Asia
Chinese stock markets drifted lower on Thursday after the recent trade talk rally run out of steam. The mood music surrounding the talks is still positive, but a lack of concrete announcements has underwhelmed regional investors. China’s inflation data for December came in below forecasts – the cost of living as measure by the Consumer Price Index rose 1.9% in the last month of the year, against forecasts of 2.1% and an annual rise of 2.2% in the previous month. The data chimes with the idea that China’s economy is running out of steam.
Japan’s Nikkei was the worst-performing of Asia-Pacific’s major markets, with a daily loss of over 1%.
Europe
Supermarkets were at the top of the FTSE 100 this morning after Tesco (TSCO) and Marks & Spencer (MKS) updated the market on Christmas trading. The uplift in retail stocks doesn’t mean that festive updates have been universally positive: Tesco’s like-for-like sales were up 1.2% in the 19 weeks to January 5, while Marks & Spencer’s were down 2.2% in the 13 weeks to 29 December. Sainsbury’s (SBRY) Christmas trading was disappointing. “Excluding the potential benefits from a successful Asda acquisition, we think Sainsbury continues to be less prepared to face the fierce competitive environment in the UK grocery market,” Morningstar analyst Ioannis Pontikis said.
Nevertheless, the British Retail Consortium said that its members had their worst December since 2008
Despite the retail bounce, the FTSE 100 was marginally lower this morning, reflecting mixed trading in European markets today.
North America
Stock futures suggest the first loss in five sessions for Wall Street as US markets catch up with the new uncertain mood in Asia and Europe.
US interest rate doves took comfort from the Federal Reserve’s use of the word “patient” to describe the course of monetary policy this year.
“Many participants expressed the view that, especially in an environment of muted inflation pressures, the Committee could afford to be patient about further policy firming," the minutes said.
Fed chair Jerome Powell remains in the public eye with a speech to the Economic Club of Washington this evening.
US inflation data for December on Friday is expected to show a drop in the rise in the cost of living from 2.2% in November to 1.9% in December – a drop below the Fed’s inflation target.
Cogeco Communications (CCA) is one of the largest Canadian companies to report this week, with earnings due on Thursday.
