Global Market Report - July 5, 2018

European carmaker shares rose today amid talk of a possible breakthrough between the United States and the EU over tariffs

Morningstar 10/07/2561

Asia

Asia stocks continued their weaker trend on Thursday despite missing the usual cues from US markets, which were closed for the Fourth of July.

China’s Shanghai Composite Index lost another near-1%, although Hong Kong’s losses were more modest. A drop in the yen against the dollar failed to support Japanese equities on Thursday as domestic stocks fell foul of the global malaise.

Europe

Carmaking stocks in Europe benefited from signs of concessions by the United States over tariffs, although the story came from German media rather than official sources. Stocks such as BMW (BMW), VW (VOW) and Fiat Chrysler (FCA) were higher on European exchanges.

Germany’s DAX, France’s CAC 40, and Spain’s IBEX were all up around 1% approaching midday.

On the FTSE 100, gains were more modest. Miners were in the ascendant, with recently sold-off Glencore (GLEN) the biggest riser on news of a share buyback. Primark owner Associated British Foods (ABF) was the biggest faller despite leaving profit forecasts for the full year unchanged. Investors fretted more about sugar margins than clothing profits after the latest trading statement.

North America

US service sector data is published today, as are the Federal Reserve minutes from the last meeting, which saw a quarter point rise in interest rates. Traders are assuming another two interest rate rises from the Fed, something supported by recent economic data. Despite a looming trade war, US economic indicators are positive. This month’s non-farm payroll data is expected to show an increase in jobs of just under 200,000 for July.

Futures are suggesting a modest recovery is US shares as markets re-open. Earnings season kicks off again next week with the big Wall Street banks; will forecast-beating news from America’s biggest companies help the markets out of their current malaise? Or will trade concerns trump fundamentals this earnings season?

 

 

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