Morning Update Note
Friday 17th September 2021
- Stocks turned in a mixed performance on Thursday as investors digested last month’s retail sales report and a bigger-than-expected increase in initial jobless claims. At the close, the Dow Jones Industrial Average was down 0.18% at 34,751.32 and the S&P 500 and Nasdaq Composite was 0.16% weaker at 4,473.75, while the Nasdaq Composite saw out the session 0.13% firmer at 15,181.92.
- Thursday’s primary focus was US retail sales, which rose unexpectedly in August, with a broad pickup in purchases across the majority of categories more than offsetting weakness at auto dealers. According to the Department of Commerce, the value of overall retail purchases climbed 0.7% last month, following a downwardly revised 1.8% decrease in July.
- Also in focus were concerns that a fresh security pact between Australia, the UK and the US may further escalate tensions between China and the US, with Beijing seen as being highly likely to reply in some form or another over the coming days.
- Moderna shares were trading higher early on Thursday after the drugmaker published data on breakthrough Covid-19 cases that backed pushes for the widespread use of vaccine booster shots.
- London stocks managed to close in the black on Thursday, with a strong showing from the likes of Rolls-Royce and Ashtead lending support. The FTSE 100 was up 0.16% at 7,027.48, alongside a gain of 0.85% to 23,632.84 for the second-tier index.
- Investors were a tad cautious ahead of the quarterly expiry of equity derivatives on Wall Street the next day, an event known as ‘quadruple witching’, which often results in stock market volatility.
- On the macroeconomic front, readings on monthly US retail sales and manufacturing activity in the US mid-Atlantic region both came in ahead of forecasts – yet Wall Street remained under pressure.
- In equity markets, Ashtead was the standout gainer, rallying after it said its annual performance would beat its previous expectations as the equipment hire company reported a 53% increase in operating profit for the first quarter.
- On the downside, Games Workshop was sharply lower as it said trading for the three months to 29 August was in line with the board’s expectations and declared a dividend, but warned over pressure on freight costs and currency exchange rates.
- Asian Markets were marginally up over night with the Hang Seng closing at 24,765.45, up 0.4%, and the Nikkei 225 closing at 30,482.18, up 0.5%.
- The campaign to become Japan’s next prime minister kicks off on Friday, with four candidates vying for leadership of the ruling party in an unusually close race. The candidates include two women hoping to lead a country that has never had a female prime minister, though both are considered long shots.
- Chinese property giant Evergrande is on the brink of collapse, and analysts warn the potential fallout could have far-reaching implications that spill outside China’s borders. After expanding rapidly for years and snapping up assets as China’s economy boomed, Evergrande is now snowed under a crushing debt of $300 billion.
- 10yr and 30yr US treasuries are currently trading at 1.33% and 1.87% respectively.
- 10yr UK gilts trade with a yield of 0.81%.
- German 10yr bund yields trade at -0.30%.
- 10yr Italian and Spanish bond yields trade at 0.71% and 0.35% respectively.
- The WTI crude oil price is $72.25
- Brent crude is $75.36
- The gold price is $1,762.80
- The silver price is $22.98
- The COMEX copper price is $4.29
– One pound buys:
- 1.38 USD
- 1.17 EUR
– One dollar buys:
- 109.89 JPY