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%.
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.