European markets open lower despite positive signals from Asia
Fiona Cincotta January 28, 2019 9:58 AM
Though Asian markets were sending positive signals this morning after President Trump ended the longest government shutdown in US history over the weekend, European indexes started the week trending down.
Though Asian markets were sending positive signals this morning after President Trump ended the longest government shutdown in US history over the weekend, European indexes started the week trending down. Negative news from big industrials such Alstom and Siemens weighed on European indices and the FTSE wasn’t helped by the upcoming Brexit vote Tuesday. Among the top London risers however was Russian steel producer Evraz, up over 3%, after the US decided to lift sanctions on another Russian metals producer Rusal.
The US government shutdown was starting to cause serious concerns for some US businesses, particularly those that depend on US government contracts. It also blocked any planned IPOs as one of the agencies paralyzed by the closure was trading regulator the Securities and Exchange Commission. The SEC and other agencies now have three frantic weeks to catch up on lost time and to prepare to go into hibernation again when the three week respite granted by Trump expires.
Tech giant results to dominate US earnings this week
Wall Street is gearing up for the busiest reporting week of the quarter with 13 out of 30 companies in the DJIA index due to present their earnings. The limelight will be on the big ones: Facebook after it announced plans to integrate its Messenger with Instagram and WhatsApp, Amazon where founder Jeff Bezos’s private life has made more headlines recently than his business decisions, and Apple with its struggles to keep iPhone sales in China on the rise. Boeing, McDonalds, General Electric and Pfizer’s results will also be spread through the week. The numbers are generally expected to reflect the economic background in the country, which is at its strongest in years but threatening to slow down over the coming months.
Brexit vote weighs on sterling
After a few relatively calm days Brexit is back centre stage ahead of a second parliamentary vote Tuesday. Although the PM will argue her best to the contrary, nothing much seems to have changed in the content of her Brexit proposal or in the political mood over the last few days other than calls to postpone the March 29 deadline. In Scotland concerns over the unresolved state of Brexit seem to have reached fever pitch as it called for a second referendum hoping to remain in the EU. The pound is continuing to be whipped by Brexit in both directions with the currency losing ground against both the dollar and euro this morning.
China slowdown remains in focus
In Asia, Chinese markets have one more week to go before the country grinds to a halt during China’s New Year. The Shanghai and Shenzhen stock exchanges will be closed for a week starting February 4. It will also grant investors temporary relief from concerns over the state of the country’s economy. Numbers Monday again confirmed that the local economy is continuing to slow down as industrial profits dropped for a second month in a row.
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.