Trade of the Day: Asian stocks drift in pre-holiday trade; European shares mixed and US futures higher; gold and US Treasuries post gains.
Quote of the Day: “They are just going to steal wholesale state secrets, whether they are the UK’s nuclear secrets or secrets from MI6 or MI5. It is somewhat shocking to us that folks in the UK would look at Huawei as some sort of a commercial decision. 5G is a national security decision,” Robert O’Brien, the US national security adviser said in a warning to the UK government about its decision to allow the Chinese telecoms company to participate in the country’s ultrafast 5G networks and added it risked giving the Chinese Communist party access to the “most intimate” details of British citizens and the ability to steal national secrets.
Stock of the day: Chipmaker SMIC rose as much as 4.7% in heavily traded volumes after it announced a China joint venture which it said will “improve the group’s production line efficiency and reducing production line construction and operation costs.”
Number of the Day: $39 million – Severance pay due to Dennis Muilenburg, Boeing’s former chief executive who was fired this week for failing to gain control of the crisis that followed the fatal crashes of two of its 737 Max jets.
Tip of the Day: “The decisive outcome of the recent election should help UK equities begin to close the large valuation gap relative to other developed markets that has opened up since 2016. This is the key reason why we expect UK equities to outperform next year. In emerging markets, we think that equities in India will continue to outperform as growth there picks up, but that equities in China and the rest of Asia will struggle,” said Capital Economics in its key market calls for 2020.
Asian markets were sideways as upcoming holidays truncated with the details of the phase one deal between the US and China still awaited. MSCI Asa-Pacific ex-Japan index eased 0.14%, but Australia’s S&P/ASX 200 index rose 0.13% and Japan’s Nikkei 225 edged up 0.04%. Hong Kong’s Hang Seng eased 0.28% with property, utilities and bank shares pulling down the benchmark.
The benchmark for blue-chip shares in China, CSI300 rose 0.37% after Premier Li Keqiang said the government was considering more measures like RRR cuts and refinancing to lower funding costs for SMEs.
“We expect China’s economy to stabilize in 2020. This should be underpinned by a combination of easing monetary conditions as the central bank introduces measures to improve the availability of credit, greater fiscal support through the government’s tax and spending policies, and potentially a bottoming in global industrial activity. Some form of trade deal with the US should also help to support a modest reacceleration in growth over the course of the year,” said Louisa Lo, Schroders Head of Greater China Equities.