Morning Message

Tuesday Morning Update

Tuesday 18th April 2017

European shares retreated as miners and energy shares dragged. The ESTX 50 (-0.53%), UK markets (-1.05%), Dax (-0.32%) and the CAC 40 (-0.89%) all posted losses in early trading. Pandora dropped -7% and DONG Energy retreated -4% after Citigroup cut its rating to “neutral” on the stocks. Galapagos jumped +4.5% after raising $338 million in a US public offering, while Uniper gained +3.3% after SocGen raised its rating on the stock to “buy” from “hold”.  

US stocks rose in a broad rally led by banks and technology shares. The Dow Jones Industrial Average (+0.90%), S&P 500 (+0.86%) and the Nasdaq Composite (+0.89%) all increased. Market focus shifted from geopolitical tensions to earnings, with several Dow components, including Goldman Sachs, General Electric and Johnson & Johnson set to release results later this week. Profits of S&P 500 companies are estimated to have risen 10.4% in the latest quarter, the first double digit percentage growth since the third quarter of 2014. Amazon jumped +2% after Credit Suisse raised its price target. Netflix, which reported results after the bell, was up +3% during the regular session but fell -2.1% after the bell.

Asian shares were mixed as two major markets returned from the Easter break, and despite a slight easing in the buying of havens as tensions surrounding North Korea looked to take a breather. The Nikkei 225 (+0.35%) increased, while the Hang Seng (-1.39%) and the S&P/ASX 200 (-0.905) both declined. Australian equities were dragged down by a selloff in mining stocks amid lower iron-ore prices. Fortescue fell -5.3%, putting the drop in the company’s share price for April at -16%. The yen weakened against other currencies, helping recently weak export reliant stocks and financials in Japan. Nomura, Mitsubishi UFJ and Mazda Motor were all up around +2%.

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