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On 23 April 2019 - US shares rally strongly on earnings; Nasdaq and S&P hit records

Anne D Picker

Anne D Picker - Econoday

Europe Reacts to Monday's Oil Rally; Asia Flat on China Stimulus Doubts.

US markets

US stocks posted strong gains centered in technology shares with the Nasdaq climbing 1.3 percent to a new record close at 8,120. The S&P, up 0.9 percent to 2,933, also posted a record close while the Dow gained 0.5 percent to 26,656, still short of its record high of 26,828 hit in early October last year.

The dollar also moved higher, rising 0.3 percent on the dollar index to 97.29 helped in part by a continuing move out of the Swiss Franc as safe-haven demand, which was heavy at the beginning of the year, continues to fade.

Earnings season is underway and related gainers in the session included Procter & Gamble, Coca-Cola, Hasbro and Lockheed Martin. Twitter also rose sharply following strong quarterly earnings, helping to pull Amazon, Apple and Microsoft all higher.

Falling sharply in the session was Harley-Davidson after the motorcycle manufacturer said tariffs from Europe and China held down first-quarter results. President Trump, in response, called the tariffs unfair and said his administration will reciprocate.

The day's economic news was headline by a very strong new home sales report for March which easily topped expectations at a 692,000 annual rate. The showing is the best since November 2017 and reflects this year's sharp drop in mortgage rates, moving from 4.65 percent for 30-year conventional loans at the end last year to an average 4.27 percent in March. Rates have since edged higher but only slightly. The gain for new home sales follows Monday's existing home sales report which did move lower in March but followed a very sharp surge in February.

These data reflect observations at 4:00 PM US ET. Brent spot crude advanced US$0.36 to $74.49 while gold fell US$4.85 to $1,272.45. The US dollar firmed against most major currencies, particularly the Canadian and Australian dollar, and slipped marginally versus the yen. The yield on the US Treasury 30-year bond fell 1 basis point to 2.98 percent while the 10-year note yield fell 2 basis points to 2.56 percent.

European markets

European markets were closed yesterday for Easter Monday and on Tuesday reacted to Monday's move by the US to end waivers for Iranian oil imports. Oil shares including British Petroleum, Total and Royal Dutch Shell all posted strong gains. The FTSE posted the day's sharpest increase at 0.8 percent while the Swiss Market Index, getting a lift from a decline in the Swiss Franc, rose 0.7 percent. Other indexes were flat to mixed with the CAC gaining 0.2 percent and the DAX up 0.1 percent. The FTSE MIB in Italy fell 0.3 percent while in Spain, where elections will be held on Sunday, the Ibex fell 0.6 percent.

The economic calendar was light headed by the EU Commission's consumer confidence index which unexpectedly lost ground in April. At minus 7.9, the index fell 0.7 points from March for its first decline in four months and equaling a 3-month low. Though comparing favorably with a long-run average of minus 11.3, the index remains short of the levels seen over much of 2017 and 2018 and warns that second quarter household spending might struggle.

In company news, Airbus rose to record highs on reports of a continued management shake-up. Nestle posted strong gains while Belgium's materials multinational Umicore, which issued a profit warning, fell steeply. Dutch supermarket chain Ahold Delhaize also fell after warning that a strike at its Stop & Shop US chain will hurt profits.

Asia Pacific Markets

Asian stocks were mixed with the Shanghai Composite down 0.5 percent and the Singapore Straits Time slipping 0.1 percent. The Topix rose 0.3 percent, the Nikkei gained 0.2 percent, and the Hang Seng was unchanged. Australia's market, which was closed Friday and Monday for Easter, jumped 1.0 percent in reaction to Monday's strength in energy prices.

Continuing to hold down optimism in Asia is concern that Chinese policy makers, following last week's strength in GDP as well as strong gains for industrial production and retail sales, will begin to pull back on stimulus.

Tuesday's economic news included the consumer price index out of Singapore which was subdued, up 0.6 percent on the year in March vs a 0.5 percent gain in February. On the month, the CPI fell 0.1 percent. The Monetary Authority of Singapore's preferred measure of core inflation, which excludes the cost of accommodation and private road transport, increased 1.4 percent on the year in March, down from 1.5 percent in February, and fell 0.2 percent on the month.

Hong Kong also released its consumer price index which increased 2.1 percent on the year in March, unchanged from February but down from the average of 2.3 percent for January and February. Officials advise comparing March inflation with the average for January and February in order to account for the impact of the timing of lunar new year holidays. Headline CPI fell 0.3 percent on the month in March after increasing 0.9 percent previously.

Looking forward

Wednesday's Asian news will be led by the latest announcement from the Bank of Japan. In Europe, France's business climate indicator will be posted as will Germany's Ifo Survey and public sector finances out of the UK. The Bank of Canada will also issue an announcement while US data will include weekly petroleum inventories.

Global Stock Markets

 

Index

23 Apr 2019

Daily Change

% Change Daily

North America

 

 

 

 

United States

Dow

26656.39

145.34

0.5

 

NASDAQ

8120.82

105.55

1.3

 

S&P 500

2933.68

25.71

0.9

Canada

S&P/TSX Comp

16669.4

92.12

0.6

Europe

 

 

 

 

UK

FTSE 100

7523.07

*

*

France

CAC

5591.69

*

*

Germany

XETRA DAX

12235.51

*

*

Italy

MIB

21896.84

*

*

Spain

Ibex 35

9527.2

*

*

Sweden

OMX Stockholm 30

1672.18

*

*

Switzerland

SMI

9635.07

*

*

Asia/Pacific

 

 

 

 

Australia

All Ordinaries

6411.07

*

*

Japan

Nikkei 225

22259.74

41.84

0.2

 

Topix

1622.97

4.35

0.3

Hong Kong

Hang Seng

29963.24

*

*

S. Korea

Kospi

2220.51

3.86

0.2

Singapore

STI

3353.47

-4.23

-0.1

China

Shanghai Comp

3198.59

-16.45

-0.5

Taiwan

TAIEX

11025.68

37.97

0.3

India

Sensex 30

38564.88

-80.30

-0.2

*Markets closed

 

 

 

Data Source — Haver Analytics

 

 

 

Note: all releases are listed in local time.

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