Europe – Brexit Redux

European equities led markets down yesterday, the FTSE losing 1.91% in London and 2.03% in Milan – other benchmarks losing in the region of a per cent and a half.

The Euro is down 0.11% after this morning’s German consumer confidence survey plunged to -3.1 for November, while a McKinsey report quoted by Reuters this morning reveals that over half of Europe’s SMEs – accounting for roughly 2/3 of the zone’s jobs – “fear for their survival.”

Also, the news outlet reports, EU and British negotiators have agreed to restart Brexit talks today, even though both sides remain locked in their positions.

Americas – Podiums a’ready

Index futures this morning indicate that yesterday’s 0.84% (Russel) to 0.22% (S&P) losses could become a trend after hopes of a pre-election stimulus ease.

The USD added 0.14% overnight after the Mortgage Bankers Association published a 1-tick improvement, but still another 0.6% contraction in mortgage applications and St Louise Fed Head Bullard said there was no need to consider negative interest rates.

The US Senate yesterday rejected Sen McConnel’s (R) proposed $1/2tn relief bill, and the FED’s Beige Book yesterday indicated that the economy continues to improve at a slight-to-modest pace.

Meanwhile, in Canada, retail sales expanded by another 0.4% MoM in August – disappointing expectations of almost triple – and house prices by 1.2% MoM in September, more than double August’s result.

Asia – DigiYuan headed to Hong Kong

Asian indices are showing red across the board, only the Hand Seng managing to add 0.03% after news that Hong Kong and China may collaborate on installing the Digital Yuan on the island in a region that still adheres to its own HK Dollar, according to HK Treasury Secretary Christopher Hui.

In Japan, foreign investments in shares contracted by ¥-94 bn.

Commodities – PayPal boosts Bitcoin

Bitcoin briefly spiked above 13K yesterday before returning to its present 12.770 level after PayPal (+5.5%) announced it would enable payments and trading on its platform.

Oil is back down below the $40 mark this morning after the EIA yesterday reported a less-than-stellar 1 mn barrel withdrawal.

Corporate – McAfee returns

AstraZeneca is down 2.5% after a Brazilian volunteer for its anti COVID vaccine died yesterday.

Tesla, after rising towards their earnings announcement yesterday, reversed back into the week-long downtrend despite better-than-expected results. Record revenues of $8.8 bn from $6.3 bn the year before and EPS jumped 69% to 27c a share. Shares jumped by 3.5% after hours.

Snap (+28.3%) yesterday starred with a 52% increase in revenues to $679 mn thanks to an 18% increase in users. Verizon (-0.87%) reported a 4.1% decline in revenues to $31 bn, resulting in a 20c drop in earnings to $1.05 per share. Biogen (0.67%) reported a 6% drop in revenue to $3.376 bn and a 47% drop in EPS to $.46. US oil pipe operator Kinder Morgan (-1.18%) reported a 10% drop in Q3 profits, while England’s Unilever (-3%) reported a 4.4% increase in sales (triple the expected). And Australia’s Nextera (-1.1%) beat expectations with am 11.3% increase in EPS to $2.39 but lagged revenue expectations by increasing only 14.6% YoY to $4.78 bn.

Finally, McAfee will be returning to the markets at an estimated $20 a share, maintaining their original symbol, which was worth about $5 a decade ago when the company was purchased by Intel. And Jeffrey Katzenberg’s Quibi yesterday officially announced it was closing, returning to investors nearly $2 bn raised to create the new online streaming service.

Still ahead – earnings today from Coca Cola, Intel, AT&T, Citrix, Amadeus, Capital One, Union Pacific, Southwest Airlines, Alaska Air, Danaher and Seagate, and dividends from Oracle and a shareholders meeting for Seagate.

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