Global Market Report - January 8 2018

Global markets, apart from the FTSE 100, started the week in buoyant mood again

Morningstar 11/01/2561

Asia

Markets in the region continued the upward trend seen across global stock indices since the start of the year. Japan’s Nikkei and Topic were closed for a public holiday, while China’s CSI 300 was up by around 0.5% on Friday’s close. Hong Kong’s Hang Seng index moved closer to the 31,000 points level – and within touching distance of the 31,958 record last reached on October 30, 2007.

Looking ahead to this week, Tuesday sees the release of consumer confidence figures for December in Japan, and Wednesday inflation numbers in China will be released. New loan figures for the Chinese economy are also expected midweek. Staying with China, the end of the week is expected to see the release of a range of trade figures for December, including imports and exports. 

Europe

The FTSE 100 stood out on Monday morning among global markets for being a conspicuous faller among a range of rising indices. Earlier, the UK blue-chip index hit a new record of 7,733 points, but the index was dragged down by disappointing interim results from Micro Focus (MCRO). The software and information technology company’s shares were off 15% on the news.

This week sees a raft of UK retailers’ Christmas trading updates, including the big supermarkets. Next (NXT) has already surprised the market on the upside. But today Mothercare (MTC) suffered the fate of Debenhams (DEB) last week, as a profit warning crashed its shares. The mother-and-baby retailer lost a quarter of its value in a morning’s trading, a fact that it is likely to make the executives of companies about to release disappointing updates anxious.

Improved economic sentiment surveys helped boost the eurozone’s largest exchanges, which were all in the black approaching midday.

North America

The puzzle of underperforming inflation in the US will be in focus again this week, with December’s CPI figures released on Friday.

US banks JP Morgan Chase (JPM) and Wells Fargo (WFC) kick off earnings season at the end of the week. With booming stock markets likely to have boosted traded profits and an improving economy reducing loan default rates, US banks are unlikely to spring too many surprises to upset the current bull market. However, the banks put in a mixed performance in the last earning season, with some obvious underperformers in a generally upbeat sector.

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