Global Market Report - December 3

News of a trade ceasefire between the US and China has sent Asia-Pacific and European markets soaring on the first trading day of December

Morningstar 06/12/2561

Global Market Report

Asia

Positive news from the G20 about a suspension in hostilities between the US and China helped world markets rally on the first trading day of the month. The 90-day truce in the trade war between both sites has been received as a breakthrough by the White House.

China and Hong Kong indices were the first to react to the upbeat news and closed up over 2.5% on Friday’s levels. The Shenzhen Component Index was the highest gainer in the Asia-Pacific region with a rise of 3.3% to 7,938 points.

Japan’s Nikkei 225 was 1% higher, while South Korea’s KOSPI was up by 1.6% on Friday’s closing levels.

Europe

The UK’s FTSE 100 was up over 2% in midmorning trading to 7,137 points, which takes the index back to levels seen in early November. But despite today’s rally, the FTSE 100 is a way off the record high of 7,859 points seen in May this year.

China-exposed mining shares showed substantial rises this morning, with Antofagasta (ANTO) up nearly 9% on Friday’s close. The FTSE 100 reshuffle looms tomorrow, with Royal Mail (RMG) expected to be ejected after a recent fall in value.

In the Eurozone, Germany’s DAX was the best performing index in percentage terms, while France’s CAC wasn’t too far behind, despite the escalating social unrest in the country.

North America

Dow futures are showing a rise of 500 points on Monday. The Fed’s sudden caution over 2019 interest rate rises has combined with the weekend’s positive developments over trade at the G20 Summit to firm up the idea of an end-of-year rally for world markets.

The non-farm payroll figures, due on Friday, have always have the potential to derail a rally. The US is expected to have added just under 200,000 jobs in November, lower than the previous month. A provisional reading of December’s University of Michigan sentiment index is due on Friday.

This week sees the release of manufacturing data in Canada and the US. Canada’s central bank is expected to keep interest rates on hold at 1.75% on Wednesday, while Federal Reserve chairman Jerome Powell testifies before the Joint Economic Committee in Congress on the same day.

US stock markets are expected to be closed on Wednesday as a mark of respect for George Bush, the former President who died at the weekend.

In Canada, more banks report earnings this week.

 

 

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