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On 28 May 2019 - Global shares mixed: US rally fizzles, Europe slips, Asia firm

Anne D Picker

Anne D Picker - Econoday

Data mixed in the US, banking worries in Italy.

US markets

Stocks pushed slightly higher through much of Wednesday's session but broke sharply lower near the close. The Dow finished with a 0.9 percent decline but the Nasdaq only a 0.4 percent dip.

News in the session was light against, however, a backdrop of uncertainty over cross border trade and also over the outlook for Europe and the UK following the latest elections and voter movement away from centrist parties.

In the US, consumer confidence is high, at 134.1 in May for the best showing since November last year and in line with the mid-month jump posted in the consumer sentiment report. A sharp drop in those who describe jobs as "hard to get" points to strength for next week's May employment report.

In downbeat data, home prices flattened out more than expected in March, at only a 0.1 percent increase for Case-Shiller's 20-city adjusted index with year-on-year growth down 3 tenths to 2.7 percent and a 7-year low. Despite improvement in underlying home sales, indications from the FHFA house price index, also up only 0.1 percent in March and also released Wednesday, are likewise pointing to very subdued conditions.

Texas manufacturing activity unexpectedly slowed in May, with the general business activity index falling into contraction at minus 5.3, down 7.3 points from the April reading and in sharp contrast to the consensus forecast calling for a modest increase. Despite the headline decline, factory activity continued to expand in May, albeit at a slower pace, with the production index falling 6.1 points but remaining in expansionary territory at 6.3.

Advanced Micro Devices rose sharply on product introductions as did Total System Services after Global Payments offered $21.5 billion for the payment technology company. Global Payments edged higher on the news.

These data reflect observations at 4:00 PM US ET. Dated Brent spot crude was down US$0.37 to $69.74 while gold was US$5.10 lower at $1,278.60. The US dollar rose against the Swiss franc, the Canadian dollar, the euro, the pound, and the yuan; it fell against the yen and the Australian dollar. The yield on the US Treasury 30-year bond fell 4 basis points to 2.71 percent while the yield on the 10-year note was down a sharp 5 basis points to 2.27 percent.

European markets

The aftermath of the European elections and an unknown outlook for the UK and Brexit continued to have limited effect on stocks. But shares did decline in the session including 0.4 percent declines for both Germany's DAX and France's CAC but only a 0.1 percent dip for the UK's FTSE.

Italy's FTSE MIB lost 0.5 percent as bank shares fell on a warning from Deputy Price Minister Matteo Salvini who said the European Commission may fine the nation for rising debts. Shares of UniCredit were down sharply on the day.

In economic data, the EU Commission's yardstick of economic sentiment posted a much-needed bounce in May. At 105.1, the headline index rose 1.2 points reflecting a more optimistic consumer sector as well as firmer morale in industry and services. However, construction and retail trade both recorded losses.

In contrast, consumer confidence in Germany is surprisingly soft. The provisional May reading of the GfK survey was revised down 0.2 points to 10.2 and now stands 0.2 points short of its April mark. June is seen dipping a further 0.1 point to 10.1 which would constitute its weakest result since the middle of 2017. GfK is still forecasting a 1.5 percent increase in consumer spending in 2019 but acknowledges downside risks.

Asia Pacific Markets

Asian equities mostly edged up Tuesday in tentative trading, as markets remained preoccupied by the US-China trade dispute. The Shanghai composite rose 0.6 percent, and the Hong Kong Hang Seng index was up 0.4 percent. Chinese markets benefited from buying linked to the pending rise in weighting of Chinese shares in the MSCI index, and comments from a top Chinese market regulator. Guo Shuqing, chairman of the Chinese Banking and Insurance Regulatory Commission, reportedly downplayed the impact of the US-China dispute on Chinese financial markets. There is also widespread expectation that Chinese authorities will introduce more stimulus to boost the economy, and will intervene if needed to stave off a market meltdown.

Japan's Nikkei 225 index gained 0.4 percent, led by video gaming shares, which were lifted by excitement over the introduction of new games. Gaming stocks Tose and Square Enix led the gains. A late uptick in Japanese equities also reflected a re-shuffling of Japanese shares in the MSCI index. Korea's KOSPI rose 0.2 percent, reflecting modest gains elsewhere.

India's BSE Sensex edged up 0.2 percent, led by gains in IT firm Infosys and in metals shares. India's markets appeared to be consolidating after rallying last week on business-friendly election results. Singapore's Straits Times index eased by 0.2 percent, paced by a 0.4 percent decline in DBS Holdings Group, the big regional lender. Australia's All Ordinaries index rose 0.5 percent, with mining and energy shares boosted by rising iron ore and oil prices. Rio Tinto, a miner, was the star performer, up 2.2 percent.

Looking forward

Wednesday's calendar for Asia is empty but data will be heavy in France: consumer manufactured goods consumption, CPI, and GDP. The KOF Swiss Lending Indicator will also be posted as will German unemployment and Italian business & consumer confidence. A policy announcement from the Bank of Canada will highlight North American economic news.

Global Stock Markets

 

Index

28 May 2019

Daily Change

% Change Daily

North America

 

 

 

 

United States

Dow

25347.77

25347.77

*

 

NASDAQ

7607.35

7607.35

*

 

S&P 500

2802.39

2802.39

*

Canada

S&P/TSX Comp

16297.46

16297.46

-0.3

Europe

 

 

 

 

UK

FTSE 100

7268.95

7268.95

*

France

CAC

5312.69

5312.69

-0.4

Germany

XETRA DAX

12027.05

12027.05

-0.4

Italy

MIB

20260.98

20260.98

-0.5

Spain

Ibex 35

9191.8

9191.80

-0.3

Sweden

OMX Stockholm 30

1565.12

1565.12

-0.2

Switzerland

SMI

9680.87

9680.87

-0.3

Asia/Pacific

 

 

 

 

Australia

All Ordinaries

6580.39

6580.39

0.5

Japan

Nikkei 225

21260.14

21260.14

0.4

 

Topix

1550.99

1550.99

0.3

Hong Kong

Hang Seng

27390.81

27390.81

0.4

S. Korea

Kospi

2048.83

2048.83

0.2

Singapore

STI

3165.32

3165.32

-0.2

China

Shanghai Comp

2909.91

2909.91

0.6

Taiwan

TAIEX

10312.31

10312.31

-0.2

India

Sensex 30

39749.73

39749.73

0.2

*Markets closed

 

 

 

Data Source — Haver Analytics

 

 

 

Note: all releases are listed in local time.

Important Information

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