Global Market Report - December 1 2017

Global investors are waiting to see whether US equities can match Thursday's record-beating performance

Morningstar 04/12/2560

Asia

With the Dow closing above 24,000 for the first time and surging 300 points overnight, Asian markets were given a fair wind in the last trading day of the week. Japan’s Nikkei moved back closer to the 25-year high levels above 23,000 points. Japanese inflation came in exactly as forecast at 0.2% in October, down from 0.7% the previous month.

Household spending in Japan was unchanged in October from a year earlier, but that is better than the decline seen in September. Japan’s manufacturing sector continued to expand at a healthy pace, the PMI survey revealed, but China’s equivalent data showed a weakening to 50.9, the lowest in five months. China’s currently jittery stock market took the news in its stride, with the Shenzhen Composite rising just over 0.5% to over 11,000 points. Gains in the Shanghai Composite index were more modest.

Europe

After an early attempt at a rise, the FTSE 100 was back in negative territory by midday, falling to just above 7,300 as the pound strengthened on news that UK factories had seen their best month since 2013. The FTSE 100 enters the final month of the year just 130 points above that seen in January 2017, with a move towards the 7,600 level earlier in the year petering out in the autumn.

On the FTSE 100, Babcock (BAB) was the biggest faller ahead of its ejection from the blue-chip index in the quarterly reshuffle. Royal Bank of Scotland (RBS) yesterday announced that it had closed the “bad bank” associated with the financial crisis, and today it said it would cut nearly 700 jobs and close one-in-four branches. The bank’s shares, which had a minor bounce after the firm passed the Bank of England’s stress test, fell 2% to 273p.

Oil majors BP (BP) and Royal Dutch Shell (RDSB) were among the FTSE 100’s biggest risers as oil cartel OPEC yesterday agreed to extend its production cuts.

In the eurozone, Italy’s MIB fell as the country’s third-quarter GDP was lower than forecast.

North America

US markets powered ahead last night, but some anxiety over delays to voting on the tax reform bill may put a brake on further gains on Friday.

Economic data will feature US manufacturing – like the rest of the world, a Purchasing Managers’ Index survey – but also ISM manufacturing and employment data.

Numbers for Canadian GDP and unemployment are due ahead of the market open today, while November’s manufacturing PMI will be released at the opening of trading on the Toronto Stock Exchange.

National Bank of Canada (NA) is the largest company in US and Canada by market capitalisation to report earnings.

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