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On 30 September 2019 - US not to delist China shares; US, Europe up; Asia mixed

Anne D Picker

Anne D Picker - Econoday

Apple Rallies, Boosted by iPhone Optimism.

US markets

Stocks got a lift Monday after the Treasury Department said it has no plans to block US share listings by Chinese companies. The Treasury's statement  contradicted earlier news reports of a Chinese blacklisting and eased concerns over the degree of US-China tensions, helping to give a lift to Apple as did rising expectations for iPhone sales on a positive outlook from CEO Tim Cook.

The major averages were higher including a 0.4 percent gain for the Dow and a percent 0.8 gain for the Nasdaq. Apple shares rose 2.4 percent on the session.

In economic news, the Chicago PMI fell 3.3 points in September to a lower-than-expected 47.1 with production at a depressed 40.4 and a 10-year low. Business confidence also hit a 10-year low with employment near a 10-year low. New orders were also a disappointment, falling 7.6 points to 48.5 which points to generally weak activity for this report this time next month. In a mixed report, the Dallas Fed general activity index for manufacturing managed to hold over zero but just barely at 1.5 though production, at 13.9, held strong in September.

These data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell $1.16 cents to US$60.75, while gold fell by US$25.90 to US$1,480.50. The US dollar rose against most major currencies. The US Treasury 30-year bond yield fell 1 basis point to 2.12 percent while the 10-year note yield was unchanged at 1.68 percent.

European markets

Amid a heavy run of mostly mixed economic data Monday, European shares ended mostly higher with France's CAC up 0.7 percent, Germany's Dax up 0.4 percent but with the FTSE down 0.2 percent.

Holding back activity is a pending announcement from the World Trade Organization whether the US and specifically Boeing have been harmed by European subsidies, a ruling that could result in heavy US tariffs. Companies in the news included HomeServe PLC which rose sharply on an analyst upgrade and GlaxoSmithKline which also rose sharply on positive news on the effectiveness of its maintenance therapy for ovarian cancer.

German retail sales staged a partial recovery in August, rising 0.5 percent in August to put purchases on a modestly rising trend and a 1.2 percent year-to-date gain. German unemployment data saw a 10,000 September decline to 2.276 million, for the first drop since April but leaving the unemployment rate unchanged at 5.0 percent. Yet the slide in joblessness could prove short-lived as employment prospects deteriorated again, with vacancies down a sizable 9,000 in the month for the sixth straight fall in a row. German consumer prices were unchanged on a monthly basis though September's year-on-year rate fell 2 tenths to 1.2 percent for a year-and-a-half low.

Inflation data out of Italy were also weak with this yearly rate at only plus 0.4 percent. KOF's leading indicators out of Switzerland were negative, falling more than 2 points to a 93.2 for a 4-year low and reflecting weakness in manufacturing but also services as well.

Asia Pacific markets

Major Asian markets were mixed Monday ahead of Chinese national holidays and a busy regional data calendar. Japanese shares closed lower after data showed a rebound in retail sales but weaker industrial production in August, with the Nikkei index falling 0.6 percent and the Topix index down 1.0 percent. Hong Kong’s Hang Seng index rose 0.5 percent on the day despite renewed escalation of civil unrest over the weekend, with the index boosted by a strong gain for the newly-listed Budweiser Brewing Company APAC, the Asia-Pacific unit of Anheuser-Busch InBev NV and the world’s second-biggest IPO this year. The Shanghai Composite index fell 0.9 percent Monday ahead of week-long national holidays starting Tuesday, while Australia’s All ordinaries index fell 0.3 percent ahead of Tuesday’s Reserve Bank of Australia policy meeting.

Retail sales in Japan rose 2.0 percent on the year in August, rebounding from a fall of 2.0 percent in July and substantially stronger than the consensus forecast for a 0.4 percent dip. Sales were stronger for food and beverages and fuel, while growth in motor vehicle sales moderated slightly. Industrial production in Japan, however, slowed sharply, falling 1.2 percent on the month in August, after increasing 1.3 percent in July. This decline was in contrast to the forecast officials made last month that output would increase 1.3 percent but more in line with PMI survey data that indicated manufacturing conditions weakened slightly that month.

PMI surveys for the Chinese manufacturing sector both showed some improvement in conditions in September. The Markit Manufacturing PMI survey’s headline index for China advanced from 50.4 in August to 51.4 in September, above the consensus forecast of 50.0. This is the third consecutive increase in the headline index and takes it to its highest since February 2018. The headline index for the official CFLP Manufacturing PMI index also rose, from 49.5 in August to 49.8 in September and above the consensus forecast of 49.6 for the highest level since April. The CFLP Non-Manufacturing PMI index eased slightly from 53.8 in August to 53.7 in September.

Looking forward

Asian data start with Japan's unemployment rate followed by third-quarter Tankan data and September's manufacturing PMI. The Reserve Bank of Australia may or may not cut rates at its Tuesday meeting with a manufacturing PMI report out of India also on the calendar. European data include Nationwide home price data out of the UK and retail sales and a manufacturing PMI report out of Switzerland. Eurozone HICP inflation data are also due as well as a run of final manufacturing PMIs for September. In North America, Canada will post monthly GDP data with ISM manufacturing the big release out of the US.

Global stock markets

 

Index

30 Sep 2019

Daily Change

% Change Daily

North America

 

 

 

 

United States

Dow

26916.83

96.58

0.4

 

NASDAQ

7999.34

59.71

0.8

 

S&P 500

2976.74

14.95

0.5

Canada

S&P/TSX Comp

16658.63

-35.64

-0.2

Europe

 

 

 

 

UK

FTSE 100

7408.21

-18.00

-0.2

France

CAC

5677.79

37.21

0.7

Germany

XETRA DAX

12428.08

47.14

0.4

Italy

MIB

22107.7

90.30

0.4

Spain

Ibex 35

9244.6

60.50

0.7

Sweden

OMX Stockholm 30

1647.67

1.07

0.1

Switzerland

SMI

10078.32

40.51

0.4

Asia/Pacific

 

 

 

 

Australia

All Ordinaries

6800.56

-23.53

-0.3

Japan

Nikkei 225

21755.84

-123.06

-0.6

 

Topix

1587.8

-16.45

-1.0

Hong Kong

Hang Seng

26092.27

137.46

0.5

S. Korea

Kospi

2063.05

13.12

0.6

Singapore

STI

3119.99

-5.64

-0.2

China

Shanghai Comp

2905.19

-26.98

-0.9

Taiwan

TAIEX

*

*

*

India

Sensex 30

38667.33

-155.24

-0.4

*Markets closed

 

 

 

 

Note: all releases are listed in local time.

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