Morning Spread

Morning Spread

Monday 8th June 2015
IndexLevelChg (%)
UK Market6801.60-0.04
Dow Indust Avg17849.46-0.31
S&P 5002092.83-0.14
Nasdaq Composite5068.45+0.18
Nikkei 22520457.19-0.02
Hang Seng27302.83+0.16
IndexLevelChg (%)
Nymex 1m58.83-0.51
Gold Spot1172.97+0.08
GBP/USD1.5256-0.09
GBP/EUR1.3709+0.21
EUR/USD1.1129+0.14
USD/JPY125.53+0.07

US equity markets were generally weaker in Friday trading, as stronger than expected employment data, increased the case for an earlier interest rate increase. However, the S&P 500 index is still only 2% below it’s all time high. Payroll data showed that wages increased on a year on year basis by the fastest rate since August 2013. Bond ‘proxies’ were notably weak with the Utilities sector down 1.7%, hitting the lowest level for seven months. Consolidated Edison was down 1.81%, Eversource Energy lost 1.58% and Wisconsin Energy fell 1.66%. A stronger $ also impacted consumer staple stocks, with Coca Cola down 1.2% and PepsiCo was down 1.1%. The Energy sector was more positive, with Nabors up 2.3% and Transocean up 3.3%.

Asia was mixed with Chinese equities closing at their highest level in 7 years boosted by the first day of trading in rail company, CRRC Corp. It was created by the merger between CSR Corp and China CNR Corp, the shares were limit up 10%. On an economic front, the Chinese data continued to be weak with May exports declining for a third straight month and imports down for a seventh straight month. By contrast, stronger than expected Japanese economic data showed that GDP growth was running at an annualised 3.9%, which will bring into question any expansion of the current QE programme. Toyota lost 1.3%, Dentsu was down nearly 4% and Japan Airlines declined 1.8%. Australian equities closed at their lowest level since mid January, with Metcash down 1.8% and Sundance Energy down 3.7%.

Europe is also weaker this morning and the German DAX index has now fallen 10% from the peak, which is classified as a correction. The blame lies mostly with the bond market, where German Bunds suffered their worst week since 1998. In corporate news, sweeping management changes at Deutsche Bank have seen the stock rise 6.3%. In the UK, stocks generally are little changed, although takeover rumours have boosted Diageo by 7.7% but hit Shire by 2.2%. Other movers include BT Group up 1.3%, Vodafone is 1.6% higher and AO World is up 1.2%.