Most stock indices climbed on earnings news

  • 24 Jan 2018

    Most stock indices climbed on earnings news

    The Nasdaq and S&P closed at new highs while the Dow Jones industrials were flat with new little economic data to trade on as investors looked to earnings. Nasdaq increased 0.7 percent while S&P was 0.2 percent higher. The Dow was virtually unchanged (down 3.79 points). The boost to shares came as lawmakers on Monday managed to pass a stopgap bill funding the government until February 8 and were able to re-open the government following a three day shutdown.

    US markets

    The Nasdaq and S&P closed at new highs while the Dow Jones industrials were flat with new little economic data to trade on as investors looked to earnings. Nasdaq increased 0.7 percent while S&P was 0.2 percent higher. The Dow was virtually unchanged (down 3.79 points). The boost to shares came as lawmakers on Monday managed to pass a stopgap bill funding the government until February 8 and were able to re-open the government following a three day shutdown.

    J&J tumbled for their worst day in nearly nine years amid confusion over its outlook after the company said sales of its arthritis drug continued to fall in the fourth quarter. Both Mattel and Hasbro climbed in afternoon trade Tuesday. Netflix surged to a new high after reporting strong subscriber growth and sales that beat expectations late Monday. Upbeat earnings news sent Procter & Gamble and Travelers higher after they reported better than expected quarterly results. Verizon also contributed to the increase. Computer hardware, biotechnology and internet stocks climbed and contributed to Nasdaq’s advance.

    These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up 80 US cents to US$1,333.40. Copper futures were down 2.45 percent to US$3.12. WTI spot crude was up US$1.18 to US$64.75. Dated Brent spot crude was up US$1.11 to US$70.14. The US dollar was down against the yen, euro, pound Swiss franc and the Canadian dollar. It was up against the Australian dollar. The Dollar Index was down 0.3 percent. The yield on the US Treasury 30 year bond was down 2 basis points to 2.90 percent while the 10 year note was down 4 basis points to 2.62 percent.

    European markets

    Most European stock markets advanced — investors were relieved that US Senators voted to support continuing legislation that extended the deadline for a short-term funding until February 8. The Bank of Japan also kept its massive monetary stimulus program unchanged, helping ease worries that it might follow the Federal Reserve and begin to move away from its extraordinary stimulus regime. The FTSE and SMI were up 0.2 percent and the DAX added 0.7 percent. The CAC however, slipped 0.1 percent.

    SAP rallied after it announced it would spend more than €2 billion in France over the next five years. GEA Group declined after reporting muted growth in preliminary revenue for fiscal year 2017. Carrefour advanced after the retailer announced a new partnership with Chinese groups Tencent and Yonghui. EasyJet jumped after the budget airline posted improved revenues and passenger numbers for the three months to December as a result of the bankruptcies of Monarch, Air Berlin and Alitalia. Pets at Home jumped after the UK’s largest pet shop chain reported a jump in third-quarter revenue on strong demand for its products during Christmas.

    British Airways owner International Consolidated Airlines rallied. Sky climbed after the competition regulator blocked Rupert Murdoch's £11.7 billion bid to take full control of the company, saying the planned takeover is not in the public interest. Logitech International was higher in Zurich. The provider of personal computer and mobile accessories lifted its full-year guidance after reporting better-than-expected sales for its fiscal third quarter. Novartis rose after its Phase 3b study of migraine drug met its endpoints. Roche also advanced. Nestlé climbed on a broker upgrade.

    German ZEW rose three points to 20.4 in January. The reading was the highest since May but below its long-term average of 23.7. The UK budget deficit was the smallest for the month of December in 17 years on credit from the EU and higher value-added tax receipts.

    Asia Pacific Markets

    Asian stocks advanced Tuesday after the three-day U.S. government shutdown ended and the Bank of Japan maintained its massive monetary stimulus program. Regional markets shrugged off news that the US will impose steep tariffs on imported washing machines and solar panels.

    The Shanghai Composite jumped 1.3 percent and the Hang Seng added 1.7 percent as investors turned more optimistic about growth in 2018.

    The Nikkei and Topix gained 1.3 percent and 1.0 percent respectively after the Bank of Japan kept the monetary policy unchanged and offered a more upbeat view on inflation expectations, helping ease jitters that it might shift toward a tighter policy. The BoJ’s policy interest rate remained at minus 0.1 percent. Mitsui Fudosan advanced and Mitsubishi Estate climbed. DIC rallied on a Nikkei report that the chemical company's group operating profit rose 5 percent in 2017.

    The S&P/ASX 200 climbed 0.8 percent and the All Ordinaries were 0.7 percent higher. Woodside Petroleum, Santos, Origin Energy and Beach Energy advanced with higher oil prices after comments from Saudi Arabia that supply curbs would continue beyond 2018. The big four banks rose along with miner Whitehaven Coal. Medical equipment maker ResMed soared after reporting a surge in quarterly revenue.

    The Kospi was up 1.4 percent thanks to foreign and institutional investors buying. The Sensex gained 1.0 percent to close at a new record high as firm global markets and growing optimism about India's economic recovery boosted investor sentiment.

    Looking forward

    Japan posts December merchandise trade and January flash PMI manufacturing. January flash PMI composite will be released for France, Germany, the Eurozone and the US. The UK posts December labour market report. In the US, November FHFA house price index and December existing home sales will be released.

    Global Stock Markets
      End2018 DailyPercent Change
     Index2017Jan 22Jan 23ChangeDaily2018Yr/Yr
    North America                
    United States Dow 24719.22 26214.60 26210.81 -3.79 0.0 6.0 31.6
      NASDAQ 6903.39 7408.03 7460.29 52.26 0.7 8.1 33.2
      S&P 500 2673.61 2832.97 2839.13 6.16 0.2 6.2 24.5
    Canada S&P/TSX Comp 16209.13 16347.98 16357.55 9.57 0.1 0.9 4.8
                     
    Europe                
    UK FTSE 100 7687.77 7715.44 7731.83 16.39 0.2 0.6 8.1
    France CAC 5312.56 5541.99 5535.26 -6.73 -0.1 4.2 14.6
    Germany XETRA DAX 12917.64 13463.69 13559.60 95.91 0.7 5.0 16.9
    Italy MIB 21853.34 23890.18 23836.60 -53.58 -0.2 9.1 22.2
    Spain Ibex 35 10043.90 10584.00 10609.50 25.50 0.2 5.6 13.0
    Sweden OMX Stockholm 30 1576.94 1635.47 1643.71 8.24 0.5 4.2 7.9
    Switzerland SMI 9381.87 9529.13 9551.58 22.45 0.2 1.8 15.8
                     
    Asia/Pacific                
    Australia All Ordinaries 6167.29 6106.20 6150.69 44.49 0.7 -0.3 7.8
    Japan Nikkei 225 22764.94 23816.33 24124.15 307.82 1.3 6.0 28.4
      Topix 1817.56 1891.92 1911.07 19.15 1.0 5.1 26.9
    Hong Kong Hang Seng 29919.15 32393.41 32930.70 537.29 1.7 10.1 43.5
    S. Korea Kospi 2467.49 2502.11 2536.60 34.49 1.4 2.8 22.8
    Singapore STI 3402.92 3569.43 3592.08 22.65 0.6 5.6 18.1
    China Shanghai Comp 3307.17 3501.36 3546.51 45.15 1.3 7.2 12.9
    Taiwan TAIEX 10642.86 11231.46 11253.11 21.65 0.2 5.7 19.1
    India Sensex 30 34056.83 35798.01 36139.98 341.97 1.0 6.1 32.0

    Data Source — Haver Analytics

    Bond markets
    10-Yr Govt Bonds Closing Yield Change Yield (bp)
    US 2.62% -4
    UK 1.35% -1
    Germany 0.56% -1
    Japan 0.06% -1
    Australia 2.83% -3

    Source — Bloomberg

    Currencies and commodities
    Currency Jan 22 Jan 23Change (%)
    Japanese yen 110.9600 110.3400 0.6%
    Australian dollar 0.8015 0.8000 -0.2%
    Yuan 6.4050 6.4047 0.0%
    Euro 1.2258 1.2294 0.3%
    British pound 1.3984 1.3996 0.1%
    Swiss franc 0.9623 0.9580 0.4%
    Canadian dollar 0.8028 0.8046 0.2%

    Source — Bloomberg 

    CommoditiesJan 23Change
    Brent Spot $70.14 1.61%
    Gold (PM fixing) $1,333.40 $0.80
    Thompson-Reuters/ Jeffreys Commodity index 200.27 0.37%

    Source — Bloomberg