Global Market Report - November 7

European stock markets and US futures reacted positively to the US midterm election results as the dollar weakened

James Gard 7 November, 2018 | 11:05AM

Global Market Report

Asia

Results from the US midterm elections began to come in as Asia-Pacific markets were trading on Wednesday and the effects were mixed. China’s Shanghai Composite lost ground again, but Hong Kong’s Hang Seng managed to hold on to its gains despite weakness late in the trading session. Japan’s Nikkei 225 drifted lower but losses were small.

Europe

Stocks in Europe responded more positively to the US political events than Asia, with gains of over 1% in the UK, Germany, France, Spain and Italy.

Usually a fall in the dollar would lead to weakness on the FTSE 100, but today the index was up 80 points or 1.20% as miners gained ground.

Shares in Marks & Spencer (MKS) were among the fallers after a subdued market update.

Spanish banks gained after a legal ruling spared them from stamp duty taxes that will now fall on borrowers rather than lenders.

Among the fallers were German carmaker BMW (BMW) which lost ground after missing earnings expectations.

North America

US stock futures rose on Wednesday after midterm election results weakened the dollar, with a mixed Democrat/Republican Congress seen as holding back President Trump’s ambitions for US economic changes.

US stock markets look set for a rise at the open, with the Dow expected to gain 140 points, the S&P 500 just over 20 points and the Nasdaq 81 points or 1.2%. With midterm results coming in as expected, unlike the 2016 presidential election, investors can resume their focus on the fundamentals, such as the upcoming Federal Reserve meeting on Thursday. October’s volatility appears not to have resurfaced so far this month.

After the drama of the midterms, it’s business as usual for stock markets: the trade war between China and the United States is so far unresolved, the Fed is committed to its tightening cycle, and the recent earnings season has not given the market an extra push higher despite generally solid results. Sanctions have just kicked against Iran’s financial services and energy sectors and the oil market remains firm.

Today, 21st Century Fox (FOXA), recently outbid in its pursuit of Sky (SKY), reports earnings. Canada’s Manulife (MFC) also publishes its numbers.

 

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
Bayerische Motoren Werke AG73.74 EUR-0.62
Manulife Financial Corp16.70 USD-0.12
Marks & Spencer Group PLC291.20 GBX0.55-
Twenty-First Century Fox Inc Class A48.16 USD-0.23

About Author

James Gard  is subeditor for Morningstar.co.uk