Darren Sinden from educational provider Trade Uni discusses the latest market moves.
European equity indices eclipsed their US peers yesterday, with the Euro Stoxx 50 up 2.4% on the day, the DAX by 1.7%, the CAC 40 by 2.3% and the MIB and IBEX by 1.7% and 1.4% respectively. The catalyst for those gains came from China, in the form of further economic stimulus and monetary easing.
Luxury goods stocks were among the biggest gainers, with LVMH up by 9.88%, Hermes by 9.1% and Kering by 9.61%. Industrials were also better, with Siemens up by 5.33%, BMW up by 3.81% and Mercedes-Benz by 3.27%, driven by hopes of a rebound in economic activity in the world's second-biggest economy. In the US, the S&P 500 finished the day up by 0.4%, the Nasdaq 100 by 0.7%, and the Dow by 0.6%.
On a sector level, the news from China did have an effect stateside. The materials sector was up by 1.97%, with every stock in the sector finishing up on the day, including stocks such as Albemarle (9.92%) and Freeport-McMoRan (7.45%). However, US consumer discretionary stocks eked out a modest 0.14% gain on the day, though gaming groups Wynn Resorts and Las Vegas Sands were up by 8.2% and 7.99% respectively and Norwegian Cruise Lines added 4.41%, while Ralph Lauren was up by 4.38%, posting a new 20-year high in the process. Those gains, however, were offset by flat performance at the likes of Amazon, Tesla and Airbnb.
Super Micro Computer's share price sank by 12.17% on reports that the US authorities were going to investigate accounting practices at the firm; practices that were recently called into question by short sellers. At one point this year SMCI had been up by more than 300%, but the year-to-date gains in the stock now stand at just 41.56%.
The Japanese yen has been active this morning with USD/JPY trading up to ¥143 as former defence minister Shigeru Ishiba won the leadership contest in Japan's ruling party to become the prime minister-elect. He is expected to favour policies promoting economic stimulus and fiscal expansion (government spending). Despite the talk of stimulus in Asia, European commodity markets are looking restrained this morning. WTI crude oil is up by 0.22%, Brent by 0.13%. Gold is down by 0.22%, silver by 0.43% and copper by 0.43%. 10-year US treasury bond yields stand at 3.785%.
The highlight on the macroeconomic calendar today is the US personal consumption and expenditure report, due out at 1.30pm (UK time). US consumers account for around 67% of US GDP and their activities can impact inflation, which feeds into interest rate policy.
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