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Finance Update – Markets Green

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Asia – Japan’s rising sun?

Asia is green across the board this morning, the Nikkei surging with a 2.05% gain while New Zealand’s DJ takes the rear with a 0.15% rise. On Thursday, the nation’s PMI dropped to 51.7 in October, better than the contractionary 46.6 expected.

Ahead of Friday’s PBoC interest rate decision, the Yuan continues rising and is now at $0.15197. Chinese data continues to improve, industrial production up another 6.9% and fixed asset investments up 1.8% in October. Retail sales, on the other hand, increased by a per cent to 4.3%, missing the mark by just over 0.5%.

The Yen added 0.12% overnight, following a 5% increase QoQ in Q3 GDP – after last quarter’s 8.2% contraction – but a 3.9% increase in industrial production, which – though still a welcome report –missed the mark by a tick.

Europe – See Brexit for direction

European benchmarks were mixed yesterday, the FTSE losing 1 third per cent while the CAC added the same.

The pound over the weekend reversed its day-long rise after Thursday’s data showed a not-as-good-as-expected 0.5% increase MoM in industrial production and a 15.5% QoQ expansion in Q3 GDP – nearly a per cent off. September’s total trade surplus contracted by nearly 80% to £0.613 bn.

Meanwhile, throughout the Eurozone, September industrial production contracted by another half per cent, and Q3’s GDP 12.6% expansion missed the mark by 1 tenth. Q3 employment increased by 0.9%, and September’s trade surplus increased to €24 bn.

Americas – Lockdowns could hamper recovery

US indices continue to express optimism despite increasingly stringent anti-COVID measures, the Russel adding 2.1% yesterday and the NASDAQ 1.02%.

Thursday’s jobless claims numbers came in better than expected last week, the continuing figure down by a half million. Consumer inflation dropped to 0 MoM in October, producer inflation added a tick to ½ a per cent YoY, and the monthly budget statement doubled the nation’s deficit to $284 bn. Michigan’s preliminary consumer sentiment index, however, indicates a 4-point drop to 77 in November.

Commodities – Bitcoin cash forks

Ahead of tomorrow’s OPEC+ meeting, in which production cuts are expected to be extended, Oil continues in a narrow 70c range after the Baker Hughes company on Friday reported an additional 10 rigs online, the total now – 236. Some lift is being provided by improving conditions in China and Japan.

Bitcoin continues to surge above 16200 this morning after Bitcoin Cash’ latest hard fork – BCH ABC & BCHN, the former which has installed a tax to finance protocol development, according to CoinDesk.

Corporate – Walmart leaving Japan

J&J shares closed up a per cent Friday after the company launched 3rd stage tests for its anti-COVID vaccination. Walmart (+1.56%), ahead of its earnings report tomorrow, is reportedly exiting the Japanese supermarket chain – selling its majority stake in Seiyu. And PNC has announced it will buy the US operations of Spain’s BBVA (+17%) banking for $11.6 bn, creating the nation’s 5th largest retail banker.

Fitch last week downgraded Aramco (+0.3%) from stable to negative amidst reports that the company would issue about $2.5 bn in debt. And in Australia, coal miner Glencore (+3.02%) has announced it plans to lay off contractors, according to Reuters. Cisco (+7.06%) Thursday reported 76c earnings per share on $11.93 bn revenues – both well above expectations.

At $1.74, Merck (+1.54%) beat EPS expectations by 31c on $12.6 bn sales – 1% up YoY. And Disney (+2.1%) reported a loss of 20c per share – less than a third of the 70c loss expected – on revenues of $14.7 bn – a half-billion better than expected.

Today, expect earnings from Baidu, Vodafone and Telstra. Colgate-Palmolive, Procter & Gamble, Abbott Laboratories, Alliant Energy, Hasbro, Hormel Foods, Kinder Morgan, Nrg Energy and Abbvie will be paying dividends.

Events

09:00 AM GMT Italy CPIs
01:30 PM GMT US NY Empire State Manufacturing Index
00:30 AM GMT (+1) Australia RBA Meeting Minutes

Analysis

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