Skip Header

On 10 September 2019 - Global shares: US flat to better before ECB meeting; Europe up, Asia mixed

Anne D Picker

Anne D Picker - Econoday

Oil prices retreat on departure of hawkish US security adviser

US markets

US equities ended flat to higher in cautious trading Tuesday, but risk tone improved as interest rates rose ahead of Thursday’s ECB meeting where expectations have ebbed away from aggressive easing. The Dow industrials rose 0.3 percent; the S&P 500 was marginally better at up 0.03 percent, and the NASDAQ eased 0.04 percent.

Energy shares retreated from early gains in line with oil prices on President Trump’s tweet abruptly firing his hawkish security adviser, John Bolton. Bolton has favored US military action against Iran and opposed peace talks with the Taliban. Along with energy, technology shares also underperformed, with weakness in software companies.

Among stocks in focus, Ford Motor Co. fell 1.4 percent after the company’s credit rating was downgraded to junk status by Moody’s Investors Service. Industrial distributor HD Supply Holdings fell 4.2 percent after an earnings miss and cutting its annual guidance. Streaming video company Netflix fell 2.1 percent after Apple unveiled pricing for its new video service. Starbucks was off 4 percent after it agreed to submit new information to the SEC regarding its accounting practices. Chipotle, the Mexican fast food chain, fell 6.3 percent after New York City sued the company for unfair labor practices.

In economic data, US job openings continue to edge lower in an indication that the risk of capacity stress in the labor market is easing. Job openings totaled 7.217 million in July for the second lowest showing since May last year. This is down 0.4 percent from June which was revised sharply lower from an initial 7.348 million to 7.248 million for the third lowest total since May last year. Separately, at a lower-than-expected 103.1, US small business optimism in August eased to its lowest level since March. Fewer respondents expect business conditions to improve and fewer see better sales volumes ahead.

These data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 21 cents to US$62.48, while gold fell by US$12.60 to US$1,495.90. The US dollar rose against most major currencies. The US Treasury 30-year bond yield jumped 9 basis points to 2.22 percent while the 10-year note yield was up 9 basis points at 1.73 percent.

European markets

European markets edged up Tuesday as traders saw value in banks, autos, and energy shares that have been weaker lately. The Europe-wide STOXX 600 rose 0.1 percent, the German DAX gained 0.3 percent, and the French CAC rose 0.1 percent. The UK FTSE-100 advanced 0.4 percent.

Banks rose on a recovery in bond yields as markets scaled back expectations for an aggressive package of accommodative measures from the ECB policy meeting due Thursday. News reports suggested ECB hawks are restraining President Mario Draghi’s desire for a big stimulus package before he leaves office. UK banks drew support from higher market rates after better UK economic data and the sense that hard Brexit has become less likely after Parliament rejected UK Prime Minister Boris Johnson’s request for a snap election, and passed a law to request more time for a UK-EU Brexit deal.

Auto shares advanced on hopes for US-China trade progress, and energy shares gained with an uptick in Brent crude oil prices during the European hours, though oil retreated later. Health care shares, on the other hand, weakened with Danish pharma Novo Nordisk off 2.9 percent and Denmark’s biotech Genmab off 4.6 percent.

In economic news, the UK labor market was strong in July and August. Claimant count joblessness was up 28,200 in August, much as expected following a revised 19,800 increase in July. ILO data showed the number of people out of work in the three months to July falling 10,000 versus the previous quarter. This compared with a 31,000 rise last time and saw this measure of the jobless rate dip from 3.9 percent to 3.8 percent, better than expectations and its lowest print since 1974. In France, industrial goods production staged only a partial rebound in July after dropping in June. Excluding construction, output was up a smaller-than-expected 0.3 percent on the month, nudging down annual growth a touch lower to minus 0.2 percent.

Asia Pacific markets

Moves in major Asian markets were mixed but generally moderate Tuesday, with Chinese inflation data the main news during the trading session. Australia’s All Ordinaries index recorded the biggest fall in the region, dropping 0.5 percent, while the Shanghai Composite index fell 0.1 percent and Hong Kong’s Hang Seng index closed unchanged on the day. Japan’s Nikkei and Topix indices closed up 0.3 and 0.4 percent respectively, boosted by a strong gain for automaker Nissan after its chief executive resigned due to misconduct relating to his compensation.

Chinese inflation data were the main focus of an otherwise light regional data calendar and generally indicated that underlying price pressures were subdued in August. Consumer prices advanced 2.8 percent on the year in August, unchanged from July. This was driven by a further acceleration in food price inflation, largely reflecting the impact of ongoing disruptions to pork supply with non-food price inflation, however, moderating. China's headline producer price index fell 0.8 percent on the year in August after dropping 0.3 percent in July, close to the consensus forecast for a decline of 0.9 percent. This is the weakest year-on-year change in producer prices since mid-2016.

Looking forward

The economic calendar is light Wednesday with housing starts due out of Canada and out of the US, producer prices and the weekly EIA Petroleum Status Report.

Global stock markets

 

Index

10 Sep 2019

Daily Change

% Change Daily

North America

 

 

 

 

United States

Dow

26909.43

73.92

0.3

 

NASDAQ

8084.16

-3.28

0.0

 

S&P 500

2979.39

0.96

0.0

Canada

S&P/TSX Comp

16537.34

42.25

0.3

Europe

 

 

 

 

UK

FTSE 100

7267.95

32.14

0.4

France

CAC

5593.21

4.26

0.1

Germany

XETRA DAX

12268.71

42.61

0.4

Italy

MIB

21869.01

-120.72

-0.6

Spain

Ibex 35

9078.2

67.60

0.8

Sweden

OMX Stockholm 30

1624.98

14.28

0.9

Switzerland

SMI

10020.48

-38.89

-0.4

Asia/Pacific

 

 

 

 

Australia

All Ordinaries

6728.01

-32.11

-0.5

Japan

Nikkei 225

21392.1

73.68

0.4

 

Topix

1557.99

6.88

0.4

Hong Kong

Hang Seng

26683.68

2.28

0.0

S. Korea

Kospi

2032.08

12.53

0.6

Singapore

STI

3155.71

9.38

0.3

China

Shanghai Comp

3021.2

-3.54

-0.1

Taiwan

TAIEX

10753.58

-47.56

-0.4

India

Sensex 30

*

*

*

*Markets closed

Note: all releases are listed in local time.

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.