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On 11 March 2019 - Global stocks advance ahead of key Brexit votes

Anne D Picker

Anne D Picker - Econoday

European markets gained as shares in both Deutsche Bank and Commerzbank rose on continued merger speculation. 

US markets

US stocks rallied Monday after last week’s declines. The Dow rose 0.8 percent on the day, the S&P advanced 1.5 percent on the day, and the Nasdaq outperformed with a gain of 2.0 percent. Apple was among the stocks driving the strong increase in the Nasdaq, rallying early in the session after a broker upgraded their recommendation for the stock and holding gains later in the day after the company scheduled a press event later in the month at which new products and services are expected to be announced. Tech firm Nvidia also advanced after announcing it will acquire Israeli chip designer Mellanox Technologies at a 14 percent premium to its Friday closing price.
 
Boeing was the weakest performer in the Dow on Monday after one of its passenger jets operated by Ethiopian Airlines crashed killing 157 people. Another of the same model of plane, the Boeing 737 MAX 8, operated by Indonesian airline Lion Air, crashed late 2018 killing 189 people. Aviation officials in China and Indonesia were reported to have instructed domestic airlines to suspend flights of this model, with other reports indicating that the US Federal Aviation Administration will certify it is airworthy. The 737 MAX 8 has been a strong seller for Boeing since introduced in May 2017, with 350 delivered to airlines since then and more than 4,600 on order.

Retail sales data showed a modest rebound in January, up 0.2 percent on the month after falling a revised 1.6 percent in December. Underlying measures of retail sales strength, however, showed a more pronounced recovery, with sales less autos up 0.9 percent after a revised drop of 2.1 percent, sales less autos and gas up 1.2 percent after a revised fall of 1.6 percent, and the control group up 1.1 percent after a revised fall of 2.3 percent. Difficulties with seasonal adjustment the impact of the government shutdown likely contributed to the volatility in sales over December and January, while advance readings for February suggest that sales will be relatively subdued that month. Other data released Monday showed weak sales growth in December contributed to an increase in business inventories, up 0.6 percent on the month after no change in November, and up 0.9 percent for retailers.

These data reflect observations at 4pm US ET. Gold fell US$5.03 to US$1,293.27 while dated Brent spot crude gained US$0.92 to US$66.66. The US dollar weakened against the pound and the Australian dollar but was little changed against other major currencies. The yield on the US Treasury 30 year bond rose 3 basis points to 3.03 percent while the 10 year note rose 1 basis point to 2.64 percent.

European markets

European markets made steady gains Monday, with the FTSE up 0.4 percent on the day and the CAC and the DAX both advancing 0.7 percent. Deutsche Bank and Commerzbank both gained as speculation about a potential merger continued.
 
German industrial production growth was weaker-than-expected in January but revised up in December. Output fell 0.8 on the month in January but advanced 0.8 percent in December, stronger than the initial estimate of a fall of 0.4 percent, with year-on-year growth weakening from a decline of 2.9 percent to a fall of 3.4 percent. Weakness in capital and intermediate goods was only partly offset by increases in consumer goods, energy and construction. Industrial production has now fallen in four of the last five months and the large drop in January and weak orders data suggest that the sector is unlikely to make a positive contribution to headline economic growth in the current quarter.

The pound strengthened ahead of this week’s key Brexit votes. UK Prime Minister Theresa May flew to Strasbourg late Monday to meet European Commission President Jean Claude Juncker in an effort to secure the concessions needed to win the support of the UK parliament for a Brexit deal. This deal is due to be presented to parliament Tuesday and, should this be rejected, a vote on whether the UK should withdraw with no deal in place will be held Wednesday. If this vote also fails, parliament will vote on Thursday on whether to seek to delay withdrawal. If this vote is rejected, Brexit will likely proceed as scheduled with no deal in place, while if passed the UK government will then seek the European Union's approval to delay withdrawal.

Asia Pacific Markets

The Asia data calendar was clear Monday but most regional indices closed higher, led by a solid rebound in China. The Shanghai Composite index rose 1.9 percent, partly reversing the 4.4 percent fall recorded Friday, with investor sentiment supported by comments from People’s Bank of China Governor Yi Gang indicating that there is some scope to ease liquidity conditions and expressing confidence that China and the United States are close to agreement on trade and currency negotiations.
 
Japanese markets also advanced Monday, with the Nikkei gaining 0.5 percent on the day and the Topix up 0.6 percent. Hong Kong’s Hang Seng index and India’s Sensex index both rose 1.0 percent. Australia’s All Ordinaries index underperformed, down 0.4 percent, with volumes low due to public holidays in much of the country.

Looking forward

Australian home loans data will be released shortly, with Indian inflation and industrial production data out later in the day. Brexit developments will be the main focus in Europe, but UK industrial production, trade and monthly GDP data are also scheduled for release. US CPI and small business sentiment data will be published Tuesday.

Global Stock Markets

 

Index

Mar 11 2019

Daily Change

% Change Daily

North America

United States

Dow

25650.88

200.64

0.8

 

NASDAQ

7558.06

149.92

2.0

 

S&P 500

2783.30

40.23

1.5

Canada

S&P/TSX Comp

16106.24

110.03

0.7

Europe

UK

FTSE 100

7130.62

26.31

0.4

France

CAC

5265.96

34.74

0.7

Germany

XETRA DAX

11543.48

85.64

0.7

Italy

MIB

20638.22

153.83

0.8

Spain

Ibex 35

9171.90

42.60

0.5

Sweden

OMX Stockholm 30

1569.93

11.30

0.7

Switzerland

SMI

9341.35

72.99

0.8

Asia/Pacific

Australia

All Ordinaries

6263.28

-23.80

-0.4

Japan

Nikkei 225

21125.09

99.53

0.5

 

Topix

1581.44

9.00

0.6

Hong Kong

Hang Seng

28503.30

274.88

1.0

S. Korea

Kospi

2138.10

0.66

0.0

Singapore

STI

3191.42

-4.45

-0.1

China

Shanghai Comp

3026.99

57.13

1.9

Taiwan

TAIEX

10250.28

8.53

0.1

India

Sensex 30

37054.10

382.67

1.0

*Markets closed
Source: Haver Analytics

Note: all releases are listed in local time. 

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