Global Market Report - November 14

World markets were weaker today as investors digested Asia economic data, the latest in the Brexit talks and a softer German economy

James Gard 14 November, 2018 | 10:49AM
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Global Market Report

Asia

Markets in Asia-Pacific ended weaker on Wednesday amid a range of key data releases. Chinese industrial production was better than expected but retail sales came in lower than forecast, although the year on year growth was just below 10%.

Japan’s economy contracted in the most recent quarter, falling by 1.2% in Q3, compared to a gain of 3% in Q2. This helped push the yen down to nearly 114 against the dollar at one point, helping the Nikkei 225 to rise while other Asia-Pacific markets, such as China and Hong Kong, were falling.

Europe

Yesterday’s announcement that a draft Brexit text had been agreed between the EU and the UK gave the pound a boost against the dollar and euro. This had the immediate impact of weakening the FTSE 100’s many dollar earnings. Combined with global stock weakness, this currency headwind pushed the FTSE 100 back down towards 7,000 points.

The pound remains above $1.30 and €1.15, similar to levels reached last night. An emergency Cabinet meeting is due in London at 2pm local time and any leaks or announcement following this are likely to unsettle sterling.

CPI inflation remained stable at 2.4%, according to the Office for National Statistics.

A fall in German GDP for the third quarter did not help the markets lift out of the doldrums. Markets in France, Spain, Germany and Italy were all nursing day of day losses of around 1%.

North America

Dow futures are suggesting another sharp fall at the open on Wednesday after yesterday’s 100 point loss.

US inflation is the standout economic data release today. The Consumer Price Index is expected to have risen by 2.5% in October from a year earlier, higher than the 2.3% reading in September. Ahead of the Federal Reserve’s last meeting of the year, a strong rise in the cost of living will help to the case for a fourth rate rise for the year. There is one final set of non-farm payroll numbers due before the Fed meeting, and last month’s smashed expectations with a 250,000 increase in jobs for October. Fed chair Jerome Powell speaks today on the economy at a Dallas Fed event

Retail sales data is due on Thursday this week for October as the country builds up for the key Thanksgiving shopping season. Walmart (WMT) reports earnings on Thursday.

Cisco (CSCO) releases numbers today after the market closes.

 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Cisco Systems Inc56.68 USD-2.41Rating
Walmart Inc140.19 USD-0.73Rating

About Author

James Gard  is content editor for Morningstar.co.uk