April 25, 2019

Daily Market Review – Thursday, April 25, 2019

Daily Market Review – Thursday, April 25, 2019

Asia

Global indexes yesterday closed in the red after a US earnings-generated increase almost across the board. Odd man out, the Nikkei, added a ½% after erasing the previous day’s gains. This morning, the Bank of Japan decided to maintain its negative interest rate.

Europe

What little news emerging from Europe yesterday was focused on Germany’s withering economy, all 3 IFO sentiment measures missing expectations. Italy’s trade surplus improved slightly, but Britain’s public sector borrowing grew to £840m. North of London, Scottish First Minister Nicola Sturgeon is preparing her nation for a 2nd referendum on independence from the UK, which is in its death throes, according to Voices for Scotland leader, Maggie Chapman.

US

The Canadian dollar tenaciously continued its south-bound slide after the central bank decided to stick to its ½% interest rate, adding a touch of extra dovishness for good measure in its forward guidance. Less chance for a hike this year, additional cuts were hinted at if the economy remains stagnant – the bank predicting 1.2% GDP growth in 2019, down from 1.7. In the US, mortgage applications contracted by another 7.3%, and the 5-year bond was auctioned off at a 2.315% yield – up from 2.172%.

Commodities

Oil lost nearly a dollar a barrel yesterday after the EIA confirmed the previous day’s API report of an inventories build-up – this time shooting past the expected 1.26mB to a whopping 5.48. The previous reading had shown a 1.4mB contraction. Prices, driven upward by the US administration’s removal of waivers on Iranian oil sanctions and OPEC+ production cuts intact, are receiving further backwind from US sanctions on Venezuela and a budding civil war in Libya, but demand is not outpacing production – even as OPEC agrees to increase production to make up for the 3-pronged supply cut. And gold finally received a breath of life as the equities rally eased off with the USD failing to take up the slack owing to weak US data and German sentiment measures. Bitcoin is back down from its summit, currently testing support at the historic 5400 level.

Shares

As expected, Boeing yesterday missed whatever expectations may have been in store for the beleaguered fly-firm. Adding insult, though, the company announced it would suspend its annual forecast – at least until the Max mess is cleared up. Caterpillar exceeded projections, pushing shares up a point and a half – a gain that was quickly lost by the time markets closed. Facebook, despite its security issues and the derived legal expenses, reported a 20% increase in revenues YoY, while earnings per share halved to 85 cents. Company shares fell $2.30 inter-daily but have risen 40% since the beginning of the year. TESLA – as expected – missed on both earnings and revenues, while VISA beat expectations on both earnings and revenue – as did Microsoft, quite easily thanks to growth in its Azure cloud services, as the company edges towards the trillion-dollar market-cap threshold. At its present 976bn, MS’s valuation is higher than Amazon’s 936, down from that firm’s 1-day cross-over last September. Meanwhile, in Europe, Eni provided shareholders with a Euro 15 per share on revenues that were up 4% YoY to €18.8B, while SAP reported an operating loss due to restructuring.
Today’s results will include Bayer, which announced a 4,500 job cut in Germany. The company is under pressure following its purchase of carcinogenic Roundup manufacturer, Monsanto and reported friction between the company’s board and its management. Barclays is also on the firing line, revenues expected to drop by double-digit percentages and employees bonuses to be cut. On the other side of the Atlantic, Amazon’s earnings today are expected to show a 42.5% increase YoY and revenues 17%, while Intel – following layoffs and investments in autonomous driving – is expected to show little change from last year’s data.

Events

10:00 AM GMT – UK CBI Industrial Trends Survey – Orders (MoM) (Apr)
12:30 PM GMT – US Continuing & Initial Jobless Claims (Apr 19), Nondefense Capital Goods and Durable Goods Orders (Mar), and Kansas Fed Manufacturing Activity (Apr) at 15:00
22:45 PM GMT – NZ Imports, Exports & Trade Balance (Mar)
23:30 PM GMT – Japan Unemployment Rate and Jobs / Applicants Ratio (Mar), and CPIs, Industrial Production and Retail Trade (YoY) (Mar) at 23:50
01:30 AM GMT (+1) – Australia Import & Price Indexes (Q1), and Producer Price Index (YoY)

For more, visit our Economic Calendar