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01 February 2019
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Financial Markets (The Total Investment & Insurance Solutions)
World markets edged lower on Friday ahead of the monthly U.S. jobs
report and after the U.S.-China trade talks yielded few immediate results.
KEEPING SCORE: Germany's DAX fell 0.2 percent to 11,153 and France's CAC
40 fell almost 0.1 percent to 4,991. Britain's FTSE 100 advanced 0.1 percent to
6,978. Wall Street was set for a quiet open. The future contract for the Dow
Jones Industrial Average was flat while the S&P 500 futures shed 0.1
percent.
THE DAY IN ASIA: Hong Kong's Hang Seng index was flat at 27,930.74 while
the Shanghai Composite index jumped 1.3 percent to 2,618.23. Japan's Nikkei 225
index rose less than 0.1 percent to 20,788.39 after the country's unemployment
rate unexpectedly fell to 2.4 percent in December from 2.5 percent the month
before. South Korea's Kospi was down 0.1 percent at 2,203.46. Australia's
S&P ASX 200 edged 0.1 percent lower to 5,862.80. Shares rose in the
Philippines and Thailand but fell in Singapore. Markets in Taiwan were closed.
CHINA-U.S. TALKS: American and Chinese negotiators wrapped up two days
of talks Thursday without a deal but with an upbeat outlook. Presidents Donald
Trump said China has agreed to buy more American soybeans, but he expects to
meet President Xi Jinping to seek agreement on other contentious issues.
"There are some points we don't agree to, but we will agree," Trump
said. "I think when Xi and I meet, every point will be agreed to." A
tariffs cease-fire between the U.S. and China is set to end on March 2, and the
U.S. is expected to raise import taxes from 10 percent to 25 percent for $200
billion in Chinese goods.
MANUFACTURING DATA: A private survey suggested manufacturing in China
slowed in January. China's Caixin Manufacturing PMI was 48.3 points in January,
down from 49.7 in December. This was its lowest reading since February 2016.
Readings below 50 indicate contraction on the index's 100-point scale. Similar
surveys were downbeat also for Britain, where companies are suffering from the
uncertainty over Brexit, and in the eurozone.
ANALYST'S TAKE: "The terrible decline in the Caixin PMI index ...
shows just how important it is for China and the U.S. to secure a trade deal.
If nothing else, a deal should prevent the near-term imposition of higher
tariffs," Robert Carnell of ING Bank said in commentary.
U.S. JOBS DATA: Traders are awaiting the release of jobs data later
Friday. The Labor Department's monthly employment report will likely show that
U.S. employers added a good amount of jobs in January, despite a partial
shutdown of the government and concerns about global growth. According to data
provider FactSet, analysts expect 165,000 jobs to be added and the unemployment
rate to remain at a low 3.9 percent.
ENERGY: Benchmark U.S. crude dropped 2 cents to $53.77 per barrel in
electronic trading on the New York Mercantile Exchange. It lost 44 cents to
settle at $53.79 per barrel on Thursday. Brent crude, used to price
international oils, rose 25 cents to $61.90 per barrel. The contract dropped 70
cents to $60.84 per barrel in London.
CURRENCIES: The dollar strengthened slightly to 108.91 yen from 108.89
yen late Thursday. The euro rose to $1.1468 from $1.1445.The Total Investment & Insurance
Solutions
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