News / Analysis
Finance Update – Market Downers Claim WinJune 29, 2020
Asia – China to License Commercial Banks for Investment
Asian markets this morning were clearly affected by the US drops on Friday. The Shanghai Composite lost 0.73%, the Hang Seng 1.25%, and the Nikkei a full 2.04%.
Japan’s consumer inflation in June remains static at 0.2% YoY, and Retail Trade in May came in at a disappointing 12.3% contraction, and large retailers saw another 16.7% contraction in sales.
The Yuan is up 2 cents this morning after the People’s Bank announced a $14bn injection into local markets through reverse repurchase agreements.
In addition, Beijing is preparing to license local commercial banks take on investment banking and equities brokering to rival companies such as Goldman Sachs and Morgan Stanley, which have recently been increasing their presence in China.
The nation’s capital market is estimated at $21 trillion, while the major Chinese banks’ assets are estimated at $43 tn.
Although New Zealand’s number of Total Filled Jobs in May fell by a fifth to 1.7 million, Consumer Confidence in June is up 7 points to 104.5.
Europe – Johnson Announces Infrastructure Projects
European stocks luckily were not yet infected Friday by the US plunges, losing anywhere between 0.11 (AEX) and 1.56 (BEL20). Only the FTSE managed to add 0.27% upon closing.
Reuters attributes the upwind to investor immigration towards Europe as Joe Boden widens his electoral gap against Trump to double digits.
The UK’s CBI failed to improve at the pace expected, contracting by 37% MoM in June, while in Italy, Consumer Confidence increased impressively to 100.6 and 97 in France.
Business confidence also improved but at 79.8 just short of expectations, and the Pound is up 0.3% after Boris Johnson has been slated to announce a set of infrastructure development plans tomorrow to help the economy back on its feet.
Americas – Fed Forbids Bank Buybacks & Upping Dividends
All 3 major benchmarks ended severely red last week, the Dow down 2.84% and the Nasdaq 2.59%, especially with Facebook’s 8.3% loss on losing Unilever advertising, worth $42 mn.
A more significant downer was the FED’s announcement it wouldn’t enable banks to buy back their own stocks or increase dividend payments in Q3, pushing Goldman Sachs, for example, down by 8.65%.
US data improved impressively almost across the board, personal consumption up by 1.7%, durable goods by 15.8%, and continuing jobless claims down by nearly 200K to 19.5 million claimants.
The Initial number, however, only came down by 60 K ton 1.5 mn new applicants, and personal spending expanded by 8.2% after April’s 12.6% contraction, but not as well as expected.
Commodities – BHP Completes $14mn Blockchain Transaction
Safe havens are up this morning on US market contagion, gold edging up again towards the 1800 mark but meeting strong resistance at 1788.
Oil lost another 73 cents on the barrel overnight after the Baker Hughes Rig Count on Friday showed a mere 1-rig contraction to 188.
And Bitcoin is back above the 9100 mark after BHP announced the completion of its first blockchain-based trade with a Chinese metals firm worth about $14 mn.
Corporate – Facebook Loses $74.6 BN
Facebook closed down 8.3% Friday after Unilever’s announcement it was pulling advertising from social networks.
PepsiCo and then Starbucks this morning announced they were following the lead after the head of Common Sense Media, which is running the “Stop Hate for Profit” campaign said they would personally call the heads of major European corporations to join the effort.
Boeing ended down 2.78% despite announcing a resumption of 737 max certification flights.
General Motors was down 3.05% Friday despite winning a $214mn order to build and service the US army’s new all-terrain infantry transporter.
Trades should keep their eyes today on AIG and Goldman Sachs in the US and Total in France, which will be paying dividends.
|08:30 AM GMT||UK||Mortgage Approvals & Consumer Credit|
|09:00 AM GMT||EU||Consumer, Industry, Business & Economic sentiment|
|12:00 PM GMT||Germany||CPIs|
|12:30 PM GMT||Canada||Industrial Production|
|02:00 PM GMT||US||Pending Home Sales|
|11:30 PM GMT||Japan||Unemployment & Industrial Production|
|01:00 AM GMT||China||PMIs|