FT : Carmakers rise on reports China moving towards cutting US auto tariffs

Carmakers rise on reports China moving towards cutting US auto tariffs

Shares in US automakers have motored ahead by more than 2 per cent in pre-market trade — and taken European rivals along for the ride — after media reports China is moving towards cutting the tariffs it placed on American-made vehicles.

In the wake of a meeting on trade between US President Donald Trump and his Chinese counterpart Xi Jinping earlier this month, Mr Trump tweeted that “China has agreed to reduce and remove tariffs on cars coming into China from the US” No further details or timeline were provided, and Beijing did not immediately confirm any change in duties.

China is moving towards cutting the tariffs on US auto imports to 15 per cent from 40 per cent, according to Bloomberg, which cited people familiar with the matter. Beijing in July imposed duties of 40 per cent on imported US vehicles in retaliation for Washington’s decision to levy duties on billions of dollars of Chinese imports.

Any move from Beijing to reduce the tariffs on US autos, as well as the resumption of purchases of US soyabeans and other agricultural commodities, could help facilitate an end to the trade war between the two countries.

Shares in General Motors were up 3 per cent in pre-market trade in New York on Tuesday, while those in Ford were up 2.5 per cent, with futures for the S&P 500 up 1 per cent.

In Europe, shares in Volkswagen were up 3.7 per cent, Fiat Chrysler gained 3.1 per cent, while BMW and Daimler both rose about 2.4 per cent. The continent’s Stoxx600 benchmark was up 1.9 per cent.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:

  • SFIX -16.9%, CAMP -11.7%, FRAN -8.9%, CASY -6.9%, NX -6.8%, URBN -1.4%, AWK -0.5% (guidance)

Other news:

  • RARX -6.5% (announces proposed public offering of $100 mln of its common stock)
  • BHVN -3.6% (offering 3,000,000 of its common shares)
  • CSTM -2.3% (to acquire Tri-Arrows Aluminum's 49% stake in Constellium-UACJ
  • ABS for $100 mln plus the assumption of 49% of approximately $80 mln of third party debt)
  • HCP -1.7% (upsizes offering by 1 mln shares and prices 15 mln shares of common stock at $28.90 per share)

Analyst comments:

  • PFE -0.9% (downgraded to Neutral from Overweight at JP Morgan)
  • NTAP -0.6% (initiated with Underperform at Cowen)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:

  • ASNA +16.8%, DSW +13.7%, ROAD +2.9%

Other news:

  • NEOS +8.1% (CEO disclosed the purchase of ~17K shares)
  • WPP +5.9% (expects to deliver organic growth in line with its peers)
  • KNSA +4% (announces interim data from open-label Phase 2 clinical trial of rilonacept) GM +2.6% (China has reportedly decided to move forward with a reduction on auto tariffs on imported U.S.-made cars)
  • F +2.6% (China has reportedly decided to move forward with a reduction on auto tariffs on imported U.S.-made cars)
  • NOC +1.6% (following today's notable strength in defense names; also to change in pension accounting)
  • MRK +1% (Merck appoints Michael Nally CMO, effective January 1)
  • AAPL +1% (rebound continues)
  • ITCI +1% (FDA has accepted for approval NDA regarding lumateperone)

Analyst comments:

  • BCOV +3% (upgraded to Buy from Neutral at B. Riley FBR)
  • NOK +2.5% (added to US 1 List at BofA/Merrill)

WSJ : Huawei’s Top Customer in Japan Reassesses Ties

Huawei’s Top Customer in Japan Reassesses Ties
Until recently, SoftBank had said it believed equipment from Huawei was safe

TOKYO— SoftBank Group Corp. 9984 2.45% is assessing the impact of eliminating less-expensive Huawei Technologies Co. gear from its Japanese network following a U.S. campaign to restrict the Chinese company’s business in countries allied with America.

SoftBank, which operates Japan’s third-largest mobile phone network, relies on Huawei to offer competitive prices against its two bigger rivals, which together control about three-quarters of Japan’s cellphone market and plan to cut phone rates by as much as 40%. SoftBank and Huawei have worked together on trials to roll out high-speed fifth-generation, or 5G, technology by 2020.

Until recently, SoftBank had said it believed equipment from Huawei and Chinese telecom-equipment maker ZTE Corp. was safe. But a company official involved in SoftBank’s discussions said Tuesday the company was assessing whether it could source equipment from other makers, and if so how that would affect network quality, cost and the timeline for introducing 5G. The official said the study was preliminary and no decision has been made.

Huawei has said its equipment is safe and that the company is owned by its employees and operates independently from the government in Beijing. Huawei representatives on Tuesday couldn’t immediately be reached for comment.

In Beijing, Foreign Ministry spokesman Lu Kang said Huawei’s critics “haven’t provided one piece of evidence that Huawei threatens their national security. Any action based on such speculations is ridiculous.” Mr. Lu said Huawei has signed 5G contracts with companies in more than 20 countries and is “gaining greater trust from its international partners.”

Following the U.S. effectively locking Huawei out of the American market based on alleged security concerns, Japan’s government on Monday revised its procurement guidelines to shore up its defenses against cyber-surveillance by hostile parties. The revisions require government agencies that source information-technology equipment to consult cybersecurity officials.

Although local media described the measures as a backdoor way to ban Huawei, government officials said the changes weren’t directed at any particular country.

A SoftBank spokesman said the company was in serious discussions with regulators and would comply with government recommendations.

>>> US Early premarket gappers

Early premarket gappers

Gapping up:

  • ASNA +12.8%, DSW +12.4%, NEOS +8.1%, WPP +3.7%, ROAD +2.9%, AAPL +1.3%, MRK +0.9%, YRCW +0.8%, BK +0.7%

Gapping down:

  • SFIX -17.3%, CAMP -9.2%, CASY -6.8%, NX -6.8%, RARX -3.8%, BHVN -3.6%, HCP -2.6%, CSTM -2.3%, URBN -1.4%, NTAP -0.6%, AWK -0.5%

>>> Ferrovial hires KPMG to carry out due diligence on Ferrovial Servicios - rep

Ferrovial hires KPMG to carry out due diligence on Ferrovial Servicios - report (translated)
11 DEC 2018
Grupo Ferrovial [BME:FER], the listed Spanish infrastructure and construction group, has appointed KPMG to carry out due diligence on the sale of its services division Ferrovial Servicios, Cinco Dias reported citing unspecified reliable sources.
The division could be sold in parts, according to the report.
Goldman Sachs has been sounding out the market about the sale and the two advisers may work together on the divestiture, Cinco Dias said.
Ferrovial Servicios is reportedly valued at approximately EUR 3bn, the Spanish-language paper noted. In 2017, it posted revenues of EUR 7bn — about 57% of the group’s total sales — and EBITDA of EUR 423m.
Financial sources told Expansion that some funds have told Ferrovial they would prefer a sale in blocks, as it allows them to acquire the assets that best match their interests, according to a previous report.

>>> What to look at today - 11th of December 2018

 Stocks in Asia traded mixed on Tuesday as investors weighed further discussions on trade between Washington and Beijing. The pound stayed lower after a slump in the wake of U.K. Prime Minister Theresa May delaying a critical vote on Brexit.
Benchmarks fell in Japan and were little changed elsewhere. India’s stocks fluctuated as traders took in the central bank governor’s surprise resignation and the implications for Prime Minister Narendra Modi of regional election results. Asian shares climbed from intraday lows after a statement saying Chinese Vice Premier Liu He discussed the timetable for trade talks with U.S. Treasury Secretary Steven Mnuchin by phone. U.S. futures remained lower and Treasuries were little changed. European futures rose. The dollar drifted and the yen pared some of Monday’s losses
US After Hours ASNA +12%, SFIX -13%, CAMP -10%, CASY -6.8%, NX -6.1% following earnings/guidance.

Nikkei -0.34% Hang Seng +0.02% CSI +0.09% Shanghai +0.03% Shenzen +0.31%

Eur$ 1.1363 CNH 6.9022 CNY 6.9013 JPY 113.15 GBP 1.2573 CHF 0.9892 TRY 5.3260 RUB 66.4985 WTI$ 51.05 +0.08%

S&P -0.22% EuroStoxx +1% FTSE +0.58% DAX +1.16% SMI+1%

Macro :
- Italy Faces Ticking Clock for Budget Changes, EU Commission Says
- Hedge Funds Most Bullish on Dollar Since January 2017: CFTC
- Oil Hedge Fund BBL Commodities Closes Flagship Value Fund
- China Slowdown to Be ‘Mild’, U.S. Recession Risk Low: BlackRock
- EU Pharma Earnings Momentum Should Justify Valuations: Jefferies

Keep an eye on :
- ABE SM : Abertis is preparing a new strategic plan that will include acquisitions and talks to governments to obtain new concession contracts, Cinco Dias reported citing chairman Marcelino Fernandez
- ABI BB : AB InBev Cut by Moody’s Amid Struggles to Trim Massive Debt Pile
- AHSL SS : CVC Capital Partners Makes SEK18b Offer for Sweden’s Ahlsell !!!!
- AIR FP : Avianca Seeks to Cut Airbus Order by as Much as Half: Reuters
- NDA GY : Aurubis 4Q Sales Beat Estimates, Sees Moderate Pretax Decline
- NDA GY : Aurubis CEO Schachler Will Leave When Term Ends in June
- CS FP : Reportedly ready for further acquisitions or equity investments in the U.S. health sector (data management, health services in companies or the coordination of health solutions)
- BAMI IM : Banco BPM Accepts Elliot, Credito Fondiario Offer for NPLs
- BP/ LN : BP Reports Helge Lund Will Be Chairman of Board
- CA FP : Carrefour, Casino Could Move As Macron Tries to Quell Protests
- CO FP : Carrefour, Casino Could Move As Macron Tries to Quell Protests
- BN FP : Danone Model Not Broken, Discount to Peers Excessive, Citi Says
- DASNSKE DC : Danske Agrees to Sell Swedish Pension Assets for $286 Million
- DSY FP : Dassault Systemes to Buy IQMS for $425m
- DBK GY : Former Deutsche Bank Anti-Money Laundering Official Probed:HR
- DBK GY : Deutsche Bank Adds LBO Advisers, Equities Traders in U.S.: FT
- DIA SM : Ence to Replace DIA in Spain’s Ibex 35 Benchmark Index
- DIS US : Disney Plans to Split Up Sale of Fox Local Sports Networks: NYP
- EDP PL : EDP: Three Gorges Names New Supervisory Board Representatives
- ENC SM : Ence to Replace DIA in Spain’s Ibex 35 Benchmark Index
- RNGI FP : Engie to Maintain Current Suez Stake: Les Echos
- GBLB BB : GBL Says Gallienne Becomes Sole CEO, Names Desmarais Chairman
- HBH GY : Hornbach Holding 3Q Prelim. Adjusted Ebit Falls 31% Y/y, Hornbach Baumarkt Cuts 3Q Adjusted Ebit View
- ISS DC : Lego Fund Voices Confidence in ISS Plan, Borsen Says
- LIN GY : Linde Raises Cash Compensation for Planned Squeeze-Out
- LHA GY : Avianca, Lufthansa Agree to Share Codes on Europe, LatAm Flights
- 7201 JP : TSE Mulls Putting Nissan on Alert List After Indictment: Nikkei --> -3.1%
- NOKIA FH : Japanese Mobile Carriers to Shun Chinese 5G Technology: Nikkei !!!!
- ONTEX BB : Ontex in Liquidity Contract With Rothschild Martin Maurel
- PUB FP : Publicis to Pay EU1,000 Bonus to Some Employees in France
- RNO FP : Lawyer Sees Major Flaw in Basis of Prosecution Against Ghosn --> 7201 -3.1%
- RNO FP : Renault, Nissan, Mitsubishi Common Platforms Too Big to Unwind
- SPM IM : Saipem Assessing Impact of ‘Cyber Attack’ on Servers
- STMN SW : Straumann Obtains 34% Stake in Ceramic Implant Maker Z-Systems
- UCG IM : Alfa-Bank Discussed Potential Sale With VTB, UniCredit: FT
- WDI GY : Prosecutors See Criminal Background in Wirecard Share Drop: Rtrs