Global market report - February 15

World investors were eagerly awaiting news from the US-China trade talks, which drew to a close today

James Gard 15 February, 2019 | 7:00PM

North America

 

US stocks futures suggest a weaker open on Friday as US-China trade talks draw to a close. A memorandum of understanding from both sides would certainly help justify the market’s faith in this week’s talks.

The steady progress made by markets this week came to end last night with a drop on the Dow Jones and S&P 500, although the Nasdaq closed higher. Still, the trend from the beginning of the year remains for a steady return of confidence after a horrible end to 2018.

In economics, a provisional reading of the University of Michigan Sentiment Index is due today. The index is forecast to have risen to 93.9, a rise from 91.2 in January.

PepsiCo (PEP) is one of the biggest companies to report earnings today, while TSX-listed Enbridge (ENB) also releases numbers.

 

Europe

 

Markets in Europe started sluggishly, reacting to a weaker close in the US and Asia, but regained momentum throughout the morning to mov back into positive territory. France’s CAC 40 was the strongest gainer, rising just under 1% on Thursday’s closing level.

FTSE 100 bank Royal Bank of Scotland (RBS) reported a doubling in profit for 2018 and rewarded investors with a 7.5p per share special dividend, taking the payout for the full year to 13p. Chief executive Ross McEwan said that Brexit could have a bigger impact on the UK economy than the Bank of England is forecasting.

After a blizzard of bad news on the UK economy, January retail sales were a rare bright point. Sales in January rose 4.1% on the same month in 2017, against a rise of 2.9% in December. Shoppers are clearly defying fears of a Brexit slowdown, or at least are taking opportunities to buy goods before the end of March. The pound nudged higher after the data release.

Asia

 

After a reasonable run during a week of trade talks, Asia equities followed global markets lower as “risk-off sentiment” took hold of investors today. After a weaker close on Wall Street, China’s Shanghai Composite dropped nearly 1.5% on the, taking the index back below 2,700 points. Hong Kong’s Hang Seng was the biggest faller in percentage terms among Asia-Pacific indices, losing 1.87% or 531 points to 27,900.

Japan’s Nikkei joined in the regional sell-off, heading back below 21,000 points.

The growth in Chinese inflation dropped back to 1.7% in January from 1.9% the previous month, while producer prices rose just 0.1% year on year in the first month of 2019.

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James Gard

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