Markets Round-Up 30th October 2017.
Stock Markets
The US stock markets hit new peaks on Friday after forecast-beating results from the technology companies including Google’s parent company Alphabet, Amazon and Microsoft (The Nasdaq jumped 144.49 points or ⇑2.2% to 6,701.26, the Dow rose 33.33 points or ⇑0.14% to 23,434.19 and the S&P 500 climbed up 20.67 points or ⇑0.81% to 2,581.07. )
Most Asian markets rose as investors waited to learn U.S. President Donald Trump’s pick to head the Federal Reserve and watch for regional data releases. (Japanese Nikkei ⇑ 0.01%, Hong Kong Hang Seng ⇓0.36%, The Chinese CSI 300 ⇓0.3%, Taiwan TAIEX ⇑0.45% Korean Kospi ⇑0.21%, Australian ASX ⇑0.27% and the Indian Nifty ⇑0.39%.)
UK stock prices ended lower despite a very strong run up by the oil majors with both BP and Royal Dutch Shell ending near highs for 2017. The FTSE 100 was down ⇓0.23% to 7487.8 however the 250 was up ⇑0.3% to 20,213.3.
European stocks were broadly up Monday afternoon as investors reacted to corporate earnings and continued to monitor a recovery in Spanish shares. (Euro Stoxx 50 ⇑0.27%, German Dax ⇑0.1%, French CAC40 flat 0% , Spanish IBEX ⇑2.44% , Italian MIB ⇑0.39%)
Currency
Sterling was on the up, rising above $1.32 on continued expectations for a Bank of England base rate hike on Thursday. The pound is up against the Euro to €1.1353 and against the dollar at $1.3207 US Dollars.
Commodities
Oil Prices held above $60 a barrel, near its highest since mid-2015, on expectations OPEC-led production cuts would be extended beyond March although rising Iraqi exports put a lid on prices. (Brent $60.5, WTI $54.1)
Gold steadied as traders stayed on the sidelines before this week’s central bank meetings and policy news, including President Donald Trump’s expected announcement of the next Federal Reserve chair.( $1277.2.)
Other News
Amazon CEO Jeff Bezos has been named as the world’s richest person. It comes after the company’s third-quarter earnings far surpassed Wall Street expectations, pushing up Amazon’s share price and increasing Mr Bezos’s wealth to $90bn, according to calculations by CNBC and data from the Bloomberg Billionaires Index.
HSBC’s reported pre-tax profits for the first nine months of the year rose by 41% to $14.9bn. Adjusted profit before tax of $17.4bn was $1.2bn or 8% higher than in 9M16, reflecting revenue growth, partly offset by an increase in operating expenses. Reported profit before tax for the third quarter of $4.6bn was up $3.8bn compared with 3Q16 but compared with 2Q17, reported and adjusted profit before tax both fell by $0.7bn.
EasyJet has confirmed a €40m (£35m) deal with Air Berlin to buy part of the insolvent German airline’s operations, in a move that will secure 1,000 jobs. EasyJet will buy some of the company’s assets at Berlin Tegel Airport, including landing slots as well as leases for up to 25 A320 aircraft. The UK airline said it plans to take on 1,000 German pilots and cabin crew. Air Berlin has already agreed to sell its Austrian airline Niki to Lufthansa as well as its regional carrier LGW.
The Spanish state prosecutor’s office has announced charges of rebellion, sedition and misappropriation of funds against the sacked president of Catalonia, Carles Puigdemont, and members of his cabinet. The leaders of the regional government in Catalonia “have created an institutional crisis that culminated in the unilateral declaration of independence and a complete disregard for our Constitution on October 27”, said Attorney General Jose Manuel Maza on Monday. The charge of rebellion against Puigdemont and his deputies carries a penalty of up to 30 years in prison, twice that of the penalty for sedition. Misappropriation of funds is punishable with a jail term of up to eight years.
The chancellor is between “a rock and a hard place” for his forthcoming Budget on 22 November, a think tank says. Philip Hammond may have to abandon his target for getting rid of the deficit if he wants to increase spending on public services, the Institute for Fiscal Studies said. He is also facing a likely cut in the forecast for productivity growth, and uncertainty around Brexit, it said. The Treasury said it would continue to adopt a “balanced approach”. Mr Hammond is to unveil his Budget on 22 November – the first since the general election.
Emmanuel Macron is facing renewed criticism over measures to slash France’s contentious wealth tax and introduce a flat rate on dividends after it emerged the country’s super rich would benefit most. British expats are also set to benefit, as the yearly percentage levy – on the wealth of residents whose global worth exceeds €1.3m – will no longer apply to financial assets such as shares.
Luke Johnson in the Sunday Times predicts that the coming year will be a busy period for buyers and sellers of businesses, with advisers warning that a Labour government would make life much less financially attractive for entrepreneurs wanting to cash out. The Sunday Times, Business and Money, Page: 11
A report from UBS warns that British workers can expect among the worst pensions in the developed world. It found a 50-year-old “average Jane” living in London can expect just 41% of her current income in retirement, just one place above the lowest-ranked city, Taipei in Taiwan.
The House of Representatives will publish the Republicans’ long-awaited tax bill on Wednesday, with committee hearings to begin the Monday after. Under the proposals, corporation tax would be cut from 35% to 20% and income taxes would be brought into three low-rate brackets. However, tax legislation normally requires 60 votes to pass the Senate, meaning that the Republicans, who control 52 of the 100 seats, would need the support of eight Democrats.
Akzo Nobel confirmed that it is currently in “constructive discussions” about a merger of its paints and coatings business with US rival Axalta Coating Sytems. In addition, it said the separation of Specialty Chemicals, including the return of the vast majority of net proceeds to shareholders, remains on track for April next year and is unaffected by these discussions. The statement followed a report by Reuters on Friday suggesting that the companies were in talks, which sent Axalta’s shares flying.
The number of visas granted for overseas businesses to open a branch in the UK fell by around 11% last year. Figures from law firm Collyer Bristow show 125 visas were granted in the year ending March 2017, compared with 140 in the previous year.
HSBC reported strong Q3 results, with 9 month pre-tax profit of $14.9bn up 41% helped by a 9% drop in operating expenses. HSBC grew lending in the Chinese state of Guangdong by $1.1bn during Q3.
Debenhams shares fell sharply following news that Sports Direct has exercised a put option with Goldman Sachs.
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