Global markets moved modestly and with no clear direction on Thursday. The US edged higher despite the yield curve inverting again, Europe and the UK edged lower with investors disappointed by the prior day’s Fed minutes, and Asia closed mixed. Investors now look ahead to Jerome Powell’s speech at the Jackson Hole conference on Friday.
US stocks edged lower early on Thursday as the 10-year/2-year treasury yield curve inverted for the third time since last Wednesday, while weak manufacturing data raised concerns about the health of the economy. However, the S&P 500 (+0.1%) and Dow Jones Industrial (+0.4%) slowly drove out of the red to earn slim gains, while the Nasdaq Composite remains -0.2% lower.
Helping lift the Dow Jones was Boeing, which flew +4.6% into green territory after a broker analyst put out an upbeat note anticipating the Federal Aviation Administration certification flight for the grounded 737 Max planes to potentially occur in the next 4–6 weeks. Also charging higher were Nordstrom shares, which surged +13.3% after the department store operator issued second-quarter financial results that beat consensus expectations. Shares of fellow clothing retailers Gap (+4.0%) and Under Armour (+2.1%) also rose, while L Brands slid -4.8% after issuing second-quarter results that disappointed. Shares of Alexion climbed +7.2% amid rumours Amgen (+0.2%) is closing in with a US$45bn bid to acquire the bio-pharma company. Financials were the top performers in the S&P 500, despite the inverted yield curve typically being a negative for banks. Shares of Wells Fargo (+1.6%), Citigroup (+1.4%), JPMorgan Chase (+1.4%), Goldman Sachs (+1.3%) and Bank of America (+1.2%) rose. Splunk slumped -8.5% despite reporting a significant earnings beat in its second-quarter and announcing a US$1bn acquisition of SignalFX, as the company drastically cut its outlook for operating cash flow.
Signs the Fed isn’t rushing to cut interest rates further in the future weighed on the Stoxx Euro 600 (-0.4%), as did poor performances in the UK and France. Shares of European retailers LVMH (-2.2%) and Adidas (-1.3%) struggled amid concerns Hong Kong protests are beginning to hurt sales in the area.
The UK’s FTSE 100 closed -1.1% in the red, after Boris Johnson completed his trip to visit French President Macron and German Chancellor Angela Merkel, which heightened investors’ fears of a no-deal Brexit, with little indication he had any luck talking either of them into striking a new deal. One bright spot on the market was NMC Health, which skyrocketed +18.6% higher as it was reported two companies are competing to buy a 40% stake in the company.
Asian markets were mixed as Hong Kong continues to be rattled by ongoing protests. The Shanghai Composite edged +0.1% higher, while the Nikkei 225 remained flat and the Hang Seng and Korean Kospi fell -0.8% and -0.7% respectively. The ASX 200 added +0.3% as earnings season ramps up.
WTI crude fell -1.6% to US$54.86 and gold fell -0.2% to US$1,499.26, while iron ore remained flat at US$86.50/MT.
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