Market briefing: US markets ended in the green yesterday, following a rally in financial and technology sector stocks
Date
5/26/2016 7:42:32 AM
(MENAFN- ProactiveInvestors - UK) Proactive Investors, Wed
UK Market Snapshot
UK markets finished higher yesterday, with the FTSE 100 index closing at its highest level since 29 April 2016, amid a recovery in crude oil prices. Financial sector firms, Aviva, St James's Place, Royal Bank of Scotland Group and Legal & General Group rose 3.9%, 4.7%, 4.8% and 5.1%, respectively, after a new poll result indicated that most of the people would vote to remain in the EU at next month's referendum. Kingfisher climbed 3.5%, after it posted a rise in its like-for-like sales in the first three months of its financial year. Imperial Brands advanced 3.0%, following a broker upgrade on the stock to 'Overweight' from 'Equal weight'. On the contrary, precious metal miners, Randgold Resources and Fresnillo declined 3.2% and 3.3%, respectively, tracking loss in gold prices. The FTSE 100 advanced 1.3%, to close at 6,219.3, while the FTSE 250 rose 0.6%, to settle at 17,135.7.
US Market Snapshot
US markets ended in the green yesterday, following a rally in financial and technology sector stocks. Alphabet, Intel and Microsoft rose 2.2%, 2.8% and 3.1%, respectively. Citigroup and JPMorgan Chase climbed 1.7% each, while MetLife and Prudential Financial gained 1.9% and 2.0%, respectively, amid expectations of higher interest rates. Toll Brothers soared 8.7%, after its second quarter results exceeded market expectations. Peers, Lennar, DR Horton and PulteGroup advanced 3.9%, 4.2% and 5.1%, respectively, on positive April US new home sales figures. However, Best Buy plummeted 7.4%, after it projected lower than expected earnings for the second quarter. The S & P 500 gained 1.4%, to settle at 2,076.1. The DJIA rose 1.2%, to settle at 17,706.1, while the NASDAQ advanced 2.0%, to close at 4,861.1.
Europe Market Snapshot
Other European markets closed stronger yesterday. Banks, Deutsche Bank, Societe Generale and Banca Monte dei Paschi di Siena climbed 3.0%, 5.4% and 10.5%, respectively. SEB rallied 9.0%, after it agreed to buy WMF from KKR & Co in a deal worth 1.6 billion. Bayer edged 4.0% up, on the news that Monsanto rejected its takeover offer, citing its too low, but remained open to more negotiations. Bayerische Motoren Werke, Volkswagen and HeidelbergCement gained 2.6%, 2.8% and 2.9%, respectively, as export-oriented shares benefitted from a stronger US Dollar. On the losing side, Galenica plunged 6.7%, after the pharmacy network stated that it would divide into separate firms by the end of 2017. The FTSEurofirst 300 index gained 2.3%, to close at 1,349.7. Among other European markets, the German DAX Xetra 30 rose 2.2%, to close at 10,057.3, while the French CAC-40 advanced 2.5%, to settle at 4,431.5.
Asia Market Snapshot
Markets in Asia are trading higher this morning, following an overnight rally on Wall Street. In Japan, Sony has jumped 6.4%, as investors concentrated on its long-term prospects in emerging products, ignoring the downbeat annual earnings outlook from the company. Asahi Group Holdings has gained 4.3%, after a broker upgraded its rating on the stock to 'Buy' from 'Neutral'. Toyota Motor has added 1.7%, after it disclosed plans of making an investment in Uber Technologies. In Hong Kong, oil majors, China Petroleum & Chemical and PetroChina have climbed 4.1% and 4.3%, respectively, on higher crude oil prices. In South Korea, Samsung Electronics and Hyundai Motor have edged 1.7% and 2.3% up, respectively. The Nikkei 225 index is trading 1.8% higher at 16,795.7. The Hang Seng index is trading 2.6% up at 20,347.1, while the Kospi index is trading 1.3% higher at 1,962.3.
Commodity, Currency and Fixed Income Snapshots
Crude Oil
At 0330GMT today, Brent Crude Oil one month futures contract is trading 1.21% or $0.59 higher at $49.20 per barrel, ahead of the EIA weekly oil inventory data, scheduled to be released later today. Yesterday, the contract climbed 0.54% or $0.26, to settle at $48.61 per barrel, after the API stated that US crude supplies declined more than expected by 5.1 million barrels during the week ended 20 May 2016.
Gold
At 0330GMT today, Gold futures contract is trading 0.21% or $2.60 higher at $1231.80 per ounce. Yesterday, the contract declined 1.78% or $22.30, to settle at $1229.20 per ounce, after upbeat US housing market data raised chances of a June rate hike by the Fed.
Currency
At 0330GMT today, the EUR is trading 0.09% higher against the USD at $1.1151, ahead of German GfK consumer confidence data for June, due to release in a few hours. Market participants will also closely monitor the release of Germany's IFO survey data for May, also set to release later today. Yesterday, the EUR weakened 0.70% versus the USD, to close at $1.1141, as weak Eurozone & German ZEW surveys highlighted a dent in the economic sentiment. The US Dollar gained ground as rate hike expectations rose following better than expected report on the US new home sales.
At 0330GMT today, the GBP is trading 0.20% lower against the USD at $1.4606. Investors will await the release of the US services PMI figures for May, schedule to release later in the day. Yesterday, the GBP strengthened 1.05% versus the USD, to close at $1.4636, after a fresh poll showed increased support to stay in the European Union, thus easing Brexit concerns.
Fixed Income
In the US, long term treasury prices fell and pushed yields higher, amid a surge in the US new home sales in April and a broad rally in global equity markets. Yesterday, yield on 10-year notes rose 2 basis points to 1.86%, while yield on 2-year notes gained 1 basis point to 0.92%. Meanwhile, 30-year bond yield rose 2 basis points to 2.65%.
Key Economic News
UK CBI distributive trade survey's retail sales balance climbed in May
In the UK, the CBI distributive trade survey's retail sales balance climbed to 7.00% in May, lower than market expectations of a rise to 8.00%. In the prior month, the CBI distributive trade survey's retail sales balance had recorded a level of 13.00%.
UK public sector net borrowing unexpectedly showed deficit in April
In the UK, the public sector net borrowing has unexpectedly reported a deficit 6.60 billion in April, as compared to a revised deficit of 6.10 billion in the prior month. Markets were expecting public sector net borrowing to report a deficit of 5.80 billion.
UK public sector net borrowing unexpectedly reported deficit in April
The public sector net borrowing (excluding temporary effects of financial interventions) has unexpectedly reported a deficit 7.20 billion in April, in the UK, following a revised deficit of 6.70 billion in the prior month. Markets were expecting public sector net borrowing to show a deficit of 6.40 billion.
UK public sector net cash requirement recorded a surplus in April
In the UK, in April, public finances (public sector net cash requirement) has posted a surplus 2.40 billion, following a revised deficit of 17.80 billion in the prior month.
Euro-zone economic sentiment index fell in May
The economic sentiment index in the Euro-zone recorded a drop to 16.80 in May. The economic sentiment index had registered a reading of 21.50 in the previous month.
German GDP rose as expected in 1Q 2016
The seasonally adjusted final gross domestic product (GDP) in Germany registered a rise of 0.70% in 1Q 2016 on a quarterly basis, meeting market expectations. In the previous quarter, GDP had recorded a rise of 0.30%. The preliminary figures had also recorded an advance of 0.70%.
German economic sentiment index registered a surprise drop in May
In May, the economic sentiment index recorded an unexpected drop to 6.40 in Germany, compared to market expectations of an advance to a level of 12.00. The economic sentiment index had registered a reading of 11.20 in the previous month.
German current situation index climbed in May
The current situation index rose to a level of 53.10 in May, in Germany, higher than market expectations of a rise to a level of 49.00. The current situation index had recorded a reading of 47.70 in the previous month.
German private consumption advanced less than expected in 1Q 2016
Private consumption recorded a rise of 0.40% on a QoQ basis in 1Q 2016, in Germany, compared to a revised similar rise in the previous quarter. Markets were anticipating private consumption to climb 0.60%.
German domestic demand advanced less than expected in 1Q 2016
In 1Q 2016, on a quarterly basis, domestic demand in Germany rose 0.80%, less than market expectations for an advance of 0.90%. Domestic demand had registered a revised rise of 0.90% in the previous quarter.
German GDP rose as expected in 1Q 2016
On an annual basis, the working day adjusted final GDP climbed 1.60% in Germany, in 1Q 2016, in line with market expectations. In the prior quarter, GDP had registered a rise of 1.30%. The preliminary figures had also recorded a rise of 1.60%.
German construction investment rose more than expected in 1Q 2016
In Germany, construction investment recorded a rise of 2.30% on a quarterly basis in 1Q 2016, more than market expectations for an advance of 1.50%. Construction investment had risen by a revised 2.00% in the prior quarter.
German capital investment rose more than expected in 1Q 2016
In Germany, capital investment rose 1.80% on a quarterly basis in 1Q 2016, compared to a revised rise of 1.40% in the prior quarter. Markets were expecting capital investment to advance 1.40%.
German government spending advanced less than expected in 1Q 2016
Government spending registered a rise of 0.50% in Germany on a QoQ basis in 1Q 2016, lower than market expectations for a rise of 0.80%. Government spending had recorded a revised rise of 0.90% in the prior quarter.
German imports advanced more than expected in 1Q 2016
On a quarterly basis, in Germany, imports climbed 1.40% in 1Q 2016, higher than market expectations for an advance of 1.00%. Imports had registered a rise of 0.50% in the previous quarter.
German GDP advanced as expected in 1Q 2016
On a YoY basis in 1Q 2016, the non-seasonally adjusted final GDP advanced 1.30% in Germany, meeting market expectations. In the previous quarter, GDP had registered a rise of 2.10%. The preliminary figures had also indicated an advance of 1.30%.
German exports rose more than expected in 1Q 2016
In 1Q 2016, on a QoQ basis, exports climbed 1.00% in Germany, higher than market expectations for a rise of 0.50%. Exports had recorded a drop of 0.60% in the previous quarter.
French industrial business climate index rose surprisingly in May
The industrial business climate index rose unexpectedly to a level of 102.00 in May, in France, compared to market expectations of a steady reading. The industrial business climate index had recorded a reading of 101.00 in the previous month.
Swiss trade surplus widened in April
Trade surplus in Switzerland rose to CHF2.50 billion in April, from a revised trade surplus of CHF2.18 billion in the previous month.
Swiss imports registered a drop in April
In April, on a MoM basis, imports recorded a drop of 3.10% in Switzerland. In the previous month, imports had registered a revised rise of 8.60%.
Swiss exports rose in April
Exports rose 0.30% in Switzerland on a monthly basis, in April. Exports had fallen by a revised 0.50% in the previous month.
US new home sales unexpectedly rose in April
New home sales unexpectedly advanced by 16.60%, on monthly basis, to a level of 619.00 K in April, in the US, compared to a revised level of 531.00 K in the prior month. Market expectation was for new home sales to drop to 523.00 K.
US Richmond Fed manufacturing index fell in May
Compared to a reading of 14.00 in the previous month the Richmond Fed manufacturing index dropped to -1.00 in May, in the US. Markets were anticipating the Richmond Fed manufacturing index to ease to 8.00.
Chinese leading economic index climbed in April
The leading economic index rose 0.10% on a monthly basis in China, in April. The leading economic index had registered a revised rise of 0.30% in the previous month.
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