Prepare for Netflix Under Fire

Asia

Indexes the world over are struggling with the zero level, China and Japan closing marginally up and the Hang Seng just missing the mark.

The Australian Dollar jumped nearly 50 pips on this morning’s Chinese data, which leaves little doubt as to that giant’s recovery.

Retail sales are up a ½%to 8.7 in March, industrial production up 3 to 8.5% and GDP, while down a 1/10 QoQ managed to beat expectations, remaining at 6.4% YoY this first quarter.

Japan’s adjusted merchandise trade balance in March fell into negative territory at -117bn yen, both imports and exports missing expectations – the latter doubling to a 2.4% contraction – as did industrial production this morning, which halved to 0.7% MoM.

This is the nation’s first trade deficit in 3 years, as trade talks with the US close their first week. Japan’s trade surplus with the US was down these past 2 months from 6.7 last year to 6.53 in March-April 2019.

Europe

This morning’s Euro is northbound after the ZEW institute provided excellent economic sentiment markers for both Germany and the EU in April, both soaring out of negative territory to 3.1 and 3.5, respectively.

The numbers – amidst this earnings reports – is putting the DAX at a 6-month high, despite closing a mere 0.67% up inter-daily.

Europe’s construction output also made an excellent recovery in February, up from -0.1% to a very positive 5.2%. Across the waters, Britain’s unemployment rate remained level at 3.9%, but average earnings excluding bonuses lost a 1/10 at 3.4% in February.

US

With most companies (certainly not banks) exceeding expectations somewhat for the year’s 1st quarter, US indexes closed slightly up yesterday – the DOW and NASDAQ by a third, the S&P by 0.05%.

The dollar index lost 20 cents on the dollar after the US FED reported a 0.1% contraction in industrial production for March. The Redbook Index for same-store sales improved marginally to 5% this past week, and the NAHB housing index added a point, putting it at 63 in April.

Commodities

Bitcoin rose to 5184 this morning, as support develops quite clearly at 5025. And surprising all pundits, the API yesterday reported a 3mB drawdown, sending prices jubilantly up a dollar 50 towards resistance at 64.56.

Adding backwind, Reuters this morning reports that Chinese refineries increased processing volumes by 3.2% last month. OPEC’s next production quota meeting is scheduled for June – Russia willing…

Shares

Bank of America shares recovered quite quickly to its quarterly earnings report yesterday, with revenues missing expectations but an EPS of 71 cents – 5 cents above expectations.

Johnson & Johnson also beat expectations, mainly on pharmaceuticals, diving shares up a percent. Netflix was not as bleak as expected, EPS up a 1/3 on expectations and revenues exceeding by $20mn, also.

As Disney readies to release its FOX-driven, Spielberg-blessed streaming service, subscriber growth is expected to slow and prices are expected to rise. Shares were down nearly 2% when trading closed yesterday.

Today, American Express and Morgan Stanley report earnings – the former showing optimism as shares rise 20% over the past 12 months.

Events

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