Global Market Report - December 11

European shares moved higher, while the British pound recovered slightly after Monday's dramatic sell-off

James Gard 11 December, 2018 | 11:11AM

Global Market Report

Asia

Markets in Asia-Pacific were modestly higher on Tuesday after a fightback from US equities overnight, although Japan slipped back.  With trade uncertainties still on the agenda and Huawei executive Meng Wanzhou still detained in Canada, US and Chinese equities can’t look to geopolitical events for encouragement. The US and China are still discussing trade amid a 90-day truce between the two countries. The possibility of retaliatory action by China against US tech giant Apple (AAPL) remains in play.

Europe

Yesterday’s slump in the pound after the dramatic U-turn by the Prime Minister over the Brexit vote left currency traders nervous of more volatility today. With the political world in a state of suspended animation while Theresa May returns to Brussels – and Commission President Jean-Claude Juncker saying there is no scope for renegotiation – the pound made a small recovery this morning back above $1.30. One notable aspect of Monday’s drama was the fall in the FTSE 100 and the pound, suggesting that the inverse link between the two since the Brexit vote two years ago could be starting to weaken.

The FTSE 100 was up 1% this morning, helped by a rise in shares of WPP (WPP), which announced job cuts amid a wider restructuring programme.

Lower down the market Interserve (IRV) shares recovered slightly after yesterday’s 50% fall.

This week sees the European Central Bank’s final meeting of 2018, marking the end of its asset purchase programme. ECB President Mario Draghi is known for his cautious and calculated language, he is expected to touch on the French riots, expected as they have already led to growth forecasts for France being lowered.

Eurozone exchanges were over 1% higher on the day.

North America

The resilience of US equity markets on Monday was noteworthy. While the Dow slipped over 450 points from the open to an intra-day low of 23,894 points, the index managed to claw back to close slightly higher on the day. Volatility hasn’t been banished from December trading, but there is plenty of buying interest at certain levels.

Adobe (ADBE) and Costco (COST) report earnings on Thursday.

Wednesday sees the release of November’s US 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%.

 

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
Adobe Inc259.69 USD-1.70
Costco Wholesale Corp237.56 USD-0.83
Interserve PLC17.76 GBP0.00-
WPP PLC824.00 GBX-2.76

About Author

James Gard  is subeditor for Morningstar.co.uk

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