By Kuala Lumpur Newsroom
KUALA LUMPUR (Sep 18) — Significant international events and markets news:
*08:00 a.m.: Italy July Balance of Trade
*12:30 p.m.: Canada July Foreign Securities Purchases
*14:00 p.m.: U.S. September NAHB Housing Market Index
*20:00 p.m.: U.S. July Overall Net Capital Flows, Foreign Bond Investment, Net Long-Term Tic Flows
The three main stock indexes were all ahead Friday with the Dow Jones industrial average up 64.86 points, or 0.29%, at 22,268.34 points, the Standard & Poor’s 500 was up 0.18% at 2,500.23 points and the Nasdaq composite index gained 0.30% to 6,448.47 points. U.S. stock benchmarks finished up Friday and made weekly gains, too, as Wall Street shook off North Korea’s latest missile launch. The Nasdaq was supported by semiconductor stocks. The strength in chip makers offset weakness in Oracle Corp. which fell 7.7% after the software company’s outlook late Thursday came in below expectations. Market participants are concerned about valuations and there are questions about the pace of economic growth. The latest economic data failed to provide clarity on the state of the economy. U.S. retail sales unexpectedly fell in August, dropping 0.2% in their second decline of the past three months. Separately, the Empire State factory gauge fell to 24.4 in September. U.S. industrial output fell 0.9% in August — the first drop in seven months. The Federal Reserve said the decline was mostly a result of Hurricane Harvey. The storm also had an effect on consumer sentiment.
The dollar weakened against its basked of comparative currencies Friday on an unexpected decline in U.S. retail sales last month that dimmed expectations for an interest-rate increase in December. U.S. retail sales unexpectedly fell in August as Hurricane Harvey likely depressed motor-vehicle purchases. Market participants are now concentrating on the Federal Open Market Committee meeting where the Fed is expected to start reducing its bond holdings. There is zero expectation for an interest-rate rise. A Bank of England policymaker suggested a possible rate increase and this helped push the pound to its highest since last June’s vote to leave the European Union. Meanwhile, the yield on U.S. 10 Year Treasury notes was up 0.017% at 2.203%.
Nikkei 225 futures were last up 0.30% at 19,850 suggesting a stronger opening Monday at Tokyo. The Nikkei share average was higher Friday and posted its biggest weekly gain in 10 months as a stronger dollar saw market participants buying shares of exporters. They ignored North Korea’s missile launch that hurt risk appetite in broader Asia. North Korea on Friday again fired a missile that flew over Japan’s northern island of Hokkaido far out into the Pacific Ocean. The Nikkei stayed in positive territory before ending 0.5% higher at 19,909.50 points. The index rose 3.3% for the week. Elsewhere in Asia Hong Kong stocks were little changed Friday after the North Korea missile. The Hang Seng index rose 0.1% to 27,807.59 points. For the week the HSI rose 0.5%. There were new worries of a slowdown in China after data Thursday showed the country’s fixed-asset investment grew at its slowest in nearly 18 years in August. Shanghai stock prices fell Friday and ended the week lower as data suggested the economy was starting to lose momentum in the face of rising borrowing costs and government-mandated capacity cuts. The Shanghai Composite Index fell 0.5% to 3,353.62 points and 0.3% for the week.
Oil futures prices were even Friday but posted their biggest weekly gain since late July on expectations of stronger worldwide demand and a decline in crude supplies. The International Energy Agency reported Wednesday that international oil supply dropped in August and raised its outlook for demand this year. Baker Hughes on Friday reported that the number of active U.S. oil rigs fell for a second week in a row by seven to 749 rigs. October West Texas Intermediate crude on the New York Mercantile Exchange settled unchanged at $49.89 a barrel after hitting an intraday high above $50. November Brent on ICE Futures Europe rose 15 cents, or 0.3% to $55.62 a barrel. WTI crude saw a 5.1% weekly rise. Brent ended 3.4% higher for the week. Oil climbed for the week as U.S. refineries and other facilities resumed operations following Hurricane Harvey.
*Abe set to call October election
Prime Minister Shinzo Abe has decided to dissolve the lower house for a snap election next month, hoping to capitalize on an uptick in public support before the opposition has a chance to regroup and mount a formidable challenge. Abe told Natsuo Yamaguchi, the leader of coalition partner Komeito, and others of his plans to call an election, likely for Oct. 22, sending ruling and opposition parties into campaign mode. It would be the first general election since December 2014. – Nikkei Asian Review
*Trump mocks ‘Rocket Man’ Kim Jong-un as advisers issue warnings
Top advisers to Donald Trump on Sunday warned North Korea to give up its nuclear weapons programs and stop threatening America and its allies, or face destruction. They did so after Trump tweeted about a phone call to South Korean president Moon Jae-in, and appeared to mock Kim Jong-un. The latest bellicose language from Washington came just days after North Korea fired another ballistic missile, which overflew Japan, and Kim boasted that such efforts would continue as his country neared its goal of “equilibrium” in military force with the US. – The Guardian
*As North Korea threat looms, Trump to address world leaders at U.N.
North Korea’s nuclear threat looms large this week over the annual gathering of world leaders at the United Nations in New York, where diplomats are eager to hear U.S. President Donald Trump address the 193-member body for the first time. North Korean diplomats will have a front-row seat in the U.N. General Assembly for Trump’s speech Tuesday morning, which will touch on the escalating crisis that has seen Trump and Pyongyang trade threats of military action. – Reuters
*Toshiba Is Said to Aim for Chip Deal With Bain by Sept. 20
Toshiba Corp. is aiming to finalize a deal to sell its memory chips business to a group led by Bain Capital at a Sept. 20 board meeting, despite opposition from partner Western Digital Corp., according to people familiar with the matter. Toshiba’s effort faces resistance because the Bain group now includes several Western Digital competitors, including Seagate Technology Plc, Kingston Technology Co. and SK Hynix Inc., said the people, asking not to be identified because the matter isn’t public. Western Digital partnered with KKR & Co. to try to buy the chips business, but Toshiba opted for the Bain bid last week, signing a memorandum of understanding as they work toward a final agreement. – Bloomberg News
*Online Insurer ZhongAn Plans IPO That Could Set Its Value at $10 Billion
China’s first online-only insurer said Sunday it plans to raise up to $1.5 billion in an initial public offering that could value the company at around $10 billion, tapping into rising investor interest in the region’s financial-technology sector. ZhongAn Online Property and Casualty Insurance Ltd., a Shanghai-based company co-founded in 2013 by Chinese billionaire Jack Ma, is set to begin a share sale Monday in Hong Kong. It named Japan’s SoftBank Group Corp. as a cornerstone investor in the deal, with a 5% stake in the company. – The Wall Street Journal
*Europe Weighs Taxing Tech Companies
The European Commission is expected to publish Monday a list of options for taxing technology companies like Google and Amazon. These companies have been in the cross hairs of European officials because of their efforts to minimize the taxes they pay by recording profits in lower tax jurisdictions, like Luxembourg and Ireland. Last year, the European Commission ordered Ireland to collect $14.5 billion in unpaid taxes from Apple in a record penalty, saying that the company’s deals with the Irish government had allowed it to pay virtually nothing on its European business in some years. – The New York Times
– By Kuala Lumpur Newsroom; email@example.com; +60320267363
– Edited by Glen Nicol Perkinson
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