Morning report

Morning News Summary

Fed Minutes Weigh on Investors

US indices recovered from Wednesday afternoon’s declines as upbeat data on the labour market helped investors shake off the minutes from the Federal Reserve’s January meeting, which hinted that an interest rate hike is in the pipeline. Europe and the UK declined on the back of downbeat data and the Fed minutes.

US benchmark indices rally on the back of positive labour data

After the Fed minutes disappointed the market on Wednesday afternoon, US stocks rebounded on Thursday morning as the impact of an interest rate hike was outweighed by US jobless claims falling by 7,000. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite Index rallied +1.4%, +1.0% and +0.8% respectively. General Electric recovered +3.9%, reversing most of the week’s earlier losses, after the company reiterated guidance on Wednesday afternoon. United Technologies Corporation rose +3.9% after its CEO talked about breaking up the company. Tesla jumped up +3.8%. Halliburton tacked on +2.5%. Walmart rebounded +1.9% after two sessions of sharp losses. Gilead Sciences stock fell -0.7% after the company announced a partnership worth up to US$3.2bn with gene editing company Sangamo (+22.1%).

Europe and the UK pulled into the light red by Fed minutes and new data 

European equities inched lower following the release of a downbeat German business sentiment survey and the release of the Federal Reserve’s meeting minutes on Wednesday. The Stoxx Europe 600 slipped into the light red, losing -0.1%. LafargeHolcim rose by an additional +0.8% after gaining in the previous session following the announcement of plans to invest in a growth strategy in India. LVMH inched up +0.7% to build on gains from earlier this week.

The UK’s FTSE 100 lost -0.4% as disappointing UK economic growth data and the release of the Federal Reserve’s meeting minutes weighed on investor sentiment. HSBC led losses, shedding -2.6%. British American Tobacco dipped -2.2% after reporting that volume of sales of cigarette and tobacco-related products fell -2.6%. Barclay’s shares bounced up +4.4% after the bank announced that it would more than double its dividend next year.

Most Asian indices fall as higher interest rates weigh on investors

Most Asian benchmark indices fell, following a sharp sell-off in the US that was caused by renewed concerns about higher interest rates. The Hang Seng Index (-1.5%), the HSCEI (-1.3%), Japan’s Topix (-0.9%) and South Korea’s Kospi (-0.6%) all moved into the red. The Shanghai Composite Index bucked the trend and jumped up +2.2% in its first day back from the new year holiday.

ASX 200 moves into the light green

The ASX 200 finished little changed for the third session in a row, nudged up by +0.1% as gains by financial sector stocks were offset by losses in the property, infrastructure and oil sectors.

Crude, gold and iron ore all progress higher

WTI crude crawled +0.3% higher to US$61.8, while gold rose +0.4% to US$1,329.3. Iron ore sprung up +1.9% to $79.5/MT.

Today’s events

  • 1H18 result: CVT, DGL, POT, SLI, STU
  • PFI ex final div 2.15 cps
  • SUM FY17 result

 

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This morning summary has been provided by Forsyth Barr Ltd and is for general information purposes only - your financial situation or goals have not been taken into account. If you would like more information or advice that is specific to you, talk to your Authorised Financial Adviser.