Skip Header

On 11 September 2019 - Global shares: US, Europe up on US-China trade hopes; Asia mixed

Anne D Picker

Anne D Picker - Econoday

Trade news helps tech, FAANGs; oil off on Trump's Iran talk

US markets

US equities advanced Wednesday, led by technology and communications services, as hopes rose for progress on US-China trade, and as markets anticipated Thursday’s ECB policy announcement. The Dow industrials rose 0.9 percent; the S&P 500 gained 0.7 percent, and the NASDAQ was up 1.1 percent.

China issued limited exemptions to its tariffs for 16 kinds of US goods. Treasury Secretary Steven Mnuchin said the two sides have a “conceptual” accord on a way to enforce any trade deal. Reports suggested an interim trade pact is possible in October.

Energy stocks underperformed as oil prices dropped on a report President Trump is considering easing sanctions on Iran, a step that might allow Iran to sell more oil. FAANG shares rose amid better risk appetite, along with semiconductors, which are sensitive to China trade news.

Among stocks in focus, Apple rose 3.0 percent in follow-through buying after Tuesday’s unveiling of new products. Retailer Restoration Hardware, now known as RH, rose 4.6 percent after reporting favorable quarterly earnings, revenues, and raising its annual guidance. Charles Schwab, the online brokerage, rose 1.9 percent after announcing layoffs and other cost-cutting measures. Dave & Buster’s, a restaurant and entertainment chain, fell 4.7 percent after lowering its full-year guidance, despite a quarterly earnings beat. Costco was off 2.3 percent after an analyst downgrade.

In US economic data, producer prices rose an as-expected 0.1 percent in August held back by contraction in food and energy prices excluding which producer prices rose 0.3 percent to exceed expectations by 1 tenth. Separately, crude oil inventories fell 6.9 million barrels in the September 6 week to 416.1 million, 5.0 percent above their level last year at this time.

These data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell US$1.38 to US$61.10, while gold rose by US$8.80 to US$1,503.90. The US dollar rose against most major currencies. The US Treasury 30-year bond yield rose 1 basis points to 2.22 percent while the 10-year note yield was up 1 basis point at 1.74 percent.

European markets

European markets advanced Wednesday on positive news from China on US-China trade, better sentiment before the ECB policy meeting, and positive corporate news. The Europe-wide STOXX 600 rose 0.8 percent, the German DAX gained 0.7 percent, and the French CAC was up 0.4 percent. The UK FTSE-100 advanced 1.0 percent.

There were several market-friendly developments on China: the government announced a list of exemptions to its tariffs on US goods in an apparent good-faith gesture ahead of formal trade talks; it removed limits on investments in China by qualified foreign investors as part of efforts to open its financial sector; and official data showed unexpectedly strong growth in domestic credit, a sign that stimulus efforts are working. On the ECB front, expectations for a more aggressive stimulus package were renewed by a Reuters report that the ECB would slash its growth forecast and project that inflation would struggle to meet its target even with a new round of stimulus.

Among shares in the Stoxx 600, financial services, travel & leisure, and chemicals outperformed, while oil & gas, autos & parts, and utilities underperformed. In corporate news, the London Stock Exchange’s share price rose 5.9 percent after its Hong Kong counterpart proposed to acquire it in a $37 billion deal. Merck, the German pharma, rose 1.4 percent after saying it has returned to growth. Vapiano, the German restaurant chain, fell 2.1 percent on an earnings disappointment.

Asia Pacific markets

Moves in major Asian markets were again mixed Wednesday, with a light regional data calendar keeping investors focused on external developments, including weaker global oil prices and the outlook for upcoming policy meetings for the European Central Bank and the Federal Reserve. US-China trade tensions also remained a focus of attention, with Chinese officials announcing that sixteen categories of US products will be exempt from tariff hikes scheduled to take place later this month. Meanwhile a senior journalist for Chinese state-run media, Hu Xijin, reported that he understands Chinese officials will introduce important measures "to ease the negative impact of the trade war”.

Japanese markets were among the strongest regional performers Wednesday, with shares of major exporters supported by further weakness in the domestic currency. The Nikkei and Topix indices advanced 1.0 percent and 1.7 percent respectively. Hong Kong’s Hang Seng index also posted a strong 1.8 percent gain on the day, while Australia’s All Ordinaries index rose 0.4 percent. The Shanghai Composite index, however, closed 0.4 percent lower on the day.

Total new yuan loans made by Chinese banks in August were CNY1,210 billion, up from CNY1,060 billion in July. Other forms of financing picked up even more strongly in August perhaps reflecting government efforts to boost investment, with aggregate financing to the economy increasing from CNY1,010 billion to CNY1,980 billion. This measure includes non-bank forms of finance such as initial public offerings, loans from non-bank financial institutions, and bond sales.

Looking forward

In economic data Thursday in Asia, Japanese machine orders and Japanese PPI will be posted as will Indian CPI and Indian industrial production. In Europe, the main event is the ECB policy announcement and press conference with Mario Draghi. Scheduled European data releases include Eurozone industrial production, French CPI, German CPI, and the Swiss producer and import price index. US data releases include CPI, EIA natural gas, Fed balance sheet, jobless claims, and Treasury budget.

Global stock markets

 

Index

11 Sep 2019

Daily Change

% Change Daily

North America

 

 

 

 

United States

Dow

27137.04

227.61

0.9

 

NASDAQ

8169.68

85.52

1.1

 

S&P 500

3000.93

21.54

0.7

Canada

S&P/TSX Comp

16611.14

73.80

0.5

Europe

 

 

 

 

UK

FTSE 100

7338.03

70.08

1.0

France

CAC

5618.06

24.85

0.4

Germany

XETRA DAX

12359.07

90.36

0.7

Italy

MIB

21891.57

22.56

0.1

Spain

Ibex 35

9059.5

-18.70

-0.2

Sweden

OMX Stockholm 30

1637.62

12.64

0.8

Switzerland

SMI

10098.59

78.11

0.8

Asia/Pacific

 

 

 

 

Australia

All Ordinaries

6752.15

24.14

0.4

Japan

Nikkei 225

21597.76

205.66

1.0

 

Topix

1583.66

25.67

1.7

Hong Kong

Hang Seng

27159.06

475.38

1.8

S. Korea

Kospi

2049.2

17.12

0.8

Singapore

STI

3204.52

48.81

1.6

China

Shanghai Comp

3008.81

-12.39

-0.4

Taiwan

TAIEX

10790.35

36.77

0.3

India

Sensex 30

37270.82

125.37

0.3

*Markets closed

 

 

 

 

*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.