Daily global market update

On 24 April, 2017 - Global shares stage a relief rally on French election results

Markets were further buoyed by the strong performance of financials and bank stocks.

United States

US stocks rallied after the first round of France's presidential election as investors breathed a sigh of relief. Emmanuel Macron, a candidate investors see as pro-business, won the most votes in Sunday's election. He will face Marine Le Pen in a runoff election in two weeks. Le Pen is one of the candidates who campaigned against the European Union, but many investors expect Macron ultimately to be victorious. The Dow Jones industrials and S&P were up 1.1 percent and the Nasdaq added 1.2 percent to close at a new record high.

Financial stocks including Bank of America, JPMorgan Chase, Goldman Sachs and SunTrust Banks gained. CR Bard surged after it agreed to be acquired by Becton Dickinson, a medical technology competitor, in a deal the companies are valuing at $24 billion in cash and stock. Becton Dickinson retreated. Hasbro jumped after reporting stronger quarterly revenue and profits than expected. Illinois Tool Works advanced after also surprising with a better-than-expected quarter.

Halliburton reported a net loss of $32 million or 4 cents per share in the first quarter. This was narrower than the $2.4 billion loss or $2.81 per share posted in the year earlier period. Excluding costs related to the extinguishment of debt, the company had earnings of 4 cents per share. Revenue rose to $4.279 billion from $4.198 billion. Whole Foods Market rose after the Financial Times reported that Albertsons is considering a takeover of the organic grocer.

These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$12.45 to US$1,269.40. Copper futures were up 0.6 percent to US$2.57. WTI spot crude was down 40 US cents to US$49.22. Dated Brent spot crude was down 41 US cents to US$51.55. The US dollar was up against the yen, pound and the Canadian dollar. The currency declined against the euro, Swiss franc and the Australian dollar. The Dollar Index was down 0.1 percent. The yields on both the US Treasury 30 year bond and 10 year note were up 2 basis points to 2.92 percent and 2.27 percent respectively.

Europe

European stocks rallied Monday after centrist Emmanuel Macron won the first round of voting in France on Sunday. Macron now moves to the final round of presidential election on May 7, helping ease concerns over political instability in Europe. Macron won 23.9 percent of the votes and Marine Le Pen was second with 21.4 percent vote. The FTSE jumped 2.1 percent, the CAC soared 4.1 percent, the DAX gained 3.4 percent and the SMI was 1.8 percent higher.

Bank stocks soared at the start of the new trading week, thanks to the relief provided by the French election result. UBS and Credit Suisse leaped as bank stocks across Europe rallied on the prospect of a more stable political environment in Europe. Banks including Commerzbank, Deutsche Bank, Crédit Agricole, Société Générale and BNP Paribas finished higher. Barclays, Standard Chartered and Royal Bank of Scotland also advanced.

Deutsche Post was higher on reports that it plans to invest $268 million in India. Innogy slipped after the energy firm backed its earnings forecast for fiscal 2017. Sartorius gained after the company posted double-digit growth in first-quarter profit and affirmed its 2017 guidance. Centrica declined after reports emerged over the weekend that the Conservatives are planning a cap on household energy bills if they are re-elected in June.

Anglo American increased after the mining giant reported higher production for commodities such as diamonds and coal for the first quarter, while copper output fell 3 percent. Novartis advanced in Zurich after saying new data have confirmed Gilenya is a highly efficacious, long-term treatment option for controlling disease activity in relapsing MS. Syngenta gained after the agriculture firm maintained its full-year targets. Philips Electronics climbed in Amsterdam after posting a sevenfold jump in first quarter profit.

Germany's April business confidence improved to a near six-year high — the Ifo business confidence index rose to 112.9 from a revised 112.4 in March. The reading was the highest since July 2011.

Asia Pacific

Asian shares were mostly higher Monday thanks to Sunday’s French election results. The results overrode tensions surrounding North Korea and worries over China’s escalating regulatory crackdown on stock manipulation. Centrist Emmanuel Macron and far-right nationalist Marine Le Pen have won the first round of the French presidential election, triggering a runoff on May 7.

The Shanghai Composite tumbled 1.4 percent to post its worst single-day loss in four months on concerns over increased regulatory scrutiny and a crackdown on leveraged trading. However, the Hang Seng added 0.4 percent.

The Nikkei and Topix gained 1.4 percent and 1.0 percent respectively after the yen fell sharply against the US dollar following the weekend's French presidential vote. Sony jumped after the company projected better-than-expected preliminary earnings. Panasonic rallied while troubled air bag maker Takata soared as much as 10 percent.

Both the S&P/ASX and All Ordinaries were up 0.3 percent. The four big banks advanced along with energy majors Oil Search, Origin Energy, Woodside Petroleum and Santos. Evolution Mining retreated with the price of gold dropped. Spotless Group slid after its board rejected an A$1.26 billion takeover bid from engineering group Downer EDI.

The Kospi added 0.4 percent as French election jitters abated led by technology majors. The Sensex was 1.0 percent higher after centrist Emmanuel Macron won the first round of voting and moved ahead to the final round of French presidential election on May 7, helping ease concerns over political instability in Europe.

Looking Forward

The European Central Bank publishes its first quarter Lending Survey. In the US, February FHFA house price index and Case-Shiller HPI will be released. March new home sales will be reports along with April consumer confidence.

Global Stock Market Recap

Global Stock Market Recap

Bond markets

Bond markets

Currencies and commodities

Currencies and Commodities

The Longer-Term Perspective

The table below demonstrates that while we may experience some short-term weakness in markets, the longer-term performance remains encouraging.

equity market

*Note — all releases are listed in local time.

Anne D Picker
Chief Economist
Econoday

Important Information

Econoday Inc. is a US company that provides financial commentary and indicators to industry professionals. All information provided and views expressed are those of Econoday. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only. Past performance is not a reliable indicator of future results. The value of investments can go down as well as up and investors may not get back the amount invested.

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