With so much taking place overnight, and confused global market whipsawing in the aftermath of a barrage of political, geopolitical and earnings news, here is another recap to follow our traditional market wrap, this time courtesy of JPMorgan, focusing on the key things that are happening this morning.
From JPM's Adam Crisafulli
- Market update – Asia saw mixed price action, Eurozone stocks are off small, and US futures are down a few points.
- What’s happening this morning? There are a few moving pieces this morning. Trump managed to go a few days w/o controversy (a relatively long stretch for the current White House) but the Comey firing is by far the biggest headline of the night. As far as the market is concerned, Comey’s dismissal saps Trump’s political capital and weakens relations w/Congress at the time when he is trying to move an ambitious pro-growth agenda through the Senate and House.
* * *
- China’s inflation data provides further evidence of CQ1 being the country’s near-term nominal growth peak (PPI cooled by more than expected). It was a mixed night of US earnings (DIS, FOSL, and YELP all suffered afterhours weakness; FOSL and YELP in particular plunged; that being said semiconductor numbers were strong w/great figures from MCHP and NVDA).
- Europe – the major indices are flat-to-down small. Autos, basic resources, retail, energy, and utilities are outperforming while media, real estate, telecoms, industrials, and luxury are lagging. There were a bunch of earnings in Europe but none were particularly controversial. Barratt Developments, ING, Ahold Delhaize, and AXA are all higher after reporting (AXA also announced plans to IPO its US life insurance operation). ITV and Heidberg Cement are trading lower on earnings.
- FX/Treasuries/oil – the DXY jumped ~60bp on Tues and is flattish so far Wed. The USD is suffering losses vs. the NZD and AUD and is about flattish vs. the big 3 crosses (EUR, JPY, and GBP). Treasuries have a bid and yields are down ~1-2bp. Oil is firm on back of headlines pointing to Saudi Arabia cutting back on shipments to Asia (although Libya at 6amET announced that its oil production has climbed above 800K BPD).
- Asia – the major markets in Asia saw mixed performance: Japan (TPX +0.22%, NKY +0.29%), HK (Hang Seng +0.51%, HSCEI +0.97%), mainland China (SHCOMP -0.9%, Shenzhen -1.36%, CSI 300 -0.44%), Taiwan (TAIEX +0.53%), Korea (KOSPI -0.99%), Australia (ASX 200 +0.61%), and India (up ~85-100bp for the major indices). The big news was the China inflation data (which is providing more evidence that CQ1 may have been the near-term nominal growth peak for the country) – mainland stocks continue to sink (the SHCOMP hit multi-month lows). The China anxiety isn’t spilling over to the other major markets. In Japan the top groups included telecoms, utilities, and energy while industrials, real estate, and fins underperformed. South Korea re-opened after being closed Tues for the election and fell ~1%