The US equity market was weak on Wednesday as rumours increased that the Federal Reserve could announce the beginning of the tapering policy next week. Most indices moved more than 1% lower, appearing to contradict the normal ‘Santa rally’. Volatility levels have been at very low levels in recent months but the VIX climbed 11% on the day. Cisco Systems fell 1.6% after it lost a court case regarding the previous merger of Microsoft and Skype. The EU General Court found that it did not restrict competition. Positive news from MasterCard saw the shares gain 3.5%. The company increased the dividend and also approved a major share buyback. The only other gainers were the usual defensive stocks such as Altria up 0.94% and Coca Cola up 0.70%. Notable fallers included Pfizer down 2.2%, Alcoa down 2.3% and Morgan Stanley down 2.1%.
Asia followed the US markets lower with exporters such as Li & Fung down nearly 5%. Chinese property developers were also weak amongst fears of a bubble, China Resources Land was down just over 3% and Shimao Property declined a similar amount. A major profit warning from Japanese chemical company, Nitto Denko, saw the shares decline nearly 20%. The company cited weak demand from China for TV and Tablet films. The pain continued for QBE Insurance in Australia with the shares losing another 5.5% after Fitch cut the credit rating.
Europe is also moving lower as investors try to lock in profits for the year. Fertiliser company, Yara International, is 2% lower on overseas currency movements with a high exposure to the volatile and weak Brazilian Real. Financials are lower with ING down 1.1% and Credit Agricole down 1.4%.In Germany, Metro is up 2.6% after announcing earnings that beat expectations and improved cash flow, leading to significantly reduced debt. In the UK, oil services company John Wood Group are down 10.6% after a profit warning. Retailer, Sports Direct, is down 4% after results which were not as positive as some analysts expected.
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.