Global Market Report - August 17

China's Shanghai stock market once again lagged a broader recovery in world shares after a turbulent week

James Gard 17 August, 2018 | 10:58AM
Facebook Twitter LinkedIn

Global Market Report

Asia

The broader trend for global shares was higher on the last trading day of the week, but once again China lagged. The Shanghai Composite Index dropped below 2,700 points on Friday to the lowest level since January 2016. The index is already in bear market territory and has been the focus of investor angst in recent months as the trade war rhetoric with the US has escalated. World markets have stabilised in recent days amid signs of negotiating between China and the US. However, President Trump said that China needs to make more concessions.

Apart from China, markets across the wider Asia region were up, including Japan, India, Australia and South Korea.

Europe

Eurozone inflation for July came in as expected at 2.1%.

Stock markets in the Eurozone and UK started positively today but lost momentum as the morning progressed. The FTSE 100 was off just 8 points in midmorning trading at 7,547, while individual stocks showed modest moves to the upside and downside. B&Q owner Kingfisher (KGF) was under pressure again after Thursday’s falls as brokers cut price targets for the stock. The company has a four-star rating from Morningstar analysts, which means that it is undervalued relative to its fair value.

North America

In terms of economics, Canadian inflation numbers for July are due. The Consumer Price Index is expected to have grown by 2.5% in July compared with a year ago.

In the United States, the University of Michigan sentiment index for July is expected to rise, giving further evidence that the economy is firing on all cylinders.

Next week, the Federal Reserve minutes for the most recent meeting are released. The world’s central bankers convene in the ski resort of Jackson Hole, Wyoming for their annual meeting. Fed chair Jerome Powell is to speak on the “role of monetary policy in a changing economy” next Friday, a theme often touched on by bank chiefs in recent speeches.

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.

Facebook Twitter LinkedIn

About Author

James Gard  is content editor for Morningstar.co.uk