Stock markets were teetering on Friday and now have kicked off the week in reverse. Asia Pacific markets like the Hang Seng and S&P/ASX are leading the declines after nothing of note came out of the weekend G20 finance ministers meeting except that China indicated it doesn’t have any plans to bring in new fiscal stimulus to deal with its slowing economy.
European markets are also falling today with concerns about the continental economy after Italian industrial sales fell faster and last week’s LTRO stimulus was way less than expected. The FTSE
is also trading lower as focus turns away from Scotland back to speculation on when the Bank of England may start raising interest rates.
US stock markets have been following their overseas counterparts lower to start the week. The S&P and NADSAQ have been following Friday’s bearish key reversal days (new highs failed to hold and indices closed down on the day), with further declines. Apple could be active again today on positive iPhone sales reports. Meanwhile, it’s Alibaba’s second day of trading, with traders asking if it can hold $90?
USD is mixed today. The greenback is outperforming against resource dollars which have been knocked back on concern about the impact a slower Chinese economy could have on resource demand. AUD has taken the brunt of these concerns. NZD has had its fall cushioned by the National (conservative) party’s big election win on the weekend. CAD has been cushioned by its sensitivity to the US which is one of the hottest economies out there at the moment.
To no surprise, GBP is the top performer for a second day in a row as traders respond favourably to the decisive No referendum vote, with continental currencies rising at a slower pace.
Tonight and tomorrow morning bring flash manufacturing PMI reports starting with China and following with France, Germany and the US. These reports give the first look at how some key economies are performing in September so far and may keep China related market action going through into tomorrow.
Apple set a new product launch record selling over 10 million of its iPhone6 and iPhone6 Plus smartphones on opening weekend in 10 countries. Sales start in 20 more countries on Friday and they are expected to be in 115 countries by the end of 2014.
Pharmaceutical producer Merck KGaA of Germany has agreed to purchase US chemical producer Signa-Aldrich for $140 per share or $17 billion in an all-cash deal at a 37% premium to Friday’s close.
Economic reports released overnight and this morning include:
New Zealand election National party and PM Key return power with the first majority government in the country in over 20 years. Labour drops to 25% support its worst result in decades.
NZ consumer confidence 116.7 vs previous 121.2
Italy industrial sales (1.3%) vs previous (0.3%)
Italy industrial orders (0.7%) vs previous (1.3%)
Economic reports due later today include:
10:00 am EDT US existing home sales street 5.20M
12:40 pm EDT Bank of Canada Deputy Governor Wilkins speaking
FOMC members Dudley and Kocherlakota are speaking today, both have historically been in the dovish camp.