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Mar 16, 2018

Asia, Europe abnd U.S. Stock Market Reports on March 16, 2018.


Trade concerns, dollar and corporates in focus

Cheang Ming

Most Asian markets closed mixed on the last day of the trading week amid a backdrop of global trade-related developments and political news out of Washington.
In Tokyo, the Nikkei 225 gave up earlier gains to close lower by 0.58 percent, or 127.44 points, at 21,676.51. Despite those losses, the benchmark finished the week up 1 percent. The broader Topix was off by 0.4 percent.
Automakers and technology names were mostly lower, while manufacturing names closed in negative territory, with Fanuc down 1.63 percent.
Meanwhile, in Seoul, the Kospi finished the day higher by 0.06 percent at 2,493.97 as Samsung Electronics pared steeper losses seen earlier to close lower by 0.78 percent. Financials ended higher, while the manufacturing and technology sectors were mixed.

-127.44 -0.58%
HSI HSI 31501.97
-39.13 -0.12%
ASX 200 S&P/ASX 200 5949.40
28.60 0.48%
SHANGHAI Shanghai 3270.39
-20.72 -0.63%
KOSPI KOSPI Index 2493.97
1.59 0.06%
CNBC 100 CNBC 100 ASIA IDX 8935.60
-51.96 -0.58%
Greater China markets were downbeat, with Hong Kong's Hang Seng Index lower by 0.44 percent by 3:03 p.m. HK/SIN. China Unicom advanced 1.68 percent ahead of the market close, but those gains were unable to lift the broader index as property names and the energy sector drove losses.
The Shanghai composite shed 0.63 percent to end at 3,270.39 and the smaller Shenzhen composite edged down 0.61 percent to close at 1,863.03. The large-cap CSI 300 index fell 0.96 percent, with technology, consumer and materials among the worst-performing sectors.
Down Under, the S&P/ASX 200 tacked on 0.48 percent to close at 5,949.40, with all sectors gaining except financials and gold producers.
Gains were led by the telecommunications sector and the consumer staples subindex, which popped 2.63 percent. Those gains came as Wesfarmers jumped 6.31 percent following news it would be spinning off its Coles supermarket business.
Meanwhile, MSCI's broad index of shares in Asia Pacific excluding Japan was off by 0.16 percent by 3:11 p.m. HK/SIN.

Worries over US trade, politics

Trade-related developments were once again in focus, with the Wall Street Journal reporting that the Trump administration was looking to impose tariffs on at least $30 billion of imports from China. Reuters on Tuesday said the figure could be around $60 billion.
Some investors are concerned that tariffs could result in retaliatory actions taken by U.S. trading partners, which could in turn lead to a trade war that dents growth.
Despite that, White House National Trade Council Director Peter Navarro on Thursday told CNBC that the U.S. could implement tariffs on imports without causing a trade war.
Political developments were also in focus after the Washington Post reported that President Donald Trump has decided to remove national security advisor H.R. McMaster from the administration. The White House pushed back on that assertion, however.
U.S. stocks were pressured in the overnight session by news that special counsel Robert Mueller had subpoenaed Trump's businesses.
The dollar slipped against the safe-haven yen on poorer risk sentiment. The greenback traded at 105.88 by 2:42 p.m. HK/SIN after touching as high as 106.38 earlier in the session.
The dollar index, which tracks the greenback against a basket of rivals, pared some of its overnight gains to trade at 90.015.
Some analysts attributed the dollar's move higher in the last session to comments from Larry Kudlow, the incoming top White House economic advisor, on Wednesday. Kudlow had told CNBC he favored a stronger dollar. (Larry Kudlow has been a long-time contributor to CNBC.)
Moves in the currency also come ahead of the Federal Reserve's meeting next week.
In corporate news, Samsung's latest Galaxy S9 and S9+ smartphone models will be available in several markets on Friday after their initial launch in February.
Meanwhile, shares of Leshi Internet and Information Technology plunged by the daily limit of 10 percent after its chairman left the company. Leshi, the listed unit of embattled tech company LeEco, is down around 60 percent this year.
Also of note, Alibaba Group, currently listed in New York, is looking to list in China, according to the Wall Street Journal. The e-commerce giant told CNBC it would consider a listing on the mainland if regulation allowed for it.
Chinese depository receipts could be introduced in China "very soon," Reuters reported, citing state-run financial newspaper Shanghai Securities News. The CDRs would give mainland investors a path to some companies listed outside China, Reuters said.
Disclosure: Larry Kudlow has been a long-time contributor to CNBC.
CNBC's Jacob Pramuk contributed to this report.


Europe closes higher amid political, trade concerns; Nex Group jumps 30.3%

Sam Meredith, Alexandra Gibbs

European stocks finished Friday's session in the black, as investors tried to shake off concerns surrounding trade and political disruption in the White House.

FTSE FTSE 7164.14
24.38 0.34% 1423364176
DAX DAX 12389.58
44.02 0.36% 219422847
CAC CAC 5282.75
15.49 0.29% 154905807
IBEX 35 --- --- --- --- --- ---
The pan-European STOXX 600 provisionally ended 0.22 percent higher, with sectors pointing in different directions by the market close. On the week, the STOXX 600 finished slightly under pressure, closing down 0.14 percent.
Britain's FTSE 100 closed up 0.34 percent, while France's CAC 40 rose 0.29 percent and Germany's DAX 0.36 percent. The German index opened late on Friday morning as Eurex reported the index had experienced delays.

Oil stocks, Nex Group shares get a boost

Oil and gas was the strongest performing industry, with the sector closing up 1.46 percent on the back of a sharp rise in oil prices. At the market close, Brent traded at $65.93, while U.S. crude hovered around $62.17. In the sector, OMV rose over 4 percent after announcing Thursday that it had acquired Shell's upstream assets in New Zealand.
Europe's financial services sector got a boost amid takeover news. Britain's Nex Group surged to the top of the European benchmark after the company said it had received an approach from one of the world's largest exchange groups, CME Group. The move, which could create a transatlantic trading powerhouse, sent shares to close up 30.35 percent.
Looking at individual stocks, Berkeley Group announced that it could not boost house building volumes beyond its current plans. It cited planning constraints and government changes in recent years in making buying a property less attractive to people. Shares of the U.K. builder fell over 5 percent.
Home improvement retailer Kingfisher fell 2 percent after the group announced that Non-Executive Director Andrew Bonfield had notified the board of his intention to step down from the company's board.
Chemicals group Linde slipped 3.5 percent after it announced Thursday that the European Commission had suspended its review of the company's merger with Praxair, while it awaits details. The sector slipped 0.62 percent, making it the worst performing industry.
Polymetal fell 3.48 percent after Jefferies cut its price target on the stock. At the bottom of the STOXX 600 was Nordea, which fell 8.3 percent. Friday marked the day of its ex-dividend date.

White House disruption

In Asia, equities finished the session relatively mixed amid heightened fears of a global trade war. U.S. stocks posted solid gains around Europe's market close, although market movements suggested they were heading for a loss on the week.
On Thursday, a report from the New York Times suggested that U.S. Special Counsel Robert Mueller had issued a subpoena for documents linked to President Donald Trump's businesses. Meanwhile, the U.S. president has decided to oust H.R. McMaster as his national security advisor, according to a Washington Post report. The White House has however denied that there are changes coming to the National Security Council.
The Russian ruble hit a one-month low against the dollar Friday, amid escalating tensions between the Kremlin and the West and an election in Russia on Sunday. The Moscow exchange closed higher Friday, however.
Euro zone consumer prices grew less than expected in February. The bloc of 19 countries sharing the single currency saw inflation at 0.2 percent month-on-month and 1.1 percent year-on-year, according to data published by Eurostat.

Wage growth spooked the market after January's jobs report, but what could be the next stumbling block for this bull market?


Stocks fall for the week on rising trade tensions

Fred Imbert, Thomas Franck, Alexandra Gibbs

A slight gain on Friday was not enough to stop stocks from posting a loss this week, weighed down by fears of a possible trade war and White House turmoil.
The S&P 500 notched a 1.2 percent loss for the week, despite a 0.2 percent gain on Friday. The Dow Jones industrial average also fell 1.5 percent on the week as shares of Boeing dropped 6.8 percent on the trade tensions. The Dow closed 72.85 points higher on Friday at 24,946.51.
The Nasdaq composite closed flat at 7,481.99 amid a 1.4 percent decline in Google-parent Alphabet and a 0.7 percent fall in Amazon shares. The index also fell 1 percent for the week.
Tariffs on steel and aluminum imports are expected to come into effect in the coming weeks, after Trump signed two declarations last week. While Canada and Mexico are exempt from the deal, investors worry that countries around the world including China may strike back.
"The market is still vulnerable to headlines, particularly with regard to trade and any retaliation," said Quincy Krosby, chief market strategist at Prudential Financial. We're "waiting for reaction from the European Union and reaction from the Chinese in terms retaliatory responses."

Also on investors' minds, Krosby added, is the two-day Federal Open Market Committee monetary policy meeting next week, with Wall Street preparing for new Federal Reserve Chair Jerome Powell to lead bankers in raising rates.
"It's Jerome Powell's first conference and the market expects a rate hike ... [investors] will also be paying attention to his comments and the press conference," Krosby said. "He's extremely fluent in the language of the Fed, extremely fluent in the thinking of the Fed."
In political news, President Donald Trump has reportedly decided to remove national security advisor H.R. McMaster from the U.S. administration, according to a Thursday report by the Washington Post. The White House has, however, denied that any changes are set to emerge within the National Security Council.
Adding to the political drama, CBS News reported on Friday that White House chief of staff John Kelly, too, could depart the administration as early as today. Fears that the chief of staff could be on his way out were kept at bay, however, after The Wall Street Journal reported that Trump and Kelly settled on a temporary "truce."
NYSE Trader on the floorKelly, rattled by President Trump's abrupt firing of Secretary of State Rex Tillerson via Twitter earlier in the week, had told colleagues to start looking for new jobs, the Journal reported. Tillerson's dismissal comes a week after Gary Cohn resigned as the National Economic Council's director.
Brendan McDermid | Retuers
NYSE Trader on the floor
"I think the market has understood for a while that this is a chaotic White House," said Michael Shaoul, chairman and CEO of Marketfield Asset Management. He noted that stocks have been trading in a close range recently. "I think it will take more economically driven or corporate-driven news for the market to make up its mind."
The Commerce Department said housing starts declined 7 percent in February, a bigger-than-expected fall. Building permits, meanwhile, fell 7.7 percent last month.
Elsewhere, consumer sentiment rose to a level not seen since 2004 in March, according to a preliminary reading from the University of Michigan. Meanwhile, the Labor Department said job openings increased to 6.3 million in January, a record.
"This week investors have been focused on Washington," said Jeff Kravetz, regional investment strategist at U.S. Bank Wealth Management. "But the narrative seems to be changing with strong economic numbers."
"I think investors are going to be focused on economic data" and the Federal Reserve next week, Kravetz said.
In corporate news, Adobe Systems reported better-than-expected quarterly earnings, sending its stock up 3.1 percent.
Meanwhile, Walmart responded to accusations of issuing misleading e-commerce results, calling the person a "disgruntled former associate." Walmart shares rose 1.9 percent.
CNBC's Jacob Pramuk contributed to this report

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