Global market report - October 22

The Shanghai stock market bounced 4% as Chinese officials talked up the prospect of economic stimulus

James Gard 22 October, 2018 | 5:00PM

North America

Last earnings season Amazon (AMZN), Google parent company Alphabet (GOOGL) and Apple (AAPL) moved ahead of their tech sector rivals – Amazon and Alphabet released earnings this week and Facebook (FB) and Apple (AAPL) follow the week beginning 29 October. Twitter (TWTR) also reports earnings on Thursday.

In economics, the week’s highlight is the release of the US GDP number on Friday. The economy is expected to have risen by 3.4% annualised on a quarter before, lower than the 4.2% in the second quarter.

Canada’s central bank is expected to raise interest rates on Wednesday to 1.75%, a quarter point rise.

Europe

Asia’s gains on Monday helped lift European stocks, although daily gains were less than 1% for most major indices.

The FTSE 100 continued to consolidate above 7,000 points, a level it was threatening to break through earlier in the month. The pound remains just above $1.30 as reports of continued threats to the UK Prime Minister’s tenure clashed with talk that a Brexit deal is “95% done”. Chancellor Philip Hammond has the tricky task next week of bringing an end to austerity while finding an extra £20 billion for the NHS in tinkering.

UK banks Lloyds Banking Group (LLOY), Barclays (BARC) and Royal Bank of Scotland (RBS) report third quarter results this week. RBS announced last month that it would resume paying dividends for the first time since the bank was bailed out during the financial crisis.

With the Federal Reserve and the Bank of England meeting next in November, the European Central Bank is the next central bank to meet. The ECB is not expected to make any changes to interest rates or quantitative easing but its QE programme is already being wound down and will end by the close of the year.

Asia

Under-pressure China stocks received a much-needed boost from talk of stimulus from the Chinese government at the start of the new trading week. The Shanghai Composite Index, which this month saw a daily fall above 5%, was 4% higher today than Friday’s close.

Hong Kong’s Hang Seng also gained on Monday.

 

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James Gard

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