Morning Spread

Morning Spread

Tuesday 18th November 2014
IndexLevelChg (%)
UK Market6697.23+0.38
Dow Indust Avg17647.75+0.07
S&P 5002041.32+0.07
Nasdaq Composite4671-0.37
Nikkei 22517344.06+2.18
Hang Seng23529.17-1.13
IndexLevelChg (%)
Nymex 1m76.26+0.85
Gold Spot1196.84+0.86
GBP/USD1.566+0.14
GBP/EUR1.2528+0.28
EUR/USD1.25+0.41
USD/JPY117.01-0.43

The US equity markets took the disappointment of the Japanese economic data in their stride and closed marginally higher. US industrial production in October edged down 0.1% marginally missing analyst expectations. The major merger deal of the day was in the oil services sector, with Halliburton taking over Baker Hughes in a transaction valued at $34.6 billion. Unfortunately investors felt the deal was carved from weakness in the Halliburton camp and the shares lost over 10%, whilst Baker Hughes rose by 9%. Other fallers included Amazon down 1.45%, Google also down by 1.45% and China Mobile fell 3.10%. On the plus side, Campbell Soup was up 1.85%, Ford gained 2.64% and Philip Morris rose 1.18%.

Asia was mixed with Japan rising on rumours that new elections would be called and that key tax rises would be delayed. Sony was up 6.4% and Citizen rallied 5%. Whilst in Hong Kong there were reasonable falls, as the casino sector was downgraded in Macau with Sands China down 3.2% and Wynn Macau down 3%. Following the connection between the stock exchange in Hong Kong and China, Hong Kong Exchanges lost another 2.4% capping a two day decline of 6.5% on competition fears. Li & Fung fell nearly 4% as the company reduced sales expectations for H2, with lower shipments to US retailers such as Kohls. The brief respite in Australia’s iron ore sector stopped with the price falling to a six year low, Fortescue was down 6.6%.

In Europe equities are rallying as the Euro strengthens and investors look for further news from Japan. On a relative valuation basis, European stocks have not been as cheap against US equities for over 15 months. There is positive news in the automotive sector as sales rise for the 14th straight month. In reaction, Renault is up 1.67%, Volkswagen is up 2.74% and Audi is up 1.57%. In the UK, Easyjet has reported positive figures supported by the weak crude oil price, however investors were disappointed to see the lack of a special dividend and the shares are down 1.88%. Royal Mail has continued its positive recent performance and the shares are up by 3.5%.