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On 24 June 2019 - Asia, Europe, US flat to weaker amid caution on US-China trade, Iran worries

Anne D Picker

Anne D Picker - Econoday

Traders await Trump-Xi meeting at G20 late in week.

US markets

US equities edged down Monday after setting new highs last week, as markets were wary ahead of a meeting expected between President Trump and Chinese President Xi late this week.  Worries about prospects for war between the US and Iran depressed sentiment.

The US announced new sanctions against Iran, and the two sides exchanged more bellicose language, including an Iranian threat to shoot down more US drone aircraft in the Gulf. Activity was cautious ahead of the expected US-China bilateral meeting at the G20 meeting June 28-29.

The Dow industrials rose a marginal 0.03 percent; the S&P 500 was down 0.2 percent, and the NASDAQ was down 0.3 percent.

Among companies in focus: pharmaceuticals Celgene (down 5.5 percent) and Bristol-Meyers (down 7.4 percent) weakened on worries over the latter’s proposed acquisition of Celgene after anti-trust concerns. Eldorado Resorts (down 11 percent) agreed to acquire Caesar’s Entertainment (up 14 percent).

United Technologies rose 1.1 percent on an analyst ratings upgrade. Gaming company Electronic Arts rose 3.9 percent on an analyst recommendation. Dow Chemical rose 2.6 percent. Farm equipment maker Deere rose 1.6 percent on an analyst upgrade.

In economic news, Texas manufacturing activity slowed more than expected in June, with the general business activity index falling to a three-year low at minus 12.1, down 5.8 points from May and much weaker than the consensus forecast.

These data reflect observations at 4:00 PM US ET:  Brent spot crude was down US$0.44 at US$64.91 while gold rose by US$22.90 at $1,423.00. The US dollar fell against most major currencies. The yield on the US Treasury 30-year bond was down 4 basis points at 2.55 percent while the yield on the 10-year note was down 4 basis points at 2.02 percent.

European markets

European equities were mostly lower Monday on a weak German IFO report, worries about US-Iran tensions, and a profits warning from automaker Daimler.

The European STOXX 600 declined 0.3 percent, the German DAX fell 0.5 percent, the French CAC slipped 0.1 percent, and the UK FTSE 100 edged up 0.1 percent.

Daimler warned it would take a huge hit to earnings due to the fallout from its diesel emissions scandal. Daimler fell 3.2 percent. Volkswagen was off 0.9 percent, and BMW fell 0.7 percent. On the plus side, healthcare and other defensive plays perked up Monday, with GlaxoSmithKline up 1.1 percent. Drugmaker MorphoSys rose 6 percent on favorable drug trial results.

In economic news, the Ifo survey found German business sentiment deteriorating broadly in June. The overall climate indicator dropped 0.5 points versus its unrevised May reading to 97.4, its third decline in as many months and its weakest reading since November 2014.  The headline fall was attributable to another downgrading to expectations which decreased a full point to 94.2, a 4-month trough and its second worst print since November 2012. By contrast, current conditions edged up 0.1 point to 100.8, their first increase since March.

Asia Pacific Markets

Major Asian markets were little changed Monday, with the regional data calendar relatively light. US-Iran tensions and the upcoming G20 summit were the main focuses of attention but incoming news provided little guidance for trading. The Shanghai Composite index and Australia’s All Ordinaries index both closed up 0.2 percent on the day, while Hong Kong’s Hang Seng index advanced 0.1 percent, as did Japan’s Nikkei and Topix indices.

Singapore inflation data showed relatively steady price pressures in May. Headline inflation picked up from 0.8 percent in April to 0.9 percent in May, while the Monetary Authority of Singapore's preferred measure of core inflation, which excludes the cost of accommodation and private road transport, was unchanged at 1.3 percent. MAS officials retained their assessment that price pressures are likely to remain subdued over the rest of the year, an assessment that was a key factor driving their decision to leave monetary policy settings unchanged at their semi-annual review in April.

Looking forward

The main event Tuesday will be Fed Chair Jerome Powell’s speech at the Council on Foreign Relations at 1 pm ET in New York. Earlier Tuesday in Asia, the Bank of Japan is to release its monetary policy board meeting minutes. New Zealand and Hong Kong release merchandise trade data. Singapore issues its industrial production report. In Europe, France is to release its business climate indicator, and the UK has CBI distributive trades data. In the US, new home sales and consumer confidence data are due.

Global Stock Markets

 

Index

24 Jun 2019

Daily Change

% Change Daily

North America

 

 

 

 

United States

Dow

26727.54

8.41

0.0

 

NASDAQ

8005.7

-26.01

-0.3

 

S&P 500

2945.35

-5.11

-0.2

Canada

S&P/TSX Comp

16523.47

-1.96

0.0

Europe

 

 

 

 

UK

FTSE 100

7416.69

9.19

0.1

France

CAC

5521.71

-6.62

-0.1

Germany

XETRA DAX

12274.57

-65.35

-0.5

Italy

MIB

21284.1

-104.53

-0.5

Spain

Ibex 35

9192.5

-34.70

-0.4

Sweden

OMX Stockholm 30

1610.94

*

*

Switzerland

SMI

9898.85

-23.98

-0.2

Asia/Pacific

 

 

 

 

Australia

All Ordinaries

6745.46

11.16

0.2

Japan

Nikkei 225

21285.99

27.35

0.1

 

Topix

1547.74

1.84

0.1

Hong Kong

Hang Seng

28513

39.29

0.1

S. Korea

Kospi

2126.33

0.71

0.0

Singapore

STI

3311.53

-9.87

-0.3

China

Shanghai Comp

3008.15

6.17

0.2

Taiwan

TAIEX

10779.45

-24.32

-0.2

India

Sensex 30

39122.96

-71.53

-0.2

*Markets closed

 

 

 

Data Source — Haver Analytics

 

 

 

Note: all releases are listed in local time.

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