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Feb 21, 2018

Asia, Europe and U.S. Stock Markets Report on February 21,2018.


Asian stocks overcome choppy moves to advance

Gregor Stuart Hunter

Asia-Pacific stock markets gained after a choppy start Wednesday, following the first down day on Wall Street in seven sessions.
Taiwan’s benchmark Y9999, +2.81%   jumped 2.8%, its biggest rise in 2 1/2 years, during the first day of trading after the Lunar New Year holiday. Tech stocks led gains, with lens maker Largan Precision 3008, +7.34%   jumping 7.3% to erase most of February’s decline.
New Zealand’s NZX 50 NZ50GR, +2.97%   rose 1.3%, its largest increase in 15 months, helped by a2 Milk ATM, +12.34%   soaring 26%.
Wall Street’s win streak was broken Tuesday, as a 10% drop in shares of Walmart WMT, -2.75%  dragged down major U.S. indexes SPX, -0.55% DJIA, -0.67%  after the retail giant reported slower online sales growth.
But markets in South Korea, Hong Kong and Japan finished higher.
Korea’s Kospi SEU, +0.60%  turned higher and rose 0.6%, but Samsung Electronics 005930, -0.25%   slipped 0.3%.
The Hang Seng Index HSI, +1.81%   rose 1.8% ahead of Thursday’s resumption of trading in Chinese markets after the Lunar New Year.
“For the rest of the year, there are reasons to be more optimistic about China than many other developed markets like the U.S., both because valuations are reasonable and haven’t gone up as much for quality stocks, and the macroeconomic picture,” said Andy Rothman, investment strategist at Matthews Asia.
He noted 2017 was a “fantastic year” for earnings growth in China, though gains would be slower this year, but more profit increases are looming.
Stocks in the MSCI China Index recorded about twice the gains in January than the S&P 500 and are down by less year-to-date than the U.S. benchmark.
Meanwhile, Japan’s Nikkei NIK, +0.21%   closed up 0.2%. The U.S. dollar USDJPY, -0.03%   rose against the yen, supporting the multinational-heavy index.
A preliminary Japanese purchasing managers index reading eased to 54 in February from 54.8. A reading above 50 indicates economic expansion and the figure “is still close to a four-year high,” said Marcel Thieliant, senior Japan economist at Capital Economics.
The figure “suggests that export volumes will continue to expand at a solid pace,” he said, and signals that price pressures aren’t strengthening more.


Germany’s DAX ends lower as eurozone business activity slows

Carla Mozee, Victor Reklaitis

Germany’s stock benchmark finished lower Wednesday, while other major European indexes closed mostly higher, as investors received disappointing updates on manufacturing and services activity in the eurozone.
How markets moved
Germany’s DAX 30 index DAX, -0.14% dipped 0.1% to end at 12,470.49, and Spain’s IBEX 35 IBEX, -0.73%  dropped 0.7% to close at 9,823.30.
On the upside, the Stoxx Europe 600 index SXXP, +0.16% rose 0.2% to finish at 381.10, and France’s CAC 40 PX1, +0.23% added 0.2% to 5,302.17. The U.K.’s FTSE 100 UKX, +0.48% gained 0.5% to end at 7,281.57, boosted by advances for miners.
On Tuesday, Europe’s main benchmarks all scored gains.
Check out: More investors looking to cut U.K. assets as Brexit uncertainty persists
The euro EURUSD, -0.0407%  bought $1.2314, down from $1.2339 late Tuesday in New York.
The yield on the 10-year German bond TMBMKDE-10Y, -2.11% recently was down 3 basis points to 0.70%, according to Tradeweb. Yields fall when prices rise.
What’s driving markets
Stocks across the continent opened lower, as the session got under way with preliminary February manufacturing and services data from France falling short of expectations. That followed figures from data firm Markit showing German manufacturing activity at a six-month low, and overall activity in the eurozone edged back from a near 12-year high.
European stocks also followed losses on Wall Street, where equities have been in recovery mode after leading a meltdown in global equities. U.S. stocks snapped a six-day winning streak on the market’s return from holiday Tuesday, as a 10% slide in shares of retailer Walmart Inc. WMT, -2.75% hurt the S&P 500 index SPX, -0.55% U.S. stocks were rallying on Wednesday about halfway through their session.
Minutes from the Federal Reserve’s January policy meeting, the last chaired by Janet Yellen, will be released later Wednesday. Investors will look for clues to the central bank’s thinking on interest rates, which can have a knock-on effect on global financial markets. The minutes are due 2 p.m. Eastern Time, or 7 p.m. London time.
Read more: 5 things to watch in the Fed minutes
Stock movers
Lloyds Banking Group PLC shares LLOY, +2.76%  rose 2.8% after the lender said it’s launching a share buyback of up to £1 billion ($1.40 billion). In the bank’s first full-year results since returning to full private ownership, pretax profit of £5.28 billion for 2017 missed expectations of £5.89 billion.
Glencore PLC shares GLEN, +5.24%  rallied 5.2%. The miner and commodities trader posted a more than fourfold rise in 2017 net profit for 2017, of $5.78 billion, and said it was considering acquisitions.
Economic data
The U.K.’s jobless rate increased unexpectedly for the first time in nearly two years, to 4.4% in the final quarter of 2017. The Office for National Statistics also said wages in the three months to December grew by an average 2.5%, slightly up from 2.4% in the January period. But wage growth is still outpaced by inflation which is running at 3%.

                                                                      U.S. - U.S. Markets - US Financial Markets

Stock-market rally vaporizes as 10-year yield climbs to 2.95%, dollar strengthens A rally for the Dow Jones Industrial Average withered on Wednesday as Wall Street struggled to interpret minutes from the Federal Reserve's January meeting. The Dow closed down 166.97 points, or 0.7%, at 24,797.78, eroding what had been a more than 300-point rally in blue chips in the immediate wake of the release of minutes at 2 p.m. Eastern Time. However, those gains gave way to losses with about an hour left in trade on the day. The S&P 500 index sank by 14.93 points, or 0.6%, to 2,701.33, but had been up by 1.2% or 32 points earlier in the day, while the Nasdaq Composite Index shed 0.2% to end at 7,218.23. A deflation of the brisker buying sentiment in stocks was attributed partly to a climb in yields for the 10-year Treasury note to a session high, and a four-year peak, at 2.95%, follows meeting minutes from the late-January gathering of the Federal Open Market Committee, which reinforced expectations that a rate increase next month is likely. A popular dollar gauge, as measured by the ICE U.S. Dollar Index , also picked up steam up 0.4% at 90.12. Minutes from the Jan. 30-31 FOMC meeting showed that officials saw a stronger economy than at the end of 2017. The strengthening "increased the likelihood that a gradual upward trajectory of the federal funds rate would be appropriate." To convey this message, officials altered their statement to point to "further gradual increases," according to the minutes. However, the Fed's minutes don't incorporate recent signs of rapidly rising inflation, including the jobs report and a recent reading of consumer prices, which both showed inflation is running hot. 5:22 p.m. Today

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