tock markets around the world have been trading lower again for the most part overnight. There hasn’t been a lot of economic news. The main event was China inflation which came in below expectations, opening the door to more potential to more stimulus which raised more concerns about the health of the Chinese economy sending the Hang Seng and the resource weighted Australian market lower.
The one Asia Pacific market that was up on the day was Japan which continues to benefit from speculation that a rising USD and weakening JPY on speculation of a hawkish Fed and neutral Bank of Japan could help exporters.
A similar rally last week in Germany, however, has failed with speculation on a dovish ECB undermining confidence in the local economy. Political uncertainty in the Eurozone may also be on the rise again with Portugal’s government still in turmoil with an alliance of Euroskeptic parties looking to take the reins and the UK publishing its formal list of EU reform demands ahead of negotiations and a potential Brexit referendum next year.
Crude oil has stabilized at a lower level overnight. The International Energy Agency forecast in its latest World Energy Outlook that it thinks the oil price could rebound toward $80.00 by 2020. In other words, low oil prices are likely here to stay for a long time just as they remained low for many years following the last generational market share war crash back in the 1980s.
Despite the overall gloom there are a few potential sunny spots in the markets today. Solar stocks could attract a lot of attention following spectacular results from Canadian Solar and strong guidance from First Solar. Stocks associated with alternative energy could attract significant interest heading into the upcoming Paris climate conference, particularly with US President Obama (who shot down the Keystone XL pipeline last week) and Canadian Prime Minister Trudeau (who just started on the job last week) leaders in the US and Canada looking to make a splash at the summit. Homebuilders may also attract interest on positive results and a dividend increase from DR Horton.
Canadian Solar $0.53 vs street $0.24, revenue $849M way above guidance $805-815M, guides next Q wales to $930-980M way above street $774M, raises full year sales guidance to $3.28-$3.33B from $2.8-3.0B
First Solar $3.41 vs guidance $3.38, guides next Q to $4.35-$4.50 above street $4.22.
DR Horton $0.64 vs street $0.63, 28% dividend increase
Significant announcements released overnight include:
China consumer prices 1.3% vs street 1.5%
China producer prices (5.9%) as expected
UK BRC same store sales (0.2%) vs street 0.8% vs previous 2.6%
Norway consumer prices 2.5% vs street 2.3%
Italy industrial production 1.7% vs street 1.4%
Greece consumer prices (0.9%) vs previous (1.7%)
Upcoming significant announcements include:
11:55 am EST Bank of Canada Wilkins speaking
5:15 pm EST FOMC Evans speaking
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