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Jan 7, 2019

Asia, Europe & US Markets Closing Reports

                                                                           ASIA

cnbc.com

Asia markets jump amid US-China trade talks

Eustance Huang


Stocks in Asia gained on Monday as investor sentiment picked up slightly amid a new round of trade negotiations between the United States and China in Beijing.
Japan’s Nikkei 225 bounced 2.44 percent to close at 20,038.97 while the Topix jumped 2.81 percent to finish its trading day at 1,512.53. Shares of automaker Toyota gained 3.15 percent.
South Korea’s Kospi gained 1.34 percent to close at 2,037.10 as shares of steelmaker Dongbu Steel skyrocketed almost 30 percent after the company announced plans to issue new shares to draw new investment. Samsung shares rose 3.47 percent.
Australia’s benchmark ASX 200 was up 1.14 percent to close at 5,683.20 as most sectors saw gains. The materials subindex advanced 2.22 percent as shares of major miners rose; Rio Tinto was up 2.69 percent, Fortescue Metals Group gained 3.26 percent and BHP Billiton jumped 3.03 percent.
Hong Kong’s Hang Seng index also saw gains of around 0.6 percent in late afternoon trade. Shares of China Mobile rose 1.11 percent following Nomura’s upgrade of its rating to “buy” from “neutral,” citing the company’s strong position for the “imminent” next generation 5G wireless standard.

Asia-Pacific Market Indexes Chart

TICKERCOMPANYNAMEPRICECHANGE%CHANGE
NIKKEINikkei 225 IndexNIKKEI20038.97477.012.44
HSIHang Seng IndexHSI25835.70209.670.82
ASX 200S&P/ASX 200ASX 2005683.200.000.00
SHANGHAIShanghaiSHANGHAI2533.0918.220.72
KOSPIKOSPI IndexKOSPI2037.1026.851.34
CNBC 100CNBC 100 ASIA IDXCNBC 1007388.23146.972.03
US-China trade talks
Mainland Chinese markets, which are closely watched in relation to Beijing’s trade war with Washington, also rose on the day
The Shanghai composite was up around 0.72 percent to close at about 2,533.09 while the Shenzhen composite jumped 1.713 percent to end its trading day at approximately 1,301.41. The Shenzhen component gained 1.584 percent to close at about 7,400.20.
The U.S. and China are holding vice ministerial level trade talks in Beijing on Jan 7-8, according to the Chinese commerce ministry. Reports said a working team led by Deputy U.S. Trade Representative Jeffrey Gerrish will meet Chinese officials to have “positive and constructive discussions.”
For its part, China is willing to resolve its trade disputes with the U.S. on an equal footing, according to Lu Kang, spokesman at the Chinese foreign ministry.
“I’m not sure what the... sort of fundamental substantive point of these trade talks will be,” Rob Carnell, ING’s chief economist and head of research for Asia Pacific, told CNBC’s “Squawk Box” on Monday.
“I’m convinced that this will be displayed as a positive result, whatever they actually agree. What slightly worries me is that at times when the U.S. administration delivers these sorts of positive results, it makes it very contingent on future activities,” Carnell said.
The world’s two largest economies slapped a series of punitive tariffs on each other’s goods last year, sparking concerns over a global economic slowdown. The U.S. has already put tariffs on $250 billion in Chinese goods — and has threatened duties on double that value of products. Beijing has responded with tariffs on $110 billion in U.S. goods targeting politically important industries such as agriculture.
Monday’s talks will follow moves and comments from central banks in both the U.S. and China.
The People’s Bank of China cut the reserve requirement ratio (RRR) — the amount of cash that banks have to hold as reserves— by 1 percent last Friday in a bid to stimulate lending amid concerns over a slowing economy.
One analyst said the Chinese central bank’s moves might not bolster growth in the world’s second-biggest economy.
“When you cut the... RRR, you release a lot of liquidity but it’s probably just going to go into refinancing bad projects from the past. And these bad projects, they’re not gonna stimulate growth,” Cliff Tan, East Asian head of global markets research at MUFG Bank, told CNBC’s “Street Signs” on Monday.
“Last year, we started the year by saying that China’s credit risk had actually risen in 2017 rather than fallen, which is a contrarian view,” Tan said. “Defaults in China in 2018 tripled. Both in terms of numbers and in terms of value. Now we’re seeing that credit itself is growing so fast it may not be pcnbc.com

Asia markets jump amid US-China trade talks

Eustance Huang

Stocks in Asia gained on Monday as investor sentiment picked up slightly amid a new round of trade negotiations between the United States and China in Beijing.
Japan’s Nikkei 225 bounced 2.44 percent to close at 20,038.97 while the Topix jumped 2.81 percent to finish its trading day at 1,512.53. Shares of automaker Toyota gained 3.15 percent.
South Korea’s Kospi gained 1.34 percent to close at 2,037.10 as shares of steelmaker Dongbu Steel skyrocketed almost 30 percent after the company announced plans to issue new shares to draw new investment. Samsung shares rose 3.47 percent.
Australia’s benchmark ASX 200 was up 1.14 percent to close at 5,683.20 as most sectors saw gains. The materials subindex advanced 2.22 percent as shares of major miners rose; Rio Tinto was up 2.69 percent, Fortescue Metals Group gained 3.26 percent and BHP Billiton jumped 3.03 percent.
Hong Kong’s Hang Seng index also saw gains of around 0.6 percent in late afternoon trade. Shares of China Mobile rose 1.11 percent following Nomura’s upgrade of its rating to “buy” from “neutral,” citing the company’s strong position for the “imminent” next generation 5G wireless standard.

Asia-Pacific Market Indexes Chart

TICKERCOMPANYNAMEPRICECHANGE%CHANGE
NIKKEINikkei 225 IndexNIKKEI20038.97477.012.44
HSIHang Seng IndexHSI25835.70209.670.82
ASX 200S&P/ASX 200ASX 2005683.200.000.00
SHANGHAIShanghaiSHANGHAI2533.0918.220.72
KOSPIKOSPI IndexKOSPI2037.1026.851.34
CNBC 100CNBC 100 ASIA IDXCNBC 1007388.23146.972.03
US-China trade talks
Mainland Chinese markets, which are closely watched in relation to Beijing’s trade war with Washington, also rose on the day
The Shanghai composite was up around 0.72 percent to close at about 2,533.09 while the Shenzhen composite jumped 1.713 percent to end its trading day at approximately 1,301.41. The Shenzhen component gained 1.584 percent to close at about 7,400.20.
The U.S. and China are holding vice ministerial level trade talks in Beijing on Jan 7-8, according to the Chinese commerce ministry. Reports said a working team led by Deputy U.S. Trade Representative Jeffrey Gerrish will meet Chinese officials to have “positive and constructive discussions.”
For its part, China is willing to resolve its trade disputes with the U.S. on an equal footing, according to Lu Kang, spokesman at the Chinese foreign ministry.
“I’m not sure what the... sort of fundamental substantive point of these trade talks will be,” Rob Carnell, ING’s chief economist and head of research for Asia Pacific, told CNBC’s “Squawk Box” on Monday.
“I’m convinced that this will be displayed as a positive result, whatever they actually agree. What slightly worries me is that at times when the U.S. administration delivers these sorts of positive results, it makes it very contingent on future activities,” Carnell said.
The world’s two largest economies slapped a series of punitive tariffs on each other’s goods last year, sparking concerns over a global economic slowdown. The U.S. has already put tariffs on $250 billion in Chinese goods — and has threatened duties on double that value of products. Beijing has responded with tariffs on $110 billion in U.S. goods targeting politically important industries such as agriculture.
Monday’s talks will follow moves and comments from central banks in both the U.S. and China.
The People’s Bank of China cut the reserve requirement ratio (RRR) — the amount of cash that banks have to hold as reserves— by 1 percent last Friday in a bid to stimulate lending amid concerns over a slowing economy.
One analyst said the Chinese central bank’s moves might not bolster growth in the world’s second-biggest economy.
“When you cut the... RRR, you release a lot of liquidity but it’s probably just going to go into refinancing bad projects from the past. And these bad projects, they’re not gonna stimulate growth,” Cliff Tan, East Asian head of global markets research at MUFG Bank, told CNBC’s “Street Signs” on Monday.
“Last year, we started the year by saying that China’s credit risk had actually risen in 2017 rather than fallen, which is a contrarian view,” Tan said. “Defaults in China in 2018 tripled. Both in terms of numbers and in terms of value. Now we’re seeing that credit itself is growing so fast it may not be possible to engineer a soft landing.”
Over in the U.S., Federal Reserve Chairman Jerome Powell said the central bank would be “patient” in observing how the economy performs this year, and adjust monetary policy accordingly. Powell’s comments, along with a strong jobs report stateside, sent stocks soaring last Friday after months of turmoil over concerns that the Fed could raise interest rates too quickly.
Currencies
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.015, retreating from an earlier high of 96.160.
The Japanese yen, widely considered a safe-haven currency, traded at 108.10 against the dollar after seeing highs below 106 in the previous trading week.
The Australian dollar was at $0.7131, recovering from lows around the $0.68 level last week.
“If ever there was a case of a currency going from zero to hero in the space of 24 hours it was the (Australian dollar) between (last) Thursday and Friday,” Ray Attrill, head of foreign exchange strategy at National Australia Bank, said in a morning note.
Attrill attributed the Australian dollar’s strong rebound late last week to factors such as a recovery in commodity prices as well as a decline in the Cboe Volatility Index, commonly known as the VIX, which fell back to the 21 handle after “having been above 35 on both sides of Christmas day” in 2018. The VIX measures implied volatility on S&P 500 index options.
— Reuters and CNBC’s John W. Schoen and Jacob Pramuk contributed to this report.ossible to engineer a soft landing.”
Over in the U.S., Federal Reserve Chairman Jerome Powell said the central bank would be “patient” in observing how the economy performs this year, and adjust monetary policy accordingly. Powell’s comments, along with a strong jobs report stateside, sent stocks soaring last Friday after months of turmoil over concerns that the Fed could raise interest rates too quickly.
Currencies
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.015, retreating from an earlier high of 96.160.
The Japanese yen, widely considered a safe-haven currency, traded at 108.10 against the dollar after seeing highs below 106 in the previous trading week.
The Australian dollar was at $0.7131, recovering from lows around the $0.68 level last week.
“If ever there was a case of a currency going from zero to hero in the space of 24 hours it was the (Australian dollar) between (last) Thursday and Friday,” Ray Attrill, head of foreign exchange strategy at National Australia Bank, said in a morning note.
Attrill attributed the Australian dollar’s strong rebound late last week to factors such as a recovery in commodity prices as well as a decline in the Cboe Volatility Index, commonly known as the VIX, which fell back to the 21 handle after “having been above 35 on both sides of Christmas day” in 2018. The VIX measures implied volatility on S&P 500 index options.
— Reuters and CNBC’s John W. Schoen and Jacob Pramuk contributed to this report.

                                                                    EUROPE

cnbc.com

Europe stocks close lower as US-China trade talks begin; Centrica down 4%

Chloe Taylor,Silvia Amaro


Stocks in Europe closed lower on Monday, erasing earlier gains seen on the back of trade talks between the U.S. and China.

European Markets: FTSE, GDAXI, FCHI, IBEX

TICKERCOMPANYNAMEPRICECHANGE%CHANGEVOLUME
FTSEFTSE 100FTSE6810.88-26.54-0.39759340087
DAXDAXDAX10747.81-19.88-0.1873351954
CACCACCAC4719.17-17.95-0.3876186269
The pan-European Stoxx 600 closed down 0.3 percent, with sectors pointing in different directions. Technology was the best performer, up 1.5 percent, while the worst performing sector was household goods, which shed 1.1 percent.
Concerns over economic growth, Brexit and the U.S. government shutdown were seen curbing investor sentiment. Earlier in the session, stocks were actually higher as two days of trade talks between the U.S. and China began. U.S. Commerce Secretary Wilbur Ross said on Monday that the two economic superpowers were likely to reach a good settlement over immediate trade issues, although he warned that longer-term problems would prove more difficult to negotiate.
Centrica ended the session as the third-worst performing company, down by more than 4 percent, as Jefferies said the owner of British Gas will likely see earnings come under pressure this year. Heineken dropped 2.5 percent following news that Goldman Sachs had downgraded the stock to a “sell” rating.
Furthermore, Alstom was down by almost 2 percent after French newspaper Les Echo reported that the Alstom-Siemens rail deal was unlikely to be approved by European authorities. The European Commission has said it will announce its decision on the deal in mid-February.
Stateside, stocks were trading higher on Monday, with all three major bourses in the green. However, the dollar weakened on the back of growing speculation that the Federal Reserve will halt its multi-year rate hike cycle, with the euro gaining 0.6 percent on the U.S. currency.
Meanwhile, Brexit and other political events remain on the radar for investors. Sterling gained some ground on Monday, rising to a one-week high ahead of British lawmakers reconvening later in the week. Investors expect the next two weeks to be highly volatile as parliament prepares to vote on Prime Minister Theresa May’s Brexit withdrawal agreement.
In France, President Emmanuel Macron is facing continued street demonstrations from the so-called “yellow vest” protestors, while new figures from Germany showed that industrial orders dropped by more than expected in November.

                                                                           US

Stocks rise in volatile trading as trade talks begin, Amazon shares gain
Fred Imbert


Stocks rose in volatile trade on Monday as investors pored through the latest U.S.-China trade developments and equities added to a massive rally in the prior trading session.
The Dow Jones Industrial Average climbed 75 points after briefly falling more than 100 points. At is high of the day, the 30-stock Dow rose more than 250 points. The S&P 500 gained 0.7 percent, led by the consumer discretionary sector. The Nasdaq Composite advanced 1 percent as Amazon shares rose more than 2.5 percent.
The S&P 500 energy sector was also among the best performers on Monday, rising 1.2 percent. Cabot Oil and Hess led the sector higher, rising more than 4 percent each. Energy stocks got a boost from a 1.2 percent surge in U.S. oil prices.
On Friday, the major indexes all surged more than 3 percent after Federal Reserve Chair Jerome Powell said the central bank would be “flexible” in its approach to monetary policy. Stronger-than-expected employment data also contributed to Friday’s sharp gains.
“The January effect will likely continue, but the market will be erratic as the trade talks continue,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “The real key is trade. Any sign that trade talks are going well could send the market to the upside.”
Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
According to Reuters, the Chinese foreign ministry said Monday that China and the U.S. have expressed an eagerness to work together. The ministry also added China stands ready to resolve trade disputes with the U.S. on an equal footing.
President Donald Trump said Sunday that weakness in the Chinese economy gave Beijing an extra incentive to work toward a resolution to the global trade war. “I think China wants to get it resolved. Their economy’s not doing well,” Trump told reporters at the White House.
The U.S. and China slapped a series of punitive tariffs on each other’s goods last year, sparking concerns over a global economic slowdown. The U.S. has already put tariffs on $250 billion in Chinese goods — and has threatened duties on double that value of products. Beijing has responded with tariffs on $110 billion in U.S. goods, specifically targeting politically important industries such as agriculture.
U.S. stocks have been volatile recently as investors grapple with the trade talks, an ongoing government shutdown in Washington and fears that the economy may be slowing down.
“It would be premature … to consider that the volatility in the stock market will disappear and that a sustained new uptrend has begun,” Bruce Bittles, chief investment strategist at Baird, said in a note.
“Fourth-quarter earnings reports will soon be forthcoming accompanied by important guidance figures for 2019,” Bittles said. “Additionally, uncertainty lingers over trade talks with China as does the impact of the slowdown in global growth on the domestic economy.”
Amazon shares rose after Pivotal Research Group initiated the company with a buy rating. The research firm said Amazon’s opportunities this year are “mostly unconstrained,” adding the stock could surge 20 percent.
— CNBC’s Sam Meredith and Eustance Huang contributed to this report.


Source: CNBC