WHAT HAPPENED OVERNIGHT IN THE US:
· S&P +0.9%, back within 17pts of record on broad rally.
· Breadth positive 4-1; miners ok, and sideways oil a relief for trucking & airlines.
· Morgan Stanley +0.6%, the latest bank to beat, first double-digit ROE in 7yrs, trading revenues +17% y/y, advisory +40%.
· After-hrs, IBM +0.3% reported profit down 2% on 12th consecutive sales decline, another victim of stronger USD, but analyst expectations had been anchored.
WHAT’S UP THIS MORNING IN THE EAST:
· China +1.4% another 7yr high; southbound quota again mainly unused, but bounce nevertheless for Hong Kong +1.8%.
· Tencent +3.7% at HK159; NPN rump marking negative -R90, should revert to around –ve R60 (bottom of recent range) when SA opens.
· Australia +0.5% led by miners – but not much more in it for us. Rio +1.5% indicates London -0.6% after production miss (Q1 iron ore 75mt vs estimates 83mt). Dalian iron futures also lower this morning, though spot should hold $51. BHP +2.4% indicates flat London open.
SOUTH AFRICAN NEWS:
· Credit Suisse & SAP have kicked off Europe earnings season this morning just about on the right foot, beating low expectations on top & bottom line. SAP pre-tax dropped 23% y/y but that was ahead of expectations thanks to cloud sales & support. Credit Suisse reported strong performance from wealth & trading in its last set of results before Dougan hands over to Thiam, but the new boss will have his work cut out to wrestle common equity tier one ratio back above 14% - the one thing that continues to blight the group.
TODAYS KEY DATA POINTS:
· 7am+: SA earnings (CIL), Europe earnings (ABF, Sky, Akzo Nobel, etc)
· 9am: SA Feb Lead Indicator
· 11am: Germany April ZEW (current 56.5, exp 55.3)
· 12pm+: Baker Hughes, du Pont, Utd Tech, Lockheed Martin
· US after-hrs: Yahoo!, Yum!