Global Market Report - January 25

World markets look set to close the week higher, with European commodity stocks buoyed by signs of recovery in China equities

Morningstar 30/01/2562

Global Market Report

Asia

Hong Kong’s Hang Seng was the outperformer among Asia-Pacific indices today with a rise of nearly 2% on the day. China’s CSI 300, which mirrors the top stocks of the Shanghai and Shenzhen indices, was up by under 1%.

While concrete news on US-China deal remains elusive, and with Chinese New Year looming, markets are likely to trade on a “wait and see” approach and stay within recent bounds. The Shanghai Composite Index is up around 150 points since the start of the year, but at 2,601, it is around 1,000 points lower than at this point last year.

Europe

The euro gained despite Germany’s IFO survey showing the weakest sentiment in nearly three years. Mario Draghi’s cautious tone at yesterday’s European Central Bank press conference chimed with data coming out the currency bloc, especially Germany. In the ECB quarterly survey, the growth forecast for the Eurozone for 2019 has been dropped to 1.5% from 1.8%, while 2020 growth is expected to be 1.5%, against an earlier forecast of 1.6%.

The FTSE 100 moved modestly higher on the day but the recent level of just shy of 7,000 points looks a way away now. The index has been held back this week by gains in the pound, which has moved up to $1.31 on glimmers of hope over a Brexit deal. The vote next Tuesday remains the key pivot point for sterling.

Vodafone (VOD) was weaker as quarterly revenue fell in the most recent three months, and its shares were under pressure again.

North America

US futures are predicting a rise at the open on Friday.

Abbvie (ABBV) and Colgate-Palmolive (CL) report numbers today.

The release of today’s US Durable Goods Orders data looks set to be another victim of the US Government shutdown, with the release delayed.

The Federal Reserve is set to beat the shutdown and meet next week for the first time this year, although no change to interest rates is expected.

Next week the tech earnings season kicks off in earnest, with Apple (AAPL) releasing numbers after the closing bell on Tuesday.

 

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