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Daily Markets Update, 8 November

 

 

 

  • European, stocks Decline dragged by Financials
  • Dollar Declines
  • The pound slipped as Brexit Negotiations round Approach

 

Bank shares lag in Europe and Asia, tracking declines in government bond yields and mixed corporate results.

Moves in global stock markets were muted Wednesday, with investors largely focused on a handful of corporate results and the U.S tax overhaul.

The Stoxx Europe 600 edged down 0.3% midday amid declines in the banking sector, while futures pointed to 0.1% opening loss for the S&P 500 after it snapped a five-day winning streak on Tuesday.

The Dow´s gain since Trump´s win is at its biggest for a day like this, since 1945: Blue-chip stock gauge has climbed 28.50% in 12 months.

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The Stoxx Europe 600 edged down 0.3% midday amid declines in the banking sector, while futures pointed to 0.1% opening loss for the S&P 500 after it snapped a five-day winning streak on Tuesday.

European lenders were down 0.6% on Wednesday and have fallen 3.6% so far this quarter—making them the worst performing sector in the region.

Shares of French lender Crédit Agricole fell 4%, leading declines, after it said its net profit recorded a double digit fall on the year.

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Earlier, Asian shares wrung out another decade peak as data showed China’s demand for imports remained buoyant, pushing the MSCI world equity index to a fresh high. Beijing reported imports in October rose 17.2% from a year earlier, beating forecasts of 16%, but export growth was just under estimates at 6.9%.

Investor focus has returned to geopolitics this week as Trump continued his tour of Asia with a central mission of rallying the world to stand up to the North Korean threat.

Shares in Saudi Arabia continued to decline even as kingdom sought to ease tension among global investors over a crackdown that’s seen princes and billionaires arrested.

Some Saudi stocks tumbled on the “purge” news. Here is Kingdom Holdings (a diversified Saudi firm)

And as the Saudis seem to reopen the Lebanon front in their struggle with Iran:

Lebanese dollar-denominated bond yields soared. Will the Saudis isolate Lebanon as they did with Qatar?

Remember that the Qatary  front is still open for the Saudis as they keep on putting pressure on Qatar for their alleged support to Iran

Qatar’s stock market continues to slump, touching another multi-year low

Venezuela :Mr. Maduro announced plans on Friday to convene bondholders in Caracas on Nov. 13 to negotiate a debt restructuring on the country’s foreign debt, estimated at between $100 billion and $150 billion. However, investors said that U.S. sanctions that restrict financial institutions from investing in new debt instruments issued by Venezuela’s authoritarian government make a deal unlikely, triggering a messy and prolonged default.

 

Below is the country’s sovereign CDS spread over the past five years. Quoted in basis points per year, a CDS price indicates the cost per year to either buy or sell exposure to the possibility of a sovereign defaulting or restructuring.    

Brazil:  Ask Sao Paulo’s banking elite who’s going to win Brazil’s next presidential election and they’ll say, hands down, it’ll be someone bent on fiscal reforms and privatization.

The only problem? Such a candidate has yet to emerge. And The Brazilian stock market :

The rally is fading quickly

 

RUSSIAN OIL EXPORTS COULD BE LOOMING PROBLEM FOR PRICES:

Russia, the world’s largest oil producer, has ramped up its crude exports this year, potentially undermining a deal with OPEC that has helped raise oil prices by 5% this year.

The Russian stock market jumped by the highest percentage since 2015 as higher oil prices attract investors.

At the same time, low inflation not being kept up with interest rates, could be a problem for the Russian economy

Elevated real rates will be a drag on growth.

 

 

Tuesday’s Key Earnings

Emerson Electric (NYSE:EMR-2.3% after a disappointing outlook.
Energy Transfer Equity (NYSE:ETE-3.1% AH missing estimates.
Energy Transfer Partners (NYSE:ETP-2.4% AH on lower revenues.
LendingClub (NYSE:LC-18.1% AH cutting its guidance.
Snap (SNAP-17.1% AH as losses more than tripled.
Valeant Pharma (NYSE:VRX+17.1% with Bausch & Lomb strength.

Today’s Markets 

In Asia, Japan +0.1%. Hong Kong -0.3%. China flat. India -0.5%.
In Europe, at midday, London -0.1%. Paris -0.2%. Frankfurt -0.2%.
Futures at 6:20, Dow -0.1%. S&P -0.1%. Nasdaq flat. Crude -0.4% to $56.95. Gold +0.5%to $1281.60. Bitcoin +4.9% to $7,470.
Ten-year Treasury Yield flat at 2.31%

 

Stocks News

Snapchat parent company Snap Inc. was an IPO darling when it went public in March, but user growth is disappearing as the company reported a Q3 loss that more than tripled. It’s now going back to the drawing board. On a conference call following earnings, CEO Evan Spiegel revealed that Snapchat (NYSE:SNAP) is working on a significant app overhaul even though it might be “disruptive to our business in the short term.”

A vote of confidence? China internet giant Tencent (OTCPK:TCEHY) has taken a 10% stake in SNAP, according to a regulatory filing, purchasing 145.8M non-voting shares over the last quarter. Shares of Snap, which sank over 17% in AH trading following a major revenue miss in Q3, sharply pared losses overnight to trade up 1.2% premarket.

After experimenting with longer tweets in September, Twitter (NYSE:TWTR) is now doubling its longstanding 140-character count to all languages where “cramming” was an issue. “In addition to more Tweeting, people who had 280 characters received more engagement, got more followers, and spent more time on Twitter,” the company said in a blog post. Users will see the change roll out over the next few days.

In one of the year’s largest corporate bond sales, Oracle (NYSE:ORCL) has borrowed $10B in a transaction that spanned five maturities – from five to 30 years – sources told the FT. According to Dealogic, the deal ties as the eighth largest corporate bond sale of the year, alongside two $10B transactions from AT&T (NYSE:T) and Apple (NASDAQ:AAPL).

The Senate Commerce Committee subpoenaed former Yahoo CEO Marissa Mayer in October to testify in a corporate data breach hearing scheduled for today, sources told The Hill, after she initially declined lawmakers’ invitation. Yahoo, now part of Verizon (NYSE:VZ), disclosed last month that the 2013 cyber attack on the company affected three billion of its users – three times its initial estimate.

The Trump administration has little to do with the impressive rally in technology stocks, according to Intel (NASDAQ:INTC) CEO Brian Krzanich. “I don’t believe people look at government or politics as to how they value us,” he told the Web Summit technology conference in Lisbon, Portugal, outlining that investors were more likely to focus on profit and revenue growth.

Reports surrounding Disney (NYSE:DIS)-Fox (FOX, FOXA) talks have raised possible antitrust concerns, but a former FCC Commissioner Robert McDowell said the potential deal would probably pass regulatory muster. “If you look through history in the first year of any new administration – especially when you have a change in parties at the White House – a lot of companies want to try to test the waters,” he told CNBC’s Squawk Alley.

Blockchain may be well on its way to becoming the future of shipping and logistics after UPS joined the Blockchain in Trucking Alliance. “The technology has the potential to increase transparency and efficiency among shippers, carriers, brokers, consumers, vendors and other supply chain stakeholders,” said Linda Weakland, UPS director of enterprise architecture.

Target is closing a dozen stores across a handful of states, including Michigan, Florida, Illinois and Texas, but not until after the holidays. Meantime, the company is vastly expanding its portfolio of smaller-format stores, which CEO Brian Cornell called more profitable than big-box locations. This year, Target (NYSE:TGT) will have opened 32 pint-sized outlets, with 35 openings planned for 2018.

Lowe’s has unveiled plans to launch so-called stores within its stores, in a partnership with software-powered retailer b8ta, to sell and educate shoppers on smart home products. In addition to the 70 Lowe’s (NYSE:LOW) stores getting a complete “smart home” outfit, 1,000 locations will launch smart home displays ahead of Black Friday and the holiday shopping season.

Marking its first partnership with a U.S. federal government agency, UBER has struck a deal with NASA to develop software for managing “flying taxi” routes in the air. Chief Product Officer Jeff Holden also said Uber Elevate would begin testing four-passenger, 200-mile-per hour flying taxi services across Los Angeles in 2020, its next test market after Dallas and Dubai.

The EU is poised to propose a 30% cut in carbon-dioxide emissions from vehicles in the decade through 2030, WSJ reports. The move, which would be part of the bloc’s push to meet its commitments under the Paris climate accord, sets the stage for tough negotiations with automakers and environmentalists. A final decision is due today after the European Commission holds its weekly cabinet meeting. Related stocks: FGMFCAUTSLATMHMCTTM

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