Japanese Markets Continue Upswing after Abe Win. Warnings for the UK. US Stock Futures Higher.

by Oct 23, 2017

Asian markets looked pretty lacklustre today, with only the TOPIX making gains after Shinzo Abe secured another term as Japans Prime Minister. His ruling coalition party (the LDP) won a decisive victory in a snap election which took place yesterday, off the back of stronger rhetoric towards North Korea and chaos in Japan’s opposition parties. Japan’s Nikkei 225 index closed higher for the 15th straight day, marking its longest winning streak ever! It was another day of losses for India’s NIFTY50. Though indian equity markets have flirted with new highs consistently over this year, they have still under-performed emerging market peers. Here are some reasons why. In Europe, indices fell at the open this morning but have since started to climb upwards. The DAX is the best performing index today thanks to gains for Volkswagen, Daimler, Adidas, Siemens and Thyssenkrupp.
Elsewhere, after Bank of England Governor Mark Carney warned MP’s last week of further price increases for goods and services in the UK, many analysts think the Bank of England is certain to raise interest rates next month. If the bank’s members do decide to push up rates, it will be the first time this has happened since a Labour government was in power some 10 years ago under Gordon Brown. Some major banks including HSBC and NatWest have already raised interest rates on some of their fixed-rate home loans. In other downbeat news, the head of European equity strategy at Credit Suisse has weighed in on the health of UK stocks and his sentiment seems bearish. After consultancy firm EY reported profit warnings for UK companies have jumped to 75 in Q3 (the biggest rise in six years), Pierre Bose of Credit Suisse said investors can expect more of these if the economy’s growth continued to deteriorate. In a note to clients, the bank said that the UK is benefiting from a global economic upturn, but it faces economic and political challenges due to Brexit, and as such Credit Suisse is neutral on UK equities. Investors may want to look elsewhere if they are risk averse.
Bitcoin prices slipped back down below $6000 to $5819 over the weekend, while commodity prices look weaker globally, causing mining and energy stocks to slip on indices. US stock futures jumped today in preparation for yet more earnings results this week after a ton of great results for companies so far in recent days. Today Invstrs should keep their eyes open for earnings reports from Hasbro, VF Corp, State Street and Kimberly-Clark Corp. Here is how these stocks have performed over the last year.
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