Morning report

Morning News Summary

Investors Eagerly Await the Fed

Global Markets are mixed on Tuesday, with the US extending gains into record territories, the UK capitalising on a weaker pound and Japan surging out of a public holiday. Europe struggled to move higher and Asian markets were lower on quieter trading. This comes as the Fed begins a two-day meeting where investors expect to see rates to rise.

US indices continue to push further into record territory

US stocks are up Tuesday, with the S&P 500 and Nasdaq Composite edging +0.1% higher each, and the Dow Jones Industrial Average adding +0.2% as investors await the start of a two-day Fed meeting. Telecommunication stocks are among the top performers, carried by an +8.6% spike in Sprint shares after news that the company is in talks with T-mobiles parent Deutsche Telecom (+3.1%) over a possible merger. The ensuing positivity was extended through to other shares in the sector, such as AT&T (+2.6%) and Verizon Communications (+2.6%). US financials gained on anticipation of possible monetary policies and fiscal stimulus to come out of the Fed meeting, among them Wells Fargo, JP Morgan and Citigroup increased by +1.6%, +1.5% and +1.4% respectively. Healthcare stocks disappointed, with Humana, Allergan and Illumina losing -3.4%, -2.9% and -1.6% to sit among the worst performers in the day.

European stocks flat while the UK continues Monday’s gains

The Stoxx Europe 600 swung between small gains and losses, eventually closing unchanged on Tuesday, with investors staying cautious ahead of this week’s Fed meeting—which will be scrutinized for hints on future US monetary policy. Amongst the biggest decliners in Europe was Heineken, slipping -3.8% after FEMSA announced it is selling a 5.25% stake in the Dutch brewer.Gains in supermarkets shares and a pullback from around 15-month highs in the pound against the US dollar led the UK’s FTSE 100 to extend gains by +0.3%. National sales across supermarkets rose by +3.6% year to date, leading shares of J Sainsbury, WM Morrison and Tesco +2.6%, +2.0% and +1.0% higher respectively. AstraZeneca shares made gains for the first time in nearly a week, adding +1.4%. Financials picked up on yesterday’s gains, with investors keeping watch of global banks, anticipating the Fed to announce a massive bond sale. HSBC (+1.2%), Lloyds (+1.1%) and Royal Bank of Scotland (+1.0%) each rose.

Bar a surge from Japan, Asian markets were muted

Asian markets were mostly lower ahead of central-bank meetings in Japan and the US. The Hang Seng (-0.4%), Kospi (-0.2%) and Shanghai Composite (-0.2%) each made losses. Japan, however, bucked the trend, with the Topix surging by +1.8% after coming out of a holiday on Monday with a weakened Yen.

ASX 200 edges lower

The ASX 200 was relatively muted, edging down -0.1% lower at market close.

Crude and iron ore drop while gold remains flat

WTI crude fell -0.5% to US$49.67 while gold was unchanged at US$1,307.24. Iron ore dropped -US$2.91 to US$68.9/MT.

Today’s events

  • StatsNZ: Balance of Payments — Jun. 2017 qtr
  • SPG ex interim div 2.07 cps (stapled 0.41 cps)


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