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On 23 October 2019 - US firms on corporate news; Europe, Asia mixed

Anne D Picker

Anne D Picker - Econoday

Chipmakers hit by warning from Texas Instruments.

US markets

US equity indexes edged up Wednesday on mixed corporate news, with chipmakers leading tech stocks lower, while health care, energy, and materials outperformed. The Dow industrials rose 0.2 percent, the S&P 500 gained 0.3 percent, and the NASDAQ gained 0.2 percent.

Among companies in the news, Texas Instruments, a semiconductor leader, dropped 7.5 percent after saying its fourth-quarter revenues would fall far short of expectations because of US-China trade. Other chipmakers tracked Texas Instruments lower. Nike, a Dow component, sold off 3.5 percent after saying its CEO and Chairman, Mark Parker, would be succeeded by board member John Donahoe.

Dow member Caterpillar, the heavy equipment maker, managed to rise 1.3 percent, but its warnings about flat demand and economic uncertainty cast a pall over the sector.

Another Dow stock, Boeing rose 1.1 percent after promising to resume sales of its 737 MAX airplane in the fourth quarter. Chipotle Mexican Grill, a restaurant chain, fell 5.2 percent despite an earnings beat and strong guidance, as the shares have rallied strongly so far this year. Health care shares were buoyed by medical device companies, with Thermo Fisher Scientific, up 5.4 percent, and Boston Scientific up 5.1 percent on earnings surprises. Energy stocks rose as crude oil prices advanced.

These data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.39 to US$61.04, while gold rose by US$3.80 to US$1,494.60. The US dollar was little changed most major currencies. The US Treasury 30-year bond yield was unchanged at 2.25 percent while the 10-year note yield edged 1 basis point lower to 1.76 percent.

European markets

European equities ended narrowly mixed Wednesday with tech stocks off on weakness in chipmakers, and mining and auto stocks popping up. The Europe-wide STOXX 600 rose 0.1 percent, the German DAX was up 0.3 percent, the French CAC down 0.1 percent and the UK FTSE-100 up 0.7 percent.

UK stocks outperformed on sterling’s weakness after Parliament rejected Prime Minister Boris Johnson’s timetable for approving the Brexit deal, which raised the prospect of new Brexit delays. A meeting between Johnson and his Labour counterpart, Jeremy Corbyn, ended without agreement on the way forward.

Among sectors in focus, tech stocks were hit by weakness in semiconductors after industry bellwether Texas Instruments predicted a big drop in current-quarter income due to US-China trade problems. Dialog Semiconductor, the UK chipmaker, fell 0.9 percent, and STMicroelectronics, the French chipmaker, fell 3.1 percent.

Among companies in the news, Norsk Hydro, the Norwegian aluminum miner, rose 2.7 percent after an earnings beat to lead mining stocks higher. Automakers rose after Peugeot (up 3.5 percent) reported strong sales. Akzo Nobel, the Dutch paint company, rose 1.2 percent after an earnings beat and announcing share buybacks. On the downside, Heineken, the Dutch beer company, fell 2.2 percent after cutting its annual profits guidance.

Among shares in the Stoxx 600, basic resources, oil & gas, and chemicals led gainers, while underperformers included financial services, technology, food & beverages.

In economic news, Eurozone consumer confidence deteriorated in October according to the EU Commission's latest survey. At minus 7.6, the headline index was more than a full point below its final minus 6.5 reading in September and on the soft side of market expectations. However, it was still stronger than its minus 10.7 long-run average.

Asia Pacific markets

Japanese markets closed higher Wednesday, catching up with gains made elsewhere in the region after Tuesday’s holiday, while other major Asian markets were flat or lower. The regional data calendar was light Wednesday, with Brexit developments the main focus for investors and generally weighing on sentiment. Hong Kong’s Hang Seng index dropped 0.8 percent on the day, the Shanghai Composite index fell 0.4 percent, and Australia’s All Ordinaries index was flat. The Nikkei and Topix indices advanced 0.3 percent and 0.6 percent respectively.

New Zealand's merchandise trade deficit narrowed from a revised NZ$1,628 million in August to NZ$1,242 million in September. Exports of goods increased 5.1 percent on the year in September, up from a revised increase of 2.6 percent in August. Stronger demand for dairy products and meat offset a year-on-year decline in exports of forestry products and year-on-year increases in exports to China, the United States and some Asian trading partners outweighed declines in exports to the European Union, Japan, and Australia. Imports of goods fell 2.1 percent on the year in September, weakening from revised growth of 3.0 percent in August, with this slowdown mainly driven by a sharp fall in petroleum imports, partly offset by a rebound in imports of motor vehicles.

Singapore's headline consumer price index advanced 0.5 percent on the year in September, unchanged from the pace recorded in August. The Monetary Authority of Singapore's preferred measure of core inflation, which excludes the cost of accommodation and private road transport, increased 0.7 on the year in September, moderating from 0.8 percent in August and falling to its lowest level since early 2016. Steady headline inflation in September reflected similar stability in key components, including housing and utilities, and food, and is consistent with MAS forecasts for price pressures to remain “muted” in the near-term. Reflecting this assessment, officials eased policy settings by targeting a slower rate of appreciation for Singapore’s exchange rate at their semi-annual policy review earlier this month.

Looking forward

On Thursday in Asia, Hong Kong merchandise trade, Japanese PMI composite flash and Japanese PMI manufacturing flash figures are due. In Europe, the ECB will make its monetary policy announcement. In European data, the Eurozone PMI composite flash will be released, along with French and German PMI composite flash data. In the US, durable goods orders, EIA natural gas, jobless claims, and new home sales data releases are scheduled.

Global stock markets

 

Index

23 Oct 2019

Daily Change

% Change Daily

North America

 

 

 

 

United States

Dow

26833.95

45.85

0.2

 

NASDAQ

8119.79

15.49

0.2

 

S&P 500

3004.52

8.53

0.3

Canada

S&P/TSX Comp

16335.93

-55.59

-0.3

Europe

 

 

 

 

UK

FTSE 100

7260.74

48.25

0.7

France

CAC

5653.44

-4.25

-0.1

Germany

XETRA DAX

12798.19

43.50

0.3

Italy

MIB

22351.07

-136.01

-0.6

Spain

Ibex 35

9385

4.80

0.1

Sweden

OMX Stockholm 30

1725.87

-2.35

-0.1

Switzerland

SMI

10023.52

6.17

0.1

Asia/Pacific

 

 

 

 

Australia

All Ordinaries

6778.22

-0.40

0.0

Japan

Nikkei 225

22625.38

76.48

0.3

 

Topix

1638.14

9.54

0.6

Hong Kong

Hang Seng

26566.73

-219.47

-0.8

S. Korea

Kospi

2080.62

-8.24

-0.4

Singapore

STI

3144.28

-16.39

-0.5

China

Shanghai Comp

2941.62

-12.76

-0.4

Taiwan

TAIEX

11239.67

-31.58

-0.3

India

Sensex 30

39058.83

94.99

0.2

*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.