Stock market snapshot as of [1/7/2019 2:44 PM]
- The trade-fuelled rally faces its next big challenge from the U.S. Institute of Supply Management’s purchasing managers’ indices (PMI) for the manufacturing sector. The main gauge is forecast to retreat to the 51 level from 52.1. That would at least point to continued growth. However, a miss will do severe damage to sentiment after key Asia-Pacific prints showed deeper growth contractions than forecast
- These fresh indications of slowing global growth appeared to slow the retreat of ‘safer’ assets like U.S. Treasurys, keeping the benchmark yield on the 2% handle whilst Europe’s counterpart, Germany’s 10-year bund yield, etched deeper into negative territory to stand at minus 0.331 a short while ago. In short, risk seeking is no less ambivalent after Presidents Trump and Xi agreed to a trade ceasefire and to resume talks on Saturday
- Among STOXX’s European ‘super sector’ indices, only the perceived ‘safety’ of Utilities is on the backfoot
- Washington’s concession to beleaguered Huawei props the Continent’s hardware focused IT shares; China-facing mining and steel producers are also favoured and the bank stock most sensitive to Washington’s falling out with Beijing, HSBC, leads lenders higher with a 1% advance
- U.S. shares are posting a commensurately strong start to the second half of the year, though the heavyweight semiconductor sector could still outshine most others. Huawei news is boosting Philadelphia’s PHLX gauge of chip shares by some 4%
Upcoming economic highlights
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.