Skip Header

On 22 October 2019 - US weaker on earnings, Brexit delay; Europe firm, Asia better

Anne D Picker

Anne D Picker - Econoday

Corporate news mixed: P&G outperforms while McDonald's and Travelers falter.

US markets

Some big earnings disappointments and more delay on the Brexit front left equities weaker Tuesday. The Dow industrials eased 0.1 percent, the S&P 500 declined 0.4 percent, and the NASDAQ lost 0.7 percent.

McDonald’s fell 5 percent on an earnings miss and same-store sales miss, while fellow Dow member Travelers Corp., the insurance company, fell 8.3 percent after reporting its insurance premiums underperformed. Toymaker Hasbro dropped 16.8 percent after its earnings faltered on tariff trouble.

On the plus side, consumer goods goliath Procter & Gamble rose 2.6 percent after upside surprises and raising its guidance. Biogen, the pharma, surged 26 percent on an earnings beat and good news about its Alzheimer's treatment. Facebook lost 3.9 percent amid concern over its regulatory problems. Energy shares rose on an uptick in crude oil prices, with ConocoPhilips up 0.9 percent.

On the Brexit front, Parliament rejected Prime Minister Boris Johnson’s timetable for acting on the Brexit deal, which leaves prospects for the deal uncertain. Nevertheless, markets remain hopeful about progress toward an interim US-China trade pact.

In economic news, US existing home sales fell back but from a tough comparison against a strong August, down 2.2 percent in September to a 5.380 million annual rate that was at the low end of Econoday's consensus range. Year-on-year, resales in September were up 3.9 percent, which is the best showing since March 2017.

These data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 59 cents to US$59.65, while gold rose by US$5.30 to US$1,490.80. The US dollar rose against most major currencies. The US Treasury 30-year bond yield fell 4 basis points to 2.25 percent while the 10-year note yield fell 3 basis points to 1.77 percent.

European markets

European equities ended marginally higher Tuesday amid mixed corporate results and uncertainty over the fate of the proposed Brexit deal. The Europe-wide STOXX 600 and the German DAX both ended up 0.1 percent, the French CAC was up 0.2 percent and the UK FTSE-100 gained 0.7 percent.

The FTSE-100 outperformed on sterling’s weakness amid doubts Parliament would approve the latest EU-UK Brexit deal. European markets were on tenterhooks through the European day, as Parliament’s vote to require more time to consider the latest Brexit deal came after the close. Prime Minister Boris Johnson said he would call for general elections if Parliament delayed approving the deal.

Meanwhile, corporate news left the overall market direction unclear. Among companies in the news, UK household goods maker Reckitt Benckiser lost 0.7 percent after lowering its sales forecast. On the positive side, UK food deliverer Just Eat rallied 24 percent on news of a takeover offer from Prosus, a Dutch internet firm. Also on the positive side were quarterly results from Swedish automaker Saab, which rose 5.2 percent, and Swiss pharma Novartis, up 1.0 percent.

Among shares in the Stoxx 600, outperformers included oil & gas, autos & parts, utilities, and telecom. Underperformers included travel & leisure, chemicals, technology, and construction & materials.

In economic news, the UK CBI industrial Trends Survey was much weaker than expected in October. The headline orders balance fell to minus 37 percent, down 9 points from September, with hefty losses in domestic and overseas demand. Output over the past three months (minus 10 percent after 1 percent) was also markedly lower and no improvement is expected over the coming quarter when production is seen at minus 16 percent.

Asia Pacific markets

Japanese markets were closed for a holiday Tuesday, with most other Asian markets posting moderate to solid gains. The regional data calendar was light during the Asia trading session, with gains on Wall Street Monday providing some boost to investor sentiment and ongoing US-China trade talks again the main focus of attention. The Shanghai Composite index advanced 0.5 percent on the day, Hong Kong’s Hang Seng index gained 0.2 percent, and Australia’s All Ordinaries index rose 0.3 percent.

Hong Kong's headline consumer price index increased 3.2 percent on the year in September, down from a three-year high of 3.5 percent in August. Officials attributed this drop in headline inflation to a comparison effect and an increase in public housing rentals twelve months earlier. Inflation, however, remains at relatively high levels, mainly due to the impact on food prices of ongoing pork shortages.

Looking forward

On Wednesday in Asia, New Zealand merchandise trade and Singapore CPI figures are due. In Europe, Eurozone EC consumer confidence and French business climate figures will be released. In the US, FHFA house prices and the EIA petroleum status report are scheduled.

Global stock markets

 

Index

21 Oct 2019

22 Oct 2019

Daily Change

% Change Daily

North America

 

 

 

 

 

United States

Dow

26827.64

26788.1

-39.54

-0.1

 

NASDAQ

8162.99

8104.3

-58.69

-0.7

 

S&P 500

3006.72

2995.99

-10.73

-0.4

Canada

S&P/TSX Comp

16418.46

16391.52

-26.94

-0.2

Europe

 

 

 

 

 

UK

FTSE 100

7163.64

7212.49

48.85

0.7

France

CAC

5648.35

5657.69

9.34

0.2

Germany

XETRA DAX

12747.96

12754.69

6.73

0.1

Italy

MIB

22478.19

22487.08

8.89

0.0

Spain

Ibex 35

9402.3

9380.2

-22.10

-0.2

Sweden

OMX Stockholm 30

1724.36

1728.22

3.86

0.2

Switzerland

SMI

9991.42

10017.35

25.93

0.3

Asia/Pacific

 

 

 

 

 

Australia

All Ordinaries

6757.66

6778.62

20.96

0.3

Japan

Nikkei 225

22548.9

*

*

*

 

Topix

1628.6

*

*

*

Hong Kong

Hang Seng

26725.68

26786.2

60.52

0.2

S. Korea

Kospi

2064.84

2088.86

24.02

1.2

Singapore

STI

3139.15

3160.67

21.52

0.7

China

Shanghai Comp

2939.62

2954.38

14.76

0.5

Taiwan

TAIEX

11184.15

11271.25

87.10

0.8

India

Sensex 30

39298.38

38963.84

-334.54

-0.9

*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.