Translate

Search This Blog

Search Tool




Jan 10, 2019

Asia, Europe & US Closing Report on January 10,2019.

                                                                              ASIA


Asia markets mostly lower as China inflation data miss expectations

Eustance Huang



Asia markets mostly slipped on Thursday following lower-than-expected Chinese inflation data while investors digested the conclusion of a three-day trade negotiation between the Beijing and Washington.
Mainland Chinese markets, watched by investors in relation to the ongoing trade war, experienced a turbulent trading day that saw stocks close in negative territory. The Shanghai composite slipped 0.36 percent to close at 2,535.28 while the Shenzhen composite shed 0.265 percent to 1,303.48. The Shenzhen component also fell 0.259 percent to close at around 7,428.61.
Hong Kong’s Hang Seng index was largely flat in its final hour of trade, with shares of Chinese tech giant Tencent gaining 0.31 percent.
The moves came after official Chinese inflation data for December, released at the same time as the market open, came in below expectations.
China’s December consumer inflation (CPI) — a gauge of prices for goods and services — rose 1.9 percent on year. That was lower than economists’ expectations of a 2.1 percent growth, according to a Reuters’ poll. Producer inflation rose 0.9 percent on-year in December, which was lower than the 1.6 percent economists were expecting.
The latest inflation figures came on the back of poorer-than-expected Chinese manufacturing data for December.
Economic data from the world’s second-largest economy has been closely watched by investors for signs of damage inflicted by the trade war between Beijing and Washington. To stimulate a slowing economy, the Chinese government has taken measures such as reducing the reserves required to be held by banks in the country to encourage lending.
“There is clearly a big slowdown ... (in) the Chinese economy and the measures so far are not enough to revive (it). At best, they could stabilize the situation probably in the second half, and we’re still at the beginning of the first quarter,” David Gaud, chief investment officer of Asia at Pictet Wealth Management, told CNBC’s “Street Signs” on Thursday.
“Whatever they do right now, it’s gonna be really tough and the first quarter is going to be challenging,” said Gaud.

Asia-Pacific Market Indexes Chart


TICKERCOMPANYNAMEPRICECHANGE%CHANGE
NIKKEINikkei 225 IndexNIKKEI20163.80-263.26-1.29
HSIHang Seng IndexHSI26521.4359.110.22
ASX 200S&P/ASX 200ASX 2005795.300.000.00
SHANGHAIShanghaiSHANGHAI2535.10-9.25-0.36
KOSPIKOSPI IndexKOSPI2063.28-1.43-0.07
CNBC 100CNBC 100 ASIA IDXCNBC 1007525.82-2.25-0.03
Elsewhere in Asia, Japan’s Nikkei 225 slipped 1.29 percent to close at 20,163.80 while the Topix index declined 0.85 percent to finish at 1,522.01.
South Korea’s Kospi closed fractionally lower at 2,063.28 despite shares of chipmaker SK Hynix jumping 2.67 percent. Oil company SK Innovation’s stock rose 0.83 percent after its CEO announced that South Korea’s oil buyers are set to resume importing oil from Iran in late January or early February, Reuters reported.
In Australia, the benchmark ASX 200 rose 0.29 percent to close at 5,795.30, with the sectors mostly higher. The heavily-weighted financial subindex gained 0.21 percent as shares of Australia’s so-called Big Four banks advanced. Westpac was 0.35 percent higher, Commonwealth Bank of Australia rose 0.17 percent, National Australia Bank gained 0.12 percent and Australia and New Zealand Banking Group advanced 0.56 percent.
U.S. and China conclude three days of trade talks
The latest round of trade negotiations in Beijing concluded on Wednesday after an unscheduled third day of talks. Officials from Washington said in a statement that they will report back to the White House for further guidance on the talks.
In a statement, the office of the U.S. Trade Representative said that officials discussed “needed structural changes in China” on matters such as forced technology transfers, intellectual property protection and cyber theft. Talks also focused on “China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States,” the statement said.
The Chinese Commerce Ministry also issued its own statement on Thursday morning, saying that the just-concluded round of trade talks with the U.S. were extensive and established a foundation for the resolution of each others’ concerns. Both parties agreed to maintain close contact, the ministry said.
“Initial signs suggest that there is modest momentum building towards a narrow agreement in coming months, but that US trade hawks are fighting an intense rear-guard action to limit the scope of that agreement and keep the pressure up on Beijing,” analysts at political risk consultancy Eurasia Group wrote in a note.
“If a deal is reached, it will almost certainly remain fragile and there will still be a long road ahead of the removal of US tariffs already imposed,” they said.
Analysts at Singapore’s DBS Group Research also said in a morning note that while the three-day meeting was a first step towards easing tensions on both sides, there are challenges ahead.
“US demands for verification and enforceable targets on intellectual-property rights, transfer of technologies and non-tariff barriers may not be that easily addressed,” the DBS analysts wrote. “This sets up room for volatility in the lead up to the 1st March deadline where negotiations on these issues need to be concluded.”
Late last year, the U.S. and China agreed to a cease-fire in their trade war, holding off on any further tariffs until early March so negotiators could seek a deal.
Dow sees fourth straight day of gains
Overnight on Wall Street, the Dow Jones Industrial Average advanced 91.67 points to close at 23,879.12 — its fourth straight day of gains. The S&P 500 also saw a four day winning streak, rising 0.4 percent to finish its trading day at 2,584.96. The Nasdaq Composite gained 0.87 percent to close at 6,957.08.
Wednesday’s moves came after a summary of the Federal Reserve’s December meeting reiterated comments from the central bank’s chairman from last week about patience regarding monetary policy.
The minutes pointed to a backdrop of low inflation in the U.S., meaning the central bank can “afford to be patient about further policy firming. ” They also indicated that some Fed officials think a “relatively limited amount” of rate hikes may be coming.
Currencies
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 95.127 after seeing an earlier high around 95.9 in the previous session.
The Japanese yen, widely viewed as a safe-haven currency, traded at 107.85 against the dollar after seeing lows around 108.9 yesterday. The Australian dollar was at $0.7181 after gaining from the $0.714 handle in the previous session.

— Reuters and CNBC’s Fred Imbert and Huileng Tan contributed to this report.


                                                                     EUROPE

Europe stocks close slightly higher as auto firms announce job losses; Tesco up 2%

Chloe Taylor,Silvia Amaro



European shares were little changed at the end of Thursday’s trading session, as investors focused on trade war developments and automakers announcing job cuts.

European Markets: FTSE, GDAXI, FCHI, IBEX


TICKERCOMPANYNAMEPRICECHANGE%CHANGEVOLUME
FTSEFTSE 100FTSE6942.8736.240.52630344592
DAXDAXDAX10921.5928.270.2679644935
CACCACCAC4805.66-7.92-0.1778493306
Christmas sales, auto job losses
Back in Europe, Osram fell to the bottom of the index, down by more than 6 percent. The lighting company said that there had been lower demand by auto firms.
Looking across the European benchmark, Sodexo was among the top performers, up by 2.5 percent. The French hospitality company reported sales figures that beat expectations and it also confirmed its outlook for the year.
The British Retail Consortium reported on Thursday that the U.K. high street saw its worst Christmas sales last year since the financial crisis in 2008, sending Europe’s retail sector down half a percent. Retailer Marks & Spencer said its like-for-like Christmas sales for 2018 were down 2.2 percent from the previous year, sending shares down more than 1 percent. Meanwhile, Debenhams announced that it’s in talks with lenders to receive fresh capital.
Tesco rose 2.1 percent after updating the markets on its Christmas performance. The grocery retailer said Thursday that it had outperformed its competitors with a 2.2 percent increase in Christmas sales.
In Europe, investors kept monitoring the Brexit process ahead of next week’s critical vote. The U.K. Parliament agreed Wednesday that the government must come up with a plan-B within three days if the Withdrawal Agreement is not approved on Tuesday.

                                                                      US

S&P 500 posts first 5-day winning streak since September

Fred Imbert


Stocks rose on Thursday, but gains were capped as disappointing holiday sales from Macy’s and a revenue guidance cut from American Airlines pressured retail and airline shares. Fear that the U.S. government shutdown might continue for a long time also pushed equities lower.
The S&P 500 climbed 0.4 percent — notching its first five-day winning streak since September — as the real estate and industrials sectors outperformed. The Dow Jones Industrial Average also posted a five-day winning streak, rising 120 points as Boeing outperformed. The Nasdaq Composite gained 0.4 percent.
Macy’s shares tanked more than 18 percent — their worst day every — after reporting its same-store sales grew by just 1.1 percent in November and December. The company also cut its earnings and revenue forecast for fiscal 2018.
The sharp decline in Macy’s dragged down the entire retail space. The SPDR S&P Retail ETF (XRT) dropped more than 1.5 percent. Shares of Kohl’s fell 4.8 percent while Nordstrom declined 4 percent.
Meanwhile, American Airlines fell more than 4 percent after slashing its revenue growth forecast for the fourth quarter. Shares of JetBlue Airways and Southwest Airlines both fell.
Traders work on the floor of the New York Stock Exchange in New York, Monday, Dec. 24, 2018.
Seth Wenig | AP
“The question is whether all of this has already been baked in,” said Quincy Krosby, chief market strategist at Prudential Financial. “If the market can look past this, it will suggest that much of this has been baked in.”
The announcements from Macy’s and American Airlines came as the earnings season for calendar fourth-quarter 2018 is set to ramp up. J.P. Morgan Chase, Bank of America, BlackRock and Morgan Stanley are among the companies set to report next week.
Fourth-quarter earnings are expected to have risen nearly 15 percent on a year-over-year basis, but growth is expected to be much lower moving forward. According to Thomson Reuters, first-quarter earnings are forecast to rise by 3.9 percent.
“Earnings growth has taken a downturn, but it still remains positive,” said Paul Springmeyer, head of investment at U.S. Bank Private Wealth Management. “While the pace of earnings growth is slowing, it is not going negative at this juncture.”
Wall Street weighed the possibility of a prolonged U.S. federal government shutdown. Earlier on Thursday, President Donald Trump tweeted he would skip the annual World Economic Forum in Davos due to the shutdown.
“It’s just a reminder of how utterly dysfunctional the federal government is,” said Ward McCarthy, chief financial economist at Jefferies. “It just means it put potential progress on trade negotiations on the shelf, and the market didn’t like that.”
Thursday’s moves down took place after delegations from Washington and Beijing ended three days of trade negotiations in China on Wednesday. China’s commerce ministry said Thursday the negotiations were extensive and had helped set up a foundation for further talks. This week’s face-to-face meetings were the first to take place since U.S. President Donald Trump and Chinese President Xi Jinping agreed to a 90-day truce last month.
If both sides are unable to secure a comprehensive trade agreement by March 2, Trump has said he plans to raise tariffs to 25 percent from 10 percent on $200 billion worth of Chinese imports.
Stocks closed higher on Wednesday, with the S&P 500 notching its longest winning streak since September. The move higher added to the sharp bounce since the broad index briefly dipped into bear-market territory in late December. Since then, the S&P 500 is up nearly 10 percent through Wednesday’s close.
“The power of the recovery rally in US and global equities has been impressive,” Michael Shaoul, chairman and CEO of Marketfield Asset Management, wrote in a note to clients. “As encouraging as all of this has been to witness it does not change the fact that a sell-off of this magnitude does not happen in a vacuum.”
“The decline marks a key downward-shift in the long technology driven bull market,” Shaoul added. “There is simply no way to tell at present whether we have witnessed the completion of a brief but tumultuous sell-off.”

S&P 500 posts first 5-day winning streak since September

Fred Imbert


Stocks rose on Thursday, but gains were capped as disappointing holiday sales from Macy’s and a revenue guidance cut from American Airlines pressured retail and airline shares. Fear that the U.S. government shutdown might continue for a long time also pushed equities lower.
The S&P 500 climbed 0.4 percent — notching its first five-day winning streak since September — as the real estate and industrials sectors outperformed. The Dow Jones Industrial Average also posted a five-day winning streak, rising 120 points as Boeing outperformed. The Nasdaq Composite gained 0.4 percent.
Macy’s shares tanked more than 18 percent — their worst day every — after reporting its same-store sales grew by just 1.1 percent in November and December. The company also cut its earnings and revenue forecast for fiscal 2018.
The sharp decline in Macy’s dragged down the entire retail space. The SPDR S&P Retail ETF (XRT) dropped more than 1.5 percent. Shares of Kohl’s fell 4.8 percent while Nordstrom declined 4 percent.
Meanwhile, American Airlines fell more than 4 percent after slashing its revenue growth forecast for the fourth quarter. Shares of JetBlue Airways and Southwest Airlines both fell.
Traders work on the floor of the New York Stock Exchange in New York, Monday, Dec. 24, 2018.
Seth Wenig | AP
“The question is whether all of this has already been baked in,” said Quincy Krosby, chief market strategist at Prudential Financial. “If the market can look past this, it will suggest that much of this has been baked in.”
The announcements from Macy’s and American Airlines came as the earnings season for calendar fourth-quarter 2018 is set to ramp up. J.P. Morgan Chase, Bank of America, BlackRock and Morgan Stanley are among the companies set to report next week.
Fourth-quarter earnings are expected to have risen nearly 15 percent on a year-over-year basis, but growth is expected to be much lower moving forward. According to Thomson Reuters, first-quarter earnings are forecast to rise by 3.9 percent.
“Earnings growth has taken a downturn, but it still remains positive,” said Paul Springmeyer, head of investment at U.S. Bank Private Wealth Management. “While the pace of earnings growth is slowing, it is not going negative at this juncture.”
Wall Street weighed the possibility of a prolonged U.S. federal government shutdown. Earlier on Thursday, President Donald Trump tweeted he would skip the annual World Economic Forum in Davos due to the shutdown.
“It’s just a reminder of how utterly dysfunctional the federal government is,” said Ward McCarthy, chief financial economist at Jefferies. “It just means it put potential progress on trade negotiations on the shelf, and the market didn’t like that.”
Thursday’s moves down took place after delegations from Washington and Beijing ended three days of trade negotiations in China on Wednesday. China’s commerce ministry said Thursday the negotiations were extensive and had helped set up a foundation for further talks. This week’s face-to-face meetings were the first to take place since U.S. President Donald Trump and Chinese President Xi Jinping agreed to a 90-day truce last month.
If both sides are unable to secure a comprehensive trade agreement by March 2, Trump has said he plans to raise tariffs to 25 percent from 10 percent on $200 billion worth of Chinese imports.
Stocks closed higher on Wednesday, with the S&P 500 notching its longest winning streak since September. The move higher added to the sharp bounce since the broad index briefly dipped into bear-market territory in late December. Since then, the S&P 500 is up nearly 10 percent through Wednesday’s close.
“The power of the recovery rally in US and global equities has been impressive,” Michael Shaoul, chairman and CEO of Marketfield Asset Management, wrote in a note to clients. “As encouraging as all of this has been to witness it does not change the fact that a sell-off of this magnitude does not happen in a vacuum.”
“The decline marks a key downward-shift in the long technology driven bull market,” Shaoul added. “There is simply no way to tell at present whether we have witnessed the completion of a brief but tumultuous sell-off.”
—CNBC’s Sam Meredith contributed to this report.CNBC’s Sam Meredith contributed to this report

Source:  CNBC