Global Investment Weekly 2019.04.22 - CTBC Private Banking
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Global Investment Weekly
2019.04.22
Market Calendar, 2019/4
W1(4/1-4/5) W2(4/8-4/12) W3(4/15-4/19) W4(4/22-4/26) W5(4/29-5/3)
Composite ECB Meeting(10) U. Of Michigan IFO Outlook(24) Euro Zone Q1
PMIs(1) Confidence(12) BOC Meeting(24) GDP(30)
DM BOJ Tankan(1) Germany ZEW(16) US Durables
RBA Meeting(2) Fed Beige Book(18) Orders(25)
US Nonfarm(5) US Retail Sales(18) BOJ Meeting(25)
US Q1 GDP(26)
Composite
EM China Social China Q1 GDP(17) CBR Meeting(26) China NBS PMI(30)
PMIs(1)
Financing(10~15)
Financials Results Growth Sector Results
Healthcare, Cons. Energy Results
S ector Staple Results Commodities
Results
Utilities, Telecom Iranian
Results Sanction
Waiver Expiry
S ur pr i se Commodity
E vent Price Upgrade
And Its Impacts
M ar ket India Election Indonesia Election
Topic
Source: Compiled by CTBC Bank, 2019/4/19
1
Investment Strategy Summary
Results And Economic Data Outperformed, Risk Asset Rallied
Global Europe: EU Outlook Bottoming Out More Likely, IFO Might Rise For The
Economy 2nd Month
Central BOJ:BOJ Monetary Policy On Hold
JPY:JPY Continued To Be In Range Bound
Bank &
China Bond: Outlook Bottoming, Treasury Yield On The Rise
FX/FI
EM Bond: DM Monetary Policy In Wait-And-See Mode, EM Bonds
Strategy Benefited
Results US: Equity Edged Higher After Posting Better-Than-Expected Earnings
Review & Growth: Fundamentals Bottoming Out To Peak Season Track
Telecom: Clash Of New Setup And Earning Concern, Patient In
Equity
Consolidation
Strategy Resource: 1Q19 Resources Earnings Mostly Fall, 2Q19 Would Recover
Source: Compiled by CTBC Bank, 2019/4/19
2Agenda
Part I Macro and Market Review
Part II Short-Term Focus and Strategy
3Macro Review
Economic Data Release Review(4/12-4/18)
Macro Data: In ZEW Germany Apr data, current situation disappointed with further slide but the more important
expectations jumped from -3.6 to 3.1, back to above 0, indicating optimistic outlook in N6M and confirming the signal of
outlook bottoming out. However, Euro Zone Apr composite PMI released two days later was dragged by France and
Germany to 51.3.Germany manufacturing and services PMIs rose but the former only increased slightly to 44.5 and
missed consensus. Therefore, though both manufacturing and service improved to support Germany composite PMI, it
still stayed at the YTD low of 52.1. The 7-month high Germany service PMI was the bright spot with 4 consecutive
months rise in activity index and accelerating new orders. In contrast, output slid for 3 consecutive months in the weak
manufacturing with falling orders. Export orders, in particular shrank the 2nd fastest in 10 years, dragged by automotives.
Release Date Country Economic Data Period Consensus Actual Prior
04/12/2019 16:00 CN Money Supply M2 YOY Mar 8.20% 8.60% 8.00%
04/12/2019 16:01 CN Aggregate Financing CNY Mar 1850.0b 2860.0b 703.0b
04/15/2019 20:30 US Empire Manufacturing Apr 8 10.1 3.7
04/16/2019 17:00 GE ZEW Survey Current Situation Apr 8.5 5.5 11.1
04/16/2019 17:00 GE ZEW Survey Expectations Apr 0.5 3.1 -3.6
04/17/2019 10:00 CN GDP YOY 1Q 6.30% 6.40% 6.40%
04/18/2019 15:30 GE Markit/BME Germany Manufacturing PMI Apr P 45 44.5 44.1
04/17/2019 16:00 EC Markit Euro Zone Composite PMI Apr P 51.8 51.3 51.6
04/18/2019 16:00 EC Markit Euro Zone Manufacturing PMI Apr P 48 47.8 47.5
04/18/2019 20:30 US Retail Sales Advance MOM Mar 1.00% 1.6% -0.20%
04/18/2019 20:30 US Initial Jobless Claims Apr 13 205k 192K 196k
Source: Bloomberg, Compiled by CTBC Bank, 2019/4/18
4Market Review
Financial Results And Economic Data Fueled Global Equity Rally
Country: Global equity mostly rose last week. China 1Q GDP growth of 6.4% beat consensus, boosting the Chinese A
shares to outperform other EM equities. Rising oil price fueled the rally of Russia equity. In contrast, Brazil equity was
relatively weak as investors waited for further information of reforms. In DM, falling risk aversion demand for JPY eased
the pressure on Japan equity with a bright catch-up rally. US equity financial results and economic data beat
consensus, but the effect of these positive news was marginalized with limited room for further rally in short-term.
Sector: Benefited from improved US/China economic data and better-than-expected corporate financial results,
financials and industrial sectors led the rally in the past week at 2.7% and 2.1% respectively. Healthcare was hit 5.1%
last week by health insurance policy and drug pricing regulations and pessimistic sector view from IBs.
Global Equity Index Change Global Sector Index Change
Source: Bloomberg, past month is for 2018/3/18~2019/4/18, past week is for 2019/4/11~2019/4/18.
Sector indices based on Morgan Stanley Capital International (MSCI) global 11 sectors. 5Market Review
Better Than Expected China Growth Boosted Global HYBs And CNY
FI: China 1Q growth of 6.4% beat market expectation, leading global HYBs higher, especially for Asian and European
HYBs which were highly correlated to Chinese growth. But Germany 10-yr treasury yield returning to positive
depressed overall European bonds. EM bonds mostly fell with local currency bonds falling 0.5% amid stronger dollar.
FX: Better than expected 1Q19 China growth rate boosted both CNY and AUD, rallying 0.2% and 0.4% respectively.
Euro Zone manufacturing PMI disappointed with slightly weaker EUR, boosting DXY by 0.3% in the past week. NZD
and CHF were the weakest performers among DM currencies with CHF depreciating by 1.2% in the past week.
Global Bond Index Change Global FX Change (Against USD)
Source: Bloomberg, past month is for 2018/3/18~2019/4/18, past week is for 2019/4/11~2019/4/18
Note: Bonds take BAML Bond Index price change in the period. FX is against USD. 6Agenda
Part I Macro and Market Review
Part II Short-Term Focus and Strategy
7Macro
EU Outlook Bottoming Out More Likely, IFO Might Rise For The 2nd Month
Real Output Data Returned To Positive Growth: Industrial Production Reversed To Positive
Euro Zone Feb industrial production rose slightly less
at 0.2% MOM but the trend has clearly improved YTD.
The 3.1% average YOY growth of Jan/Feb was much
better than -4.5% in 4Q18.
IFO Might Rise For The 2nd Month Next Week: The
released Sentix and ZEW results both showed more
optimistic correspondents. As recent real data were no
longer weak and shocks from external negative factors
such as Brexit and trade war became mild, business
outlook might rebound further in IFO survey next week.
Investors More Optimistic On Economic Outlook More Optimistic Correspondents
資料來源：(右上)JP Morgan 2019/4/12；(左下)Bloomberg 2013/4~2019/4；(右下)Bloomberg 2007/1~2019/4
8EM Bond Strategy
DM Monetary Policy Wait And See, EM Bonds Benefited
EM Major Currency Sovereign, Corporate, IGB Prefer Major Currency Sovereign In EM: DM central
banks had no urge to tighten. EM central banks
Sovereign: 6.1%
followed with RBI and Banxico might cut rates this year,
Upward Downward 2Q19 Corporate: 6.3%
IGB: 4.4% benefiting EM bonds. Historically sovereign bonds used
to be strong when Fed paused hikes. DXY still
Deviation Realized Quant Voluntary
consolidates at the high. If shocks raise FX volatility,
Reason: Dovish Fed has moderated EM central banks major currency sovereign would be more stable.
policies, positive to EM bonds. But US treasury yield
has overreacted to the easing policy, we would like to To Seek Value Sector In Asia IGBs: EM corporate
caution possible chain reaction of US treasury yield rating deterioration has stabilized though downgrades
retracement. Corporate bonds credit ratings have (mainly in China) were still more than upgrades. Some
stabilized but sliding earning still impacts HYBs so we sectors with weak credit quality (e.g. real estate) have
prefer IGBs among corporate bonds.
their bonds overpriced. Banking, Consumer Goods and
Capital Goods Sector have more opportunities.
EM Bonds Mostly Rally When Fed Pauses Hikes EM Corporate Bond Rating Downgrade Improved
Source: (Left)Bloomberg, ICE Data Indices, denominated in USD, (Right)JPM, 2019/4/3, Compiled by CTBC Bank, 2019/4/12
9Asia Macro
China Outlook Bottoming, Monetary Policy Holds, Treasury Yield To Rise
Timing Mismatch Of CNY Amplified The Effects, But
China 10-yr Treasury Yield
Bottom Is Forming: Recent Chinese economic data
2Q19 3% were impressive with 1Q19 GDP growth of 6.4% on par
Upward Downward
3Q19 3.1% with 4Q18, Mar NBS and Caixin manufacturing PMI
Deviation Realization Quant Voluntary above 50, financing growth rising with medium/long-
Reason: Timing mismatch of Chinese New Year amplified term loans and consumption/production outperform.
the magnitude of improvement but outlook is building Though timing mismatch of CNY might amplify the
the bottom with leading indicator turning better and effects but we expect bottom to form.
medium/long-term loans rising steadily. PBOC 1Q
meeting deleted 4Q18 ‘outlook faces tough challenge’. PBOC 1Q Meeting Wording Conservative: PBOC 1Q
With stable fundamental, China monetary policy would revealed the fundamental has stabilized so monetary
shift from rapid easing to neutral with easing bias, 2-yr policy shifted from rapid easing to neutral with easing
treasury yield might retrace after short-term rally with bias, adjusting with liquidity level. Though 2Q RRR cut
bottom appeared in 1Q. is still possible but total room for 2019 cuts might shrink.
Prior Chinese Credit Expansion Fueled Momentum PBOC 1Q Meeting Wording Compared To 4Q18
Highlights:
• Deleted ‘Outlook faces tough challenge, increase the
extent of counter-cyclical measures’ in 4Q18
• Monetary policy mentioned ‘maintain control over the
floodgates of monetary supply’ again and retained ‘ keep
liquidity at a reasonable and ample level’ since 2Q18.
Source: (L)Credit Suisse, 2013/3~2019/3, (R)Huachuang Securities, 2019/4/16
10BOJ
BOJ Monetary Policy On Hold
Weak Japanese Economic Data But Overseas Outlook Seemed To Improve: Recently released Japanese economic
data continued to be weak with manufacturing outlook as the biggest concern. Japan 1Q Tankan large manufacturing
confidence slid to 12 with outlook falling to 8. Feb core machine tool order shrank further. But as China/US/Europe
economic data sent positive signal, Japan manufacturing outlook might rebound with recovering external demands.
BOJ Has No Urge To Amend Monetary Policy: BOJ Apr meeting would forecast outlook and inflation of 2021, expecting
some downgrades from 2020. But the downgrades were within market expectation. Considering the relative level of JPY
and 10-yr JGB, 4/27~5/6 golden holidays, and recovering external outlook, we believe BOJ Apr meeting would maintain
monetary policy if Japan/US trade talk is not broken apart. Policy rate would be kept at -0.1% and 10-yr JGB target at 0%.
Japan Large Manufacturer Confidence Fell Most Corporate Inflation Expectation Downgraded
Source: (L)Bloomberg, 2000~2019/3, (R)Nomura, 2014/3~2019/4
11JPY Strategy
JPY Continued To Be In Range Bound
JPY Outlook: BOJ easing tools have approached its limit
but JPY could not depreciate too much due to its risk
Japan Economy In Downward Trend
aversion nature. But Japanese economic data were in the
downward trend while the year end consumption tax hike Goldman Sachs Current
could cause some shocks. BOJ would be unlikely to Activity Index - Japan
tighten this year, trapping JPY in a range bound. We
therefore recommend buy on retracement but no chase 6MMA
principle in JPY investment. JPY/TWD might retrace to
range mid of 0.275 in the next month as the possible
entry point.
JPY Futures Speculative Position Net Short To Enter When JPY/TWD Returned To 0.275
CFTC Futures Net
Speculative Position JPY/TWD
Net Long
Net Short
Source: Bloomberg, 2019/4/17
12US Equity Strategy
Better Than Expected Results Boosted US Equity But With Limited Room
US Corporate Results Kick Start, US Equity Near New High:
Mid To Late Apr As Super Reporting Season
81% of the 42 S&P500 companies results beat expectation.
Results better than the downgraded expectation fuel US equity to
new high. But earnings diverged with mixed results in banking.
Global banks such as Goldman Sachs and Citibank were
dragged by revenue with profits missing target. Domestic banks
benefited from Fed rate hikes with rising consumer loan earnings.
US Equity Approaches Fair Value Of 2019, Further Room
Limited: Earnings might bottom out in 1Q19 but investors long
position was still small with conservative sentiment so we think
2Q19 rally still possible. But considering 2019 consensus growth
of 4% and average P/E of 17X, S&P500 fair price falls to 2975,
near its current level, so further rally would be limited.
S&P500 Quarterly Earning Forecast By Sector S&P500 Approaching 2019 Fair Value
S&P 500 @17x
@15x @16x @18x @19x
2019EPS/本益比 (5年平均)
EPS +2% 2565 2736 2907 3078 3249
ESP +3% 2595 2768 2941 3114 3287
ESP +4%
2625 2800 2975 3150 3325
(市場共識)
ESP +5% 2640 2816 2992 3168 3344
ESP+6% 2670 2848 3026 3204 3382
Source: Goldman Sachs, Compiled by CTBC Bank, 2019/4/12
13Sector Strategy - Growth
Fundamentals Bottoming Out To Peak Season Track
1Q19 Growth Sector Weaker Than Past: Tech has
rallied YTD in 2019 so we think it has correction risk in
Tech Led The Rally YTD In 2019
the reporting season. But central banks stimulus eased (Normalized)
external risks so we think even if it corrects in the short-
term, growth sector could still rebound in 2H19 peak
season with stable and abundant themes.
Market Awaits 2H19 Peak Season Demand:
Economic data slowed YTD in 2019, but it has not Tech
changed the peak/off season demand cycle so far. Consumer Staple
World Index
Therefore, 2H19 demand would still be better than Industrial
1H19 but corporate forecasts were mixed. We caution
possible shocks during the reporting season.
1Q19 Growth Sector Weaker Than Past Tech YOY Positive, Consumer Staple Volatile
公司 日期 QoQ YoY
科 TI 2019/4/23 -11.2% -6.8%
技 INTEL 2019/4/26 -32.0% 0.0%
非
AMAZON 2019/4/25 -22.7% 42.7%
核
心 FORD 2019/4/25 -11.7% -38.4%
3M 2019/4/23 8.4% 0.2%
工
CATERPILLAR 2019/4/24 11.1% 0.5%
業
BOEING 2019/4/24 -23.8% 14.7%
Source:(Top Right)Bloomberg, 2018/4/17-2019/4/16, (Bottom)Bloomberg, 2019/4/2, Compiled by CTBC Bank, 2019/4/16
Note: Sector indices based on Morgan Stanley Capital International (MSCI) global 11 sectors. 14Sector Strategy - Telecom
Clash Of New Setup And Earning Concern, Patient In Consolidation
Telecom Results To Release: Media and entertainment
Market Expectation On Telecom Companies
companies like Tweet, Facebook, Comcast and Google’s parent
company Alphabet and telecom giants Verizon and AT&T would
release their results. From market forecasts, though 1Q19
revenue slowed, growth rate was still double-digit. Profit growth
slowed more profoundly, indicating rising sector saturation as
expenditure squeezed earnings for better contents and network.
Clash Of New Setup And Earnings Concern, Patient In
Consolidation: As market focused on economic growth linked
corporate momentum, telecom might be the first to correct amid
slowing earnings in 1Q19 to reflect the risks. There might be
opportunity of rebound after moderate correction.
Overall Telecom 1Q19 Earnings To Slow
S&P500 Earnings YOY Growth Forecast(%)
Source: (Right)Bloomberg, 2019/4/16, (L)Factset, 2019/4/5, Compiled by CTBC Bank, 2019/4/16
15Sector Strategy - Resource
1Q19 Resources Earnings Mostly Fall, 2Q19 Would Recover
1Q19 Energy Results Mostly Contracted: Though 1Q19 Metals And Mining Outperformed YTD In Resource
Brent rebounded due to Jan OPEC+ output cut, base effect
caused 1Q19 energy sector results to contract. We expect
2Q19 oil price to maintain at relative high level with output
growth so 2Q19 earnings could maintain positive but slightly
milder growth. We are positive on 2Q19 MSCI energy index.
Chemicals Contracted: Chemicals 1Q19 sales/margin slid
due to slowing economy, off season and narrow spread. But
2Q19 downstream demand and higher capacity utilization
would boost industrial gas in 1H19. 1Q19 iron ore and
copper prices surged due to supply shock from work safety,
environment protection, improving mining 1H19 earnings.
We are positive on 2Q19 MSCI Commodities.
1Q19 Earning: Mining And Industrial Gas Led 2Q19 Commodity High YOY Growth Due To Mining
Source: Bloomberg, 2019/4/15, Compiled by CTBC Bank, 2019/4/16
16Target Price
Target Price – Rates/FI
spot price 目標價 目標價
第二層 第三層 2019/4/18 2019Q2 2019Q3
美國聯邦基準利率(上緣) 2.50 2.50 2.50
美 美國10Y 2.57 2.70 2.70
巴西利率 6.50 6.75 6.75
歐洲央行再融資利率 0.00 0.00 0.00
德國10Y 0.08 0.35 0.35
英國央行利率 0.75 0.75 0.75
歐 英國10Y 1.24 1.35 1.30
南非政策利率 6.75 6.75 6.75
南非2Y 6.87 7.20 7.35
俄羅斯政策利率 7.75 7.75 7.75
日本央行利率 -0.10 (0.10) (0.10)
日本10Y -0.03 (0.10) (0.12)
中國存準率 13.50 12.5 12.0
亞 中國2Y 2.91 3.00 3.10
台灣央行利率 1.38 1.38 1.38
澳洲目標利率 1.50 1.50 1.25
澳洲10Y 1.95 1.85 1.80
第二層 第三層 2019/4/18 2019Q2 2019Q3
全球投資級債 2.88 3.30 3.14
成熟市場投資級債指數 美國投資級債 3.70 3.99 3.99
歐洲投資級債 0.78 1.20 1.08
全球高收益債 5.83 6.92 6.86
成熟市場高收益債指數 美國高收益債 6.14 6.96 7.13
歐洲高收益債 3.14 4.46 4.14
新興主要貨幣主權債指數 新興主要貨幣主權債 5.78 6.10 6.05
新興主要貨幣企業債 5.71 6.30 6.28
新興主要貨幣企業債指數 新興投資級債 4.07 4.40 4.55
新興高收益債 7.03 8.00 7.70
新興當地貨幣債 6.36 6.65 6.50
新興當地貨幣債指數 人民幣債 3.77 4.05 4.20
亞洲當地貨幣債 4.88 5.30 5.20
Source: Compiled by CTBC Bank, 2019/4/18 : TP Adjustment
17Target Price
Target Price - Equity
spot price 目標價 目標價
第二層 第三層 2019/4/18 2019Q2 2019Q3
成熟市場股 2160.9 2150 2000
美國 2900.5 2900 2600
美
拉丁美洲 2745.8 2800 3000
巴西 93284.8 97000 103000
歐洲 3162.3 2960 3100
英國 4090.6 3800 3920
歐 德國 12153.1 11200 11900
新興歐洲 328.9 292 312
俄羅斯 1259.0 1100 1190
泛太平洋 163.9 160 165
澳洲 6349.9 6200 6500
日本 22090.1 23000 23000
新興市場股 1096.4 1020 1080
新興亞洲 557.8 520 560
中國A 3248.6 2800 3100
亞
中國H 11756.3 11000 12000
香港 29951.0 27500 30000
台灣 10962.0 10500 10650
韓國 2213.8 2300 2350
印度 39165.0 39550 39550
東協 808.7 820 820
科技 265.8 250 260
成長型產業 非核心消費 262.9 253 260
工業 259.4 255 259
金融 117.9 104 107
利率型產業
地產 216.7 205 210
能源 212.5 215 207
天然資源產業
原物料 262.8 265 255
公用事業 135.4 132 130
核心消費 232.9 230 230
防禦型產業
健護 233.1 238 260
電信 71.7 65 69
Source: Compiled by CTBC Bank, 2019/4/18
18Target Price
Target Price – FX/Commodity
spot price 目標價 目標價
第二層 第三層 2019/4/18 2019Q2 2019Q3
美元指數 96.967 96 94
美元兌日圓 111.91 112 110
成熟國家 歐元兌美元 1.1297 1.14 1.17
美元兌瑞郎 1.0098 0.99 0.96
英鎊兌美元 1.3043 1.32 1.32
澳幣兌美元 0.7184 0.69 0.69
商品貨幣 紐幣兌美元 0.6722 0.66 0.65
美元兌加幣 1.3353 1.34 1.35
美元兌台幣 30.836 30.8 30.6
美元兌星幣 1.3536 1.35 1.34
新興貨幣
美元兌人民幣 6.6973 6.85 6.75
美元兌南非幣 14.0309 13.8 13.5
spot price 目標價 目標價
第三層 2019/4/18 2019Q2 2019Q3
布蘭特原油 70.85 75 70
鐵礦砂 92.5 90 85
黃金 1272.08 1330 1350
Source: Compiled by CTBC Bank, 2019/4/18
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