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Daily Briefing – Tuesday, April 18, 2017

Europe

With the 1st round of French elections scheduled for Sunday, the Turkish president enhanced his own authority in a referendum held on Monday. Markets throughout the continent opened slightly up as geopolitical tensions solidify, and the IMF will be releasing its forecasts on the global economy this afternoon.

US

Yesterday’s data continues a soft trend in the US economy. The Empire State Manufacturing index dropped by 2/3 to 5.2 and the housing market index lost 3 points. The American Chamber of Commerce in China said yesterday that US companies in China are undergoing their most difficult period in years as barriers remain high and the Chinese government continues to support and protect local industries. The lobby is calling upon the White House to work towards a levelling of the playing field, despite President Trump’s softening stance last week in the face of North Korean tensions.

Asia

Chinese data was good yesterday, with YoY GDP revised upwards by a tenth and both retail sales and industrial production both up. As the government tightens capital outflow restrictions, foreign investments fell by nearly 50% on last year’s data and home prices rose 0.7% in March – their fastest since October. . In Japan, with population in a steep decline, the number of foreign residents has surged by 40% over last year’s figures, according to a government report from Friday, and now rests at nearly 2½ million.

Commodities

After losing 1% – the biggest decline in a month – following a EIA report that shale production could rise by 2.5% in May, oil steadied overnight as investors await the outcome of the OPEC freeze meeting next week.

 

Shares

Netflix quarterly earnings were less than expected, with revenue at $2.64bn and Q2 projections revised downward. New subscribers missed targets by 200k; but following a momentary post-report dip, shares recovered to a 2 point gain. On the block today – IBM and Yahoo. IBM is expected to show, yet again, a decrease in revenues for the 17th quarter in a row; and Yahoo is expected to show an EPS of $0.08, compared to last year’s Q1 of 0.01 on revenues of $807mn.

Week’s Events

12:30 PM GMT US: Housing Starts and Building Permits, followed at 1:15 by Industrial Production
8:30 PM GMT API Weekly Crude Oil Inventories
0:30 AM GMT (+1) Australia: Westpac Leading Index & Auto sales.
Post NY Market Close IBM Quarterly Earnings
Post NY Market Close Yahoo Quarterly Earnings

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