Global market report - February 4

The UK's FTSE 100 outperformed European indices today, while Chinese stock markets are closed for Chinese New Year

James Gard 4 February, 2019 | 7:00PM

North America

 

Google parent company Alphabet (GOOGL) brings to a close the earnings reporting season from the FAANGs after the market closes tonight. The company’s share price has been lifted in recent days as sentiment shifts back towards technology stocks and investors embrace riskier assets again after a bruising end to 2018.

Morningstar assigns a four-star rating to the company, with a fair value estimate of $1,300 per share, above the current share price.

Disney (DIS) and Viacom (VIAB) are among other big name firms reporting.

In economics, the ISM non-manufacturing/services composite index for January is due on Tuesday.

The Canadian unemployment rate for January is expected to creep up to 5.7%, from 5.6% in the prior month.

 

Europe

 

Having had a strong run in recent weeks, the pound slipped back today on news that the UK construction sector only just expanded in January. The manufacturing PMI disappointed last week, and the services sector index is due on Tuesday. A slowdown in housebuilding activity in January has troubled sector experts.

The drop in the pound helped the FTSE 100 hold above 7,000 points, bucking the downwards trend for European equities.

BP (BP), Ocado (OCDO) and GlaxoSmithKline (GSK) are among FTSE 100 companies updating the market this week.

The Bank of England meets this week for both its interest rate setting decision and to publish the quarterly Inflation Report. The Bank is not expected to change interest rates or QE, but Brexit – and its effect on economic growth – will be front and centre of the press conference. Interest rates are not expected to be lifted until after Brexit at least.

Asia

 

Sony (6758) grabbed headlines today with an 8% fall in its share price and its revenue outlook was slashed. Still the Nikkei 225 managed a gain on Friday’s close.

China markets are closed all week for Chinese New Year. The Hong Kong Stock Exchange was open today, and the Hang Seng drifted lower, but the market is closed for the following three days.

 

About Author

James Gard

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