Global Market Report - August 21

President Trump's criticism of the Federal Reserve chairman Jerome Powell has weakened the dollar

James Gard 21 August, 2018 | 11:11AM
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Global Market Report

Asia

China’s Shanghai Composite Index pushed back above 2,700 points on Tuesday as calm returned to global markets. Comments from President Trump about the Federal Reserve and US interest rates weakened the dollar, and this provided some relief for recently under pressure currencies such as the Chinese yuan.

News from the Japanese retail sector was mixed: supermarket sales were up 1.5% in July on the same month last year, but both nationwide and Tokyo department store sales slumped on a year ago.

Very minor moves in the Japanese yen-US dollar rate led to Japan’s Nikkei 225 ending virtually unchanged on Monday’s close.

Europe

Major eurozone markets such as Germany and France were up around 0.5% on Tuesday morning as traders picked up on the more positive mood in Asia and the US.

The FTSE 100 looked set to join in the upward move in early trading but a weakening in the US dollar against the pound has held back the UK blue-chip index.

The pound was also supported by news of an improvement in the UK’s public finances.

Again, results provided the driver for share price moves: mining giant BHP Billiton (BLT) was the FTSE 100’s biggest faller as it posted a fall in full-year profits despite a record final dividend. On an underlying basis, attributable profit was up 33% to $9.62 billion. The full-year dividend per share was up over 40%year on year to 118 cents.

Housebuilder Persimmon (PSN) was the biggest riser on the FTSE 100 after a rise in first-half profits.

North America

Currency traders took a dim view of President Trump’s criticism of the Federal Reserve and its chair, Jerome Powell, who after all was appointed by the President. Powell speaks at the Jackson Hole meeting of central bankers on Friday, where he is expected to respond to the criticism – and give some direction about how many interest rate rises are expected this year.

US stock markets are expected to open marginally higher but the S&P 500 is close to a record high, and the Nasdaq is not too far away.

Medical device firm Medtronic (MDT) is among the largest of the companies reporting today.

 

 

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About Author

James Gard  is content editor for Morningstar.co.uk