There were further gains for US equities on Friday as investors reacted positively to the reduction in interest rates by China. This boosted both the cyclical Materials sector and the Industrials sector. Major climbers included Freeport-McMoRan up 3.57%, Caterpillar was up 4.27%, Tyco International gained 3.82% and Dow Chemical was up 2.64%. The S&P 500 index has now rebounded 11% since the October low and the VIX volatility measure also reflects this, falling back to a reading of only 12.9. In the Retailing sector, the Gap dropped 4.2% as the company issued a profit warning, Abercrombie & Fitch fell 1.34% in response. In the Software sector, design company Autodesk rose nearly 7% as the company beat expected results.
In Asia there were further gains, as investors were reassured that the Central Banks would continue to supply ample liquidity to the global financial system. Deflation remains a major challenge for many economies. Chinese Financials are strong with China Life and Haitong Securities up more than 5%. In Australia, BHP Billiton was up 3.8% and Rio Tinto gained 3.4%. In Japan, Nippon Paper was up just over 4%, Nikon was up nearly 3% and Unitika was up just over 5%. The South Korean market closed at the highest level since October 1st with Hyundai Wia up 8% on news of a major new engine plant investment.
Europe is a little mixed in early trading, with focus in the UK on the Life Assurance sector. Late on Friday, Aviva surprised the market by announcing advanced plans to bid £5.6 billion for Friends Life. The addition of some £20 billion of AUM could be potentially ‘game changing’ for Aviva. However there is some concern that the domestic deal goes against previously stated International expansion plans. Aviva is currently down 3.53%, whilst Friends Life is up nearly 8%. A major faller is Petrofac down 23% as the oil services company issued a major profit warning, impacted by the weak crude oil price.
Morning Spread 8th March 2017 European shares traded flat this morning, the modest moves masking significant results driven games by several companies on a bust day for European earnings.
Morning Spread 2nd November 2016 Asian stocks followed global equities lower despite gauges of manufacturing in China topping estimates and the Bank of Japan maintained its record stimulus program.
Morning Spread 1st November 2016 Asian stocks were mixed as declines in oil prices dragged energy shares lower and investor anxiety grew over next week’s US presidential election.
Morning Spread 28th October 2016 Asian stocks fell as oil explorers pushed down Hong Kong gauges, while investors digested earnings from several companies.
Morning Spread 27th October 2016 US stocks were mixed following the release of earnings from several companies.
Morning Spread 24th October 2016 US stocks were little changed as a record day for Microsoft and earnings from McDonald’s helped offset a fall in energy and healthcare shares.
Morning Spread 19th October 2016 Asian shares rose as a barrage of Chinese data confirmed the economy had stabilised on the back of government spending and a hot housing market, even if worries about debt continue to mount.
Morning Spread 10th October 2016 Asian stocks were mixed following the second US presidential debate between Hilary Clinton and Donald Trump.
Morning Spread 5th October 2016 Most Asian stocks outside Japan slid on concern central banks will reduce stimulus, while the Nikkei climbed after the yen weakened.
Morning Spread 27th September 2016 Asian stocks advanced with investors viewing Democratic candidate Hillary Clinton as having gotten the upper hand in the first US presidential debate.