1. Asia Coughs Up Some Cash
Both China and Japan have agreed to open their wallets and cough up some fiscal or monetary stimulus to offset their persistent growth issues. But can the kings of infrastructure spending do enough to counteract the weight of the global slowdown?
China’s central bank has already announced its plans to significantly ramp up fiscal spending this year to try to boost its slowing economy and “do all it can for stability”. So far, we have only seen a taste of what China can do to pull on the reigns of its economy. So prepare for some serious change this year.
Japan, on the other hand, has stuck with its policy of monetary easing and trimmed its inflation forecast after receiving a larger than expected drop in December export data. This further highlighted the need for continued support for its trade-dependent economy.
News of further intervention in Asia created a currency chain-reaction, sending the Japanese Yen lower and the Aussie and Kiwi Dollar higher. Oil also inched up slightly on hopes that stimulus would raise demand from two of its larger customers.
The wallets are officially open, let’s see how deep these two Asian powerhouses need to dig.
2. Toyota & Panasonic Buddy Up
Two automotive and tech giants have decided to meet in the middle to take part in the arms race going on in the electric vehicle (EV) market. And the news has competitors trembling in their boots.
The joint venture was formed with the goal of using both firms’ industry expertise to address the pressing issues facing the budding industry and prioritise the star of the show – the batteries.
Their aim is to streamline the production cost structure, energy density, charging time and safety of the batteries while also ensuring stable supply capacity and effective recycling mechanisms. Sounds like they’ve got it all figured out!
Toyota’s share price has been in a consistent downtrend since the start of 2018 which it is hoping to break through acquiring market share in the fast-growing EV market.
Toyota has been relatively slow to hop on the EV gravy train, but now its on board, and with Tesla under severe growth stress it may just have found the perfect time to mount its assault on the market.
Today we are watching…
1. Ford Mortor (#ford)
Ford will report its earnings today and analysts are saying “it’s too cheap to ignore”. It is currently heavily undervalued and has an impressive 6.99% dividend yield, making it extremely attractive. However, October-December sales fell short of expectations which is likely to weigh on revenue. The consensus earnings per share estimate is $0.32 and revenue is $38.66bn. Let’s see whether its cheap valuation can win out on the day.
2. Abbott Laboratories (#abbott)
Abbott Laboratories is set to post its earnings today and analysts are upbeat about its chances of beating expectations. The company has seen multiple positive earnings revisions in the lead up to today which is always a good sign of a possible bumper earning report. Strong demand for its medical devices, pharmaceuticals and nutrition segments have proven to be highly lucrative and are forecast to stick with the trend in 2019.