News / Analysis
Finance Update – Equities bloodbathOctober 22, 2020
European equities led markets down yesterday, the FTSE losing 1.91% in London and 2.03% in Milan – other benchmarks losing in the region of a per cent and a half.
The Euro is down 0.11% after this morning’s German consumer confidence survey plunged to -3.1 for November, while a McKinsey report quoted by Reuters this morning reveals that over half of Europe’s SMEs – accounting for roughly 2/3 of the zone’s jobs – “fear for their survival.”
Also, the news outlet reports, EU and British negotiators have agreed to restart Brexit talks today, even though both sides remain locked in their positions.
Index futures this morning indicate that yesterday’s 0.84% (Russel) to 0.22% (S&P) losses could become a trend after hopes of a pre-election stimulus ease.
The USD added 0.14% overnight after the Mortgage Bankers Association published a 1-tick improvement, but still another 0.6% contraction in mortgage applications and St Louise Fed Head Bullard said there was no need to consider negative interest rates.
The US Senate yesterday rejected Sen McConnel’s (R) proposed $1/2tn relief bill, and the FED’s Beige Book yesterday indicated that the economy continues to improve at a slight-to-modest pace.
Meanwhile, in Canada, retail sales expanded by another 0.4% MoM in August – disappointing expectations of almost triple – and house prices by 1.2% MoM in September, more than double August’s result.
Asian indices are showing red across the board, only the Hand Seng managing to add 0.03% after news that Hong Kong and China may collaborate on installing the Digital Yuan on the island in a region that still adheres to its own HK Dollar, according to HK Treasury Secretary Christopher Hui.
In Japan, foreign investments in shares contracted by ¥-94 bn.
Bitcoin briefly spiked above 13K yesterday before returning to its present 12.770 level after PayPal (+5.5%) announced it would enable payments and trading on its platform.
Oil is back down below the $40 mark this morning after the EIA yesterday reported a less-than-stellar 1 mn barrel withdrawal.
AstraZeneca is down 2.5% after a Brazilian volunteer for its anti COVID vaccine died yesterday.
Tesla, after rising towards their earnings announcement yesterday, reversed back into the week-long downtrend despite better-than-expected results. Record revenues of $8.8 bn from $6.3 bn the year before and EPS jumped 69% to 27c a share. Shares jumped by 3.5% after hours.
Snap (+28.3%) yesterday starred with a 52% increase in revenues to $679 mn thanks to an 18% increase in users. Verizon (-0.87%) reported a 4.1% decline in revenues to $31 bn, resulting in a 20c drop in earnings to $1.05 per share. Biogen (0.67%) reported a 6% drop in revenue to $3.376 bn and a 47% drop in EPS to $.46. US oil pipe operator Kinder Morgan (-1.18%) reported a 10% drop in Q3 profits, while England’s Unilever (-3%) reported a 4.4% increase in sales (triple the expected). And Australia’s Nextera (-1.1%) beat expectations with am 11.3% increase in EPS to $2.39 but lagged revenue expectations by increasing only 14.6% YoY to $4.78 bn.
Finally, McAfee will be returning to the markets at an estimated $20 a share, maintaining their original symbol, which was worth about $5 a decade ago when the company was purchased by Intel. And Jeffrey Katzenberg’s Quibi yesterday officially announced it was closing, returning to investors nearly $2 bn raised to create the new online streaming service.
Still ahead – earnings today from Coca Cola, Intel, AT&T, Citrix, Amadeus, Capital One, Union Pacific, Southwest Airlines, Alaska Air, Danaher and Seagate, and dividends from Oracle and a shareholders meeting for Seagate.
|11:00 AM GMT||UK||CBI Industrial Trends. Consumer Confidence at 11 PM. Retail Sales at 6 AM (+1).|
|12:30 PM GMT||US||Jobless Claims. Existing Home Sales at 2 PM. Presidential Debate at 1 AM GMT (+1)|
|02:00 PM GMT||EU||Consumer Confidence|
|09:00 PM GMT||NZ||CPI|
|10:00 PM GMT||Australia||PMIs|
|11:01 PM GMT||Japan||CPIs. Manufacturing PMI at 0:30 (+1).|