Global stocks were mixed Wednesday as the US dollar tumbled (只備英文版)

  • 2018年1月25日

    Global stocks were mixed Wednesday as the US dollar tumbled (只備英文版)

    US stocks were mixed Wednesday in choppy trading. The S&P slipped 0.1 percent and the Nasdaq down 0.6 percent. The Dow Jones industrials managed to increase 0.2 percent. Investors remained focused on global trade issues. The US currency weakened after Treasury Secretary Steven Mnuchin said the declining dollar is good for US exporters, suggesting he isn't likely to try to stop the currency's recent slide.

    US markets

    US stocks were mixed Wednesday in choppy trading. The S&P slipped 0.1 percent and the Nasdaq down 0.6 percent. The Dow Jones industrials managed to increase 0.2 percent. Investors remained focused on global trade issues. The US currency weakened after Treasury Secretary Steven Mnuchin said the declining dollar is good for US exporters, suggesting he isn't likely to try to stop the currency's recent slide.

    A day after the Trump administration placed tariffs on some imported solar products and washing machines, investors focused on the World Economic Forum in Davos, Switzerland, and on comments by officials including Mnuchin. Treasury Secretary Mnuchin said he is not concerned that the dollar has weakened because it's making US goods less expensive in other markets. The declining dollar hurt shares of smaller companies — they do most of their business domestically and a weaker currency hurts their profits because oil and imported components become more expensive.

    Airlines dropped sharply after United Continental said it plans to ramp up passenger capacity. American Airlines and Spirit were lower. Texas Instruments declined after its revenue forecast for the current quarter disappointed. Applied Materials retreated. Apple also declined. JPMorgan Chase and Navient rallied. Whirlpool, which gets most of its revenue overseas, continued to rally as the weaker dollar could boost its sales and aid its earnings. General Electric had a solid fourth quarter, but the stock dropped after the company said it is being investigated by federal regulators after disclosing a $15 billion charge to cover miscalculations by its North American Life & Health insurance business. Abbott Laboratories jumped after its quarterly profit and 2018 adjusted earnings forecast beat estimates.

    These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$20.30 to US$1,353.70. Copper futures were up 3.8 percent to US$3.23. WTI spot crude was up US$1.53 to US$66.00. Dated Brent spot crude was up 91 US cents to US$70.87. The US dollar was down against all of its major counterparts including the yen, euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index tumbled 0.94 percent. The yield on the US Treasury 30 year bond was up 3 basis points to 2.93 percent and the 10 year note was up 2 basis points to 2.64 percent.

    European markets

    European stock indices retreated Wednesday. Both the euro and pound rallied against the US dollar pressuring exporters. Investors also weighed the strong flash PMIs ahead of Thursday’s policy announcement from the European Central Bank. In his press conference, ECB President Mario Draghi is likely to ignore the hawkishness surrounding the robust euro-area economy to signal a dovish stance. Traders will be parsing every word of the forward guidance after the governing council agreed in December to 'revisit' it early this year. The FTSE and DAX lost 1.1 percent, the CAC declined 0.7 percent and the SMI slipped 4.01 points.

    Suez SA tumbled after the utility lowered its 2017 earnings targets, citing costs related to political instability in Spain. Veolia Environnement declined after selling its US industrial cleaning services division for $120 million in an all-cash transaction. Marks and Spencer Group declined after announcing plans to close its London distribution center. Sage Group retreated after it reported that its first-quarter group organic revenue increased by 6.3 percent. Antofagasta declined after it reported full-year copper production in line with guidance.

    Ahold Delhaize was lower in Amsterdam after it reported muted growth in fourth-quarter sales at constant exchange rates. Novartis rallied in Zurich after its 2017 sales and profits topped forecasts. Roche and Nestlé declined. Credit Suisse and Partners Group climbed along with Swiss Re and Zurich Insurance. Apple supplier AMS sank on a broker downgrade. Maersk jumped in Copenhagen on reports it is seeking a partner for its drilling unit.

    Flash January Eurozone composite PMI climbed to 58.6 from 58.1 in December — the highest since June 2006. Germany’s reading for the composite PMI edged down to 58.8 from December's 80-month high of 58.9. France’s reading was 59.7 in January, broadly unchanged from December. The UK ILO unemployment rate held steady at 4.3 percent, the lowest level in 42 years in the three months to December. At the same time, the employment rate rose to 75.3 percent from 74.5 percent a year ago.

    Asia Pacific Markets

    Asian stocks were mixed Wednesday with news of US tariffs on washing machines and sonar panels sparking fears of a global trade war.

    The Shanghai Composite was up 0.4 percent while the Hang Seng inched up 0.1 percent. Mainland Chinese investors were optimistic about growth in 2018.

    The Nikkei and Topix declined 0.8 percent and 0.5 percent respectively thanks to the strengthening yen. The US dollar dropped below the ¥110 threshold for the first time in four months, triggering selling in exporters. Weaker than expected Japanese trade data for December also dented sentiment.

    December’s merchandise trade surplus widened to ¥359 billion in December from ¥112 billion in November. Exports increased 9.3 percent on the year after increasing 16.2 percent in November. Imports advanced 14.9 percent on the year slowing from 17.2 percent in November. Fanuc, Sony, Tokyo Electron, Banks Mizuho Financial, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial Group all retreated. Mitsui Fudosan and Pacific metals however, advanced.

    Both the S&P/ASX and All Ordinaries added 0.3 percent. Banks ANZ, NAB and Westpac edged higher while Commonwealth declined. Insurer QBE jumped on expectations the company is working on improving its return on equity by selling non-core and underperforming assets. Medical equipment maker ResMed advanced. Energy majors Woodside Petroleum, Santos and Oil Search climbed 1 after Brent crude prices surged towards $70 a barrel for the first time in a week. Weaker base metal prices led to the declines BHP Billiton, Fortescue Metals Group and Rio Tinto.

    The Kospi and Sensex both edged up 0.1 percent.

    Looking forward

    Germany posts January Ifo survey. The European Central Bank announces its monetary policy decision. ECB President Mario Draghi’s press conference will follow. Canada releases November retail sales. In the US, December new home sales and leading indicators will be released along with weekly jobless claims, money supply and Fed balance sheet. The meetings in Davos continue.

    Global Stock Markets
      End2018 DailyPercent Change
     Index2017Jan 23Jan 24ChangeDaily2018Yr/Yr
    North America                
    United States Dow 24719.22 26210.81 26252.12 41.31 0.2 6.2 30.8
      NASDAQ 6903.39 7460.29 7415.06 -45.23 -0.6 7.4 31.1
      S&P 500 2673.61 2839.13 2837.54 -1.59 -0.1 6.1 23.5
    Canada S&P/TSX Comp 16209.13 16357.55 16284.21 -73.34 -0.4 0.5 4.1
                     
    Europe                
    UK FTSE 100 7687.77 7731.83 7643.43 -88.40 -1.1 -0.6 6.7
    France CAC 5312.56 5535.26 5495.16 -40.10 -0.7 3.4 12.7
    Germany XETRA DAX 12917.64 13559.60 13414.74 -144.86 -1.1 3.8 13.6
    Italy MIB 21853.34 23836.60 23622.62 -213.98 -0.9 8.1 20.6
    Spain Ibex 35 10043.90 10609.50 10563.00 -46.50 -0.4 5.2 10.6
    Sweden OMX Stockholm 30 1576.94 1643.71 1631.20 -12.51 -0.8 3.4 5.5
    Switzerland SMI 9381.87 9551.58 9547.57 -4.01 0.0 1.8 13.8
                     
    Asia/Pacific                
    Australia All Ordinaries 6167.29 6150.69 6168.81 18.12 0.3 0.0 7.7
    Japan Nikkei 225 22764.94 24124.15 23940.78 -183.37 -0.8 5.2 25.6
      Topix 1817.56 1911.07 1901.23 -9.84 -0.5 4.6 25.0
    Hong Kong Hang Seng 29919.15 32930.70 32958.69 27.99 0.1 10.2 43.0
    S. Korea Kospi 2467.49 2536.60 2538.00 1.40 0.1 2.9 22.8
    Singapore STI 3402.92 3592.08 3609.24 17.16 0.5 6.1 18.7
    China Shanghai Comp 3307.17 3546.51 3559.47 12.96 0.4 7.6 13.0
    Taiwan TAIEX 10642.86 11253.11 11152.16 -100.95 -0.9 4.8 n.a.
    India Sensex 30 34056.83 36139.98 36161.64 21.66 0.1 6.2 30.5

    Data Source — Haver Analytics

    Bond markets
    10-Yr Govt Bonds Closing Yield Change Yield (bp)
    US 2.64% 2
    UK 1.41% 5
    Germany 0.58% 3
    Japan 0.07% 1
    Australia 2.82% -1

    Source — Bloomberg

    Currencies and commodities
    Currency Jan 23 Jan 24Change (%)
    Japanese yen 110.3400 109.1600 1.1%
    Australian dollar 0.8000 0.8075 0.9%
    Yuan 6.4047 6.3575 0.7%
    Euro 1.2294 1.2401 0.9%
    British pound 1.3996 1.4208 1.5%
    Swiss franc 0.9580 0.9459 1.3%
    Canadian dollar 0.8046 0.8111 0.8%

    Source — Bloomberg 

    CommoditiesJan 24Change
    Brent Spot $70.87 1.30%
    Gold (PM fixing) $1,353.70 $20.30
    Thompson-Reuters/ Jeffreys Commodity index 202.89 1.31%

    Source — Bloomberg