Global Market Report - December 12

World equities were higher today amid tentative signs of progress in trade talks, while UK investors had to grapple with news of a no confidence vote in the Prime Minister

James Gard 12 December, 2018 | 10:50AM

Global Market Report

Asia

Despite a mixed performance from US markets on Tuesday, Asia equities moved higher, led by Japan’s Nikkei which rose by 2% on the day.

Hong Kong’s Hang Seng was up by a similar amount in percentage terms, while China’s Shanghai Composite Index edged above 2,600 points – a level the index has struggled to hold above since October’s volatility.

Signs of progress in trade talks between the US and China have helped stock markets in recent days – China has just made concessions on US cars, for example. Huawei’s Meng Wanzhou has been released on bail, with President Trump expected to intervene in the case for strategic reasons.

Europe

Today’s Brexit development is the no confidence vote in Prime Minister Theresa May, but currency markets didn’t react too strongly, certainly in contrast to the news that the Brexit vote had been postponed, or even the day when Brexit Secretary Dominic Raab resigned.

The pound dipped below $1.25 in the morning perked up marginally as the morning progressed. Weakness in sterling has helped the FTSE 100 gain more ground today after yesterday’s 1.3% rise. Global market rises are also a factor, with gains of nearly 2% in France – adding to Tuesday’s move higher – and just over 1% on Germany’s DAX. The FTSE 100 rose 1% to just below 6,900 points.

Sainsbury’s (SBRY) shares were lower after news that it had asked for more time to respond to a regulatory investigation into its proposed merger with Asda. Sainsbury's said they will ask the UK CMA for an extra 11 working days over the Christmas period to be able to respond to a "large amount of material" recently provided to the supermarket.

North America

US inflation data for November is out today before the market opens. The Consumer Price Index is expected to have dropped from 2.5% to 2.2%, closer to the Federal Reserve’s 2% target. The Fed is meeting next week and is, on balance, expected to raise rates, although the margin of doubt is increasing after lacklustre job figures for November.

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%.

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

 

 

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 Inc299.87 USD0.18
Costco Wholesale Corp266.77 USD0.24
Sainsbury (J) PLC187.60 GBX-0.21

About Author

James Gard  is subeditor for Morningstar.co.uk

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