In the U.S.:
- November nonfarm payrolls were a strong 266K versus October’s upwardly revised 163K reading. The strong report is expected to have little Fed impact after a high bar was set for further policy rate changes.
- House Speaker Nancy Pelosi has asked congress to draft formal articles of impeachment which will set the stage for a full house vote sometime around the last week of December. The move was widely expected and the battle will move to the Republican led Senate.
On Thursday, CyrusOne (CONE) was attacked by a ransomware program which affected six managed service customers primarily serviced by a New York data center. Upon discovery of the incident, CyrusOne initiated its response and continuity protocols to determine what occurred, restore systems and notify the appropriate legal authorities. Shares of CyrusOne dropped over 7% following the attack but rebounded back to previous levels before the Thursday close.
- November official China manufacturing PMI rose to 50.2 versus October’s 49.3 reading. Both production and new orders rebounded while the export and import order sub-indexes declined at a slower pace.
- China’s Ministry of Finance announced exclusions will be made by application to tariffs on some soybean, pork and other commodity products from the US. Bloomberg suggested this is a procedural step that may also signal a broader trade agreement with the US is drawing closer.
- News that North Korea may be preparing to launch an ICBM has Japan concerned that the next show of force may be to launch the missile over its islands. As an ally of the US, Japan is weary that as Pyonyang’s frustration with the lack of progress regarding denuclearization talks with the US may force its hand to get global attention.
Sun Hung Kai Properties announced the launch of Townplace, a new rental housing brand targeting young professionals in Hong Kong. Townplace will start with two properties in Soho and Kennedy Town providing 421 homes, which are expected to generate more than HK$200 million in revenue per year.
- German October industrial production fell 1.7% m/m versus September’s 0.6% fall. The drop was the biggest since April and highlighted how the trade war continued to undermine German manufacturing.
UK small cap Capital & Counties Plc (Capco) announced that it has completed the sale of its interests in Earls Court in West London for £425 mn with initial net proceeds of £156 mn received and the balance to be received over the next two years. Capco also used the opportunity to provide a brief business update, reaffirming its position as a prime Central London property investment company focused around Covent Garden in the heart of London’s West End. With the sale, Capco’s balance sheet is in a strong position with a loan-to value of less than 20%, providing it with significant capacity to capitalize on investment opportunities in the area. With the update, Capco announced two acquisitions in Convent Garden for over £50 mn. Capco also indicated that it expects to convert to UK REIT status before the end of 2019 and target a more progressive dividend policy going forward.
The views expressed in this update are as of the date of this blog entry. These views and any portfolio holdings discussed in the update are subject to change at any time based on market or other conditions. The adviser disclaims any duty to update these views, which may not be relied upon as investment advice. In addition, references to specific companies’ securities should not be regarded as investment recommendations or indicative of the Adelante products, strategies, or portfolios.