Morning Message

Mid-Week Update

Wednesday 29th March 2017

European stocks rose this morning amid rising optimism over the strength of the US economy and as two years of Brexit negotiations will be formally triggered by a letter from Prime Minister Theresa May today. The ESTX 50 (+0.33%), UK markets (+0.04%), Dax (+0.57%) and the CAC 40 (+0.28%) all increased. Prime Minister May will notify EU Council President Donald Tusk in a letter that Britain really is quitting the bloc it joined in 1973. The start of the formal Brexit process comes a day after the Scottish Parliament backed a bid to hold a second independence referendum that would break up the UK. BHP Billiton climbed +1.3% after saying it is considering a new iron ore investment in Australia. Daimler AG rose +1.3% after telling shareholders it is expecting record sales for its Mercedes-Benz division this year.

US stocks rose with financial and energy shares surging as data showed US consumer confidence soaring to a more than 16 year high. The Dow Jones Industrial Average (+0.73%) and Nasdaq Composite (+0.60%) both posted gains, while the S&P 500 (0.00%) was flat. US consumer confidence surged to a more than 16 year high in March amid growing labour market optimism, while the trade deficit in goods narrowed sharply in February. The economy’s strengthening fundamentals were bolstered by other data showing further increases in house prices in January. Apple rose +2.1% and gave the biggest boost to the S&P 500 and the Nasdaq, as the shares hit an all-time high. General Motors rose +2.4% after Greenlight Capital urged the company to split its stock into two classes. Tesla rose +2.7% after disclosing that Tencent Holdings had taken a 5% in company for $1.78 billion.

Asian shares were positive as markets awaited the formal move by the UK to start an historic split with the European Union. The Nikkei 225 (+0.08%), Hang Seng (+0.19%) and the S&P/ASX 200 (+0.90%) all advanced. The Australian army and emergency workers headed to areas in Queensland state that were hit by Cyclone Debbie. Tourist resorts along Australia’s Great Barrier Reef and mainland coastal areas were belted with wind gusts stronger than 160 mph and there were reports of significant structural damage. Toshiba was up +1.01% after its US subsidiary Westinghouse is set to file for US bankruptcy, in a bid to limit losses. Samsung Electronics were up +0.72% ahead of the launch of the Galaxy S8 smartphone.

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