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On 29 July 2019 - Global shares: US, Europe mixed to weaker as market awaits macro news; Asia off

Anne D Picker

Anne D Picker - Econoday

M&A in focus with Mylan-Pfizer generic drug deal, UK's LSE buying Refinitiv.

US markets

US stocks were mixed but mostly weaker Monday as investors awaited news including the Federal Reserve’s policy announcement Wednesday, a heavy economic data calendar, and word from US-China trade talks underway in Beijing. The Dow industrials rose 0.1 percent, the S&P 500 slipped 0.2 percent, and the NASDAQ fell 0.4 percent.

Consumer staples rose, led by tobacco, and health care rose on strength in generic pharma after news that Pfizer (down 3.8 percent) would merge its generic drug business, Upjohn, with Mylan (up 12.6 percent), the maker of EpiPen. Pfizer shareholders will get 57 percent of the new combined company, while Mylan shareholders will own 43 percent. Other big winners included Tower Semiconductor, up 10.8 percent, on an earnings and revenue beat. Dean Foods was up 1.6 percent after naming a new CEO.

Big losers included Insperity, down 24.8 percent after cutting its guidance. Exact Sciences was down 0.3 percent after an earnings miss and news it will buy Genomic Health (up 6.6 percent). Dish Network, the TV distributor, fell 3.1 percent after an analyst downgrade from Barclays.

In economic news ahead this week, expectations for the Fed’s policy announcement on Wednesday center on a 25 basis point rate cut, but a recent run of strong US economic data has added to market uncertainty. The Bank of Japan is scheduled to announce its latest policy decision on Tuesday, and the Bank of England policy meeting is occurring on Thursday. Key US data this week include US ISM manufacturing index on Thursday and employment on Friday.

These data reflect observations at 4:00 PM US ET: Dated Brent spot crude rose 37 cents to US$63.83 while gold rose US$7.40 to US$1,439.60. The US dollar rose against most major currencies. The yield on the US Treasury 30-year bond yield was unchanged at 2.59 percent while the yield on the 10-year note was down 1 basis point at 2.06 percent.

European markets

European equities ended mixed Monday with earnings and deal news in focus, with UK shares outperforming and other shares weaker. Trading was muted ahead of Federal Reserve, Bank of Japan, and Bank of England policy meetings this week, and as traders awaited news from US-China trade talks in Beijing.

The Europe-wide STOXX 600 gained 0.03 percent, the German DAX was off 0.02 percent, the French CAC eased 0.2 percent, and the UK FTSE 100 rose 1.8 percent. The FTSE MIB fell 0.6 percent.

UK shares rose as London Stock Exchange shares jumped 15.3 percent on news it may buy Refinitiv Holdings, and on other M&A-related news including a 20 percent rally in the UK food delivery firm Just Eat, on news it may be acquired by a rival, Takeaway.com (down 0.5 percent). Italian shares fell, with banks leading, on more worries about Italian political instability and fiscal woes.

Among sectors in the Stoxx 600, outperformers included telecom, financial services retail, and real estate, while underperformers included autos, banks, technology, and personal and household goods.

Among notable earnings, Heineken dropped 6 percent after an earnings miss due to higher input costs. Bankia, a Spanish bank, fell 2 percent after an earnings miss. Sanofi, the French pharma company, rose 1.5 percent after reporting great results for its vaccines businesses. Ryanair was off 0.7 percent after warning of falling fares this summer.

Asia Pacific Markets

Most major Asian markets closed lower Monday ahead of a new round of US-China trade negotiations in Beijing this week. Moves in Japan and China were modest, with the Nikkei and Topix indices both closing down 0.2 percent on the day and the Shanghai Composite index falling 0.1 percent. Hong Kong’s Hang Seng index, however, posted a large decline, down 1.0 percent after another weekend of political unrest and street disturbances. Korea’s Kospi index also dropped sharply, falling 1.8 percent as concerns continue about the impact of Japan’s recent announcement that it will restrict exports of high-tech materials to Korea. Australia’s All Ordinaries index were the main exception to weakness Monday, closing up 0.5 percent.

Japanese retail sales data were the highlight of a light regional data calendar Monday. Sales increased 0.5 percent on the year in June, slowing from revised growth of 1.3 percent in May but stronger than the consensus forecast of 0.1 percent. Motor vehicles and fuel sales drove this moderation in headline growth, partly offset by slightly stronger growth in food and beverage sales.

Looking forward

In Asia Tuesday, the big event is the BOJ monetary policy announcement, plus US-China trade talks continue in Beijing. On the data front: Japanese unemployment rate and industrial production reports are due. In Europe, Eurozone economic sentiment, French GDP flash, French consumer manufactured goods consumption, German CPI data, German Gfk consumer climate, and Swiss KOF leading indicator data will be released. In the US, consumer confidence, pending home sales, personal income and outlays, and S&P Corelogic Case-Shiller data will be released. The FOMC meeting gets under way on Tuesday in Washington, D.C., with its conclusion and policy announcement on Wednesday.

Global Stock Markets

 

Index

29 Jul 2019

Daily Change

% Change Daily

North America

 

 

 

 

United States

Dow

27221.35

28.90

0.1

 

NASDAQ

8293.33

-36.88

-0.4

 

S&P 500

3020.9

-6.65

-0.2

Canada

S&P/TSX Comp

16489.57

-44.53

-0.3

Europe

 

 

 

 

UK

FTSE 100

7686.61

137.55

1.8

France

CAC

5601.1

-8.95

-0.2

Germany

XETRA DAX

12417.47

-2.43

0.0

Italy

MIB

21709.3

-128.44

-0.6

Spain

Ibex 35

9215.4

-10.10

-0.1

Sweden

OMX Stockholm 30

1614.3

3.66

0.2

Switzerland

SMI

9970.87

2.79

0.0

Asia/Pacific

 

 

 

 

Australia

All Ordinaries

6911.44

32.09

0.5

Japan

Nikkei 225

21616.8

-41.35

-0.2

 

Topix

1568.57

-2.95

-0.2

Hong Kong

Hang Seng

28106.41

-291.33

-1.0

S. Korea

Kospi

2029.48

-36.78

-1.8

Singapore

STI

3346.39

-17.37

-0.5

China

Shanghai Comp

2941.01

-3.53

-0.1

Taiwan

TAIEX

10885.73

-6.25

-0.1

India

Sensex 30

37686.37

-196.42

-0.5

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.