Morning Message

Friday Market Update

Friday 28th April 2017

European markets were slightly lower this morning as investors concentrated on new earnings reports and geopolitical tensions. The ESTX 50 (-0.12%), UK markets (-0.34%) and the Dax (-0.09%) all posted losses in early trading, while the CAC 40 (+0.10%) gained. UBS rose +3% after saying its net income rose 79% in the first quarter of this year. RBS also jumped +2% in early trade after also reporting better than expected quarterly figures with a profit of £259 million. Barclays dropped over -4% after saying it missed out on a bond trading boom even though its first quarter profit doubled. Sanofi was up +2% after reporting business income increased by 4% and an 11% jump in sales.

US stocks rose, powered by strong earnings from technology companies. The Dow Jones Industrial Average (+0.03%), S&P 500 (+0.06%) and the Nasdaq Composite (+0.39%) all increased. Earnings were back in the spotlight, a day after the Trump administration unveiled a tax reform plan that proposed deep tax cuts for businesses, but offered little detail about its implementation. Energy was the biggest loser among the major S&P 500 sectors, falling 1.8% on the back of a more than 2% decline in oil prices. Comcast rose +3%, after reporting profit that beat analysts’ estimates on strong subscriber growth. American Airlines dropped -7% after the company said it had offered a mid-contract pay increase for pilots and flight attendants.

Asian stocks closed mixed as comments from President Trump on an existing free trade pact with Seoul to payment for a sophisticated anti-missile system caught investors by surprise. The Nikkei 225 (-0.29%) and the Hang Seng (-0.40%) retreated, while the S&P/ASX 200 (+0.04%) was slightly positive. Trump also warned that conflict with North Korea was possible, even though he said he preferred a peaceful resolution. Shares of Korean carmakers moved after the news, with shares of Hyundai Motors eventually closing -2.04% lower. Korean retailers also dipped with Lotte Himart down -2.83% and E-mart dropping by -2.13% at the close. Nintendo rose +2.11% after saying it was forecasting a 121% surge in operating profit for the new fiscal year.

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