News / Analysis
Finance Update – Tesla Sharing MoreFebruary 17, 2020
Asian markets are closing mainly up this morning, the Shanghai and Shenzhen composites up in the 2-2.4% region, the Hang Seng up 0.69% but the Nikkei down 0.72%.
Mainland optimism has been fuelled by liquidity injections by the central bank in addition to government announcements that it would roll out tax cuts for manufacturers.
This morning, China’s Ministry of Agriculture announced it has approved poultry product imports from the US, banned since 2015.
Japan’s economy continues sliding, GDP contracting by a frightening 6.3% YoY in 2019’s 4th quarter – a 6-year record – and industrial production down by another 3.1% YoY. Consumers and businesses are still reeling from last year’s sales tax hike.
Europe saw some positive data on Friday, its trade surplus up to €22.2bn and employment up by 0.3%.
Ahead of its non-policy meeting Wednesday and policy meeting minutes the following day, a Reuters poll of economists have concluded that the ECB’s negative interest rates have been ineffective against low inflation.
The UK Pound continues to maintain its 4-month range after briefly bottoming at 1.29 last week. Last week’s 1% increase is its sharpest in over 2 months.
PM Johnson last week replaced Finance Minister Sajid Javid with loyalist Rishi Sunak in a bid to increase public spending next month, this as negotiations with the EU over a new trade deal are set to begin in March.
US data was mixed Friday, with retail sales growth up by 0.3% but industrial production contracting by the same number.
Equities markets also closed mixed, the Nasdaq up 0.2% and the Dow-30 down 0.09%. Back wind to markets were provided by rumours that the White House intends to introduce incentives for retail stock purchasing.
Additionally, US trade representatives have announced a planned increase in tariffs on European aircraft imports. US markets today are closed on Washington’s birthday and in Canada thanks to Family Day.
Oil is steady after breaking through the $52 resistance line Friday. Two rigs were added last week to the Baker Hughes count, as OPEC+ mulls cancelling its February meeting, aimed at cutting production.
Meanwhile, gold continues trending above the 1585 mark, and Bitcoin lost its 10K handle Friday and is now forming the right shoulder of an H&S pattern.
The recent surge in value is being attributed to the expected May halving – a planned 50% cut in award coins for miners, written into the coin’s underlying code.
TESLA has announced a further $2bn of shares set to be sold, with underwriters being given a 30-day option tom purchase at a discount.Shares doubled over the past month, all this after the company’s previous $2.3bn in May, used to launch production in China.
Meanwhile, Berkshire Hathaway has lowered its stake in Wells Fargo and Goldman Sachs ahead of its Saturday night annual report release.
Tomorrow, Walmart reports quarterly earnings. EPS is expected to increase 24% to $1.44, but these have surprised to the upside consistently for the past year.
|10 AM GMT||EU||Construction Output (Dec)|
|1:30 PM GMT||Canada||Investments in Canadian & Foreign Securities (Dec)|
|0:30 AM GMT (+1)||Australia||RBA Meeting Minutes|