Global Market Report - December 7

World markets regained some equilibrium after a highly volatile week, while investors looked ahead to US jobs data

James Gard 7 December, 2018 | 11:05AM

Global Market Report

Asia

After this week’s tumultuous trading, markets in Asia-Pacific recovered some poise on Friday, but performances of China and Hong Kong indices were far from convincing. The diplomatic row over the arrest of Huawei executive Meng Wanzhou rumbles on and has started to overshadow the 90-day truce between the US and China. Canada, where the Ms Meng was arrested, denies any political motivation behind the arrest, which is believed to related to sanctions busting deals with Iran.

China’s Shanghai Composite Index is around 40 points lower than at the start of the week, but Hong Kong’s tech focused Hang Seng is off around 1,000 points at just over 26,000.

Japan’s Nikkei 225 made a modest recovery today but is still down on the week.

Europe

The FTSE 100 bounced back this morning after yesterday’s drubbing, which saw the index shed 3% to 6,700 points – effectively erasing all the gains since the year 2000. In comparison, the S&P 500 is now double where it was 18 years ago, and the Dow Jones has more than doubled. There is of course the argument that without the sterling depreciation seen since the EU referendum vote, the FTSE 100 would be even lower.

The index was up over 100 points this morning to over 6,800 points.

Shares in London-focused housebuilder Berkeley Group (BKG) rose this morning after it increased its full-year profit guidance and reiterated dividend pledges to investors.

Germany’s DAX has entered a bear market on an intra-day basis.

Next week the European Central Bank has its last meeting of the year.

North America

Non-farm payrolls are the economic highlight of the week, with just under 200,00 jobs expected to have been added last month. With the current market volatility, any deviation from this level could unsettle traders. Still, the Federal Reserve’s interest rate tightening cycle is less predictable than it was a few months ago.

A provisional reading of December’s University of Michigan sentiment index is due on Friday. Canada unemployment figures are also due at the end of the week.

The Dow Jones is expected to end the week lower, although investors were heartened by the stunning reversal seen yesterday, from a 500 point loss within-day to a close just 79 points down.

The difference between the highest and lowest levels this week has been stark, with 25,881 as the high and 24,261 as the low.

 

 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Berkeley Group Holdings (The) PLC3,319.00 GBX-3.29-

About Author

James Gard  is subeditor for Morningstar.co.uk