May 14, 2019

Equities follow US index collapse southward

Equities follow US index collapse southward

Asia

Asian equities this morning are echoing yesterday’s US index bloodbath, the Hang Seng down 1.43%. Otherwise, the reaction has been muted, with mainland indexes skirting the zero from just below, and the Nikkei down a half percent on a risk-fed yen – now at a 14-week high despite continuing monetary stimulus. Trump’s latest tariffs will not apply to already-ship-laden goods, giving negotiators time to lessen the impact as they meet in Beijing; however, the upcoming Trump-Xi meeting for now is an uncertainty, and China’s end-of-month retaliatory tariffs are still in place. Meanwhile, Australia’s National Bank produced a 3 point index on business conditions in April (down from 7) and a flat reading of confidence, as the impact of a weakening economy takes hold.

Europe

European equity futures are up this morning after yesterday’s US-led plummet that cost the DAX 1.52% and the FTSE 0.55%. This morning’s consumer price indexes from Germany remained flat at 2% in April, wholesale prices up 2.1% from March’s 1.8%. The pound is slightly leading the Euro this morning following reports that Labour and government continue to seek a formula for Brexit.

US

The dollar still buoyed by safe-haven flows into bonds, yesterday was not a good day for US equities. The Nasdaq starred with a 3.41% contraction, other benchmarks following its lead, pressed further down by Apple’s $13 loss after the Supreme Court opened the gates for over 100 mn US users to sue the company for anti-trust behaviour. Apple faces a charge of charging a 30% commission on apps in its store, imposed by force of monopolistic behaviour.

Commodities

Gold steeply added $20 per troy ounce yesterday on risk aversion while oil lost $2, as traders await tonight’s API report against a background of geopolitical stress. Iran is thought to be behind the attack on 2 Saudi tankers making their way towards the Gulf yesterday. Another beneficiary of the turmoil seems to be Bitcoin, which added another $1000 over the past 24 hours, thrice crossing the $8000 mar and currently settling just above.

Shares

Vodafone this morning announced a €7.6 bn loss on €43.7 bn of revenue, cutting dividends from 15 cents to 9 despite earlier promises to the contrary. Tomorrow – Cisco and Alibaba – both continuing to trade down since the beginning of the month.

Events

08:30 AM GMT – UK Unemployment Rate, Average Earnings Including Bonus (Mar), Claimant Count Rate (Apr)
09:00 AM GMT – German ZEW Economic Sentiment & Current Situation (May)
09:00 AM GMT – EU Industrial Production w.d.a. (YoY) (Mar) & ZEW Economic Sentiment (May)
10:00 AM GMT – US NFIB Business Optimism Index (Apr). Then Import & Export Price Indexes (Apr) at 12:30, & Redbook Index (May 10) at 12:55
20:30 PM GMT – OIL API Weekly Crude Oil Stock (May 10)
00:30 AM GMT (+1) – Australia Westpac Consumer Confidence (May), and Wage Price Index (Q1) at 1:30
02:00 AM GMT (+1) – China Retail Sales, Industrial Production, Foreign Direct Investment (Apr)
05:00 AM GMT – Japan Construction Orders & Housing Starts (Apr)

For more, visit our Economic Calendar