Despite an ongoing sell off in bond markets international equities turned soggy in overnight trading. Striking German metal workers weighed on European exchanges and stronger data and good company reports failed to lift US indices. Futures markets indicate weak openings but a commodities rally and recent outperformance may give Asia Pacific investors more to cheer about over the day.
Members of Germany’s largest union enacted their first strike in 34 years. The action appeared to rattle investors who jumped on gains that previously took the DAX to record highs. This investor caution flowed across the continent and the Atlantic. As the US reporting season approaches the half way mark sales growth is up 10% and profits are ahead around 15%. Macro data continued the good news with a stronger than expected ISM reading. The weakness in US indices is surprising in light of the news flow.
Asia Pacific investors may shrug off these soft leads. Japanese and Australian equities outshone the world yesterday, and a clear valuation gap in favour of the region could see further surprising gains today. Rallies in oil and industrial metals could see a focus on resource sectors.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.