Global Market Report - October 17 2017

Japan's winning streak continued on Tuesday while US investors are looking ahead to Goldman Sachs' third-quarter results 

James Gard 17 October, 2017 | 11:15AM

Asia

Japanese and Australian stock markets were the best performing in the Asia-Pacific Region on Tuesday, boosted by the positive momentum from another record close on Wall Street overnight. Japan’s Nikkei was up 80 points at the close at 21,336.12, buoyed by carmakers and manufacturers, its highest level for 21 years.

Meanwhile the country’s Topix index is at highs last seen since before the financial crisis. The Chinese stock market was less bullish however, with the CSI 300 index little changed from the day before. It’s a key week for investors in China, with Wednesday’s Communist Party Congress and Thursday’s release of economic growth figures for September. Hong Kong’s Hang Seng index was also little changed on the day.

Europe

The FTSE 100 was just in positive territory in midmorning trading on Tuesday after a weaker start to the day. An increase in sterling after strong inflation data also held back leading shares. Contrasting trading statements from Pearson (PSON) and Merlin Entertainments (MERL) put the companies at the top and bottom of FTSE 100 companies: Pearson shares were over 6% higher at 662p, while shares in Legoland and Madam Tussauds owner Merlin crashed around 20% to 368p after it said revenue would be impacted by terrorism in London and bad summer weather.

UK inflation was also in focus after it hit a five-year high of 3% in September, exceeding the inflation target of 2% and increasing the odds of a November interest rate rise from the Bank of England. The Governor, Mark Carney, must now write a letter to the Chancellor explaining why the cost of living is above target. The Governor also faces MPs on the Treasury Select Committee today. 

In Europe, Germany’s Dax struggled to make gains after ZEW surveys of showed a fall in economic optimism among leading companies.

North America

Goldman Sachs (GS) is the pick of the earnings announcements today. The investment bank is expected to report third-quarter earnings of $4.25 a share amid a backdrop of mixed performances so far from US banks. Johnson & Johnson (JNJ), like Goldman, releases earnings before market close. Entertainment group Netflix’s (NFLX) results after market close showed the company predicting $11 billion in revenues this year after a bumper third quarter.

In economics, US import and export prices for September will be in focus. Data will also be released on the housing market, manufacturing and industrial production. 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Goldman Sachs Group Inc205.95 USD-7.50
Johnson & Johnson145.62 USD0.19
Merlin Entertainments PLC327.80 GBX-0.73-
Netflix Inc294.07 USD-3.10
Pearson PLC921.00 GBX-0.09

About Author

James Gard  is subeditor for Morningstar.co.uk