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May 1, 2018

CNBC | Asia Europe and U.S. Stock Markets Report on May 1, 2018.


dollar moves, RBA decision and oil in focus

Saheli Roy Choudhury

Markets in Australia and Japan traded mostly higher on Tuesday while many Asian markets were shut for a public holiday.
The session in Asia followed a decline in U.S. stocks amid a pullback in the telecommunications sector.
Australia's ASX 200 rose 32.5 points, or 0.54 percent, to 6,015.20, with the heavily weighted financial sector gaining 1.37 percent. Major banking names gained more than 1 percent each.
Shares of ANZ rose 2.35 percent, Commonwealth Bank was up 1.88 percent, Westpac increased by 1.43 percent and the National Australia Bank added 1.73 percent.
ANZ reported a rise in first-half profits that beat market expectations. The bank said its cash profit from continuing operations rose 4 percent to 3.49 billion Australian dollars for the six months to Mar. 31, compared to analysts' predictions of A$3.46 billion, Reuters reported. That was helped by a fall in bad debt charges and lower costs, according to the news wire.
The energy sector was up 0.3 percent as oil stocks mostly gained. Shares of Santos rose 0.49 percent, Oil Search was up 1.02 percent and Woodside Petroleum added 0.62 percent.
The Reserve Bank of Australia left its cash rate unchanged at 1.5 percent in a widely anticipated move.
In its policy statement, Governor Philip Lowe said the bank predicted growth in the Australian economy to pick up and average above 3 percent in 2018 and 2019. Inflation is expected to pick up gradually and the central forecast for inflation is a bit above 2 percent in 2018.
"Business conditions are positive and non-mining business investment is increasing," Lowe said. "Higher levels of public infrastructure investment are also supporting the economy. Stronger growth in exports is expected."
The statement added that the low level of interest rates have also supported the economy. Still, household income has been growing slowly and debt levels are high, according to the statement.
The Australian dollar traded at $0.7538 as of 2:09 p.m. HK/SIN, declining from levels above $0.7600 in the previous week.
In Japan, the Nikkei 225 finished up 40.16 points, or 0.18 percent, at 22,508.03, but the Topix index fell 3.05 points, or 0.17 percent, to 1,774.18.
Meanwhile, the U.S. dollar index, which measures the greenback against a basket of currencies, held above the 91 level. It last traded at 91.891 at 2:14 p.m. HK/SIN.
The Japanese yen traded at 109.39 to the dollar and the euro fetched $1.2067.
Oil prices rose overnight amid heightened geopolitical risks.
Israeli Prime Minister Benjamin Netanyahu claimed a cache of files obtained from Iran proves the country ran a secret program to build nuclear weapons.
However, the trove of data did not contain new information that was not known to diplomats who negotiated the landmark Iran nuclear deal in 2015. Iran-watchers said the press conference appeared calculated to embolden Trump to scrap the accord.
"Investors were spooked by reports that an Israeli intelligence report suggested Iran had a secret nuclear weapons program," Daniel Hynes, a senior commodity strategist at ANZ, wrote in a morning note. "This comes at a sensitive time, with the U.S. President required to ratify the Iran nuclear deal "
Netanyahu's remarks come less than two weeks before U.S. President Donald Trump must decide whether to continue suspending sanctions against Iran under that deal, or restore the penalties on one of the world's biggest oil producers.
U.S. crude rose on Tuesday during Asian hours, gaining 0.13 percent to $68.66 a barrel at 2:16 p.m. HK/SIN while global benchmark Brent added 0.11 percent to $74.77.

40.16 0.18%
HSI HSI 30808.45
527.78 1.74%
ASX 200 S&P/ASX 200 6015.20
32.50 0.54%
SHANGHAI Shanghai 3082.18
7.15 0.23%
KOSPI KOSPI Index 2515.38
22.98 0.92%
CNBC 100 CNBC 100 ASIA IDX 8622.06
-33.38 -0.39%
— CNBC's Tom DiChristopher contributed to this report.

UK stocks close slightly higher amid thin trade; Just Eat up 4%

Silvia Amaro, Ryan Browne

European equities closed mixed on Tuesday as most bourses were closed for the Labor Day public holiday.

FTSE FTSE 7520.36
11.06 0.15% 585123282
DAX DAX 12612.11
31.24 0.25% 99506185
CAC CAC 5520.50
37.31 0.68% 75638228
IBEX 35 --- --- --- --- --- ---
The U.K.'s FTSE 100 closed provisionally 0.15 percent higher, with other prominent benchmarks — from the likes of Germany, France and Spain — all shut for the day.
Just Eat was among the top performers, up by 4 percent. The company reported a 24 percent increase in U.K. orders in the first quarter of the year and a jump in revenues of 49 percent.
BP shares rose 1.8 percent. The company said that profits surged 71 percent amid the rally in oil prices.
In other corporate news, the U.K. competition and markets authority submitted its opinion on the 21st Century Fox-Sky merger to the U.K. government on Tuesday. Culture Minister Matt Hancock is set to give his verdict on the takeover by June 13.
In terms of data, U.K. manufacturing PMIs came in below expectations at 53.9, against an expected 54.8. As a result, sterling fell to a 15-week low of $1.3683.
The poor data narrow the chances that the Bank of England will announce a rate hike Thursday.

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On Wall Street, stocks fell as traders anticipated the release of Apple's latest quarterly results.
President Donald Trump decided to delay a decision on metal tariffs for Europe, Canada and Mexico until June 1. Meanwhile, Argentina, Australia and Brazil received a permanent exemption from the new metal duties.
Back in Europe, the Italian anti-establishment party Five Star Movement has called for a fresh election in June as the political impasse following the March election has not been overcome.


Nasdaq closes higher as Apple jumps ahead of earnings

Fred Imbert, Alexandra Gibbs

The Nasdaq composite rose on Tuesday, led by gains in Apple ahead of the tech giant's quarterly earnings release.
As of 2:48 p.m. ET, the tech-heavy index traded 0.6 percent higher while Apple climbed 1.6 percent.
The S&P 500 also traded just above breakeven, erasing earlier losses, as Apple's gains pushed the technology sector 1 percent higher.
Apple is scheduled to report fiscal second quarter earnings and revenue Tuesday after the close. Apple is the largest publicly traded company in the U.S., with a market cap of nearly $850 billion.
"Tonight's earnings release from [Apple] will likely keep most fundamental investors from making aggressive changes to their risk," said Jeremy Klein, chief market strategist at FBN Securities, in a note to clients. But "even if [Apple CEO] Tim Cook lays an egg tonight, most analysts will assess the Q1 reporting season as an unmitigated success."
Traders work on the floor of the New York Stock Exchange. Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.
Of the S&P 500 companies that have reported thus far, 80 percent have posted better-than-expected earnings, according to Thomson Reuters I/B/E/S. Merck, Pfizer, Aetna, and Archer Daniels Midland all reported stronger-than-forecast results before the bell Tuesday.
Tuesday marked the first trading day of May, which kicks off a historically rough period for the market. The major indexes posted their first monthly gains last month.
Investors also looked to Washington as the Fed began a two-day monetary policy meeting.
Market participants are not expecting any alterations to interest rates. However, investors will be on the lookout for clues about the central bank's views on inflation and the economy.
"The bad news is that inflationary pressures are building. The good news is that Fed officials must be doing a victory dance," said Ed Yardeni, president and chief investment strategist at Yardeni Research, in a note. "That's because they've been trying to boost the inflation rate closer to their 2.0% target ever since they publicly announced it at the start of 2012."
"Now that their mission seems to have been accomplished, Fed officials are likely to stay on their announced course of gradually tightening monetary policy," Yardeni said.
Meanwhile, the Dow Jones industrial average fell 100 points, with Boeing falling 1.3 percent and contributing the most to the losses.
Boeing's losses pushed the aerospace sector lower The iShares U.S. Aerospace & Defense ETF (ITA) dropped 1.8 percent and was on track to post its first six-day losing streak since November 2017.
In economic data news, the ISM manufacturing index hit 57.3 in April.