Global Market Report - August 15 2017

Asian and European indices posted modest gains, while UK inflation data and Germany's GDP were the standout economic news

James Gard 15 August, 2017 | 11:27AM
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Asia

World markets continued to benefit from a dropoff in the nuclear rhetoric between the US and North Korea. Japanese investors reacted to Monday’s stronger than expected GDP data, with the Nikkei closing up over 1% at 19,753. Japan’s industrial production in June was up 5.5% year-on-year, against 4.9% in June.

Hong Kong’s Hang Seng was index was less than 0.3% lower at 27,174.96, while the Shanghai Composite index was up just 0.31% at 3706.06. Beyond the markets, the pressure on the North Korean regime has been continued by China banning imports of coal, iron ore and seafood from North Korea – implementing UN sanctions. China itself could be subject of sanctions after President Trump ordered a review of the Chinese approach to intellectual property, which has long been a bugbear for US governments.

Europe

Most European indices made modest gains amid a range of economic data. UK inflation was the standout, with CPI unchanged at 2.6%. The steadying in inflation rates pushed the pound lower against the dollar and euro. UK inflation is now higher than that of 10 other developed nations, including the US and Germany, but markets are not pricing in a rate rise in response.

Germany’s economy grew 0.6% in the second quarter – the UK was up just 0.3% in the same period - and Q1 numbers were revised up to 0.7%. The data gave some support to the Dax, as campaigning for the autumn elections in Germany begins in earnest.

On the FTSE 100, the biggest risers came from a variety of sectors. Defence giant BAE Systems (BA), rose nearly 2% to 591p after a broker upgrade. Newly merged fund company Standard Life Aberdeen (SLA) made a positive start, rising 1.9% to 432p.

Most European indices were up less than 0.5% by 11am BST.

North America

The Dow Jones Industrial Average closed just short of 22,000 on Monday, and analysts expect stronger retail sales data for July to help the index to breach this key level again. July’s output is expected to have risen by 0.4%, against a fall of 0.2% in June. Results from Home Depot (HD) today and Walmart (WMT) later in the week are likely to keep the US consumer in focus.

Other companies reporting on Tuesday are Dick’s Sporting Goods (DKS) and Urban Outfitters (URBN). In Canada, existing home sales for July are the standout data, while Quebec-based food distributor Metro (MRU) is set to report earnings.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
abrdn PLC136.90 GBX-0.29
BAE Systems PLC1,373.00 GBX-0.65Rating
Dick's Sporting Goods Inc199.98 USD2.49Rating
Metro Inc85.83 CAD0.87Rating
The Home Depot Inc399.44 USD2.85Rating
Urban Outfitters Inc37.31 USD2.90Rating
Walmart Inc83.85 USD0.49Rating

About Author

James Gard

James Gard  is senior editor for Morningstar.co.uk

 

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