North America
US equity futures point to a rise at the open on Thursday, consolidating the market’s gains since the start of the year. The Dow Jones, for example, is up 2,000 points since the start of the year and at 25,500 points, could easily reclaim the 26,000 level that was breached at the end of last year.
Coca-Cola (KO) reports before the market opens today, while Nvidia (NVDA) reports after the closing bell. In Canada, Brookfield Asset Management (BAM.A) is one of the biggest companies to report.
In economics, US retail sales for December are released before the market opens, as well as weekly jobless claims to February 9.
Europe
Sterling was slightly weaker against major currencies today and that helped the FTSE 100 push above 7,200 points, regaining levels last seen since early October 2018. Eurozone indices also nudged higher, with France’s CAC 40 the strongest performer in morning trading. Germany’s economy failed to grow in the fourth quarter, while the Eurozone itself managed just 0.2% growth. Spain was the best performer among major economies, rising 0.7% quarter on quarter and 2.4% year on year.
The market reacted positively to AstraZeneca’s (AZN) full-year results today as product sales growth accelerated in the fourth quarter. However, operating profit was down 17% and the dividend is held at $2.80 for the full year. The company yields over 3%, compared with GlaxoSmithKline’s (GSK) 5%+ yield. Morningstar analysts rate AZN as a two-star stock, which means that it is overvalued relative to its fair value estimate of £48.50. Shares are currently trading just below £60.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “In recent years Astra’s been slowly eating itself to keep the dividend going, while it waits for the pipeline to deliver. Selling off long term assets in exchange for cash today isn’t sustainable, and the labs were always in a race against the clock.”
Asia
Markets in Asia-Pacific were mixed despite another closing gain on Wall Street, but daily losses in China, Japan and Hong Kong were very modest. More positive noises from the trade talks have helped US and Asia equities this week but China lagged today. The US administration is considering extending the March deadline for new tariffs on Chinese goods by 60 days.
Chinese trade figures dominated the Asia-Pacific economics calendar today. In local currency terms, exports rose much more than expected in January on the year before, gaining nearly 14%, against forecasts for a rise of just under 4%. Imports rose 2.9% last month, compared with expectations of a drop of 1.9%. China’s trade surplus for January was just below $40 billion, compared with $57 billion in December.
