Morning report

Morning News Summary

Red Week Holds on Mixed Friday

Most sharemarkets outside America rose on Friday, however, each market made chunky weekly losses as US–China trade concerns continued to plague investors. US equities slid into the red, while the UK and Europe gained thanks to a recovery in oil prices after OPEC and Russia agreed to production cuts. Most Asian markets also rose.

US stocks sink lower

The S&P 500, Dow Jones Industrial Average and Nasdaq Composite retreated by -2.3%, -2.2% and -3.1% respectively, helping each index close down by between -4.5% and -4.9% for the week, the biggest weekly percentage decline for all three since March. Lack of any concrete progress toward reducing US–China trade tensions bolstered risk-off sentiment and overshadowed the November employment report.

Ulta Beauty, the US beauty store operator, made the biggest drop on the S&P 500, tumbling -13.1% after releasing earnings that came with weaker holiday sales than analysts had hoped for. The tech sector was the worst performing in the market, headlined by significant losses in the shares of Advanced Micro Devices (-8.6%), Nvidia (-6.8%), Netflix (-6.3%), Micron Technology (-6.3%), Intel (-4.4%), Intuit (-4.3%), Amazon (-4.1%), Apple (-3.6%), Alphabet (-2.9%) and Facebook (-1.6%). Shares of Broadcom bucked the trend, managing a +0.6% increase thanks to fourth-quarter fiscal results coming in ahead of consensus expectations. The energy sector experienced a mild recovery after being a major drag on the market earlier in the week, with the sector led by a +1.7% gain in Schlumberger shares.

European and UK stocks climb on Friday, but down for the week

European equities snapped a 3-day losing streak, with the Stoxx Europe 600 closing +0.6% higher, however, it was still lower for the week amid growing concerns that the US–China trade row may erupt again. German healthcare company Fresenius was the worst performing stock on the index, dropping by -17.0% after it released a profit warning. Helping lift the region was a rebound in energy stocks, with key players Royal Dutch Shell and Total adding +2.6% and +1.7% respectively.

The UK’s FTSE 100 bounced back, adding +1.1%, with support coming from a rally in oil stocks after OPEC and Russia agreed to cut output. Investors now look ahead to this week’s parliamentary vote on Brexit. Tesco shares rose +2.7% after two former executives were acquitted in a fraud and false accounting trial. Associated British Foods fell by -4.6% after announcing that trading at its Primark clothing retail stores was “challenging” in November.

Asian markets mostly shift higher

Asian markets managed to move into the green, aided by a soft recovery in the US on Thursday. The Taiwan SE (+0.8%), Nikkei 225 (+0.8%) and Kospi (+0.3%) each rose, while the Shanghai Composite remained flat, and the Hang Seng fell by -0.4%.

The ASX 200 added +0.4%.

Crude and gold up, iron ore down

WTI crude rose +2.2% to US$52.61 and gold rose +0.9% to US$1,248.35, while iron ore lost -US$1.00 to US$66.90/MT.

Today’s events

  • Green Cross Health ex interim div 3.50cps


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