News / Analysis
Finance Update – China Woes Front & CentreJuly 23, 2020
Asia – A vaccine from Wuhan
The Shenzhen Composite this morning leads Chinese indices down with -1.31%. Hong Kong managed to stay above the water at 0.39%, but the Nikkei also lost 0.6%.
Chief amongst the protagonists is the fanning of already tense US-Sino relations by the closure of China’s consulate in Houston, where espionage activities allegedly took place. China, in retaliation, plans to close the US consulate in the South West city of Chengdu.
In other China news, Sinopharm has announced that its Coronavirus vaccine could be ready for use by the end of the year. The company is a collaborative initiative of the Beijing Institute of Biological Products and the Wuhan Institute of Biological Products.
Australia’s National Bank reported a deterioration in Q2 business confidence to -15.
Americas – US-Sino trade on track
The US Trade Representative is seeking to exempt certain products, primarily medical products, from the new additional tariffs list, this a week after China booked its largest single-day corn purchase.
Indices yesterday closed in the green led by the DOW’s +0.62%, and the Dollar was down marginally after housing data disappointed expectations – improving but failing to reach the mark, with mortgage applications losing a per cent.
Canada’s consumer inflation improved in June to 1.1% YoY – a 4-tick improvement in the core figure.
Europe – UK HK visas unlawful
Meanwhile, officials at the Chinese Embassy in London are branding the British government’s decision to open a citizen pathway for Hong Kong residents as unlawful, despite the contention that China’s security laws constitute a breach of the 1984 handover agreement.
Despite the approval of a huge EU aid bill and expected new regulations to ease its capital markets regime, European indices ended in the red yesterday led by Holland’s AEX which lost 1.44% over the session.
Consumer confidence in Germany, however, has improved for August to -0.3 from -9.4 the month before.
Commodities – Crypto scam victims suing YouTube
Oil surprisingly added $1.75 for a barrel of WTI crude during the day despite the EIA missing the mark with a 4.9-million-barrel increase in inventories.
Also adding unrealized downward pressure, Reuters this morning reports that shale producers could revive output to the tune of 2 million daily barrels.
Bitcoin soared past the 9400 resistance level overnight to peak at 9542 before settling just above 9500 as Coindesk reports a class suit against YouTube for failing to remove Bitcoin scams using the names and likeness of the plaintiffs, who include Apple co-founder Steve Wozniak, Bill Gates, Elon Musk and Michael Dell.
Whereas Twitter removed the offending accounts almost immediately, the suit claims, YouTube continues unapologetically hosting, promoting, and directly profiting from similar scams.”
Corporate – Intel reporting
Tesla yesterday added 4.4% in after-hours trading after posting a 50 cent EPS despite a 4.9% drop in revenues YoY. This 4th consecutive profit report lines the company up for inclusion in the S&P500 index.
Microsoft lost 3% after hours and after closing up 1.44% for the day after announcing a 13% increase in revenues YoY, and Biogen also exceeded expectations with a 2% increase YoY in revenues and a 22% surge in earnings to $9.59 per share.
Snapchat, on the other hand, is down 6.38% and some more after trading after announcing a 23 cent loss per share. Iberdrola also missed expectations at 9 cents a share on revenues of €7.04B.
Northern Trust is down 5% despite surpassing expectations with an EPS of $1.46 on #313.3mn, down 19.5% YoY. And Whirlpool added 4.8% after hours, adding to its daily 2% rise on 55 cents EPS thanks to $35 mn income.
Today’s earnings reports include Intel, AT&T, Unilever, Verizon, Danaher, Daimler, Union Pacific, Relx, Amadeus, Neste Oil, FirstEnergy, Skyworks, Southwest Airlines, Twitter, Citrix, Repsol, Alaska Air, Easyjet and Alliance Data Systems.
Land Securities will be paying dividends, and Marvell Technologies will hold a shareholders meeting.
|10:00 AM GMT||UK||Industrial Trends. ND for Consumer Confidence. Retail sales at 6 AM (+1)|
|12:30 PM GMT||US||Jobless Claims|
|02:00 PM GMT||EU||Consumer Confidence|
|10:45 PM GMT||NZ||Trade Balance|
|11:00 PM GMT||Australia||Services, Composite & Manufacturing PMIs|