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Mar 9, 2018

Asia, Europe abd U.S. Stock Markets Report on March 9, 2018


US tariffs, BOJ and currencies in focus

Cheang Ming

Asian stocks closed higher on Friday following news that U.S. President Donald Trump had agreed to meet North Korean leader Kim Jong Un. The move also tracked moderate gains seen on Wall Street following the implementation of U.S. metals tariffs.
President Donald Trump would meet with North Korean leader Kim Jong Un by May, South Korean National Security Office chief Chung Eui-yong said. South Korean envoys had hand-delivered a letter from Kim to Trump on Thursday U.S. time.
The meeting was confirmed by the White House and in a subsequent tweet by Trump, who said that "great" progress was being made. He added that sanctions would "remain until an agreement is reached."
The Trump administration's acceptance of North Korea's invitation sets in motion the most significant development in years of intermittent negotiations about the North's nuclear weapons program.
Still, experts were ambivalent on whether or not the meeting, the details of which have not been confirmed, would result in anything substantial on the matter of denuclearization.
Japan's Nikkei 225 closed higher by 0.47 percent at 21,469.20 after earlier recording gains of more than 2 percent on the news. The broader Topix index gained 0.32 percent.
Meanwhile, South Korea's Kospi advanced 1.08 percent to close at 2,459.45 as tourism-related stocks got a boost from the latest geopolitical development. Retailer Lotte Shopping jumped 7.09 percent and cosmetics company Amorepacific advanced 4.45 percent.
Against the safe-haven yen, the dollar rose 0.5 percent to trade at 106.72.

101.13 0.47%
HSI HSI 30996.21
341.69 1.11%
ASX 200 S&P/ASX 200 5963.20
20.30 0.34%
SHANGHAI Shanghai 3307.64
19.23 0.58%
KOSPI KOSPI Index 2459.45
26.37 1.08%
CNBC 100 CNBC 100 ASIA IDX 8809.64
36.78 0.42%
Elsewhere, Hong Kong's Hang Seng Index rose 0.96 percent by 3:05 p.m. HK/SIN. On the mainland, the Shanghai composite edged up by 0.58 percent to close at 3,307.64 and the Shenzhen composite added 1.56 percent to end at 1,885.38.
Small cap names on the mainland outperformed, with the ChiNext start-up board rising 3.05 percent. The blue chip CSI 300 saw slighter gains of 0.78 percent.
Sydney's S&P/ASX 200 edged up 0.34 percent to finish at 5,963.20 as most sectors traded in the green, with the exception of energy stocks and gold producers. The heavily weighted financials sector rose 0.74 percent on the day.
Ahead, markets will turn their focus to the release of U.S. nonfarm payrolls data during U.S. hours.

Trump signs tariffs

Markets stateside closed with moderate gains after Trump signed tariffs on steel and aluminum imports that exempted Canada and Mexico. The move, which takes effect in 15 days, will result in tariffs of 25 percent and 10 percent on steel and aluminum, respectively.
Earlier in the week, Gary Cohn, the Trump administration's top economic advisor, resigned from his post following the announcement last week that those tariffs would be implemented.
Steel producers in Japan underperformed gains on the benchmark on those developments. The Topix Iron & Steel sub-index declined 0.94 percent, with JFE Holdings and Kobe Steel down 1.49 percent and 3.21 percent, respectively.
Meanwhile, South Korea's Posco lost 3.63 percent and Hyundai Steel declined 2.48 percent.
Elsewhere, the European Central Bank on Thursday dropped its easing bias, fueling expectations that the central bank would move towards normalizing monetary policy.
In currencies, the dollar index, which tracks the greenback against six peers, firmed to trade at 90.165 by 2:52 p.m. HK/SIN.
The move higher also came as the euro's overnight decline on the back of what analysts perceived as dovish comments from ECB President Mario Draghi. The common currency was mostly steady at $1.2316, a touch above its overnight low of $1.2296.
Oil prices edged up after sliding more than one percent overnight. U.S. West Texas Intermediate futures tacked on 0.15 percent to trade at $60.21 per barrel. Brent crude futures added 0.22 percent to trade at $63.75.
The Bank of Japan kept its policy steady on Friday, which was in line with expectations. In a Reuters poll, most economists indicated they expected the central bank to keep its long-term rate target steady in 2018.
"Actual policy tweaks in terms of asset purchases or yield-curve control settings remain some way off, but words can be very powerful," ANZ Research analysts said in a morning note.
CNBC's Silvia Amaro and Amanda Macias contributed to this report. 


European stocks bounce back after strong US jobs report

Justina Crabtree, Sam Meredith, Alexandra Gibbs

European stocks finished Friday's trading session on a positive note, following a better-than-expected jobs report from out of the U.S..

FTSE FTSE 7217.17
13.93 0.19% 456368907
DAX DAX 12339.25
-16.32 -0.13% 73514464
CAC CAC 5271.17
17.07 0.33% 54539972
IBEX 35 --- ---
--- --- ---
The pan-European STOXX 600 provisionally rose 0.36 percent by the close, but off session highs. On the week, the STOXX 600 popped 2.98 percent. Major sectors meantime ended mostly in the black Friday.
Looking to European bourses, the U.K.'s FTSE 100 rose 0.22 percent, while France's CAC 40 popped 0.28 percent. Germany's DAX however came under slight pressure, closing down 0.17 percent.
Equities in the region received a lift in the second half of the session, after a report from the U.S. Labor Department revealed that the nation had added 313,000 jobs last month, surpassing analyst expectations of 200,000. Construction was the biggest sectoral gainers, with 61,000 new job roles, followed by retail. Wall Street opened sharply higher following the news, with the Dow soaring over 150 points at the start of trade.

Autos underperform

While the majority of Europe's sectors posted solid gains, autos fell into the red amid heightened fears of a global tit-for-tat trade war. Looking into the sector, Germany's Schaeffler and Continental both slipped to the bottom of the sector, with the latter suffering from a rating downgrade from CFRA Research.
Looking at individual stocks, GVC Holdings posted a full-year net gaming revenue rise of 17 percent in 2017. The online gambling firm said its latest figures were lifted by gains from the business it bought three years ago. Shares of GVC Holdings rose over 4 percent.
Meantime, shares of Lagardere tumbled 8.2 percent after the French media group reported worse-than-expected earnings figures on Friday. The company forecast its 2018 operating profits to be stable in comparison to last year.
British satellite firm Inmarsat saw shares slip 6 percent, after it reported earnings and said that it had cut its dividend, in order to spend more on delivering Wi-Fi on commercial planes, according to Reuters.

Tariffs, North Korea developments shake up markets


Nasdaq closes at record, Dow rallies more than 400 points after jobs report

Fred Imbert, Alexandra Gibbs

U.S. stocks traded higher on Friday after the release of stronger-than-expected employment data.
The Nasdaq composite advanced 1.8 percent to 7,560.81 and hit intraday and closing records, erasing the losses from last month's correction. The Nasdaq 100, which is made up of the 100 largest companies in the Nasdaq composite, also reached a record high. Friday marked the first time since Jan. 26 that either index reached a record high.
Shares of Facebook, Amazon, Netflix and Google all rose to help the indexes rise.
The Dow Jones industrial average rose 440.53 points to close at 25,335.74, with Goldman Sachs among the biggest contributors of gains to the index. The 30-stock index also closed above its 50-day moving average, a key technical level.
The S&P 500 gained 1.7 percent to end at 2,786.57, with financials as the best-performing sector. It also closed above its 50-day moving average.
"This jobs report was the perfect slice of pizza," Kevin Mahn, president and chief investment officer at Hennion & Walsh, told CNBC's "Power Lunch" on Friday. "It did reaffirm the underlying strength of this economy, but it also diminished some of those inflationary concerns and the potential that there could be more than three rate hikes this year."

The U.S. economy added 313,000 jobs in February, according to the Bureau of Labor Statistics. Economists polled by Reuters expected a gain of 200,000.
Wages, meanwhile, grew less than expected, rising 2.6 percent on an annualized basis. Stronger-than-expected wage growth helped spark a market correction in the previous month.
"As far as the market is concerned, you couldn't have scripted it any better," said JJ Kinahan, chief market strategist at TD Ameritrade. But "it still remains a mystery how you can create these many jobs and not have wages go up more."
Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York.
Getty Images
Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York.
The Cboe Volatility Index (VIX), widely considered to be the best gauge of fear in the market, hit its lowest level since Feb. 1 and traded more than 11.5 percent lower at 14.62.
A "solid jobs number with lower wage numbers has muted inflation concerns," said Jeff Chang, managing director at Cboe Vest. "This has dampened the fears we saw in the equity markets early last month. With the VIX below 16, you could be seeing investors reducing their hedges to these concerns."
The moves Friday came after Wall Street finished on a positive note on Thursday, following more developments concerning tariffs.
President Donald Trump signed two declarations on Thursday, which would implement tariffs on steel and aluminum imports. The tariffs are expected to take effect in 15 days and will put a 25 percent charge on steel, and 10 percent on aluminum. Canada and Mexico however are exempt.
"I'm glad to see Canada and Mexico [were] spared in the latest tariff initiatives," said Peter Boockvar, chief investment officer at Bleakley Advisory Group, in a note. "But, 75% of our trading partners were slapped. I get that China was the real target here but we import 13% of our steel from Brazil, 10% from South Korea, 5% from Japan, 4% from Germany and 3.5% from Taiwan to name some others."
Friday also marked the nine-year anniversary of the bull market. It also marks the "Haines Bottom." Before the open on March 10, 2009, CNBC anchor Mark Haines called the bottom of the financial crisis on air.
On March 9, 2009, the S&P 500 closed at 676.53. Since then, the S&P 500 is up around 300 percent. Consumer discretionary is the best-performing sector in that time period, rising more than 550 percent. A theoretical $10,000 bet on Amazon would be worth $250,000 today.
In corporate news, Goldman Sachs closed 1.7 percent higher after a report said CEO Lloyd Blankfein is preparing to leave the company by year-end.
Boeing CEO Dennis Muilenburg told Reuters the company has "plenty of cash horsepower" to make acquisitions, such as the proposed tie-up with Brazil's Embraer. Boeing shares rose 1.7 percent on Friday.
Shares of Mattel fell 7.1 percent amid news Toys R Us may liquidate its U.S. operations. Mattel is a Toys R Us debt holder..



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