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27 September 2018
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| Financial Markets (The Total Investment & Insurance Solutions) |
European stock markets recovered their poise Thursday after earlier
retreats in Asia as investors relaxed over the prospect of further U.S.
interest rate rises.
KEEPING SCORE: In Europe, France's CAC 40 and
Germany's DAX were steady at 5,512 and 12,388 respectively. The FTSE 100 index
of leading British shares was up 0.3 percent at 7.536. U.S. stocks shed 0.2
percent to 5,499.30 and Germany's DAX fell 0.4 percent to 12,340.45. Britain's
FTSE 100 was almost flat at 7,512.28. U.S. stocks were set for a flat opening
too with Dow futures and the broader S&P 500 futures up 0.1 percent.
FED RATE HIKE: On Wednesday, the Fed signaled
its confidence in the U.S. economy by raising a key interest rate for a third
time this year. It lifted its short-term rate — a benchmark for many consumer
and business loans — by a quarter-point to a range of 2 percent to 2.25 percent
and hinted at another hike in December and further increases next year. It also
dropped the word "accommodative" to describe its monetary policy
stance, though Fed Chairman Jerome Powell sought to downplay that move.
"Our economy is strong," he said. "Growth is running at a
healthy clip, unemployment is low. The number of people working is rising
steadily, and wages are up. Inflation is low and stable, all of these are very
good signs."
ANALYST TAKE: "Ultimately the Fed's
actual policy path will be dependent on the economic data, and if the slowdown
is too sharp then three rate hikes in 2019 could be too optimistic," said
Kathleen Brooks, research director at Capital Index.
ITALY BUDGET: Another point of interest,
particularly in Europe, centers on the Italian government's budget. Economy
minister Giovanni Tria is facing pressure from the two governing parties to
balance promises made during this year's election and commitments the country
needs to abide to as a member of the eurozone.
ASIA'S DAY: Japan's Nikkei 225 dropped 1.0
percent to 23,796.74. South Korea's Kospi, which reopened after a national
holiday, added 0.7 percent to 2,355.43. Hong Kong's Hang Seng index slipped 0.4
percent to 27,715.67. The Shanghai Composite Index lost 0.5 percent to
2,791.77. Australia's S&P ASX 200 was 0.2 percent lower at 6,181.20.
ENERGY: Benchmark U.S. crude rose 68 cents to
$72.25 per barrel in electronic trading on the New York Mercantile Exchange
while Brent crude, used to price international oils, added 44 cents to $81.78
per barrel.
CURRENCIES: The euro fell 0.3 percent to $1.1708
while the dollar rose 0.1 percent to 112.86 yen.The Total Investment & Insurance Solutions
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