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Jan 23, 2019

Asia, Europe & US Markets Closing Report.


Major Asian markets end mixed amid uncertainty over US-China trade talks

Eustance Huang

Major stock markets in Asia ended mixed on Wednesday amid concerns over the state of ongoing U.S.-China trade negotiations, after reports emerged that the White House canceled a trade planning meeting with Beijing this week.
The mainland Chinese markets, closely watched in relation to the trade war between Beijing and Washington, saw early gains but eventually lost steam. The Shanghai composite and Shenzhen component both saw slight gains to close at about 2,581.00 and 7,523.77, respectively. The Shenzhen composite rose 0.129 percent to finish its trading day at around 1,316.28.
Hong Kong's Hang Seng index saw fractional losses, as of its final hour of trade.
Officials from the Chinese finance ministry said Wednesday that Beijing will boost fiscal expenditure in 2019 to bolster the country's economy.
China delivered about 1.3 trillion yuan of cuts in taxes and fees in 2018, in a bid to stem a slowdown in the country's economic growth as the country was embroiled in a trade fight with Washington.
Japan's Nikkei 225 shed 0.14 percent to close at 20,593.72 while the Topix index declined 0.60 percent to end its trading day at 1,547.03. Shares of Apple supplier Japan Display soared 18.75 percent, following a report that the company was looking for a bailout after disappointing sales of the iPhone XR. Japan Display supplies the liquid crystal display screens used in the iPhone XR.
Meanwhile, Japanese automaker Subaru saw its stock drop 3.44 percent. The stock moves came after Subaru announced it had halted production at its car factory in Japan due to a defective part.
Japan's central bank kept interest rates steady, as expected. The Bank of Japan also left its forward guidance, a move taken in July to keep interest rates extremely low for an extended period, unchanged.
South Korea's Kospi gained 0.47 percent to close at 2,127.78.
In Australia, the ASX 200 slipped 0.26 percent to finish its trading day at 5,843.70. The energy sector declined by 1.53 percent as oil stocks mostly fell on the back of Tuesday's drop in crude prices. Santos dropped 1.49 percent, Oil Search declined 1.06 percent and Woodside Petroleum fell 1.34 percent.
Oil prices attempted to stage a partial recovery on Wednesday following the losses in the previous session, with international benchmark Brent crude futures rising 0.52 percent to $61.82 per barrel and the U.S. crude futures contract advancing 0.43 percent to $53.24.

Asia-Pacific Market Indexes Chart

NIKKEINikkei 225 IndexNIKKEI20593.72-29.19-0.14
HSIHang Seng IndexHSI27008.202.750.01
ASX 200S&P/ASX 200ASX 2005843.700.000.00
KOSPIKOSPI IndexKOSPI2127.780.000.00
CNBC 100CNBC 100 ASIA IDXCNBC 1007590.82-23.98-0.31
US-China trade truce
On Wall Street overnight, the Dow Jones Industrial Average snapped a four-day winning streak as it fell 301.87 points to close at 24,404.48. The S&P 500 shed 1.4 percent to finish its trading day at 2,632.90 while the Nasdaq Composite slipped 1.9 percent to close at 7,020.36.
Stocks stateside dropped to their lows of the day following a Financial Times story which said the U.S. had canceled a trade meeting with Chinese officials. The report was later confirmed by a source familiar with the situation to CNBC's Kayla Tausche.
White House economic advisor Larry Kudlow, however, denied that report, telling CNBC that "there was never a planned meeting" other than the scheduled visit by Chinese Vice Premier Liu He next week.
"I think both sides have lots of incentives to try to deliver a mutually agreeable win but the difficulty will be whether China can move enough to satisfy the structural demands that have been placed upon China by the U.S. negotiating team," Nelson Dong, senior partner at law firm Dorsey & Whitney, told CNBC's "Squawk Box" on Wednesday.
The U.S. and China are aiming to strike a deal to break their trade impasse before March 1. The two economic powerhouses have been locked in an ongoing trade war since 2018 which has seen both sides slap billions of dollars worth of tariffs on each other's goods.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.298 after touching an earlier session high of 96.344.
The Japanese yen, widely seen as a safe-haven currency, traded at 109.62 against the greenback after after touching a high of 109.31 earlier. The Australian dollar was at $0.7135 after seeing an earlier low of $0.7114.
— Reuters contributed to this report.


European stocks edge lower at close of trade; Metro Bank tanks 39% to drag on FTSE

Holly Ellyatt, Alexandra Gibbs

European stock markets rose then fell on Wednesday, as investors took cues from the whipsaw in U.S. market action.
The pan European Stoxx 600 Index closed provisionally down 0.06 percent on the day. Most individual bourses in Europe were traded lower, after a strong start on Wall Street faded. Before giving up gains, the Dow Jones industrial average jumped over 250 points in morning trade, on the back of strong earnings reports.

European Markets: FTSE, GDAXI, FCHI, IBEX

FTSEFTSE 100FTSE6842.88-58.51-0.85666020295
Looking at the corporate space, stocks showed a mixed to positive picture with the retail sector leading the pack, up over 1.5 percent as a whole. France’s Carrefour topped Europe’s benchmarks after an upbeat earnings report, which saw the retailer express optimism for its strategy plan going forward. Shares jumped nearly 7 percent.
Sticking with the sector, Ahold Delhaize popped over 3 percent after it reported fourth-quarter sales in line with analyst expectations. Elsewhere, Logitech jumped almost 6 percent on Wednesday, after JP Morgan upgraded its rating and price target on the stock.
On the opposite end of the STOXX 600, British lender Metro Bank tanked nearly 39 percent after it cautioned that its growth had softened in the final quarter. The weakness from Metro Bank added pressure to the FTSE 100, which under-performed fellow markets, falling almost 1 percent.
Meanwhile, shares of Deutsche Bank pared losses to trade higher in later trade, despite a report from Bloomberg stating that the U.S. Federal Reserve is investigating the German lender’s role in a Danske Bank money laundering scheme. The bank has since responded to this, saying in a statement to Reuters that it’s received requests for information from regulators and law enforcement agencies.
Trade talks in focus
Investors continue to be somewhat cautious in Europe amid uncertainty over trade talks between the world’s biggest economies, the U.S. and China, after reports emerged that the White House cancelled a trade planning meeting with Beijing. When asked for comment, the White House said to CNBC that “the teams remain in touch in preparation for high level talks with Vice Premier Liu He at the end of this month.”
Elsewhere, officials from the Chinese finance ministry said Wednesday that Beijing will boost fiscal expenditure in 2019 to bolster the country’s economy, Reuters reported.
Back in Europe, Brexit continues to dominate headlines and parliamentary debate in the U.K. At the World Economic Forum, British Trade Secretary Liam Fox said to CNBC that he believed that there was a “good chance” that the U.K. would secure an exit agreement with the European Union. Britain is scheduled to leave the bloc on March 29, 2019.


Dow rises more than 150 points on strong earnings from IBM, P&G and United Technologies

Fred Imbert

The Dow Jones Industrial Average rose on Wednesday on the back of strong quarterly earnings from companies like IBM, United Technologies and Procter & Gamble.
The 30-stock index rose 171.14 points to 24,575.62. The S&P 500 gained 0.2 percent to close at 2,638.70, led by a 1.2 percent jump in the consumer staples sector. The Nasdaq Composite advanced 0.1 percent to 7,025.77.
Dow members United Technologies and Procter & Gamble both rose more than 4.8 percent after reporting better-than-expected earnings. IBM, another Dow component, jumped 8.5 percent in its best session since Oct. 18, 2017.
“Ultimately, when you look at the data, the thing that matters most to the market is earnings,” said Andres Garcia-Amaya, founder of Zoe Financial. “I would say the technology sector is one that could make or break the story for equities. If you look at margins for the sector versus the other sectors, it’s by far the largest.”
“If you start to actually see margins for the technology sector deteriorate, that’s going to basically be something investors are not going to be happy about,” Garcia-Amaya said.
Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
More than 14 percent of S&P 500 companies have released their calendar fourth-quarter results so far. Of those companies, 72.9 percent have topped earnings estimates, according to FactSet data. However, only 58.7 percent of those companies have beaten sales forecasts.
Overall, profits for the companies that have reported have grown by 13.2 percent, slightly above expectations. However, that would be the slowest pace of earnings growth since the fourth quarter of 2017, when S&P 500 profits expanded by 15.5 percent.
Wednesday’s move higher came after steep losses in the previous session. On Tuesday, the Dow snapped its four-day winning streak, closing down more than 300 points lower, as global growth fears added jitters to market sentiment.
The International Monetary Fund (IMF) revised down its estimates for global growth earlier this week, projecting a 3.5 percent growth rate across the globe in 2019, and 3.6 percent for next year. The fund had already slashed its forecasts back in October, due to trade tensions, however issues still remain as the institution keeps its eye on other topics filled with uncertainty, such as Brexit. Weak economic data out of China didn’t ease fears either.
Meanwhile, investors continue to keep a close eye on trade negotiations with the China.
White House economic advisor Larry Kudlow told CNBC’s “Closing Bell” on Tuesday that reports of a meeting between U.S. and Chinese trade officials had been canceled. He added that no intermediate gatherings had been scheduled other than the visit by China Vice Premier Liu He.
—CNBC’s Alexandra Gibbs, Thomas Franck and Kayla Tausche contributed to this report.

Source: CNBC

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