Asia
Markets in Asia-Pacific were mixed, with Japan losing ground and China and Hong Kong rallying after another record close for the Dow Jones and S&P 500 overnight. The Hang Seng rose nearly 1.5% to 29,222, moving closer to the pre-financial crisis high above 30,000 that the Hong Kong index hit at the end of November.
Europe
Following on from Tuesday’s inflation numbers, today’s UK unemployment numbers revealed a slight rise in the percentage of jobless people to 4.3%. But average weekly earnings – in the three months to October – rose by 2.5%. But the gap between CPI inflation at 3.1% and RPI inflation at 4% means that the British workers are still seeing their incomes squeezed by the rising cost of living.
The pound made an early move higher against the euro, which stalled the FTSE 100’s attempts to make gains above the 7,500 points level it breached on Tuesday.
In company news, Tui Travel (TUI) led the FTSE 100 on a sharp rise in full-year profits and a hike in the dividend. The company, which is listed in London and Frankfurt, said that demand for cruise holidays has driven this year’s strong results. But it said that the squeeze on British holidaymakers from the fall in the pound has led to more emphasis on affordable holidays outside the eurozone.
Interim results from Dixon Carphone (DC) pushed the shares higher on the FTSE 250, despite a fall in demand for smartphones from customers, who are often delaying mobile phone upgrades.
Eurozone exchanges were modestly lower approaching midday.
North America
The biggest event on the global economics calendar this week, and indeed month, is tonight’s interest rate announcement from the Federal Reserve. The market assumption is that the Fed will raise rates by 0.25%, which has been widely trailed by members of the FOMC in recent weeks and months. The bigger question is what will happen in the New Year and how many rate hikes we will see in 2018.
It will also be Janet Yellen’s last meeting as Federal Reserve chair, with a new leader – expected to be Jerome Powell – to start in the New Year.
Morningstar’s Jim Sinegal says: “Some are concerned that the Fed may be raising rates too fast. The Fed has outlined a fairly aggressive path for further increases in 2018, but futures data show that the market is only expecting one more rate increase. We think that's because inflation has been lower than the target, and wage growth has also been relatively slow.”
Before the Fed announcement, US inflation numbers will be released before the market opens – the Consumer Price Index is forecast to have risen by 2.2% in November on a year-on-year basis, up from 2% the month before.
Company earnings results are uneventful but news of Disney’s (DIS) $60 billion takeover of 21st Century Fox's media assets (FOXA) is holding investors’ attention as the end of the year approaches.
