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Global Market Report - November 14 2017

European economics took centre stage on Tuesday, with UK inflation data and eurozone GDP figures released

James Gard 14 November, 2017 | 11:02AM

Asia

Asian equities took their cue from a uncertain day’s trading on Wall Street on Monday. After the recent surge to 25-year highs, Japan's Nikkei closed unchanged at 22,380, a way off the recent intraday high above 23,000 points. In China, the Shenzhen Composite was nearly 1% lower on the day at 11,582, as the recent rally showed signs of losing momentum.

Domestic economic data showed that Chinese retail sales were lower than forecast for October but still 10% higher year on year; industrial production was 6.2% higher in the month compared to October 2016.

Japan’s GDP figures for the third quarter are released early on Wednesday.

Europe

Germany’s Dax reacted positively to news that the country’s GDP rose 0.8% in the third quarter, against a forecast rise of 0.6%. However, the strengthening euro took the edge off early gains and approaching midday the German stock exchange was just in positive territory.

UK inflation was a touch lower than forecast at 3% in October, as measured by the Consumer Price Index, but the figure was still a five-year high, due to a strong rise in food and transport costs. The “earnings gap” between inflation and wages is likely to be underlined on Wednesday when average pay figures for September are released. Pay is forecast to have grown by 2.2% in the month on a year earlier, excluding bonuses.

In corporate news, Tesco (TSCO) was one of the biggest risers on the FTSE 100 as the supermarket’s takeover of wholesaler Booker was given the provisional green light by the UK competition authority. Vodafone (VOD) raising its full-year guidance was also received well by investors, but ITV (ITV) was bottom of the index after revealing a fall in broadcast and online revenues in its latest trading statement.

North America

US stock markets managed to close in positive territory on Monday despite a lower open and ongoing fears over delays to corporate tax cuts. American retailers will be in focus this week, kicking off with Home Depot (HD) today, then Target (TGT) before the market opens on Wednesday, followed by Dow Jones constituent Wal-Mart (WMT) reporting on Thursday. Analysts expect Home Depot sales to have been boosted by hurricanes Irma and Harvey as people living in affected regions bought goods to repair their homes,

Nasdaq-listed networking firm Cisco Systems (CSCO) reports after the market closes on Wednesday.

While producer price data will be released on Tuesday, the week’s highlight in economics will be Consumer Price Index data for October. Released on Wednesday, the figure is likely to show that inflation rose by 2% in October on the same month last year. 

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Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
Cisco Systems Inc35.90 USD0.06
ITV PLC150.50 GBX0.13-
Target Corp58.14 USD5.52
Tesco PLC184.70 GBX0.19
The Home Depot Inc167.74 USD0.14
Vodafone Group PLC228.70 GBX0.11
Wal-Mart Stores Inc97.47 USD-2.16
About Author

James Gard  is subeditor for Morningstar.co.uk