Global Market Report – September 29 2017

Asia

Japanese indices closed marginally lower at the end of the week, but are higher than at the start of the month of September and at the beginning of the quarter. The Nikkei ended the month at 20,356.28, around 4,00 points higher than at the same point in 2016. The profile is similar for the country’s benchmark Topix index. Weaker than expected economic data, particularly relating to housing starts for August, weighed on sentiment.

China’s CSI 300 ended the week slightly higher, ahead of an extended break next week – the index has been rangebound for much of September but is 200 points higher than at the start of the quarter, now standing at 3863.50. 

Europe

UK currency investors continue to be preoccupied with Brexit negotiations and trade, and the next likely move in interest rates. Mixed messages on the former have abounded this week: Brexit secretary David Davis has hailed “great progress” in the talks, whereas European Commission president Jean-Michel Juncker today said that it would be a “miracle” if the UK met its deadline for moving negotiations onto the next phase.

Bank of England Governor Mark Carney told the BBC this morning that the central bank remains worried by consumer debt, and said that UK banks are currently mispricing the risks associated with loans going sour. He also teed up the prospect of a November interest rate rise, with the Bank’s monetary policy committee not meeting in October.

Nationwide reported a 2% year on year rise in house prices in September, but London prices fell for the first time in eight years. Britain’s economic growth for the second quarter was confirmed at 1.5%, a downwards revision from the previous reading of 1.7%.

Despite these concerns, the FTSE 100 managed to push up by less than half a percent in midmorning trading to 7361, similar to levels seen at the start of September and the third quarter. Shares in construction company Carillion (CLLN) lost 10% in morning trading as it revealed a loss of over £1bn in the last half-year period, as well as a further £200m in writedowns.

Germany’s Dax looks set to close the period close to the record high levels seen in June this year, as the eurozone’s biggest economy benefits from a pickup in growth in the region. Indeed, the country saw a 23,000 drop in unemployed people in September, against a forecast for a fall of 5,000. Germany’s unemployment rate dipped to 5.6%, from 5.7% in the previous month. 

North America

There is a range of economic data due to be published in Canada and the United States on Friday. Canada’s GDP is forecast to have grown by 3.9% in July on a year on year basis. In the US, personal spending and consumption for August will be revealed, as well as weekly rig count numbers.

Of the companies reporting in New York and Toronto, food firm McCormick&Co (MKC) is the biggest. Investors will be keen to see whether US indices manage to post yet another record to end the month and the quarter. 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person’s sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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