Global Market Report - February 2, 2018

Global markets were generally weaker on Friday ahead of the US jobs report

Morningstar 07/02/2561

Asia

Markets in the region were again mixed after a tepid performance from US indices overnight. The general drift was lower, which included a daily fall for Japan’s Nikkei, Hong Kong’s Hang Seng – a recent strong performer – but China’s CSI 300 bucked the trend, driven by a rise in the Shenzhen index. China’s economy is in focus next week, with the services purchasing managers’ index revealed on Monday for January. Thursday brings a raft of trade data, including imports and exports, which will show how well China is transitioning away from being an export-dominated economy.

Europe

After the UK’s manufacturing sector missed growth forecasts in the January PMI survey, today’s construction figures also came in below expectations. At 50.2, the survey suggests that the construction industry only just expanded in January – although the month is usually among the weakest for construction activity, with the spillover from the festive period and snow affecting onsite activity. The UK’s dominant services sector will be in focus with the equivalent survey on Monday, although growth in this sector is expected to be healthier than with manufacturing and construction.

The FTSE 100 drifted lower on Friday morning, losing 25 points to 7,466, weighed down by a disappointing trading update from telecoms firm BT (BT.). Shares in pharmaceutical giant AstraZeneca (AZN) were also lower after a sharp drop in profits for the full year.  A drop in sterling against the dollar and the euro failed to help sentiment towards UK equities.

Eurozone exchanges followed the global trend and were down by around 1% approaching midday.

North America

This crowded week for earnings and economics comes to a head today with the release of US job numbers for January. The forecast is for 180,000 jobs to have been added in January, against a rise of 148,000 in December. The unemployment rate is expected to stick at 4.1% for the month.

US oil giants Chevron (CVX) and Exxon Mobil (XOM) reveal earnings before the market opens on Friday.

With Google parent company Alphabet (GOOGL), Apple (AAPL) and Amazon (AMZN) reporting after the market closed last night, tech investors will be keen to see what the share price reaction will be to a mixed group of earnings.

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