1. Asia’s Bull Run Comes To A Halt
After an impressive week of gains, the Chinese stock market came to a grinding halt as poor trade data completely derailed the market’s momentum, dragging the Chinese CSI 300 index down 4% during the session. Ouch!
The manic selling spree was sparked by the release of Chinese customs data which showed a 20.7% decrease in Dollar-denominated exports for the month of February when only a 4.8% loss was expected. Yikes, that’s quite a miss.
Markets all across Asia were swallowed up by the fallout with the Japanese, South Korean and Australian indexes all falling in unison. The Nikkei closed down 2.01%, while the Kospi and ASX dropped 1.31% and 0.96% respectively.
While the numbers were undoubtedly a massive surprise and disappointment, Singaporean portfolio manager, Sarah Lien, said that analysts are still “very bullish” on China. She also mentioned that its outlook for 2019 looked “constructive” with a number of solid opportunities present in its domestic market.
For today, however, the bull has been stopped in its tracks….But we all know it won’t be long before its back with a bang. So don’t stray too far from your Chinese favourites.
2. Oil Markets Feel The Pinch
There was more push and pull in the oil markets this morning as prices sagged in response to gloomy news out of Europe and Asia, along with reports of growing US inventories. The tug of war never ends.
In the last 24 hours Brent Crude and West Texas Intermediate oil slid -1.65% and -0.85%. Both were dragged lower by Mario Draghi’s woeful outlook for the Eurozone, which he said was in “a period of continued weakness and pervasive uncertainty”.
Recently, oil prices have been buoyed by OPEC’s supply curbing measures and sanctions on Venezuela and Iran, reaching monthly high of $67.58. Demand has remained steady from large importers, such as China, but concerns of a more protracted global slowdown are beginning to put downside pressure on prices.
While OPEC and Russia have been slowing production, US producers, Chevron and Exxon Mobil, have been expanding their operations and generating record levels of output.
This has thoroughly undermined OPEC’s efforts and, when coupled with the possibility of weakening demand towards the end of 2019, could mean even more downward pressure on prices to come, and considerable friction between OPEC and the US.
Never a dull day in the oil markets!
Today we are watching…
1. Debenhams (#debham)
Down and out retailer, Debenhams, enjoyed a healthy 34% bounce this morning after Sports Direct CEO, Mike Ashley, launched a coup to take control of the company. He announced his plans to oust every director but one and appoint himself to the board in an executive role and step down as Sports Direct’s CEO. Ashley also mentioned his plans to merge Debenhams with another ailing retail franchise, House of Fraser, in an effort to aid both companies in their restructuring. Serious stuff, Mr Ashley,. Let’s see how it plays out!
2. Electronic Arts (#elecarts)
Electronic Arts was the pick of the litter yesterday as the whole market fell apart around it. The stock picked up +4.84% during the session and may be poised for more gains. Analysts have turned bullish on the stock which is currently down -22.64% in a 52 week period. The general consensus is that the share is undervalued and may hold considerable upside if its upcoming product range can perform as is expected. Keep an eye on this one.
