strong case.
FX Empire
Asian Markets Weaken as Chinese Military Assembles Near Hong Kong Border
Although Hong Kong’s airport reopened on Tuesday after it was shut down on Monday due to protestors staging a sit-in at the airport, one economist still described the situation in Hong Kong as “very disconcerting.”
Bloomberg
Japan’s Topix Index Wipes Out This Year’s Advance on Yen Surge
(Bloomberg) -- Japan’s Topix index slumped, wiping out this year’s advance, after the yen climbed to its highest since March last year on global trade concerns and political uncertainty.The benchmark measure fell 1.2% Tuesday, resuming trade after a three-day weekend. It is down 0.5% year-to-date and one of the worst performers among the 24 developed markets tracked by Bloomberg. The yen maintained gains after rising 1.1% against the dollar over the past four sessions and is trading around 105.28 to the dollar. The Nikkei 225 Stock Average lost 1.1% Tuesday and is still up 2.2% so far this year.President Donald Trump said that talks with China planned for next month could be called off after the trade war escalated in recent days. Turmoil in Hong Kong and Argentina further dented sentiment. Argentina President Mauricio Macri’s stunning rout in primary elections over the weekend triggered a bout of selling in stocks, leaving much of Wall Street wondering whether the crisis-prone country was headed for yet another default.“The yen is pretty strong,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd. in Tokyo. “We’re in a situation where it’s hard to be purely optimistic.”Asia’s second-largest economy just capped an unimpressive earnings season where companies that have reported earnings for the June quarter showed an average 0.9% decline in earnings per share, according to data compiled by Bloomberg. About 1,996 companies have reported earnings so far this season out of 2,143 companies.“Many companies’ annual plans are based on a yen forecast of around 105 to 108 per dollar and if the yen rises to 104, market expectations for local corporate business sentiment will take another beating,” said Toshihiko Matsuno, who works in investment research and services at SMBC Nikko Securities Inc.The average dollar-yen forecast from the nation’s large manufacturers is 109.35 for the fiscal year ending March 31, according to the Bank of Japan’s quarterly Tankan survey published earlier this year.Sera said the global flight-to-haven assets is being exacerbated by Argentina, which is spurring concern over emerging-market risks.Thanks to the latest sell-off, the Topix is trading less than 12 times its estimated earnings. This compares with the S&P 500 Index’s 17 times.“A key focus will be on whether the Topix will breach its lowest level for the year of 1,462 marked on Aug. 6,” Sera said. She said economic data slated for release from China and the U.S. later this week will provide clues.To contact the reporters on this story: Min Jeong Lee in Tokyo at mlee754@bloomberg.net;Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.netTo contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Naoto Hosoda, Teo Chian WeiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
FX Empire
Economic Data Put the EUR and the GBP in Focus…
It’s a busier day on the economic calendar, with the Pound and the EUR in the spotlight. Is this the day on which the Pound falls back to $1.19?
FX Empire
Asian Markets Finish Higher, but Europe, U.S. Dive after Hong Kong Shuts Airport
Stocks reversed gains after Hong Kong International airport announced it has cancelled all departures for the remainder of the day, according to multiple media reports.
FX Empire
Asian Shares Mixed; Investor Focus Remains on Chinese Yuan Midpoint Fix
The People’s Bank of China fixed its midpoint for the yuan at 7.0136 against the dollar on Friday – the second time this week the benchmark was set weaker than 7. China’s consumer price index in July rose 2.8% on-year – its fastest year on-year pace since February 2018, according to data from the National Bureau of Statistics.
Bloomberg
S&P 500 Erases Weekly Loss as China Tensions Ease: Markets Wrap
(Bloomberg) -- Equities rallied after China’s stronger-than-expected daily fixing of its currency eased fears about a worsening trade conflict.The S&P 500 Index posted its biggest advance in two months, building on gains in Europe and Asia and erasing its loss for the week. A surge in technology companies pushed the Nasdaq Composite up more than 2%. Treasury yields edged lower and the dollar weakened. Oil climbed.Thursday’s move by the People’s Bank of China was seen as an effort to stabilize its currency and went some way toward easing market concern that peaked Monday, when a weak reference rate spurred concern that the trade war was heating up. Despite evidence of some renewed risk appetite, stocks are still well off the record highs reached last month and traders remain jumpy about the potential for escalation in the conflict.“For now, as far as volatility, the worst is over,” Rick Bensignor, the founder of Bensignor Group and a former strategist for Morgan Stanley, said in an interview at Bloomberg’s New York headquarters. “China’s smartly doing what they can. On their part, I think it’s a good tactical move.”The dollar extended its decline after President Donald Trump said a strong greenback was hurting U.S. manufacturers and urged the Federal Reserve to cut interest rates.The Stoxx Europe 600 rose the most in seven weeks. A gauge of Asia stocks increased as China’s Shanghai Composite rebounded from the lowest level since February. The Australian dollar gained from its lowest level in a decade. Bitcoin hovered below $12,000, a level it’s failed to close above for one month.Oil snapped a three-day losing streak after Saudi Arabia contacted other producers to discuss options to stem a rout that’s been driven by the worsening China trade conflict.Here are the main moves in markets (all sizes and scopes are on a closing basis):StocksThe S&P 500 Index increased 1.9% at the close of trading in New York; the Nasdaq Composite added 2.2%.The Stoxx Europe 600 Index jumped 1.7%, the biggest increase in more than seven weeks.The MSCI Asia Pacific Index climbed 0.6%, the largest increase in almost three weeks.The Shanghai Composite Index jumped 0.9% for the biggest increase in more than five weeks.CurrenciesThe Bloomberg Dollar Spot Index dipped 0.2%.The onshore yuan rose 0.2% to 7.0451 per dollar.The euro slipped 0.1% to $1.1187.The Australian dollar jumped 0.7% to $0.6807 for the biggest increase in three weeks.The Japanese yen climbed 0.3% to 106.01 per dollar.BondsThe yield on 10-year Treasuries fell one basis point to 1.72%.Germany’s 10-year yield increased two basis points to -0.56%, the first advance in two weeks.Britain’s 10-year yield rose four basis points to 0.52%.CommoditiesGold rose 0.1% to $1,502.94 an ounce.West Texas Intermediate crude rose 3.2% to $52.75.\--With assistance from David Ingles, Adam Haigh, Andreea Papuc, Laura Curtis and Andrew Dunn.To contact the reporters on this story: Vildana Hajric in New York at vhajric1@bloomberg.net;Brendan Walsh in Austin at bwalsh8@bloomberg.netTo contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, ;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
U.S. Shares Picking Up Positive Vibe from Europe, Asia
The major U.S. stock indexes are expected to open the cash market higher, based on the pre-market futures trade. Investors are shifting toward “risk-on” sentiment because of a stable yuan and firming U.S. Treasury yields. These two markets will influence prices all session.
FX Empire
China Trade Data and a Weaker Yuan Set the Tone Early
The markets remain in the grip of the U.S – China trade war, with the direction of the Yuan now dictating proceedings.
Bloomberg
Stocks, Treasury Yields Climb After Day-Long Dives: Markets Wrap
(Bloomberg) -- U.S. equities and benchmark Treasury yields mounted an impressive comeback late in the day, reversing sharp drops as investors turned more positive on the outlook for global growth amid central-bank moves to ease monetary policy.The S&P 500 Index eked out a modest gain after tumbling as much as 2%, with CVS Health Corp.’s biggest jump in almost eight years and an advance for the biggest tech companies supporting the gauge. Yields on 10-year Treasuries edged higher after an earlier plunge. Currency markets were volatile after rate cuts in New Zealand, India and Thailand.Traders are weighing asset valuations after this week saw the biggest one-day plunge in global equities since February 2018 amid fear an escalation in the trade war will spur a global recession. Threats of expanded tariffs are also creating uncertainty in corporate boardrooms, spurring concern there will be a pullback in capital outlays and a drop in earnings. Hope is resting on central banks to buoy growth.“A lot of investors feel like we’re getting ready to hit a wall because of the actions of the trade war,” said Bob Phillips, managing principal at Spectrum Management Group. “I’m hoping wiser heads will prevail in this trade battle and something will work out.”New Zealand’s dollar tumbled after a bigger-than-expected rate cut. The yuan dipped after China set its reference rate slightly weaker than expected. India’s rupee and the Thai baht slipped. The U.S. dollar was steady, while the yen gained and gold rallied toward $1,500 an ounce.The dovish moves by three central banks underscore the global shift toward easier policy even after the Federal Reserve’s unexpectedly hawkish stance last week. President Donald Trump again on Wednesday urged the Fed to ease policy, saying in a tweet that “They must Cut Rates bigger and faster, and stop their ridiculous quantitative tightening NOW.”Elsewhere, oil extended a decline after Brent crude closed in a bear market on Tuesday. The Stoxx Europe 600 erased most of an advance that reached 1.1% at one point. Shares were mixed and calmer in Asia, with Japanese stocks closing barely changed while equities in Shanghai fell.These are some key events to watch out for this week:A string of Fed policy makers speak this week, including Chicago’s Charles Evans on Wednesday.Here are the main moves in markets (all sizes and scopes are on a closing basis):StocksThe S&P 500 Index rose 0.1% at the close of trading in New York.The Stoxx Europe 600 Index rose 0.2%.The MSCI AC Asia Pacific Index rose 0.1%.CurrenciesThe Bloomberg Dollar Spot Index was little changed.The euro rose 0.1% to $1.1215.The British pound declined 0.2% to $1.2146.The Japanese yen advanced 0.2% to 106.21 per dollar.BondsThe yield on 10-year Treasuries rose one basis point to 1.71%.Germany’s 10-year yield decreased five basis points to -0.59%, hitting the lowest on record.Britain’s 10-year yield declined three basis points to 0.48%, the lowest on record.Japan’s 10-year yield dipped one basis point to -0.2%, the lowest in about three years.CommoditiesWest Texas Intermediate crude fell 2.4% to $52.32 a barrel, the lowest since early June.Gold gained 2% to $1,504.66 an ounce, the highest in more than six years.\--With assistance from Adam Haigh, Eddie van der Walt, Robert Brand, Claire Boston and Vildana Hajric.To contact the reporters on this story: Vildana Hajric in New York at vhajric1@bloomberg.net;Olivia Rinaldi in New York at orinaldi1@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.