Closing Wrap – Monday, November 25, 2019
In European Equity Markets the pan-European Stoxx 600 climbed 1.05%, with travel and leisure stocks adding 1.96% to lead gains as all sectors and major bourses traded in positive territory. The FTSE 100 in London moved higher by 0.96%. In terms of individual stock moves, Siemens Gamesa shares gained 9% after it awarded a two-year global turbine cable supply contract to Nexans. Italy’s Prysmian added 4.6% after its Western Link project was taken over by the client, according to Reuters, while German giant Thyssenkrupp slid 5% after Exane BNP Paribas analysts downgraded the company’s stock to “neutral” from “outperform” and cut its price target.
In Currency Markets sterling climbed back above $1.29 on Monday, drifting further from recent lows, as polls continued to show the ruling Conservatives as runaway favourites to win the Dec. 12 election with a pledge to implement Brexit and halt 3-1/2 years of political uncertainty. The pound rose 0.6% to $1.2913, rising off 10-day lows hit on Friday when dire Purchasing Managers’ Index (PMI) data highlighted the weak state of the UK economy and underscored the low possibility of interest rate hikes in the near future. Against the euro too, it firmed 0.6% at 85.37 pence to reach a one-week high.
In Commodities Markets oil prices were little changed on Monday as positive comments from the United States and China rekindled hopes in global markets that the world’s two largest economies could soon sign an interim deal to end their trade war. Brent crude futures were down 6 cents at $63.33 a barrel. West Texas Intermediate (WTI) crude was down 15 cents at $57.62. U.S. national security adviser Robert O’Brien on Saturday said that an initial trade agreement with China was still possible by the end of the year. Analysts at Barclays said they expect Brent to oscillate around $60 a barrel for the next two years.
In US Equity Markets Apple Inc and semiconductor stocks powered the S&P 500 and Nasdaq indexes to record highs on Monday, after a report signaled that the United States and China were nearing a trade truce, with sentiment also buoyed by a raft of mega deals. The S&P 500 was up 0.67%, at 3,131.19. Trade-sensitive Intel Corp and Applied Materials Inc helped lift the Philadelphia Semiconductor index 2.1% as a Chinese state-backed tabloid said Beijing and Washington were “very close” to an initial pact. In M&As, Tiffany & Co jumped 6.2% after the luxury jeweler agreed to a sweetened $16.2 billion deal with France’s LVMH.
In Bond Markets Euro zone bond yields edged up on Monday, as positive trade war developments trumped uncertainty and weak euro zone data that boosted safe-haven assets last week. Most euro zone government bond yields recovered from 2-1/2 week lows hit last week hit on trade uncertainty and euro zone data, which showed that business growth had almost ground to a halt and the services industry growth was weaker than expected. The German benchmark 10-year bond yield was up around a basis point in late trade at -0.35%.