Global Market Report - July 13

Stock markets were content to ignore trade fears for now, while President Trump's media interview on Brexit hit the pound

Morningstar 16/07/2561

Global Market Report


Japan was the standout market in Asia Pacific on Friday as global markets looked to close the week on a positive note. A near-2% gain in the Nikkei pushed the index back towards the 23,000 points level. In China, the main markets were mixed, with Shenzhen posting gains amid a retreat for the Shanghai Composite Index. While trade tensions have not exactly disappeared, investors have been encouraged this week by China’s restrained response to the recent threats of $200 billion in extra tariffs by the United States. China’s trade surplus with the US expanded in June as imports fell sharply


Donald Trump’s visit to the United Kingdom was always expected to test the nerve of diplomats but currency traders are the latest group to be affected by the President’s frankness. The pound has been tested recently by the resignation of two Cabinet ministers, although the loss of the Foreign Secretary had more impact on sterling than the exit of the Brexit Secretary, David Davis. Sterling suffered again after Trump said a soft Brexit would not help Britain’s chances of a free trade deal with the United States. Early this year sterling looked set to retest pre-Brexit levels above 1.45 against the dollar. But now the pound is threatening to break through 1.32.

Investors in FTSE 100 trackers and dollar earning stocks will not mind too much as the index spiked back above 7,700 points at the end of a choppy week. Micro Focus (MCRO) was head of the FTSE 100 in early trading, with only three stocks in the red.

In Europe, Spain lagged while Germany and France made modest gains.

North America

Today sees the start of second quarter earnings season, with banks JP Morgan (JPM), Wells Fargo (WFC) and Citigroup (C) firing the starting gun. With the US economy performing strongly and the jobs market buoyant, nasty surprises for US investors are unlikely this reporting period.

Oil companies are expected to have a good earnings season with the recent rise in commodity prices. Rising inflation will be a feature of many companies’ reports. Tech firms will no doubt focus on privacy concerns among consumers in the wake of the Cambridge Analytica scandal.

Today also sees the release of the University of Michigan Sentiment Index for July.



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