Global Market Report - December 10

Asian markets fell again at the start of the new trading week, while US stocks are expected to drop at the open on Monday

James Gard 10 December, 2018 | 11:11AM

Global Market Report

Asia

Another chunky fall on Wall Street on Friday set the tone for a weak start to Monday for Asia-Pacific markets.

The relationship between the US and China remains tense as the diplomatic row over the arrest of Huawei’s Meng Wanzhou rumbles on. China is urging Meng’s release and has summoned the US ambassador to Beijing, Terry Branstad.

Indices in Japan and Australia were the worst affected to percentage terms, shedding 2% on the last session’s close. Hong Kong and China markets were off around 1%. 

Europe

This week sees the European Central Bank’s final meeting of 2018, marking the end of its asset purchase programme. The Bank of England and Federal Reserve meet next week.

Currency traders are awaiting the Parliamentary vote on Tuesday with much trepidation, fearing that the Prime Minister losing the key vote will spark volatility.

Today’s UK economic data showed that the trade deficit in goods and services widened in the August-October period. The monthly UK GDP data showed the economy grew by just 0.1% in October. UK unemployment data is due out on Tuesday.

Today’s shock share price plunge belonged to outsourcer Interserve (IRV), whose shares halved this morning. As it struggles to agree a rescue deal with lenders, the company warned that any plan would dilute the holdings of existing shareholders.

UK and Eurozone markets were weaker but falls were not of the same magnitude as those seen in Asia and the US on Friday.

North America

Stock futures are suggesting that US markets will resume their falls on Monday, continuing the worst start to December since 2008. A more doveish tone from the Fed next week could reverse some of the losses seen so far this month. The possibility that the central bank could also hold off on raising interest rates for the fourth time this year is still keeping the dream of a “Santa Rally” alive.

The US economic calendar is light for the first two days of the week but Wednesday sees the release of November’s inflation data. The Consumer Price Index is expected to drop back to a rise of 2.2% on the year, against 2.5% in October.

Weekly jobless figures are due on Thursday, following Friday’s disappointing monthly job creation figures. US retail sales figures are due on Friday, and again the figures are expected to point to a slackening in growth. October’s 0.8% rise is forecast to drop to a gain of just 0.1%.

 

 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Interserve PLC12.36 GBX-1.12-

About Author

James Gard  is subeditor for Morningstar.co.uk