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Trump states he will cooperate with House Judiciary Committee Investigation - EMEA Brief 05 Mar

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MichaelaIG

  • Trump is subject of large-scale investigation by the House Judiciary Committee who have sent requests for documents to 81 individuals. The investigation will look into alleged obstruction of Justice, corruption and potential abuses of power. 
  • Despite positive outlook of US and China trade war, as parties appear closer to reaching formal agreement, U.S stocks saw a downturn after positive opening. The S&P fell 0.4% to 2,792.62, The Dow tumbled 206.67 points to 25,819.65 and the Nasdaq closed 7,577.57 down 0.2%. 
  • Oil prices rose following trade talk news and potential further Russian and OPEC output cuts. Brent futures rose 21 cents to $65.28 a barrel. 
  • Carlos Ghosn, former chairman of Nissan Motor, has been granted bail by Tokyo court after spending more than 3 months in Jail. 
  • Saleforce shares fell 3 percent yesterday after weak first-quarter revenue outlook of $3.67 compared to analyst expectations of $3.70. However co-CEO Marc Benioff remains positive stating that $30 billion revenue is "right around the corner". 
  • Disney cut CEO Bob Iger's future pay prior to annual shareholder meeting. The cut also results in loss to CEO of $8 million from proposed bonus following acquisition of Fox's entertainment assets. 

Asian overnight: Asia-Pacific are largely trading in the red, as Chinese growth forecasts pointed towards a slower projection for the world's second largest economy. With Chinese premier Li Keqiang laying out a target of 6-6.5% growth for 2019 (previously 6.5%), we saw a clear acknowledgement that this slowdown is unlikely to end anytime soon.

UK, US and Europe: We also saw a negative led come from the US, were initial gains turned bearish, with the Dow closing down 207 points. Looking ahead, all eyes will be on the UK services sector PMI number, following on from weaker manufacturing and construction readings. With the reading on the cusp of contraction territory (50.1), it would take much to see the sector move into decline for February. Also keep an eye out for the eurozone retail sales, and US services PMI readings.

South Africa: Global equity markets are trading mostly lower this morning with US Index Futures marginally down while most Asian equity indices trade lower as well (excluding the Shanghai Composite). Moves are however marginal and it would appear that markets are pausing the recent rally in anticipation of a US China trade deal. The dollar has been strong and in turn commodity price have been under pressure, in particular that of precious metal prices, platinum and gold. The rand remains well off its best levels of the past few weeks. Tencent Holdings is up nearly 4% in Asia, suggestive of a positive start for major holding company Naspers. BHP Group is down 0.85% in Australia, suggestive of a weaker start for local miners.  

Economic calendar - key events and forecast (times in GMT)

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9.30am – UK services PMI (February): activity expected to weaken, falling to 49.7 from 50.1. Markets to watch: GBP crosses
3pm – US new home sales (December), ISM non-mfg PMI (February): sales to fall 10% MoM, while the ISM is expected to weaken to 56 from 56.7. Markets to watch: US indices, USD crosses

Source: Daily FX Economic Calendar

 

Corporate News, Upgrades and Downgrades

  •  DX Group suffered a loss before tax of £5.3 million, down from £14.1 million a year earlier. Group revenues rose 7% to £157 million. 
  • NMC Health has agreed to form a healthcare joint venture with a pension fund in Saudi Arabia.
  • Ashtead reported a 17% rise in statutory pre-tax profit to £240.9 million for Q3, thanks to strong rental demand in US and Canadian markets. 
  • Phoenix Group swung into profit for 2018, with pre-tax profit rising to £470 million, from a £28 million loss a year earlier. 

DWS upgraded to buy at Citi
Genus upgraded to buy at Liberum
Greene King upgraded to neutral at JPMorgan
Mitchells & Butlers raised to overweight at JPMorgan

Altice Europe cut to underweight at Barclays
Iliad downgraded to equal-weight at Barclays
Safestore cut to sell at Kempen & Co
United Utilities downgraded to neutral at Citi

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