Global market report - February 26

European and Asian markets struggled on Tuesday, while US investors awaited Jerome Powell's Senate testimony and the start of the Trump-Kim summit

James Gard 26 February, 2019 | 7:00PM

North America

 

US markets’ reaction to news of a breakthrough in US-China trade talks was muted last night, certainly compared to Shanghai’s 5.6% surge yesterday, with very modest gains on the Dow, S&P 500 and Nasdaq.

Housing market statistics are in view today, including home price indices, housing starts data for December as well as building permit numbers. The US consumer confidence index, expected after the market opens, is expected to show a rise.

Federal Reserve chair Jerome Powell testifies before the Senate banking panel on today, a testimony which is usually closely watched. He also delivers his twice-yearly testimony to the House of Representatives panel on Wednesday. And on Friday he speaks on “economic developments and longer-term challenges”.

The Trump-Kim summit starts in Vietnam on Wednesday. While the meeting is less historic than last year’s, any newsflow has the potential to move markets – particularly as US-China talks are almost running in parallel with those between America and North Korea.

In figures due on Wednesday, Canadian inflation is expected to have dropped back from 2% to 1.4% from December to January, as measured by the consumer price index. Canada’s economy is forecast to have grown by 1.4% in December from the same month in 2017. The GDP data is due on Friday.

Tesla (TSLA) shares are under pressure in pre-market trading after the US Securities and Exchange Commission asked a judge to hold Elon Musk in contempt following a tweet last week about the car maker’s production.

 

Europe

 

Markets in Europe were in the red on Tuesday morning after Asia’s softer close.

The FTSE 100 was under particular pressure as sterling gained ground on the idea that Brexit could be postponed.

FTSE 100 housebuilder Persimmon (PSN) gained ground on news that annual profits had exceeded £1 billion. The shares fell sharply yesterday on reports that the Government is unhappy about Persimmon’s handling of the Help to Buy contract. The controversy over the pay awarded to the previous chief executive also refuses to go away.

Asia

 

China stocks struggled to match Monday’s stellar performance, with the Shanghai Composite Index drifting lower on Tuesday. Still the index is close to 3,000 points and is now up 500 points since the start of the year after 2018’s sell-off.

Indices in Japan, India and Hong Kong also sold off today.

 

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James Gard

James Gard  James Gard is subeditor for Morningstar.co.uk.