News / Analysis
Finance Update – Pharma Fanfare Dies OutNovember 18, 2020
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%.
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.
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.
WTI Crude continues trending sideways after yesterday’s disappointing addition of 4.174mB to stocks at the National Repository in Cushing Oklahoma.
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.
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|12:00 PM GMT||US||Mortgage Applications. Building permits & housing starts at 1:30|
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|03:30 PM GMT||OIL||EIA Oil Stocks Change|
|00:30 AM GMT (+1)||Australia||Unemployment & participation rate|