US equity markets dropped modestly on Wednesday as investors reacted to the formal announcement by the Federal Reserve of the ending of the QE stimulus programme. The more optimistic view on the economy was interpreted as interest rates rising sooner than expected. Financials were mixed with Bank of America rising 1.1% on its exposure to the consumer market, whilst JP Morgan lost 0.57%. In the Technology sector, the stand out feature was the 6% fall in Facebook. Despite the social networking giant reporting earnings and revenues that were better than expected, the company warned of much higher spending on acquisitions in the coming year. Other fallers included Mondelez down 1%, Toll Brothers down 1.4% and Newmont Mining down 4.76%. Gainers included Abercrombie & Fitch up 2%, China Mobile was up 2.2% and Ultra Petroleum was up 1.7%.
In Asia overnight, there was a reasonable rise in most markets with the Nikkei up 0.67% and India was up 0.9%. Shanghai stocks were also in positive mood as early steps were made to boost the trading link with the Hong Kong exchange. There were some fears over Chinese company earnings growth however and PetroChina lost 2% and ICBC fell nearly 1%. In Australia, Coca-Cola Amatil rose 4.5% on a positive growth outlook, whilst Flight Centre fell nearly 3% on a poor outlook from the CEO. In South Korea, Samsung Electronics jumped nearly 5% on positive Q4 profit news. In Japan, Keyence Corporation rose to a record, up 5.8%, after results beat expectations and the dividend was boosted. Yahoo Japan however, fell nearly 6% on a profit warning.
Europe is weaker in trading on Thursday as investors digest the Fed news and the subsequent strength in the US$. In the UK, Barclays is up just over 1% after reporting an unexpected jump in third quarter profits. This is despite setting aside an additional £500 million for the settlement of the currency rigging probe. Precious metal prices are weak with Randgold Resources down 3%, Anglo American down 2.75% and Fresnillo down 2.15%. In Germany, Linde AG is down 5%, after the largest manufacturer of industrial gases in the world issued a profit warning. Lacklustre European growth and slowing manufacturing growth were cited as the main factors. Other decliners include Den Norske Bank down 1.12%, Statoil down 2.52% and Seadrill down 3.48%.
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.