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Apr 15, 2018

CNBC | Asia, Europe and U.S. Stock Markets Report on April 15, 2018.


Trade, geopolitics, stocks and currencies in focus

Cheang Ming

Asian shares closed mostly higher on Friday, with investor confidence improving amid a de-escalation in recent trade and geopolitical tensions.
Japan's Nikkei 225 rose 0.55 percent, or 118.46 points, to close at 21,778.74, but was off an intraday high of 21,778.74 earlier. The broader Topix advanced 0.63 percent, with financial and materials stocks climbing amid the weaker yen.
Meanwhile, South Korea's Kospi edged up by 0.51 percent to end at 2,455.07. Cosmetics names finished the day with significant gains, with Amorepacific closing up 3.55 percent, while technology had a mixed session.


118.46 0.55%
HSI HSI 30808.38
-22.90 -0.07%
ASX 200 S&P/ASX 200 5829.10
13.60 0.23%
SHANGHAI Shanghai 3159.39
-20.77 -0.65%
KOSPI KOSPI Index 2455.07
12.36 0.51%
CNBC 100 CNBC 100 ASIA IDX 8633.79
10.16 0.12%
The positive sentiment was also seen in Australia. The S&P/ASX 200 firmed 0.23 percent to end at 5,829.10.
Hong Kong's Hang Seng Index drifted slightly higher by at 3:00 p.m. HK/SIN. The index was up 0.11 percent before the market close. Mainland markets finished the day lower: The Shanghai composite eased 0.65 percent to end at 3,159.39 and the Shenzhen composite shed 0.32 percent to close at 1,834.38.
Investors also digested trade data out of China, which showed March exports in dollar terms declined 2.7 percent on year, missing expectations. Imports in dollar terms rose 14.4 percent, topping the 10 percent rise projected in a Reuters poll. A rare trade deficit of $4.98 billion was posted for the month, Reuters reported.
MSCI's broad index of shares in Asia Pacific excluding Japan, meanwhile, held onto gains, last trading higher by 0.14 percent.
The overall improvement in investor confidence came after President Donald Trump's Thursday tweet on Syria, as well as a de-escalation in recent trade tensions.
"Never said when an attack on Syria would take place. Could be very soon or not so soon at all!" Trump said in a tweet on Thursday. A Twitter post from the president on Wednesday taunting Russia on Syria saw stock markets decline earlier this week amid concerns over heightened geopolitical tensions.
"Market sentiment remains at the mercy of political rhetoric and ... the theme from the overnight session is that there are encouraging signs of an ease in tensions in Syria along with improved prospects for resolutions in trade tensions," Rodrigo Catril, senior foreign exchange strategist at National Australia Bank, said in a note.
Of note, Trump asked his advisors to consider rejoining a major Trans-Pacific trade deal after first pulling out of the agreement last year. Following the U.S. withdrawal, the remaining 11 countries have since signed the trade agreement earlier this year.
He later said in another tweet that he would only re-enter the agreement if it was "substantially better" than what was offered to former U.S. president Barack Obama.
The latest trade-related development comes after recent trade tensions between the U.S. and China. Newly imposed and proposed tariffs from both countries had caused jitters in global stock markets in recent weeks.
Earnings season also kicked off stateside, with Citigroup and J.P. Morgan Chase among the major banking names reporting on Friday U.S. hours. S&P 500 earnings are forecast to have grown 17.1 percent in the first quarter, according to FactSet.

Firmer dollar 

Improved risk appetite saw the dollar extend gains made overnight against the yen. The greenback traded at 107.53 at 2:34 p.m. HK/SIN. The dollar held steady after its Thursday advance against the Swiss franc, which is also regarded as a safe haven during times of instability, to last trade at $0.9632.
The dollar index, which tracks the U.S. currency against six peers, was slightly firmer at 89.800.
Meanwhile, the Hong Kong Monetary Authority bought the territory's currency after the Hong Kong dollar touched the weak end of an allowed range. The Hong Kong dollar is pegged to the U.S. dollar.
On the commodities front, oil prices slipped after touching more than three-year highs earlier in the week. U.S. West Texas Intermediate shed 0.22 percent to trade at $66.92 per barrel and Brent crude futures shed 0.22 percent to trade at $71.86.
In individual movers, shares of SJM Holdings traded higher by 4.75 percent after rising more than 10 percent after announcing that gambling tycoon Stanley Ho would be retiring as its chairman on June 12. Shares of other Hong Kong-listed casinos mostly traded higher on Friday.
— CNBC's Fred Imbert contributed to this report. 


Trump, Syria, US banks, earnings

Silvia Amaro, Justina Crabtree

European equities closed marginally higher Friday afternoon.
The pan-European Stoxx 600 closed 0.12 percent up with all major bourses above the flat line, although business sectors revealed a mixed bag.


FTSE FTSE 7264.56
6.22 0.09% 683369480
DAX DAX 12442.40
27.39 0.22% 79065849
CAC CAC 5315.02
5.80 0.11% 70490377
IBEX 35 --- --- --- --- --- ---
Basic resources was easily the top gainer mid-afternoon, closing around 1.4 percent higher. Stora Enso rose during the final hours of trading to finish 3.6 percent in the green after reporting higher-than-expected first-quarter profits.
Retail was the worst performing sector, dropping during late deals to close 0.8 percent to the downside. British stationer WHSmith dragged the sector lower and closed 6.5 percent down. The firm reported a 1 percent drop in interim pre-tax profit for the six months to February 28 earlier this week as the U.K. retail space remains under pressure.
Tech stocks closed slightly lower, down by 0.17 percent. Sage was easily the sector's worst performer. The British software company closed the week 8.2 percent in the red after it issued a profit warning.
Looking across the index, shares of the European shopping center landlord Klepierre hit the top spot for most of the day — ultimately closing fourth, up 3.6 percent — after it stepped back from buying Hammerson. The latter closed 9 percent lower, foundering at the bottom of the benchmark. Meanwhile, Intu, another shopping center real estate company, topped the index to close 4.2 percent up. Hammerson is now clear to press ahead with a takeover, which could create the U.K.'s largest property company, according to the Guardian.
Volkswagen has appointed a new chief executive, Herbert Diess, as the company moved ahead with its overhaul plan. The shares closed 0.4 percent higher.
Meanwhile, a joint venture between Thyssenkrupp and Tata Steel will be delayed, Reuters reported, so labor agreements can be concluded.
Media reports also said that U.S. hedge fund Elliott Management has taken a stake in Micro Focus. The stock closed 3.2 percent to the upside.

U.S. stocks higher, major banks report strong results

U.S. stocks traded lower on Friday as bank shares gave up their initial gains. The major averages were still on track to post strong weekly gains, however.
The Dow Jones industrial average fell 124 points, with J.P. Morgan Chase as the worst-performing stock in the index. The S&P 500 declined 0.4 percent as financials dropped 1.6 percent. The Nasdaq composite pulled back 0.6 percent.
Citigroup, Wells Fargo and J.P. Morgan Chase all reported quarterly earnings and revenue that surpassed analyst expectations. Bank shares initially traded higher before falling more than 2.5 percent, as the strong results were already priced in.
Overall, market sentiment was slightly calmer from previous sessions as geopolitical concerns eased. President Donald Trump tweeted Thursday that he had never said an attack on Syria would be imminent. "Could be soon or not soon at all," Trump said.


Dow closes more than 100 points lower as bank shares drop

Fred Imbert, Alexandra Gibbs

U.S. stocks fell on Friday as several banking companies weighed down the major indexes on the final day of an otherwise strong week for equities.
The Dow Jones industrial average fell 122.91 points to close at 24,360.14, with J.P. Morgan Chase as the worst-performing stock in the index. The S&P 500 closed 0.3 percent lower at 2,656.30 as financials dropped 1.6 percent. The Nasdaq composite declined 0.5 percent to 7,106.65. The indexes opened sharply higher on the back of strong earnings from some of the big banks.
Citigroup, Wells Fargo and J.P. Morgan Chase all reported quarterly earnings and revenue that surpassed analyst expectations. Bank shares initially traded higher before falling, as the strong results were already priced in. The SPDR S&P Bank ETF (KBE) fell 1.6 percent, while J.P. Morgan dropped 2.7 percent.
Expectations for this earnings season are high, especially for financials. According to FactSet, S&P 500 earnings are forecast to have grown by 17.1 percent last quarter. Financials, meanwhile, are expected to see earnings increase by 24 percent. Bank of America, Goldman Sachs and Morgan Stanley are all scheduled to report next week.
"I don't see how they don't do well," said Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research, regarding financials during the earnings season. "You've got rates rising as well as higher market volatility, so they should benefit from that."
Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the opening bell. Drew Angerer | Getty Images News | Getty Images
Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the opening bell.
So far, the earnings season is off to a good start, according to Nick Raich, CEO of The Earnings Scout. In a note to clients, he said earnings growth thus far totals 26.8 percent for the first quarter.
"In nearly 25 years of compiling earnings data, we have never measured this much growth this late in the cycle," said Raich. "The Tax Cuts and Jobs Act is a major reason why we are seeing such growth."
Despite Friday's decline, the major averages posted strong gains for the week. The Dow and S&P 500 rose 1.8 percent and 2 percent this week, respectively, while the Nasdaq advanced 2.8 percent.

The moves Friday come after Wall Street finished its previous session in the black. On Thursday, the Dow gained 293.60 points to close at 24,483.05, after President Donald Trump clarified his position on a possible missile attack in Syria.
Markets have been on edge in recent days after Trump appeared to criticize the Kremlin for its supporting Syrian President Bashar Assad, following a suspected chemical attack last weekend.
Concerns about a trade war with China are also lingering. The Wall Street Journal reported, citing officials familiar with the matter, that the Trump administration is planning to ratchet up the trade pressure on China through new tariffs and by threatening to block Chinese technology investment in the United States. The S&P 500 has fallen more than 3 percent over the past month.
In economic news, the University of Michigan's consumer sentiment index ticked down to 97.8 in April from 101.4 in March.