Global market report - February 7

Markets across the developed world drifted lower today, but Australia was the rare exception as the prospects of an interest rate cut increased

James Gard 7 February, 2019 | 7:00PM

North America

US stock futures are suggesting a softer open on Wall Street today. January’s rally has proved difficult to sustain in the absence of concrete news on trade talks and as the US dollar has strengthened this month.

Philip Morris (PM) is one of the largest companies to report earnings on the New York Stock Exchange today.

Weekly jobless claims are due today. In the week to February 2, weekly claims are expected to fall from 253,000 to 223,000.

In Mexico, inflation data and an interest rate decision are due today. Mexico’s overnight rate is expected to remain at 8.25%. Canadian unemployment numbers are due on Friday, with a slight uptick in the jobless rate expected to 5.7%.

Europe

With a weaker close on Wall Street last night, European markets struggled to gain any traction on Thursday. The FTSE 100 was barely in positive territory, while the FTSE 250 and All Share were ower on the day in morning trading. In the Eurozone, German and Spanish benchmarks were off around 0.50% on the day. The European Commission has today cut forecasts for the Eurozone’s major economies, with Italian growth expected to be 0.2% this year, against a previous forecast for a 1.2% expansion.

UK listed travel firms were in focus today. Tui (TUI) shares crashed over 15% today after a profit warning on Wednesday night. Shares rival Thomas Cook Group (TCG) went in the other direction, gaining nearly 12% despite a widening in operating losses in the first quarter. Thomas Cook shares fell 80% last year, so today’s bounce could be seen as a relief rally rather than a sustainable recovery.

Ocado (OCDO) shares were under pressure again as the online retailer continues to assess the damage at its Andover site.

The Bank of England is expected to hold interest rates today. The quarterly inflation report will be closely watched, not least for clues on the next interest rate rise, but also for any growth downgrade. The IMF held its growth forecast for the UK in its latest World Economic Outlook, despite Brexit uncertainties.

Asia

While China stock exchanges remain closed for the rest of the week, Hong Kong’s Hang Seng will reopen on Friday, although trading volumes are expected to be muted. Japan’s Nikkei weakened on the day, while Australia’s All Ordinaries gains on rising hopes the central bank may be considering a cut in interest rates – after keeping the base rate unchanged for 30 months.

 

 

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James Gard

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