Espresso for April 27th
QUOTE OF THE DAY
“I consider myself the presumptive nominee,” Donald Trump told supporters at Trump Tower in New York.
WHAT MARKETS ARE TALKING ABOUT
OIL PRICES AND TECH EARNINGS BRING VOLATILITY AHEAD OF FED
Oil prices hit 2016 highs on the back of a rally in the gasoline market and after an industry group reported a surprise draw in U.S. crude stockpiles. Brent prices are up 10% year-to-date and 13% in the last month.
Meanwhile, U.S. stock index futures fluctuated after Apple reported its first quarterly sales drop in more than a decade. Twitter also fell a harsh 15% following disappointing 1Q16 results. The world’s three most valuable companies (Apple, Alphabet and Microsoft) have all released disappointing results in the past week, painting a bleak picture of the technology sector.
TRUMP AND CLINTON CRUSHED RIVALS IN NORTH-EAST PRIMARIES
Super Tuesday (3? 4?) happened. Connecticut, Delaware, Maryland, Pennsylvania, and Rhode Island hosted primaries, which left Donald Trump and Hillary Clinton closer to winning their parties’ nominations, while Madame Secretary won 4 of 5 contests and leaves Vermont Senador Bernie Sanders with practically zero chances of winning the Democratic presidential nomination, Donald Trump swept all five of Tuesday’s contests to boost chances of avoiding contested convention. Here is how each party is doing:
Unless Donald Trump sweeps most of the Republican primaries by June 7, when the party’s race ends, chances are high that the GOP will choose its nominee in a “contested convention” for the first time in almost 70 years. Trump’s recent performances puts him close to the 1,237 benchmark.
What is a contested convention?
When the GOP holds its convention in Cleveland in July, 2,472 delegates will each cast a vote for one of the contenders. If no one wins a majority of 1,237 on the first ballot, the party will hold a second ballot. If necessary, it will conduct further rounds until one candidate emerges with that majority.
MEXICO’S EARNINGS SEASON CONTINUES
Wal-Mart de Mexico (WALMEX), Mexico’s biggest retailer, reported a 29.9% rise in 1Q net income. Wal-Mart de Mexico posted a net profit of P$6.719bn ($389 million) in the January-March period, up from P$5.175bn in the year-earlier period.
PINFRA posted strong results triggered by strong cash deployment (P$ million): Revenues 2,729 (+32.4%), Operating Profit 1,409 (+31.8%), EBITDA 1,493 (+31%), Net Income 1,042 (+21.9%). Post TTM EV/EBITDA 15.8x. The company’s outlook remains bright, as its strong balance sheet puts in a solid position to take on new projects or acquire brownfield ones.
MEGA‘s 1Q16 highlights: Revenues hiked 21.6% YoY to P$4bn; video sales rose 16% YoY as subscribers increased a record 19% YoY with 133k net additions QoQ; internet revenues up 36% YoY, adding 94k subscribers QoQ; 15k landlines were added QoQ; EBITDA reached P$1.78bn (17.6% YoY); net profit of P$1bn (+31.7% YoY), reflecting a P$69mn FX gain.
SANTANDER KICKS OFF BRAZILIAN BANKS EARNINGS SEASON
On Wednesday, Banco Santander Brasil SA (SANB11.SA) will be the first of Brazil’s top listed banks to report results. Bradesco BBDC4.SA will follow suit on Thursday, while Itaú Unibanco (ITUB4.SA) and Banco do Brasil (BBAS3.SA) plan to do so on May 3 and May 13, respectively. Consensus expects poor numbers, with meager credit expansion and increasing NPLs. While benefiting from political news in the short term, the outlook for the sector remains particularly challenging. Check our heat map to see how bank stocks are doing in #LATAM.