Most stocks advanced Friday despite mixed earnings and looming US government shutdown (只備英文版)

  • 2018年1月22日

    Most stocks advanced Friday despite mixed earnings and looming US government shutdown (只備英文版)

    US stocks continued to climb to new highs at week’s end, virtually ignoring the possibility of a US government shutdown at midnight. The Dow Jones industrials, S&P and Nasdaq all closed at new record highs. The Dow was up 0.2 percent, the S&P added 0.4 percent and the Nasdaq gained 0.6 percent. On the holiday shortened week the Dow and Nasdaq were up 1.0 percent while the S&P was 0.9 percent higher.

    US markets

    US stocks continued to climb to new highs at week’s end, virtually ignoring the possibility of a US government shutdown at midnight. The Dow Jones industrials, S&P and Nasdaq all closed at new record highs. The Dow was up 0.2 percent, the S&P added 0.4 percent and the Nasdaq gained 0.6 percent. On the holiday shortened week the Dow and Nasdaq were up 1.0 percent while the S&P was 0.9 percent higher.

    Retailers, banks and consumer goods companies accounted for much of the gains. Energy stocks declined along with crude oil prices. Utilities also declined as bond yields edged up to their highest level in more than three years. The market rally suggested that the possibility of a federal government shutdown this weekend wasn't worrying traders. At market close on Friday, despite eleventh-hour effort to reach an agreement, there was no sign that a government shutdown would be averted before a midnight Friday (US Eastern Time) deadline. A continuing budget resolution late Friday night failed to pass the Senate and the government duly closed at one minute after midnight.

    Mattel climbed. Philip Morris International, British American Tobacco, Universal, Nike and Campbell Soup also advanced. Banks and other financial stocks also rose. Synchrony Financial gained. Lowe's was higher after the home-improvement supply retailer named three new directors. However, IBM slumped despite a solid fourth quarter report. American Express retreated after the credit card issuer suspended its share buy-back program for six months following a big one-time tax charge.

    These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$2.75 to US$1,334.95. Copper futures were down 0.36 percent to US$3.19. WTI spot crude was down 58 US cents to US$63.37. Dated Brent spot crude was down 70 US cents to US$68.61. The US dollar was up against the euro, pound, Swiss franc and the Canadian dollar. It retreated against the yen and was virtually unchanged against the Australian dollar. The Dollar Index was up 0.2 percent. The yield on the US Treasury 30 year bond was up 3 basis points to 2.93 percent while the 10 year note was up 4 basis points to 2.66 percent.

    European markets

    European shares advanced Friday even though energy stocks were under pressure thanks to declining crude oil prices. Investors managed to shrug off concerns over a possible US government shutdown. The FTSE was up 0.4 percent, the CAC and SMI each added 0.6 percent and the DAX advanced 1.2 percent. On the week, the FTSE and SMI declined 0.6 percent and 0.4 percent respectively while the CAC and DAX were 0.2 percent and 1.4 percent higher.

    BASF rallied after its preliminary sales for 2017 rose 12 percent. Software AG jumped after the firm said that the US Federal Tax reforms will have a positive impact on the future business results of the group. ThyssenKrupp gained after its CEO confirmed its full year 2018 forecast at its annual general meeting. Ceconomy tumbled after the company's operating profit fell 16 percent in the first quarter, reflecting price reductions around Black Friday.

    Remy Cointreau retreated even though its third-quarter sales growth surpassed estimates. Air France-KLM rose despite broker downgrade. Dignity and Carpetright plummeted after issuing profit warnings. EasyJet climbed on a broker upgrade. Logitech advanced prior to reporting financial results next Tuesday. Geberit rose after reporting strong fourth quarter sales growth on Thursday. UBS and Credit Suisse gained along with Richemont and Swatch. Novartis and Roche both increased but Nestlé retreated in Zurich.

    Germany's December producer price inflation eased to 2.3 percent on the year after increasing 2.5 percent in November. UK December retail sales tumbled a monthly 1.5 percent, the biggest drop since June 2016. Sales advanced 1.0 percent in November when consumers were lured by Black Friday promotions.

    Asia Pacific Markets

    Most Asian stocks rose Friday thanks to stronger than expected fourth quarter Chinese gross domestic product data and expectations for strong corporate earnings. They helped investors shrug off concerns about a potential US government shutdown.

    The Shanghai Composite was up 0.4 percent after fourth quarter growth figures beat expectations. The Hang Seng was also up 0.4 percent. For the week, the Shanghai Composite was up 1.7 percent and the Hang Seng added 2.7 percent.

    The Nikkei was up 0.2 percent and the Topix gained 0.7 percent. For the week, the both indices were 0.7 percent higher. Toyota, Honda, Canon, Panasonic and Sony rose despite the yen's strength. Lender Sumitomo Mitsui Financial, Mitsubishi UFJ and Nintendo rallied.

    Both the S&P/ASX and All Ordinaries lost 0.2 percent Friday. For the week, the former was down 1.1 percent and the latter, 0.9 percent. Gold miners Regis Resources, Northern Star, Newcrest and Saracen Mineral Holdings declined. Rio Tinto retreated after reportedly halting shipments from Mongolia mine. BHP Billiton and Fortescue Metals Group ended lower after iron ore prices dipped overnight.

    The Kospi was up 0.2 percent and 1.0 percent on the week. The Sensex added 0.7 percent Friday and 2.7 percent for the week.

    Looking forward
    Central Bank activities    
    Jan 23 Japan Bank of Japan Monetary Policy Meeting
    Jan 25 Eurozone European Central Bank Monetary Policy Announcement
         
    The following indicators will be released this week...    
    Europe    
    Jan 23 Germany ZEW Survey (January)
    Jan 24 Eurozone PMI Manufacturing, Services & Composite Survey (January flash)
      Germany PMI Manufacturing, Services & Composite Survey (January flash)
      France PMI Manufacturing, Services & Composite Survey (January flash)
      UK Labour Market Report (December)
    Jan 25 Germany Ifo Survey (January)
    Jan 26 Eurozone M3 Money Supply (December)
      UK Gross Domestic Product (Q4. 2017 first estimate)
         
    Asia Pacific    
    Jan 24 Japan Merchandise Trade Balance (December)
        PMI Manufacturing Survey (January flash)
    Jan 26 Japan Consumer Price Index (December)
         
    Americas    
    Jan 24 United States PMI Manufacturing, Services & Composite Survey (January flash)
        Existing Home Sales (December)
    Jan 25 Canada Retail Sales (November)
      United States Initial Unemployment Claims (week ending prior Saturday)
        International Trade in Goods (December)
        New Home Sales (December)
        Leading Indicators (December)
    Jan 26 United States Durable Goods Orders (December)
        Gross Domestic Product (Q4.2017 first estimate)
      Canada Consumer Price Index (December)
    Global Stock Markets
      End DailyPercent Change
     Index2017Jan 18Jan 19ChangeDaily2018Yr/Yr
    North America                
    United States Dow 24719.22 26017.81 26071.72 53.91 0.2 5.5 31.5
      NASDAQ 6903.39 7296.05 7336.38 40.33 0.6 6.3 32.1
      S&P 500 2673.61 2798.03 2810.30 12.27 0.4 5.1 23.7
    Canada S&P/TSX Comp 16209.13 16284.47 16353.46 68.99 0.4 0.9 5.2
                     
    Europe                
    UK FTSE 100 7687.77 7700.96 7730.79 29.83 0.4 0.6 7.4
    France CAC 5312.56 5494.83 5526.51 31.68 0.6 4.0 13.9
    Germany XETRA DAX 12917.64 13281.43 13434.45 153.02 1.2 4.0 15.5
    Italy MIB 21853.34 23630.81 23749.22 118.41 0.5 8.7 21.9
    Spain Ibex 35 10043.90 10432.70 10479.50 46.80 0.4 4.3 11.7
    Sweden OMX Stockholm 30 1576.94 1624.78 1630.62 5.84 0.4 3.4 6.9
    Switzerland SMI 9381.87 9452.35 9509.77 57.42 0.6 1.4 14.9
                     
    Asia/Pacific                
    Australia All Ordinaries 6167.29 6130.37 6119.30 -11.07 -0.2 -0.8 7.2
    Japan Nikkei 225 22764.94 23763.37 23808.06 44.69 0.2 4.6 24.4
      Topix 1817.56 1876.86 1889.74 12.88 0.7 4.0 23.2
    Hong Kong Hang Seng 29919.15 32121.94 32254.89 132.95 0.4 7.8 40.9
    S. Korea Kospi 2467.49 2515.81 2520.26 4.45 0.2 2.1 22.0
    Singapore STI 3402.92 3521.31 3550.36 29.05 0.8 4.3 17.9
    China Shanghai Comp 3307.17 3474.75 3487.86 13.11 0.4 5.5 11.7
    Taiwan TAIEX 10642.86 11071.57 11150.85 79.28 0.7 4.8 19.5
    India Sensex 30 34056.83 35260.29 35511.58 251.29 0.7 4.3 31.4

    Data Source — Haver Analytics

    Bond markets
    10-Yr Govt Bonds Closing Yield Change Yield (bp)
    US 2.66% 4
    UK 1.34% 1
    Germany 0.56% 0
    Japan 0.07% 0
    Australia 2.86% 5

    Source — Bloomberg

    Currencies and commodities
    Currency Jan 18 Jan 19Change (%)
    Japanese yen 111.0800 110.7200 0.3%
    Australian dollar 0.7994 0.7997 0.0%
    Yuan 6.4200 6.4040 0.2%
    Euro 1.2235 1.2228 -0.1%
    British pound 1.3887 1.3867 -0.1%
    Swiss franc 0.9592 0.9628 -0.4%
    Canadian dollar 0.8050 0.7999 -0.6%

    Source — Bloomberg 

    CommoditiesJan 19Change
    Brent Spot $68.61 -1.01%
    Gold (PM fixing) $1,334.95 $2.75
    Thompson-Reuters/ Jeffreys Commodity index 198.78 -0.42%

    Source — Bloomberg