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On 17 May 2019 - Global stocks mixed to lower; Chinese criticism of US heats up

Anne D Picker

Anne D Picker - Econoday

Japanese shares higher on sharp gains for Sony.

US markets

Chinese officials went out of their way all week to downplay the outlook for compromise or even the possibility that trade talks will resume. Yet the US stock market remained largely upbeat with the Dow slipping 0.4 percent on Friday for a limited weekly decline of 0.7 percent and a still substantial year-to-date gain of 10.4 percent. Stocks ended off their lows on Friday after the US and Canada announced a bilateral trade deal that will suspend tariffs on aluminum and steel and which have raised expectations that Mexico will soon join the agreement.

On US-China trade, China's Ministry of Commerce described US trade tactics as "bullying behavior" while The People's Daily ran front page commentary saying China will withstand a trade war.

In company news, media site Pinterest fell sharply on earnings as did machinery maker Deere which cited concerns over lower Chinese soybean demand tied to the outbreak of swine fever. Chip-equipment maker Applied Materials rose sharply on earnings while automaker Tesla fell sharply on reports of cost-cutting plans.

A curious 3 tenths jump in year-ahead inflation expectations headlined Friday's economic data in the US, a burst higher that is likely tied to US-China tariff increases. The jump contrasts with the week's run of flat US data, especially retail sales and industrial production, and may raise talk of tariff-induced stagflation in the months to come.

These data reflect observations at 4:00 PM US ET. Dated Brent spot crude was down US$0.52 to $72.21 while gold was US$9.40 lower at $1,277.40. The US dollar rose against the yuan, the Australian dollar, the pound, the yen, the euro, the Swiss franc and was little changed against the Canadian dollar. The yield on the US Treasury 30-year bond was down 1 basis point to 2.83 percent while the yield on the 10-year note was also down 1 basis point to 2.39 percent.

European markets

European shares ended a positive week with mostly slight declines on Friday. France's CAC rose 2.1 percent in the week with the FTSE up 2.0 percent and the DAX up 1.5 percent. Year-to-date, the DAX is 15.9 percent higher with the CAC up 15.0 percent and the FTSE up 9.2 percent.

In the UK, the Labour Party broke off compromise talks on Brexit with Prime Minister's Theresa May's government in news that sent the pound lower.

Friday's economic news was light but did include April's final for Eurozone harmonised inflation which was unrevised at a 0.7 percent monthly increase for a 1.4 percent yearly rate. The rebound more than reversed a probable Easter-related 0.2 percentage point decline in March and made for the strongest reading since last November.

Among shares, auto-related shares extended recent declines including French parts supplier Valeo. UK discount carrier EasyJet jumped after affirming earnings expectations.

Asia Pacific Markets

Asian shares were mixed Friday, with Chinese markets off sharply on the latest escalation in the US-China trade dispute. Japanese equities rose, led by tech shares, as Sony rallied on buyback news, and Australian markets remained buoyant on rising commodities prices and the weakening Australian dollar.

Chinese markets suffered more fallout from US sanctions on Huawei and ZTE, and from harsher rhetoric from China on the trade dispute. The Shanghai composite dropped 2.5 percent, and was off 1.9 percent for the week. The Hang Seng index fell 1.2 percent as it tracked the Shanghai lower, with technology and property shares leading the declines. Singapore's Straits Times index fell 0.8 percent, with financials leading the downturn.

Tech shares were the story in Tokyo as the Nikkei 225 rose 0.9 percent. Sony rallied by 10 percent on a share buyback, and other tech shares tracked Cisco higher after upbeat earnings. Tokyo shares retreated from highs late in the day on the selloff in Chinese stocks. The Nikkei was down 0.4 percent for the week.

Australia's All Ordinaries rose 0.7 percent Friday as mining and energy shares continued their run higher, though the market gave up much of its gains at the close on China worries. Ongoing weakness in the Australian dollar has given the commodities-export market a lift, along with expectations for a rate cut from the Reserve Bank of Australia as soon as next month.

In economic news, Singapore's non-oil domestic exports fell 10.0 percent on the year in April, improving modestly from a drop of 11.8 percent in March. Total imports rose 7.5 percent on the year after advancing 1.5 percent previously. Japan's index of tertiary industry activity fell 0.4 percent in March after falling 0.6 percent on the month in February. Declines in the component index for six of the 11 main industry groups within the services sector outweighed increases in the remaining five.

Looking forward

Central Bank activities

21-May

Australia

RBA Minutes (April)

22-May

US

FOMC Minutes (May)

23-May

EZ

ECB Minutes (May)

The following indicators will be released this week...

Europe

20-May

Germany

PPI (April)

21-May

EZ

EC Consumer Confidence (May)

22-May

UK

CPI (April)

23-May

EZ

PMI Composite Flash (May)

 

France

PMI Composite Flash (May)

 

Germany

GDP (Q1)

 

 

PMI Composite Flash (May)

   

Ifo Survey (May)

 

UK

Retail Sales (April)

Asia Pacific

20-May

Japan

GDP (Q1a)

22-May

Japan

Machine Orders (March)

24-May

NZ

Merchandise Trade (April)

23-May

Japan

PMI Manufacturing Flash (May)

24-May

Japan

CPI (April)

 

NZ

Merchandise Trade (April)

Americas

21-May

US

Existing Home Sales (April)

22-May

Canada

Retail Sales (March)

23-May

US

New Home Sales (April)

24-May

US

Durable Goods Orders (April)

Global Stock Markets

 

Index

17 May 2019

Daily Change

% Change Daily

North America

 

 

 

 

United States

Dow

25764

-98.68

-0.4

 

NASDAQ

7816.28

-81.77

-1.0

 

S&P 500

2859.53

-16.79

-0.6

Canada

S&P/TSX Comp

16401.75

-42.11

-0.3

Europe

 

 

 

 

UK

FTSE 100

7348.62

-4.89

-0.1

France

CAC

5438.23

-9.88

-0.2

Germany

XETRA DAX

12238.94

-71.43

-0.6

Italy

MIB

21105.28

-46.52

-0.2

Spain

Ibex 35

9280.1

-24.20

-0.3

Sweden

OMX Stockholm 30

1606.86

-8.52

-0.5

Switzerland

SMI

9659.08

-1.51

0.0

Asia/Pacific

 

 

 

 

Australia

All Ordinaries

6460.21

42.72

0.7

Japan

Nikkei 225

21250.09

187.11

0.9

 

Topix

1554.25

16.70

1.1

Hong Kong

Hang Seng

27946.46

-328.61

-1.2

S. Korea

Kospi

2055.8

-11.89

-0.6

Singapore

STI

3205.46

-24.80

-0.8

China

Shanghai Comp

2882.3

-73.41

-2.5

Taiwan

TAIEX

10384.11

-90.50

-0.9

India

Sensex 30

37930.77

537.29

1.4

*Markets closed

 

 

 

Data Source — Haver Analytics

 

 

 

Note: all releases are listed in local time.

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