Global Market Report - November 9

Asia-Pacific and European markets sold off on Friday amid worries over a slowing Chinese economy

James Gard 9 November, 2018 | 10:57AM

Global Market Report

Asia

The post-midterm rally in global markets proved shortlived, with indices in Asia-Pacific picking up on the hesitant mood on Wall Street on Thursday night. Chinese data exacerbated the growing sense that the country’s economy is slowing down amid the wider backdrop of a US-China trade war. There is further Chinese data out next week which will make the picture clearer, and this includes industrial production, retail sales and jobless figures.

Hong Kong’s Hang Seng crashed back through 26,000 points with a loss of over 600 points on the day, a fall of nearly 2.5% on Thursday’s close.

Europe

UK economic growth accelerated in the third quarter, according to today’s data from the Office for National Statistics. GDP grew 0.6% in Q3, up from 0.4% in the second quarter and the year on year growth rose from 1.2% to 1.5%. But economists noted that the growth rate eased off towards the end of the quarter. The EY Item Club expects growth for the year at 1.3%, its lowest since 2009. The European Commission forecasts UK growth of 1.2% in 2019, which is significantly below the Office for Budget Responsibility’s forecast of 1.6% unveiled in the Budget.

Since Budget day on October 29 the pound has rallied against the dollar but today sterling is within touching distance of $1.30 again. The pound’s revival, combined with the global volatility, has knocked the FTSE 100 down from 7,500 points to 7,100 today. Weakness in Asia dragged down European stock markets across the board. Miners were off sharply and represented the biggest fallers on the FTSE 100 on Friday.

North America

The Federal Reserve stuck to its guns in terms of committing to further interest rate rises, and this lines up December for the fourth rate rise this year. Jerome Powell, who has come under fire by President Trump in recent months, is now committed to a press conference for each of next year’s meetings.

Today’s University of Michigan sentiment index for November is expected to soften from the previous month.

Overnight, shares in Disney (DIS), which is planning to take on Netflix (NFLX) with a new on-demand video service next year, rose after hours.

Today investment firm Altaba (AABA) is one of the largest firms to report earnings.

 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Altaba Inc63.59 USD-1.24
Netflix Inc286.22 USD-1.32
Walt Disney Co116.19 USD-0.79

About Author

James Gard  is subeditor for Morningstar.co.uk