>>> TradeGate Pre-Market indication

DAX:
  • Siemens (SIE TH) +1.6%
    • Siemens Affirmed at A1 by Moody’s
  • ThyssenKrupp (TKA TH) +1.4%
  • Infineon (IFX TH) +1.4%
    • Trump Huawei Ban Ripples Across Industry as Supplies Halted (4)
  • BASF (BAS TH) +1.3%
  • Daimler (DAI TH) +1.1%
    • Daimler Eyes 20% Lower Administrative Costs: Handelsblatt
MDAX:
  • Siltronic (WAF TH) +2%
  • Evotec SE (EVT TH) +1.3%
    • Evotec SE to Buy Just Biotherapeutics For Up to $90M
  • Aareal Bank (ARL TH) +1.1%
  • K+S (SDF TH) +0.8%
  • Telefonica Deutschland (O2D TH) +0.7%
  • United Internet (UTDI TH) -0.6%
SDAX:
  • Ceconomy (MEO TH) +3.1%
    • Ceconomy Profit Falls as Western, Southern Europe ‘Challenging’
  • Steinhoff (SNH TH) +3.1%
  • Schaeffler (SHA TH) +2.4%
  • Nordex (NDX1 TH) +2%
    • Nordex Upgraded to Buy at Nord/LB; PT 16 Euros
  • Heidelberger Druck (HDD TH) +1%
  • Leoni (LEO TH) -1.8%
    • Leoni May Need Big Capital Increase, Debt Worrying: Lampe

>>> What to look at today - 21st of May 2019

Asian stocks were mixed Tuesday as investors digested moves by Washington against Huawei Technologies Co. that sank U.S. technology shares overnight. The yuan steadied near a six-month low.
Chinese shares had the strongest gains in the region. While they dipped in Tokyo, they were off their lows, and stocks fluctuated in Hong Kong. Samsung Electronics Co. helped bolster Korean shares, on bets it may benefit from Huawei’s need to shift away from U.S. suppliers. S&P 500 Index futures climbed after the benchmark dropped Monday, with semiconductor stocks among the biggest laggards as the White House blacklisted China’s top telecom company. Australia’s dollar dropped with bond yields after the central bank governor flagged that an interest-rate cut will be considered next month.
US After Hours QTT -7%, NDSN -2.5% move lower after earnings

Nikkei -0.22% Hang Seng -0.04% CSI +1.34% Shanghai +1.23% Shenzen +1.61%

Eur$ 1.1153 CNH 6.9308 CNY 6.9057 JPY 110.17 GBP 1.2723CHF 1.0108 RUB 64.5247 TRY 6.0382 WTI$ 63.56 +0.60%

S&P +0.39% EuroStoxx +0.57% Dax +0.58% SMI +0.57%

Macro :
- Woodford Flagship Fund Downgraded by Morningstar: FT
- MSCI To Announce Prospective Upgrade of Kuwait To EM on June 25
- China Warns About ‘Unwavering Resolve’ to Fight U.S. ‘Bullying’

Keep an eye on :
- ADP FP : Aeroports de Paris Proposes Augustin de Romanet as Chairman, CEO
- ADS GY : Nike, Adidas Call Tariffs ‘Catastrophic’ in Open Letter to Trump
- AMG NA : AMG Plans to Build Greenfield Plant in Ohio Using Bond Proceeds
- BIDU US : *BAIDU PLANS TO SPIN OFF AUTONOMOUS CAR BUSINESS: CAIJING
- BIOAB SS : BioArctic Get EU15M Milestone Payment From Eisai BAN2401 Study
- CEC GY : Ceconomy Profit Falls as Western, Southern Europe ‘Challenging’
- COFB BB : Cofinimmo Buys Office in Brussels CBD for About EU6m
- DAI GY : Daimler Eyes 20% Lower Administrative Costs: Handelsblatt
- DMP GY : Dermapharm 1Q Adj. Ebitda Up 20.7% to EU43.7m; Confirms Guidance
- DBK GY : Deutsche Bank Says NYT Story Contains Misleading Statements
- DBK GY : Top Deutsche Bank Investors Focus Their Discontent on Chairman
- DIA SM : LetterOne, Banks Reach Accord on Restructuring Synd. Debt
- EDF FP : EDF Names Lewandowski Senior Exec VP for Nuclear and Thermal
- ENGI FP : Neoen Owner Mulls Sale to Engie in Return for Stake:BFM Business
- ECP FP : Besson's Movie Studio That Made `Taken' Seeks U.S. Bankruptcy
- DEC FP : Clear Channel Wins City of Paris Street Furniture Contract
- LEO GY : Leoni May Need Big Capital Increase, Debt Worrying: Lampe
- MBWS FP : Marie Brizard Reports Progress in Talks With Financial Partners
- MYSL LN : Mike Ashley’s Sports Direct Divests Stake in MySale Fashion Site
- MONT BB : Montea Sees Growth of Adj. EPS, Dividend by at Least 5%
- NEOEN FP : Neoen Owner Mulls Sale to Engie in Return for Stake:BFM Business
- NHY NO : Norsk Hydro: Brazil Court Lifts Remaining Embargo at Alunorte
- NRS NO : Norway Royal Salmon 1Q Operating Ebit Misses Est.
- RBS LN : Four Banks Win Dismissal From U.S. Forex Antitrust Case
- RNO FP : Renault to Add Car-Sharing Technology to Electric Zoe Models
- GLE FP : SocGen Plans to Pull Back From Trading in Brazil, Latin America
- SOON SW : Sonova Full Year Sales of CHF2.76b Match Estimates (1)
- GLE FP : Four Banks Win Dismissal From U.S. Forex Antitrust Case
- SSE LN : Options Narrow for SSE After Failed Merger and Fleeing Customers
- TIT IM : Telecom Italia 1Q Organic Adjusted Ebitda Meets Est.
- TIT IM : Telecom Italia Profits Are Still Falling as CEO Deepens Overhaul
- TEMN SW : Temenos Sees Non-IFRS Total Rev. Growth of at Least 10-15% CAGR
- UBSG SW : Four Banks Win Dismissal From U.S. Forex Antitrust Case
- WDP BB : WDP’s Structural Tailwind to Maintain Profits: Morgan Stanley

>>> Europe : Brokers Upgrades & Downgrades - 21st of May 2019

>>> Up
* Bilia Upgraded to Buy at Handelsbanken; Price Target 87 Kronor
* Burberry Upgraded to Market Perform at Bernstein
* Maersk Upgraded to Accumulate at Fearnley; PT 8,100 Kroner
* Nokian Renkaat Upgraded to Buy at ABG; Price Target 32 Euros
* Nordex Upgraded to Buy at Nord/LB; PT 16 Euros
* Norsk Hydro Upgraded to Overweight at JPMorgan; PT 45 Kroner
* Swiss Re Upgraded to Neutral at Mediobanca SpA; PT 95 Francs

>>> Down
* Cewe Stiftung Cut to Hold at GSC Research; Price Target 90 Euros
* ElringKlinger Cut to Underperform at MainFirst; PT 4.40 Euros
* Hypoport Downgraded to Hold at Pareto Securities; PT 200 Euros
* Leoni Downgraded to Sell at Bankhaus Lampe
* Orkla Downgraded to Neutral at SpareBank; Price Target 80 Kroner
* Ryanair Downgraded to Neutral at JPMorgan; PT 11.30 Euros
* Wendel Downgraded to Hold at HSBC; PT 139 Euros

>>> Initiation
*
* Atlas Copco Rated New Outperform at RBC; PT 325 Kronor
* BioMerieux Rated New Outperform at MainFirst; PT 82 Euros
* Bucher Rated New Sector Perform at RBC; PT 340 Francs
* Adevinta Rated New Buy at SEB Equities; PT 93 Kroner
* Moncler Rated New Outperform at Macquarie; PT 42 Euros
* Network International Holdings Rated New Buy at Citi
* Network International Holdings Rated New Overweight at Barclays
* Network International Holdings Rated New Buy at Goldman
* NETW LN Rated New Equal-weight at Morgan Stanley
* Network International Holdings Rated New Neutral at JPMorgan
* Rational Rated New Underperform at RBC; PT 475 Euros
* Sandvik Rated New Sector Perform at RBC; PT 175 Kronor
* Sesa Rated New Outperform at Mediobanca SpA; PT 40 Euros
* SKF Rated New Outperform at RBC; PT 200 Kronor
* VAT Rated New Underperform at RBC; PT 100 Francs
* Vicat Rated New Neutral at Citi; PT 45 Euros
* WDP Rated New Overweight at Morgan Stanley; PT 175 Euros

>>> Call
* Atlas Copco, SKF Favored as RBC Initiates on Capital Goods Firms

>>> Asian Update

Asia Market Update: Asian chipmakers trade mixed after US declines amid focus on supplies to Huawei; Aussie drops as RBA signals rate cut


General Trend:
- Chinese equities rise in early trading, on track for first gain in 3 sessions
- Japanese chipmakers underperform amid focus on Huawei, Chinese chipmakers and Samsung however outperform
- Chinese rare-earth companies rise on speculated import restrictions
- Chinese smartphone maker Xiaomi rises less than 2% following earnings report
- Softbank rises in Japan on hopes that Sprint/T-Mobile merger is approved
- Australia financial sector rises after regulator (APRA) moves to ease mortgage rules , continued momentum after surprise election results
- Woolworth’s declines in Australia amid cautious broker commentary
- Australian building materials firm James Hardie (exposed to US housing market) rises after results and guidance
- RBA Gov Lowe signals possibility for June rate cut
- Big three Aussie banks now all call for June rate cut
- Aussie yields remain above recent lows despite comments by Lowe
- Some analysts examine if mortgage-related move by APRA will ease some of the rate cut pressure on the RBA
- Lowe: Move by APRA would complement, not substitute, monetary policy
- China PBoC injected liquidity for the first time in 7 sessions
- USD/CNH remains below 6.95 amid stability pledges out of China
- Chinese bond yields rise as domestic equities and yuan gain
- Chinese soymeal futures decline over 1.5% in the face of lingering trade worries
- South Korea chip exports continued decline during first 20 days of May
- US Fed Chair Powell did not comment directly on monetary policy, mentioned CLOs and leveraged loans
- Singapore cut top end of 2019 GDP growth target range after mixed final Q1 GDP data; cut forecast for non-oil exports
- Thailand cut 2019 growth forecast amid expectation for weaker exports
- Technology companies react to temporary reprieve given to Huawei by US gov’t; Huawei itself plays down the importance of the move

***Headlines/Economic Data***
Australia/New Zealand
-ASX 200 opened +0.1%
- (AU) RESERVE BANK OF AUSTRALIA (RBA) MAY MINUTES:OUTLOOK WOULD THUS BE LESS FAVOURABLE WITHOUT AN EASING IN POLICY OVER NEXT 6 MONTHS (replacing prior wording of not a strong case for near term adjustment In monetary policy)
-(AU) RBA GOV LOWE SPEECH IN BRISBANE: BOARD WILL CONSIDER CASE FOR RATE CUT IN JUNE
- JHX.AU Reports FY19 Net $228.8M v $146.1M y/y; adj Op $300.5M v $301Me; Rev $2.51B v $2.05B y/y
- (AU) APRA: Proposes to amend guidance on mortgages, proposes removing the minimum 7% mortgage rate buffer
-(AU) Australia Treasurer Frydenberg: Tax cuts will be delivered as soon as passed by parliament; affirms budget surplus target

Japan
-Nikkei 225 opened -0.4%
- 8028.JP Suing to dissolve 15 year JV partnership with Ting Hsin Food Conglomerate - Nikkei
- 8306.JP Mitsubishi UFJ Financial group reportedly reducing MUFG Bank branches by 35% by FY23 (had prior plans to close 20%) – Nikkei
- (JP) Japan Fin Min Aso: GDP at 2.1% and two quarters of growth "is not bad"; fundamentals continue to be firm
- (JP) Japan Q1 Housing Loans Y/Y: 2.4% v 2.4% prior
- (JP) Japan Econ Min Motegi: Japan and the US will hold working level trade talks today; no decision on Lighthizer talks ahead of Trump's visit
- (JP) Bank of Japan (BOJ) Gov Kuroda: Bond buying is to reach price target, no finance Govt debt
- 6758.JP CEO Yoshida announces mid-term corporate strategy for FY19-21: planning to increase FY20 CAPEX to ¥1.1-1.2T, to stably raise dividend over the long term, want to buyback in an agile manner

Korea
-Kospi opened +0.1%
- (KR) South Korea Apr PPI Y/Y: 0.6% v 0.5% prior (2nd consecutive increase)
- (KR) Bank of Korea (BOK) Gov Lee: Not considering currency redenomination; BOK steps to cap won decline not a problem – Yonhap (overnight)
- (KR) South Korea May 1-20th Exports y/y: -11.7% v -8.7% prior; Imports y/y: -0.1% v -1.2% prior; Chip exports -33% y/y; Car exports +12.6% y/y
-005490.KR US will further reduce tariff on cold rolled steel - Yonhap

China/Hong Kong
-Hang Seng opened -0.4%; Shanghai Composite opened -0.1%
- (CN) Reportedly China to suspend business with all suppliers who agreed to halt supplying Huawei; may temporarily hike tariffs for Apple; All China trade talks with U.S. said to be halted - Money China twitter (after the close yesterday)
- (CN) US Commerce Dept: confirms plans in filing to revise 'entity list' restrictions on Huawei so existing customers can maintain networks
- Huawei Founder Ren: Won't rule out use of US chips, 90-day license [issued by US] does not make much sense for Huawei; Infineon has not stopped supplying chips to Huawei (refutes recent press report) - Chinese Media
- (CN) China PBoC Open Market Operation (OMO): Injects CNY70B in 7-day reverse repos v skips prior: Net: CNY80B v CNY0B prior (1st injection after 6 skips)
- 1913.HK Starts strategic review on wholesale channels, considers it essential to ensure greater consistency in pricing policies across retail and digital channels
- (CN) Not a large chance for the yuan to experience disorderly devaluation, necessary to make counter cyclical adjustments of yuan; Risk of 'over-depreciation' of yuan (CNY) are emerging over the short-term - China Securities Journal Front Page Commentary
- (CN) China is using $25T in equity stakes in state-owned enterprises (SOE) to address pension hole – SCMP
- (CN) China PBoC sets yuan reference rate: 6.8990 v 6.8988 prior
- (CN) China said to have extended ban on imports of medium to heavy rare earths, including dysprosium oxide and terbium oxide, from Myanmar; raised rare earth import tariffs from the US to 25% from 10% - Chinese press

Other Asia
- (SG) Singapore Q1 Final GDP Q/Q: 3.8% v 2.3%e; Y/Y: 1.2% v 1.4%e; Cuts 2019 GDP estimated range: 1.5-2.5% (prior 1.5-3.5%)
-(TH) Thailand Q1 GDP Q/Q: 1.0% v 1.3%e; Y/Y: 2.8% (slowest pace in 4-yrs) v 2.8%e
- (SG) Monetary Authority of Singapore (MAS): Current monetary policy stance is appropriate; expects inflation pressures to be stable this year

North America
- (US) Fed Chair Powell: No direct comments on interest rates; Sees business lending risk as moderate; job creation is strong and wages are rising in context of muted inflation pressures - Speech on assessing risks to the financial system
- (US) Fed's Clarida (moderate, voter): Full employment may go at least as low as 3.6%; labor market may not be operating beyond full employment (US session)

Europe
- (IR) Iran President Rouhani: In favor of talks and diplomacy, but under current conditions do not accept




***Levels as of 1:20 ET***
- Nikkei 225, -0.3%, ASX 200 +0.2%, Hang Seng -0.1%; Shanghai Composite +1.4%; Kospi +0.7%
- Equity Futures: S&P500 +0.4%; Nasdaq100 +0.5%, Dax +0.1%; FTSE100 +0.3%
- EUR 1.1173-1.1162 ; JPY 110.26-110.01 ; AUD 0.6929-0.6885 ;NZD 0.6544-0.6517
- Gold -0.2% at $1,275/oz; Crude Oil +0.4% at $63.45/brl; Copper +0.4% at $2.740/lb

>>> US After Hours Summary: QTT -7%, NDSN -2.5% move lower after earni


After Hours Summary: QTT -7%, NDSN -2.5% move lower after earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to news: ARWR +6.7% (to join S&P SmallCap 600), CLVS +5.1% (highlights Phase 3 ARIEL3 Rubraca data), S +4.3% (continued strength), USAT +4.2% (receives additional Nasdaq deficiency and extends contract of Interim CFO), AKRX +2.9% (receives ANDA for Azelastine Hydrochloride Nasal Spray, 0.1%), ASNA +2.6% (to commence a wind down of Dressbarn's operations), QEP +1.3% (spikes on reports of M&A interest), LM +1% (lightly traded; appoints Trian Partners representatives to Board)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: QTT -7.2% (also announced resignation of Lei Li as CEO; appointed Eric Siliang Tan as CEO and Xiaolu Zhu as co-CFO), NDSN -2.5%

Companies trading lower in after hours in reaction to news: OCUL -9.2% (OTX-TP failed to meet primary endpoint in Phase 3 glaucoma trial), MRCY -5.1% (announces 5.0 mln common share offering), VNE -4.8% (launches concurrent offerings of $350 mln of common stock and $150 mln of convertible senior notes due 2024), GH -4.7% (proposes 4.5 mln share offering), SWI -4.6% (launches public offering of 15.0 mln shares of common stock), CVNA -3.2% (commences public offering of 3.5 mln shares of common stock and private offering of $250.0 mln of senior notes), INSM -2.7% (commences $250 mln stock offering; presented new ARIKAYCE data), VAR -2.3% (lightly traded; to acquire Cancer Treatment Services International; lowers FY19 EPS guidance), MRK -0.7% (Phase 3 KEYNOTE-119 study did not meet primary endpoint)

>>> US Close Dow -0.33% S&P -0.67% Nasdaq -1.46% Russell -0.70%

Closing Stock Market Summary

The S&P 500 declined 0.7% on Monday, led lower by the technology stocks. Lingering concerns about Chinese retaliation against U.S. tech companies following U.S. scrutiny of Huawei Technologies dampened general buying interest. 

The Dow Jones Industrial Average lost 0.3%, and the Russell 2000 lost 0.7%. The Nasdaq Composite underperformed with a loss of 1.5%.

Alphabet (GOOG 1138.85, -23.45, -2.0%) and many of the semiconductor companies reportedly began suspending business activity with Huawei to comply with new regulation that requires U.S. government approval to work with the Chinese firm. Lumentum Holdings (LITE 44.42, -1.90, -4.1%) cut its fiscal Q4 guidance to reflect lost business from Huawei. 

The possibility that other semiconductor companies could also lower their guidance, and the possibility that China could retaliate against U.S. tech companies, weighed heavily on the Philadelphia Semiconductor Index (-4.0%) and the S&P 500 information technology sector (-1.8%). 

Despite the gloomy mood in tech space, the broader market had rallied well off its session lows during the day. An overall lack of buying conviction, however, sent stocks back to their opening lows before a rebound in the last 45 minutes of action helped stocks close off those levels. 

The S&P 500 real estate (-1.6%), materials (-1.5%), and communication services (-1.2%) sectors joined the tech sector (-1.8%) as the day's worst-performers. The utilities (+0.2%), financials (+0.1%), and energy (+0.1%) sectors were the lone sectors to finish higher.

Apple (AAPL 183.09, -5.91, -3.1%) was a notable underperformer and was further pressured by HSBC cutting its price target to $174 from $180. Tesla (TSLA 205.36, -5.67, -2.7%) finished well off its session lows (-7.5%), but it still closed at its lowest level since Dec. 2016 after Wedbush cut its price target to $230 from $275.

In M&A news, FCC Chairman Ajit Pai indicated his support for the merger deal between T-Mobile US (TMUS 78.29, +2.92, +3.9%) and Sprint (S 7.34, +1.16, +18.9%). Shares surged on the news, but lost steam after a report indicated that the Department of Justice is leaning against the merger.

U.S. Treasuries finished lower despite the negative disposition in equities. The 2-yr yield increased one basis point to 2.22%, and the 10-yr yield increased two basis points to 2.42%. The U.S. Dollar Index declined 0.1% to 97.95. WTI crude increased 0.9% to $63.30/bbl on rising U.S.-Iran tensions and OPEC+ producers signaling that production cuts may last throughout 2019.

Investors did not receive any economic data on Monday. Looking ahead, investors will receive Existing Home Sales on Tuesday.

  • Nasdaq Composite +16.1% YTD
  • S&P 500 +13.3% YTD
  • Russell 2000 +13.1% YTD
  • Dow Jones Industrial Average +10.1% YTD