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Daily Briefing – Tuesday, November 7, 2017

Europe

Following a string of tragic PMIs yesterday (all in the red, save the Eurozone’s), last night saw BRC retail sales in the UK drop from 1.9% expansion in September to a 1% contraction this past month – the index’s worst performance since 2008. Germany’s industrial production numbers this morning also reveal a 1.6% contraction in September, the yearly figure down from 4.6% to 3.6%.  And French individual investments projections also dropped from 7% to 4% in Q4.

 

US

The USD lost gains to crude oil price increases yesterday and stocks closed at record highs, again – primarily on excellent earnings reports. Meanwhile, the senate struggles to pass tax legislation as Trump continues to ruffle feathers in Asia – leaving Japan empty-handed on what he calls unfair trade.

 

 

 

Asia

Asian shares hit 10-year highs overnight as oil pared back some of yesterday’s gains. The Nikkei added 1.8% on export shares as the Yen slid. And the Hang Seng closed up 1.35%. Chinese composites were up 0.8%. Australia early this morning kept interest rates steady at 1.5% as inflation weakened and wage growth remained stagnant. Hiring momentum, on the other hand, continues to grow, but housing loans are outpacing income growth.

 

 

Commodities

Gold spiked towards 1284 during the US session yesterday, trending slightly lower as the Asian session got underway, as the Yen lost power to the USD.  And oil is finally reacting to the Saudi conflagration, WTI breaking above 57 after OPEC producers agree to an output cut extension, seeing its highest one-day surge in nearly a year.

 

 

Shares

Not since Intel sued AMD for using its ‘386’  brand-name and lost, has the high-tech world been as stunned as when the two rivals announced they would team up to address the threat posed by NVidia’s AI and graphics drive. AMD shares were up 7% on the announcement. Salesforce shares also rose after announcing a strategic partnership with Google. Today, Tesco reports quarterly earnings before the New York bell. Expect a losing EPS of -21 cents. Last quarter, the company missed revenue estimates, clocking in t $40.1mn. Snap reports after the New York session. Expect an EPS of minus 38 cents on revenues of $236 mn – up 84% Year on Year. And Zynga reports after the NY session as well. Expect the gaming company to report an EPS of 1 cent on a net income of $7 mil.

 

Today’s Events

10 AM GMT EU: Retail Sales
1:55 PM GMT US Redbook Index followed at 3 by JOLTS Job Openings, and Consumer Credit Change at 8.
9:30 PM GMT API Weekly Crude Oil Stocks
2 AM GMT (+1) China: Trade Balance

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