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On 14 January 2020 - Global shares: US flat to down; Europe firm; Asia mixed

Anne D Picker

Anne D Picker - Econoday

Corporate reports leave US market mixed before US-China trade signing.

US markets

US equities were flat to lower Tuesday after mixed corporate earnings reports and anticipation of Wednesday’s US-China trade pact. The Dow industrials rose 0.1 percent, the S&P 500 declined 0.2 percent as did the NASDAQ.

Risk assets retreated from earlier highs after a Bloomberg story in midafternoon repeating that existing US tariffs on Chinese goods would remain in place until after November, and noting that US tariff cuts hinged on Chinese compliance in the trade accord. Other reports said the trade deal would call for large Chinese purchases of US oil, manufactured goods, and farm goods.

Among sectors in the S&P 500, financials and industrials led the gains, while energy, REITs, and technology lagged.

Among companies in the news, Dow member JP Morgan Chase rose 1.1 percent as its earnings and revenues topped expectations, led by trading revenues. Citigroup gained 1.6 percent after an earnings and revenues beat, led by interest income and strong growth in its consumer business. Delta Airlines rallied 3.3 percent as its traffic, profits, and revenues came in unexpectedly high. On the downside, Wells Fargo fell 5.4 percent after an earnings miss. Boston Scientific, the medical device maker, dropped 6.2 percent on a weak fourth-quarter sales update.

In US economic news, the CPI is not pointing to building momentum for inflation. December's CPI managed only a 0.2 percent gain which was 1 tenth shy of Econoday's consensus, while CPI excluding food and energy likewise missed expectations with only a 0.1 percent gain. Year-on-year, the overall reading rose 2 tenths to 2.3 percent with the core holding at 2.3 percent. These readings hit expectations.

These data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 50 cents to US$64.64, while gold fell US$4.50 to US$1,546.80. The US dollar was mixed against major currencies. The US Treasury 30-year bond yield fell 3 basis points to 2.27 percent while the 10-year note yield fell 4 basis points to 1.81 percent.

European markets

European equities were flat to firmer Tuesday, with support from luxury stocks. The Europe-wide STOXX 600 rose 0.3 percent, the German DAX rose 0.04 percent, the French CAC gained 0.1 percent while the UK FTSE-100 also gained 0.1 percent.

Markets were awaiting details from the US-China trade pact announcement scheduled for Wednesday in Washington, D.C. EU Trade Commissioner Phil Hogan is also due in Washington, D.C., this week to discuss US-EU trade disputes.

Among sectors, travel & leisure, personal & household goods, and construction materials outperformed, while oil & gas, autos, and technology lagged.

Strength in luxury stocks gave the market a lift after a UBS upgrade. LVMH, the French luxury goods conglomerate, rose 1 percent. UK homebuilder Taylor Wimpey gained 3.9 percent after it raised its guidance for 2020. On the downside, oil stocks eased as oil prices declined, with BP off 0.3 percent. Dialog Semiconductor, the UK chipmaker, fell 3.4 percent after a disappointing fourth quarter report.

Asia Pacific markets

Major Asian markets posted mixed results Tuesday, with the regional data calendar providing limited guidance to investor sentiment. Ahead of the signing of phase one of a US-China trade deal later in the week, Chinese trade data showed stronger imports growth in December while US authorities revoked their designation of China as a currency manipulator. Australia’s All Ordinaries index outperformed with an increase of 0.8 percent on the day. while Japan’s Nikkei and Topix indices advanced 0.7 percent and 0.3 percent respectively. The Shanghai Composite index fell 0.3 percent while Hong Kong’s Hang Seng index closed down 0.2 percent.

China's trade surplus in US dollar terms widened from US$38.73 billion in November to US$46.79 billion in December. Exports rose 7.6 percent on the year in December after falling 1.3 percent in November, while imports rose 16.3 percent on the year after advancing 0.5 percent previously. Annual data showed China’s exports rose 5.0 percent in 2019 while imports rose 1.6 percent.

India's wholesale price index increased by 2.59 percent on the year in December, up sharply from 0.58 percent in November. The index advanced 0.41 percent on the month after increasing 0.08 percent previously. The increase in WPI inflation largely reflected a stronger increase in food prices, which account for around 15 percent of the index. These rose 13.24 percent on the year in December after increasing 11.08 percent in November. CPI data published earlier in the week showed an increase in headline consumer inflation from 5.54 percent in November to 7.35 percent in December.

Looking forward

On Wednesday in Europe, the following reports are scheduled: French CPI, UK CPI and PPI, Eurozone industrial production and merchandise trade. In North America, releases are scheduled for the following: PPI-FD, Empire State manufacturing, Atlanta Fed business inflation expectations, and the EIA petroleum status report.

Global stock markets

 

Index

14 Jan 2020

Daily Change

% Change Daily

North America

United States

Dow

28939.67

32.62

0.1

 

NASDAQ

9251.33

-22.60

-0.2

 

S&P 500

3283.15

-4.98

-0.2

Canada

S&P/TSX Comp

17352.9

59.48

0.3

Europe

UK

FTSE 100

7622.35

4.75

0.1

France

CAC

6040.89

4.75

0.1

Germany

XETRA DAX

13456.49

4.97

0.0

Italy

MIB

23928.21

31.62

0.1

Spain

Ibex 35

9528.3

-15.60

-0.2

Sweden

OMX Stockholm 30

1792.9

2.39

0.1

Switzerland

SMI

10655.82

33.41

0.3

Asia/Pacific

Australia

All Ordinaries

7078

57.84

0.8

Japan

Nikkei 225

24025.17

174.60

0.7

 

Topix

1740.53

5.37

0.3

Hong Kong

Hang Seng

28885.14

-69.80

-0.2

S. Korea

Kospi

2238.88

9.62

0.4

Singapore

STI

3270.54

19.47

0.6

China

Shanghai Comp

3106.82

-8.75

-0.3

Taiwan

TAIEX

12179.81

66.39

0.6

India

Sensex 30

41952.63

92.94

0.2

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.