Global Market Report - May 31, 2018

Chinese equities outperformed on Thursday after positive manufacturing data, while European markets regained some poise amid the Italian crisis

James Gard 31 May, 2018 | 11:06AM
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US markets flipped back into “risk on” mode on Wednesday so Asia followed suit, with China’s Shanghai Composite Index leading the charge after its sharp fall yesterday.

Economic drivers were also in play in Hong Kong and China today: China’s manufacturing PMI for May beat expectations. The sector is still expanding at a healthy rate, the survey showed. Tomorrow’s Caixin PMI survey for manufacturing will give a fuller picture of the sector’s strength as the country continues to rebalance away from exports towards domestic consumption.

Still, Chinese equity markets have been in the  doldrums in the closing stages of this month. At just under 3,100 points, the Shanghai Composite is a way of its recent high above 3,500 points at the start of the year – and indeed off its all-time high above 5,000 points in June 2015.

While the diplomatic channels between the US and North Korea, and the US and China, still open, more optimistic investors can cling to the hope that de-nuclearisation can be achieved and trade war avoided.


The Italian political crisis has not gone away but markets are more stable than earlier this week. The FTSE MIB benchmark is up over 1% on the day and 10-year yields dipped again. Spain’s 10-year yield also retreated as the country gears up for the result of a no confidence vote in the Prime Minister, Mariano Rajoy.

European stocks were modestly higher on Thursday but this month the FTSE 100 has outperformed its Eurozone counterparts because of a rebound in commodity stocks.

The quarterly reshuffle in FTSE 100 sees Ocado (OCDO) and betting firm owner GVC (GVC) promoted, while security company G4S (GFS) and private healthcare firm Mediclinic (MDC) are demoted to the FTSE 250.

North America

The economics calendar is rather fuller than in recent days, with highlights including personal spending data, home sales, Chicago PMI, weekly jobless initial and continuing claims. Tomorrow's non-farm payrolls number overshadows them all.

Retailers' earnings are in focus today with a market update from discounter Costco (COST) and American Eagle Outfitters (AEO).



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.

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James Gard  is content editor for