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On 12 November 2019 - US flat to higher; Europe up on earnings; Asia better

Anne D Picker

Anne D Picker - Econoday

Trump speech leaves market uncertain on US-China trade prospects.

US markets

US equities were flat to slightly higher Tuesday after President Trump’s highly-anticipated midday speech lacked news on US-China trade talks. The Dow industrials was unchanged, the S&P 500 rose 0.2 percent, and the NASDAQ rose 0.3 percent.

Trump, speaking at the Economic Club of New York, repeated that a US-China trade deal could come soon and that the US would only sign a deal in its interests. He also threatened to raise tariffs significantly if no deal is forthcoming. Markets are awaiting an appearance from Fed Chair Jerome Powell Wednesday on Capitol Hill. Markets were bolstered earlier by a Bloomberg report that the US would delay imposing tariffs on European autos for six months.

Among sectors, communications services, health care, and technology outperformed, while energy, consumer discretionary, and financials underperformed. Among companies in the news, CBS, the television network, fell 3.6 percent after its revenues missed expectations. Advance Auto Parts fell 7.5 percent on an earnings miss and after lowering the high end of its sales guidance. D.R. Horton, the construction company, gained 3 percent after an earnings and revenues beat, and after raising its guidance.

In US economic news, the small business optimism index showed modest but wide improvement in October, at 102.4 which was at the high end of expectations and up 6 tenths from an unexpectedly weak September. Eight of the index's 10 components improved in October, led by plans to increase inventories and including increased plans to make capital outlays.

These data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 12 cents to US$62.04, while gold rose by US$1.60 to US$1,458.40. The US dollar rose against most major currencies. US Treasury 30-year bond yield fell 4 basis points to 2.39 percent, and the US 10-year note yield fell 3 basis points to 1.91 percent.

European markets

Major European equities indexes rose Tuesday on a batch of upbeat earnings results, with autos in focus after a report that President Trump will delay tariffs on European autos for six months. The Europe-wide STOXX 600 rose 0.4 percent, the German DAX gained 0.6 percent, the French CAC rose 0.4 percent, and the UK FTSE-100 was up 0.5 percent.

Spanish stocks suffered after news that left-wing parties had agreed to form a government, with the IBEX down 0.9 percent. Among sectors in the STOXX 600, telecoms, financial services, and semiconductors were leaders, with food & beverages, retail, and personal & household goods lagging.

Gainers on positive earnings included Deutsche Post, up 3.4 percent; Infineon Technologies, the German chipmaker, up 5.7 percent; and Osram Licht, a German lighting manufacturer, up 0.1 percent; Vodaphone, the UK telecom, up 5 percent; and Porsche, the automaker, up 1 percent. Losers on earnings disappointments included Continental, the German tire maker, down 3.2 percent; and 1 & 1 Drillisch, a German telecom, down 1.6 percent; and Prysmian, an Italian cable manufacturer, down 1.6 percent.

In economic news, ZEW's November survey found a minimally less negative assessment of the current state of the German economy but a marked improvement in expectations. The current situation gauge was minus 24.7, up just 0.6 points versus its October print and still one of its weakest readings since 2010. However, the forward-looking component jumped nearly 21 points to minus 2.1, notably stronger than the market consensus and equaling a 7-month high.

Asia Pacific markets

Most major Asian markets closed higher Tuesday, with the regional data calendar light but investor sentiment supported by reports that the United States will delay any decision to impose tariffs on auto imports from the European Union. Japan’s Nikkei and Topix indices advanced 0.8 percent and 0.3 percent respectively, with shares of major exporters gaining in response to further currency weakness.

The Shanghai Composite index rose 0.2 percent, while Hong Kong’s Hang Seng index advanced 0.5 percent, recovering some of the heavy losses made Monday but still vulnerable to further volatility as civil unrest continues. Australia’s All Ordinaries index underperformed, closing down 0.3 percent on the day.

Looking forward

On Wednesday in Asia, Indian CPI, Japanese PPI, and the Reserve Bank of New Zealand monetary policy announcement are scheduled. In Europe, German CPI, UK CPI and PPI, and Eurozone industrial production data are due. In North America, the big event is congressional testimony from Fed Chair Jay Powell, plus US CPI and US Treasury budget data will be released.

Global stock markets

 

Index

12 Nov 2019

Daily Change

% Change Daily

North America

 

 

 

 

United States

Dow

27691.49

0.00

0.0

 

NASDAQ

8486.09

21.81

0.3

 

S&P 500

3091.84

4.83

0.2

Canada

S&P/TSX Comp

16909.38

26.62

0.2

Europe

 

 

 

 

UK

FTSE 100

7365.44

36.90

0.5

France

CAC

5919.75

25.93

0.4

Germany

XETRA DAX

13283.51

85.14

0.6

Italy

MIB

23782.15

292.22

1.2

Spain

Ibex 35

9306.7

-81.80

-0.9

Sweden

OMX Stockholm 30

1774.72

11.22

0.6

Switzerland

SMI

10314.16

8.89

0.1

Asia/Pacific

 

 

 

 

Australia

All Ordinaries

6857.05

-19.97

-0.3

Japan

Nikkei 225

23520.01

188.17

0.8

 

Topix

1709.67

5.64

0.3

Hong Kong

Hang Seng

27065.28

138.73

0.5

S. Korea

Kospi

2140.92

16.83

0.8

Singapore

STI

3267.8

27.15

0.8

China

Shanghai Comp

2914.82

4.84

0.2

Taiwan

TAIEX

11520.37

93.09

0.8

India

Sensex 30

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*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.