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On 18 March 2019 - US stocks advance ahead of Federal Reserve policy meeting

Anne D Picker

Anne D Picker - Econoday

Brexit vote in doubt; Chinese shares post another strong gain.

US markets

US stocks closed moderately higher Monday, with data and other market-moving news limited ahead of the Federal Reserve policy meeting later in the week. The Dow and the Nasdaq both rose 0.3 percent, while the S&P gained 0.4 percent. Boeing fell on reports that investigators have found “clear similarities” between last week’s crash of one of its 737 MAX planes and another crash last year involving the same class of aircraft. Facebook also fell heavily after an analyst lowered its stock’s rating.

The National Association of Home Builders’ survey indicated that conditions have been steady in March, with its housing market index unchanged at 62. Sales were somewhat stronger relative to February, but this was offset by a drop in traffic, suggesting that the market is being supported by high-end buyers at present. Conditions were better in the South and West, and flat in the Midwest and Northeast.

These data reflect observations at 4:00 PM US ET. Gold fell US$0.30 to US$1,302.60 while dated Brent spot crude rose US$0.24 to US$67.40. The US dollar made a small gain against the Canadian dollar, was flat against the yuan, and weakened slightly against other major currencies. The yield on the US Treasury 30 year bond rose 1 basis point to 3.02 percent while the 10 year note advanced 2 basis points to 2.60 percent.

European markets

European markets were mixed Monday. The FTSE rose 1.0 percent, but the CAC advanced just 0.1 percent while the DAX closed down 0.2 percent. The fall in the DAX came despite Deutsche Bank and Commerzbank both posting strong gains Monday after the banks confirmed over the weekend that merger talks are underway. A merger between the two banks would likely result in the third largest European bank behind HSBC and BNP Paribas.

Eurozone merchandise trade data showed the region’s trade surplus widened from €15.6 billion in December to €17.0 billion in January. Exports rose for the first time since October, up 0.8 percent on the month, with year-on-year growth rebounding from a revised fall of 1.9 percent to an increase of 2.5 percent. Imports rose 0.3 percent the month, with year-on-year growth picking up from a revised 2.7 percent to 3.4 percent. The surplus in January is above the average recorded in the three months to December and suggests that external demand may provide a boost to headline growth in the current quarter.

After Prime Minister Theresa May indicated over the weekend that she will present her Brexit deal to parliament again in the coming week, House of Commons Speaker John Bercow ruled Monday that parliament will not hold a vote unless it is substantially different from the deal rejected last week. It remains unclear whether this obstacle to another vote can be cleared before the European Union leaders summit scheduled to take place on Thursday. Prime Minister May has told legislators that if they approve the deal before the summit then the UK’s withdrawal from the EU will be able to take place with only a short delay but that if this does not happen Brexit will be postponed for many months, perhaps indefinitely.

Asia Pacific Markets

Asian markets closed higher Monday but there was again significant variation in their performance. The Shanghai Composite index posted another large move, up 2.5 percent on the day after reports indicated that the stock exchange is about to accept submissions for initial public offerings for technology start-ups. Hong Kong’s Hang Seng index also advanced strongly, up 1.4 percent. Japan’s Nikkei and Topix indices rose 0.6 percent and 0.7 percent respectively, while Korea’s Kospi index and India’s Sensex index were the regional underperformers, up just 0.2 percent.

Japan and Singapore trade data published Monday both showed stronger export growth in February, though this improvement likely reflected to some extent the impact of the timing of lunar new year holidays in China and elsewhere in the region. Japan’s merchandise trade balance shifted from a revised deficit of Y1,416 billion in January to a surplus of Y339.0 billion in February. Exports fell 1.2 percent on the year in February after falling 8.4 percent in January, while year-on-year growth in imports weakened from a revised decline of 0.8 percent to a sharper fall of 6.7 percent. Exports to China rebounded from a sharp drop of 17.4 percent to an increase of 5.5 percent. Singapore’s non-oil exports rose 4.9 percent on the year after falling 10.1 percent previously, with its exports to China also swinging from a large year-on-year fall to a big increase.

Looking forward

Australian property prices data and the minutes of this month’s Reserve Bank of Australia meeting will be published shortly. Germany’s Ifo survey and the UK labour market report are the highlights of the European data calendar Tuesday, while US factory orders data will be released as the Federal Reserve’s policy meeting begins.

Global Stock Markets

 

Index

Mar 18 2019

Daily Change

% Change Daily

North America

United States

Dow

25914.1

65.23

0.3

 

NASDAQ

7714.48

25.95

0.3

 

S&P 500

2832.94

10.46

0.4

Canada

S&P/TSX Comp

16251.37

111.02

0.7

Europe

UK

FTSE 100

7299.19

70.91

1.0

France

CAC

5412.83

7.51

0.1

Germany

XETRA DAX

11657.06

-28.63

-0.2

Italy

MIB

21234.61

189.20

0.9

Spain

Ibex 35

9409.1

66.90

0.7

Sweden

OMX Stockholm 30

1605.01

9.25

0.6

Switzerland

SMI

9496.93

13.83

0.1

Asia/Pacific

Australia

All Ordinaries

6283.58

18.52

0.3

Japan

Nikkei 225

21584.5

133.65

0.6

 

Topix

1613.68

11.05

0.7

Hong Kong

Hang Seng

29409.01

396.75

1.4

S. Korea

Kospi

2179.49

3.38

0.2

Singapore

STI

3212.96

12.78

0.4

China

Shanghai Comp

3096.42

74.67

2.5

Taiwan

TAIEX

10512.7

73.46

0.7

India

Sensex 30

38095.07

70.75

0.2

Source: Haver Analytics

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.