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On 18 January 2019 - Stocks ended Friday and the week on a positive note

Anne D Picker

Anne D Picker - Econoday

The US government shutdown continues.

US markets

US stocks advanced Friday and for the week. The Dow Jones industrials were up 1.4 percent Friday and 3.0 percent on the week. The S&P added 1.3 percent and 2.9 percent while the Nasdaq advanced 1.0 percent and 2.7 percent. The rally reflected traders’ optimism about trade talks between the US and China. Adding to positive sentiment, a report from Bloomberg said China has offered to go on a six-year buying spree to ramp up imports from the US. The people said the aim of easing the tariffs is to advance trade talks and win China's support for longer-term reforms.

The positive news on trade overshadowed the preliminary consumer sentiment report for January — it showed a substantial deterioration in US consumer sentiment. The index plummeted to 90.7 from the final December reading of 98.3. The consumer sentiment index tumbled to its lowest level since hitting 87.2 in October of 2016. "Consumer sentiment declined in early January to its lowest level since Trump was elected," said Surveys of Consumers chief economist Richard Curtin. "The decline was primarily focused on prospects for the domestic economy, with the year-ahead outlook for the national economy judged the worst since mid-2014." Curtin attributed the loss “to a host of issues including the partial government shutdown, the impact of tariffs, instabilities in financial markets, the global slowdown and the lack of clarity about monetary policies."

JB Hunt Transportation and Kansas City Southern climbed after their fourth-quarter reports. Deere also gained. Among technology companies, Microsoft and Cisco Systems advanced. Tesla declined after the company said it would cut 7 percent of its jobs. CEO Elon Musk said the cuts are meant to reduce costs as the company lowers the price for its cars. He said in a note to staff that the road ahead is "very difficult."

These data reflect observations at 4:00 PM US ET. Gold was down US$9.70 to US$1,283.60. Copper was up 1.46 percent to US2.72. WTI crude was up US$1.73 to US$53.80. Dated Brent spot crude was up US$1.52 to US$62.70. The US dollar down against the Canadian dollar but advanced against the euro, pound, Swiss franc, yen and Australian dollar. The yield on the US Treasury 30 year bond was up 3 basis points to 3.10 percent while the 10 year note was up 4 basis points to 2.78 percent.

European markets

European stocks advanced Friday with many indices rising to multi-week highs as investors indulged in buying amid increasing signs of progress in US/China trade talks and fairly good earnings reports from US companies so far. Brushing off concerns about Brexit the FTSE rallied 2.0 percent to end the week 0.7 percent higher. The CAC gained 1.7 percent and 2.0 percent. The DAX jumped 2.6 percent and 2.9 percent and the SMI added 1.2 percent and 2.2 percent on the week.

Automobile and resources gained with investors buying these stocks on optimism about a resolution to US/China trade disputes. In the UK, Ashtead Group, Morrison Supermarkets, Antofagasta, Prudential Life Insurance, Rolls-Royce Holdings, FBS, Barratt Developments and Hargreaves Lansdown gained. In France, Atos, ST Microelectronics, Michelin, Technip FMC, Carrefour, ArcelorMittal, Accor, Kering and Valeo advanced while in Germany, Wirecard, Continental AG, BASF, Covestro and Daimler gained. Infineon, Bayer, Fresenius, BMW, SAP, Deutsche Post, Deutsche Bank and Siemens also rose sharply. In Switzerland Sika, Geberit, Compagnie Financiere Richemont, Julius Baer and LafargeHolcim gained. Kering and LVMH rallied.

In economic news, December UK retail sales including auto fuel dropped a monthly 0.9 percent after increasing 1.3 percent in November. The European Central Bank showed that the Eurozone current account surplus decreased in November, led by a decline in the surplus in the visible trade and primary income accounts and worsening of the deficit in the secondary income account.

Ryanair issued a profit warning — the airline blamed lower-than-expected winter fares due to overcapacity and initially dragging the stock down. However, it advanced along with easyJet by the close of trading.

Financial services led the gains on FTSE 100, recovering from a sell-off on Thursday caused by a profit warning from Société Générale. HSBC also advanced. BP and Shell also provided support as crude prices rose after data showed OPEC output fell.

Asia Pacific Markets

Stock indices in Asia climbed Friday as reports of progress in US/China trade talks as well as stronger than expected economic data from the US helped ease global growth worries.

The Shanghai Composite climbed 1.4 percent as investors waited for China's fourth-quarter GDP data. The Hang Seng was 1.3 percent higher. For the week, the former was up 1.7 percent and the latter, 1.6 percent.

The Nikkei and Topix closed higher as the yen weakened on improved risk appetite after reports that the US could lift trade tariffs on China. The Nikkei was up 1.3 percent on the day and 1.5 percent on the week while the Topix added 0.9 percent and 1.8 percent. Exporters surged, with Canon, Nissan Motor, Panasonic and Sony rising. In the tech sector, Tokyo Electron and Advantest rallied. In December, the national consumer price index was up 0.3 percent on the year.

Both the S&P/ASX and the All Ordinaries advanced 0.5 percent Friday. For the week, both indices were up 0.5 percent. The four big banks advanced. Rio Tinto edged up after it flagged a rise in Pilbara iron ore exports this year. BHP, which will unveil its second-quarter production figures next week, also advanced.

The Kospi was virtually unchanged Friday and 2.3 percent on the week on optimism for progress in the US/China trade dispute. 

Looking forward

Central Bank activities

Jan 22

Japan

Bank of Japan Monetary Policy Announcement

Jan 24

EZ

European Central Bank Monetary Policy Announcement

The following indicators will be released this week...

Europe

Jan 21

Germany

Producer Price Index (December)

Jan 22

Germany

ZEW Survey (January)

 

UK

Labour Market Report (December)

Jan 23

EZ

EC Consumer Confidence (January flash)

Jan 24

EZ

Manufacturing, Services & Composite PMI (January flash)

 

Germany

Manufacturing, Services & Composite PMI (January flash)

 

France

Manufacturing, Services & Composite PMI (January flash)

Jan 25

Germany

Ifo Survey (January)

Asia Pacific

Jan 21

China

Gross Domestic Product (Q4.2018)

   

Industrial Production (December)

   

Retail Sales (December)

Jan 23

Japan

Merchandise Trade Balance (December)

Jan 24

Australia

Labour Force Survey (December)

Americas

Jan 22

Canada

Manufacturing Sales (November)

 

United States

Existing Home Sales (December)

Jan 23

Canada

Retail Sales (November)

Jan 24

United States

Initial Unemployment Claims (week ending prior Saturday)

   

Manufacturing PMI (January flash)

Jan 25

 

Durable Goods Orders (December)*

   

New Home Sales (December)*

*Most US government economic reports are being delayed by the government shutdown.
The calendar shows release schedule prior to the shutdown.

Global Stock Markets

 

Index

Jan 18 2019

Daily Change

% Change Daily

North America

United States

Dow

24706.35

336.25

1.4

 

NASDAQ

7157.23

72.77

1.0

 

S&P 500

2670.71

34.75

1.3

Canada

S&P/TSX Comp

15303.83

92.61

0.6

Europe

UK

FTSE 100

6968.33

133.41

2.0

France

CAC

4875.93

81.56

1.7

Germany

XETRA DAX

11205.54

286.92

2.6

Italy

MIB

19708.06

237.68

1.2

Spain

Ibex 35

9069.10

160.50

1.8

Sweden

OMX Stockholm 30

1499.79

25.90

1.8

Switzerland

SMI

9023.96

109.82

1.2

Asia/Pacific

Australia

All Ordinaries

5941.21

31.38

0.5

Japan

Nikkei 225

20666.07

263.80

1.3

 

Topix

1557.59

14.39

0.9

Hong Kong

Hang Seng

27090.81

335.18

1.3

S. Korea

Kospi

2124.28

17.22

0.8

Singapore

STI

3224.34

9.90

0.3

China

Shanghai Comp

2596.01

36.37

1.4

Taiwan

TAIEX

9836.06

46.91

0.5

India

Sensex 30

36386.61

12.53

0.0

Data 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.