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Finance Update – Pharma Fanfare Dies Out

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Asia – Germany bucks anti-China sentiment

Asian indices are mixed this morning, Australia up ½% but NZ down 1.39%, the Hang Seng up a 1/3 % but the Nikkei down 1.1% and Shanghai up 1/4 % but Shenzhen down 1/2 %.

The Yen added a third per cent overnight as the nation’s trade surplus grew to ¥872.9 bn; and the Aussies is flat following this morning’s report of a displeasing 0.1% increase in wage prices for Q3.

Meanwhile, Reuters reports that, despite international pressure to the contrary, German exports to China during the 1st 3 quarters of the year rose to 8% of the total and imports to 11%.

Europe – EU in recession

European benchmarks straddled the 0 level yesterday, the FTSE starring with a 0.87% loss.

The Euro is managing to maintain some upward momentum, despite a Reuters poll placing the zone in the midst of a double-dip recession, after Italy’s Trade Surplus yesterday swelled to €5.849 bn; but the Pound is also gaining traction thanks to surprisingly good Consumer & Producer Inflation, as well as Retail Trade data for October.

BoE Deputy Governor Ramsden yesterday said his bank would implement any measures required to maintain its target 2% inflation rate.

Americas – Retail plunges

US indices quelled their rise yesterday, the Dow losing 0.56%, except the Russel, which gained another 0.29% on Fed Head Powell’s speech yesterday pushing for an extension of emergency credit programmes.

The USD is back to a southerly squall after disappointing Retail Data for October – sales decimating to 0.3% MoM. Industrial production, on the other hand, expanded by 1.1% MoM after September’s 0.4% contraction, and the Redbook Index shows a 1.7% YoY improvement in same-store sales.

Commodities – Oil stocks up

WTI Crude continues trending sideways after yesterday’s disappointing addition of 4.174mB to stocks at the National Repository in Cushing Oklahoma.

Corporate – Aramco loans to pay Saud dividends

Yesterday, Berkshire Hathaway announced it was investing in pharma companies involved in COVID Vaccine research & production, specifically AbbVie (+0.86%), Bristol-Myers Squibb (-0.28%), Merck (1.71%) and Pfizer (-3.53%) to the tune of $5.7 bn – most trading on a discount. Traditionally, fund head Buffet has shunned basket investments.

And with oil down 45% in Q3, Aramco (-1.4%) yesterday issued its $8 bn bond issuance to help pay an expected $75 bn in dividends – mostly to its largest shareholder, the Saudi government.

On the earnings front, Walmart (-2.17%) yesterday announced a 5.2% YoY increase in revenues to $137 bn, with earnings up 56.5% to $1.80 per share. Home Depot (-2.54%) revenues were up 23.2% to $33.54 bn and earnings 25.7% to $3.18 per share. EasyJet (-3%) didn’t fare as well, revenue down by 52.9% to £3 mn and a £1.79 loss per share.

Still ahead, Nvidia and British Land report earnings, while Western Digital holds a shareholders meeting.

Events

10:00 AM GMT EU CPIs
12:00 PM GMT US Mortgage Applications. Building permits & housing starts at 1:30
01:30 PM GMT Canada CPIs
03:30 PM GMT OIL EIA Oil Stocks Change
00:30 AM GMT (+1) Australia Unemployment & participation rate

Analysis

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