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On 25 October 2019 - US gains on earnings, trade hopes; Europe firm; Asia mixed

Anne D Picker

Anne D Picker - Econoday

Intel rally leads semiconductors higher after USTR positive on US-China deal

US markets

US equities rose Friday, with technology, materials, and energy stocks leading on positive earnings and hopes for a US-China trade deal.  The Dow industrials rose 0.6 percent, the S&P 500 gained 0.4 percent, and the NASDAQ was up 0.7 percent.

Risk assets improved after US Trade Representative Robert Lighthizer’s comment that the US and China are close to finalizing terms of a trade deal.  Along with technology, materials advanced, with precious metals miners and chemicals outperforming. Energy shares gained, led by exploration and production stocks, with crude oil prices rising. Industrials advanced, with machinery shares leading.

Among companies in the news, Intel rallied 8.1 percent to lead semiconductors higher after an earnings beat and raising its Q4 and annual guidance. Another Dow stock, Visa, the credit card company, rose 0.9 percent after an earnings beat and healthy business report. Agriculture chemicals company Scotts Miracle-Gro rose 4.2 percent on an analyst upgrade. H & E Equipment, which rents tools to contractors, rose 9.7 percent to extend its gains after reporting strong results Thursday.

On the downside, Amazon, the online retail leader, fell 1.1 percent after reporting a big earnings miss, reflecting its investments in one-day delivery. Its shares recovered from the worst levels of the day. V.F. Corporation, maker of Vans shoes and North Face camping gear, fell 7.4 percent after an earnings miss, despite reaffirming its guidance and raising its dividend.

In US economic news, consumer sentiment fell back in the latter half of October compared to the first half but still showed solid improvement from September. The index ended October at 95.5 versus 96.0 at mid-month and against 93.2 in September.

These data reflect observations at 4:00 PM US ET:  Dated Brent spot crude oil rose 40 cents to US$62.03, while gold rose by US$2.70 to US$1507.60. The US dollar rose against most major currencies.  The US Treasury 30-year bond yield was up 3 basis point to 2.29 percent while the 10-year note yield rose 4 basis points to 1.80 percent.

European markets

Most major European equities indexes ended marginally higher Friday after mixed corporate results. The Europe-wide STOXX 600 rose 0.2 percent, the German DAX   was up 0.2 percent, the French CAC gained 0.7 percent and the UK FTSE-100 slipped 0.1 percent.  

The food & beverages sector suffered after Anheuser-Busch Inbev reported an earnings miss and cut its profits guidance for the year. The Belgium-based brewer dropped 11 percent.  On the positive side, WPP, the UK advertising giant, rallied 6.1 percent, and Michelin, the French tiremaker rose 6 percent on earnings beats. Barclays, the UK bank, rose 2.4 percent on strong trading revenues.

French markets outperformed after luxury goods makers Kering (up 8.7 percent) and Moncler (up 11.3 percent) said sales were holding up in Hong Kong, a key market, despite ongoing protests there. UK markets underperformed as traders eyes more delays and uncertainty over Brexit.

In economic news, Ifo's latest survey suggested no change in the generally subdued state of German business activity in October. Overall sentiment matched September's 94.6 print, broadly in line with the market consensus and equalling its second weakest reading since November 2012. Meanwhile French producer prices (ex-construction) edged up 0.1 percent on the month in September. However, this still saw annual PPI inflation slide deeper into negative territory at minus 1.0 percent, down from a revised minus 0.6 percent in August.

Asia Pacific markets

Major Asian markets posted mixed but generally modest results Friday, with changes on the week also showing some variation. The regional data calendar was light Friday, with Brexit developments again a major focus but providing little clear direction. Australia’s All Ordinaries index was among the stronger performers in the region, closing up 0.6 percent to extend its gain on the week to 1.2 percent. Japanese markets also advanced Friday, with the Nikkei and Topix indices up 0.2 percent and 0.3 percent respectively on the day and both closing the week 1.5 percent higher. The Shanghai Composite index rose 0.5 percent on the day and was flat on the week, while Hong Kong’s Hang Seng index fell 0.5 percent on the day and 0.2 percent on the week.

Singapore's manufacturing output rose 0.1 percent on the year in September after falling a revised 6.4 percent in August. Stronger headline growth was largely driven by the volatile biomedical industry, with conditions still weak elsewhere in the manufacturing sector, in line with recent trade and PMI survey data. Biomedical output, around 20 percent of total manufacturing production, rose 21.9 percent on the year in September, up from 9.5 percent previously. Excluding the biomedical industry, manufacturing output fell 4.3 percent on the year in September after dropping 10.3 percent in August.

Looking forward

Central Bank activities

 

 

Oct-30

Canada

Bank of Canada Policy Announcement/Monetary Policy Report

 

US

Federal Open Market Committee Policy Announcement

 

 

Fed Chair Press Conference

Oct-31

Japan

Bank of Japan Policy Announcement

The following indicators will be released this week...

Europe

Oct-28

Eurozone

M3 Money Supply

Oct-29

UK

M4 Money Supply

Oct-30

Eurozone

EC Consumer Confidence Flash (October)

 

France

Consumer Manufactured Goods Consumption (September)

 

 

GDP Flash (Q3)

 

Germany

CPI (October)

 

 

Unemployment Rate (October)

 

Italy

Business and Consumer Confidence (October)

 

Switzerland

KOF Swiss Leading Indicator (October)

Oct-31

Eurozone

GDP Flash (Q3 p)

 

 

HICP Flash (September)

 

 

Unemployment Rate (September)

 

France

CPI (October f)

 

Germany

Retail Sales (September)

 

Italy

CPI (October p)

 

 

GDP (Q3 p)

Nov-01

Eurozone

PMI Manufacturing Index (October)

 

Switzerland

Adjusted Real Retail Sales (September)

 

 

CPI (October)

 

UK

CIPS/PMI Manufacturing Index (October)

Asia Pacific

Oct-30

Australia

CPI (Q3)

Oct-31

China

CFLP Manufacturing PMI (October)

 

Hong Kong

GDP (Q3)

 

Japan

Industrial Production (September)

 

 

Retail Sales (September)

 

Japan

PMI Composite Flash (October)

Nov-01

China

PMI Manufacturing (October)

 

India

PMI Manufacturing (October)

 

Japan

PMI Manufacturing (October)

 

 

Unemployment Rate (September)

Americas

Oct-28

US

International Trade in Goods (September)

Oct-29

US

Consumer Confidence (October)

 

 

Pending Home Sales (September)

 

 

S&P Corelogic Case-Shiller HPI (August)

Oct-30

US

ADP Employment (October)

 

 

GDP (Q3 a)

Oct-31

Canada

Monthly GDP (August)

 

US

Chicago PMI (October)

 

 

Employment Cost Index (Q3)

 

 

Jobless Claims (Week of Oct 26)

 

 

Personal Income and Outlays (September)

Nov-01

US

Construction Spending (September)

 

 

Employment Situation (October)

 

 

ISM Manufacturing Index (October)

 

 

PMI Manufacturing Index (October)

Global stock markets

 

 

End

2019

 

Daily

Percent Change

 

 

 

Index

2018

Oct 24

Oct 25

Change

Daily

2019

Yr/Yr

North America

 

 

 

 

 

 

 

 

United States

Dow

23327.46

26805.53

26958.06

152.53

0.6

15.6

7.9

 

NASDAQ

6635.28

8185.8

8243.12

57.32

0.7

24.2

12.6

 

S&P 500

2506.85

3010.29

3022.55

12.26

0.4

20.6

11.7

Canada

S&P/TSX Comp

14322.86

16369.32

16404.49

35.17

0.2

14.5

9.9

Europe

 

 

 

 

 

 

 

 

UK

FTSE 100

6728.13

7328.25

7324.47

-3.78

-0.1

8.9

4.6

France

CAC

4730.69

5684.33

5722.15

37.82

0.7

21.0

13.7

Germany

XETRA DAX

10558.96

12872.1

12894.51

22.41

0.2

22.1

14.0

Italy

MIB

18324.03

22527.42

22608.99

81.57

0.4

23.4

20.2

Spain

Ibex 35

8539.90

9391.8

9430.2

38.40

0.4

10.4

7.3

Sweden

OMX Stockholm 30

1408.74

1736.98

1747.31

10.33

0.6

24.0

16.0

Switzerland

SMI

8429.30

10106.53

10197.09

90.56

0.9

21.0

17.1

Asia/Pacific

 

 

 

 

 

 

 

 

Australia

All Ordinaries

5709.44

6796.69

6840.98

44.29

0.6

19.8

18.8

Japan

Nikkei 225

20014.77

22750.6

22799.81

49.21

0.2

13.9

7.2

 

Topix

1494.09

1643.74

1648.44

4.70

0.3

10.3

3.3

Hong Kong

Hang Seng

25845.70

26797.95

26667.39

-130.56

-0.5

3.2

6.7

S. Korea

Kospi

2041.04

2085.66

2087.89

2.23

0.1

2.3

3.0

Singapore

STI

3068.76

3168.87

3185.53

16.66

0.5

3.8

7.2

China

Shanghai Comp

2493.90

2940.92

2954.93

14.01

0.5

18.5

13.7

Taiwan

TAIEX

9727.41

11320.14

11296.12

-24.02

-0.2

16.1

19.0

India

Sensex 30

36068.33

39020.39

39058.06

37.67

0.1

8.3

17.1

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.