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On 23 January 2019 - Global stocks were mixed Wednesday

Anne D Picker

Anne D Picker - Econoday

Investors turned their attention to earnings.

US markets

US stocks finished modestly higher but failed to regain the bulk of Tuesday’s steeper losses. The Dow advanced 0.7 percent and the S&P rose 0.2 percent. Nasdaq rose 0.1 percent. As the earnings season gathers steam, investors were turning their attention to the quarterly results of individual companies and their recently and often contrasting guidance for 2019 while keeping an eye out for news on the progress of US-China trade negotiations. On that front, President Trump reportedly said he would not agree to any deal with China unless it makes substantive changes to the way it does business, including how it handles intellectual property.

Economic data released Wednesday included a solid 0.4 percent November rise in the FHFA House Price Index, maintaining the year-on-year gain at 5.8 percent. Another positive for the housing market was the release of the MBA purchase applications for home mortgages, which while retreating slightly on the week wee13 percent higher than the level a year ago and close to a 9-year high after exceptionally strong volumes in the previous 2 weeks. The Richmond Fed Manufacturing Index rose in January to minus 2 after plunging in December to minus 8, but its has contracted for 2 months, the lowest readings in more than 2 years, and the deep contraction of the sub-indexes such as backlogs of orders at minus 21, points at best to moderation for a factory sector faced with slowing global markets and dislocations tied to tariffs.

IBM sharply advanced on the back of quarterly results posted after the market close Tuesday showing earnings of $1.95 billion after net loss of $1.05 billion in the year ago quarter. Procter & Gamble advanced after reporting revenue and earnings that beat expectations and raised the high end of its guidance for 2019 organic sales growth. Kimberly-Clark declined after the company reported quarterly results that missed expectations. Tesla declined flowing a downgrade from outperform to underperform by a brokerage house. Internet provider Comcast advanced after its quarterly earnings and revenue beat analysts’ expectations. Abbott Laboratories declined on disappointing revenues. Burger King owner Restaurant Brands advanced sharply after the company named Burger King president Joseph Cil as its CEO and provided upbeat sales data. Verizon Communications advanced on news that its media group is cutting 7 percent of its 11,385 workforce to focus the group on fewer areas, such as mobile and video-focused products.

European markets

European stocks declined modestly Wednesday with investors cautious or indecisive in the face of multiple corporate profit warnings (often accompanied by strong results) and often weaker than expected data pointing to an economic slowdown the depth and duration of which many believe depends on the outcome of the US-China trade talks. The DAX and CAC fell 0.2 percent and 0.1 percent, respectively, while the FTSE 100 declined 0.8 percent.

Brexit anxiety is obviously also in play for the UK, whose CBI industrial trends data for January was softer than expected, showing the key orders balance dropping 9 points to minus 1 — a 3-month low — and exports declining 19 points to minus 5 — below any reading posted in 2018. The survey also showed overall business falling at the fast rate since 2016 to minus 23 percent, and export confidence declining the fastest since 2009 to minus 32 percent. In the Eurozone, the EC published its Consumer Confidence flash, showing sentiment improving slightly from December, albeit to a still weak minus 7.9 and the second weakest reading (after December) since March last year.

Metro Bank plunged after reporting weaker than expected earnings. Supermarket chains Carrefour and Ahold Delhaize advanced after announcing positive trading updates.

Plastics packaging manufacturer RPC Group advanced on news that Apollo Global Management has agreed to buy the company after extensive negotiations for GBP3.3 billion.

Asia Pacific Markets

Asian stocks closed mixed but mostly moderately lower Wednesday following a sharper downturn in US stocks Tuesday amid revived concerns about decelerating global - but especially Chinese - economic growth and the related progress of US-China trade negotiations, said to be lacking on certain key issues. The release of Japan’s merchandise trade data for December featured a sharper than expected 3.8 percent drop from a year ago in exports, driven ominously by a 7.0 percent year-on-year decline in exports to China. As expected, the Bank of Japan announced it is leaving its monetary policy settings and forward guidance unchanged, and downwardly revised its forecasts for core CPI, with fiscal 2019 lowered from 1.4 percent to 0.9 percent.

Japan’s Nikkei declined 0.1 percent and the Topix by 0.6 percent. Car manufacturer Subaru declined after the company announced its only factory in Japan stopped production following the discovery of a defective component. Tiremaker Bridgestone fell after the company announced it will buy Telematics from TomTom for $1 billion. Among gainers, Apple display supplier Japan Display sharply advanced following a news report that it is in advanced talks with Taiwan’s TPK holding and Chinese state-owned Silk Road Fund that includes a 30 percent initial stake that may eventually increase. Softbank and Ricoh advanced.

The Shanghai Composite rose 0.1 percent while the Hang Seng closed virtually unchanged, up 2.75 points. Tencent declined, extending yesterday’s losses on the back of news that its online games were not on the third list of titles approved by authorities. China Mobile, China Unicom and China Telecom advanced after the Chinese Ministry of Industry and Information Technology said a solid foundation exists to speed up the pace of the commercialization of 5G technology.

Korea’s Kospi rose 0.5 percent while Taiwan’s TAIEX fell 0.5 percent. Samsung Electronics and Taiwan Semiconductors both declined.

Australian All Ordinaries fell 0.3 percent. Energy companies Woodside and Origin declined weighed down by oil price weakness. Electronics retailer Harvey Norman advanced following a brokerage analyst’s upgrade to outperform.

Looking forward

Japan releases its PMI manufacturing Index flash for January. Australia will release the labour force survey. France and Germany both release their January PMI composite Flash. Hong Kong releases its merchandise trade data. The Eurozone will release its January PMI composite flash. The European Central bank will issue its monetary policy announcement. In the U.S., jobless claims will be released as well as the PMI composite flash for January, U.S. leading indicators, the EIA’s weekly natural gas report, the Kansas City Fed manufacturing index, the EIA petroleum status report, and the Fed balance sheet.

Global Stock Markets

 

Index

23 Jan 2019

Daily Change

% Change Daily

North America

 

 

 

 

United States

Dow

24575.62

171.14

0.7

 

NASDAQ

7025.77

5.41

0.1

 

S&P 500

2638.70

5.80

0.2

Canada

S&P/TSX Comp

15208.33

-25.43

-0.2

Europe

 

 

 

 

UK

FTSE 100

6842.88

-58.51

-0.8

France

CAC

4840.38

-7.15

-0.1

Germany

XETRA DAX

11071.54

-18.57

-0.2

Italy

MIB

19400.15

-37.12

-0.2

Spain

Ibex 35

9128.80

91.30

1.0

Sweden

OMX Stockholm 30

1478.72

-7.60

-0.5

Switzerland

SMI

8957.19

-9.15

-0.1

Asia/Pacific

 

 

 

 

Australia

All Ordinaries

5908.72

-15.56

-0.3

Japan

Nikkei 225

20593.72

-29.19

-0.1

 

Topix

1547.03

-9.40

-0.6

Hong Kong

Hang Seng

27008.20

2.75

0.0

S. Korea

Kospi

2127.78

10.01

0.5

Singapore

STI

3171.11

-21.60

-0.7

China

Shanghai Comp

2581.00

1.30

0.1

Taiwan

TAIEX

9846.40

-48.26

-0.5

India

Sensex 30

36108.47

-336.17

-0.9

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.