WHAT HAPPENED OVERNIGHT IN THE US:
· S&P -0.3%, remained wrong side of 100-day moving average for a second day – this time in heavier volume.
· Data mixed, and mostly second-line. Fed fund futures didn’t blink (72,5% in favour 2016 hike); USD steady at 9-month high.
· But corporate earnings dominated flow with more than half S&P500 now reported. So far so good; Q3 adj EPS up 3% y/y with >70% beats.
WHAT’S UP THIS MORNING IN THE EAST:
· Asia mixed. China flat - on track for 3rd straight weekly gain. But Hong Kong -0.6%, 2nd weekly loss in 3. Tencent -1%, below HKD 210 for first time in 2 weeks.
· Japan helped by soft Yen; Sept ‘core-core’ inflation (ex food/energy) back down at zero – a 3yr low – in latest blow to Abe. But 10yr JGB anchored by BoJ (below or) at zero.
· Australia -0.2%, another 6-week low. But BHP +1.9% & Rio +0.8%, indicating London up 0.5%. Dalian iron futures +3% - extending Oct gains to more than 20% - should mean spot at $65/t. Vale yday signalled “half” as much supply coming on line in 2017 than 2016 – and China steel production continues to pick up, defying slowdown expectations. Coking coal also nearly twenty percent for the month.
SOUTH AFRICAN NEWS:
· Expect AllShare -0.25%. From SA close yday, gold +$3 ($1271), plat +$8 ($973), copper +0.4% ($2.16/lb), oil unch ($50.50), USDZAR -0.2% (13.85), S&P -0.1%.
· Dischem: offering up to 238,405,268 shares, price range R16.25-20.25 per share (implied mkt cap R14.1bn – R17.3bn or $1.0bn - $1.3bn). Books open (28 Oct-14 Nov); expected pricing 15 Nov. Standard Bank bookrunner and joint global coordinator / transaction sponsor.
· ANH: Q3 norm EPS 83c vs cons 100c (sbge 95c), interim div unch (at 160c). Volumes (-0.9%) were ahead of our est but revenues in line with price-mix soft. Brazil was esp weak with EBITDA down 31% in reported FX as pricing and margins came under pressure.
TODAYS KEY DATA POINTS:
· 8am: Germany Oct CPI
· 2.30pm: US Q3 GDP first read (+2.6% q/q)