April 23, 2019
Asian markets are mixed as U.S. results season accelerates
Shares in Asia showed a mixed tone on Tuesday, April 23.
Stocks in China fell after the South China Morning Post reported that Beijing could refocus on structural reforms, rather than offering stimulus measures, after better-than-expected economic growth in the first quarter.
The Nikkei 225 in Japan lost its initial gains and fell slightly, with Fast Retailing stocks losing more than 2.5 percent. Meanwhile, South Korean Kospi rose slightly. Australia's ASX 200, which closed on Monday for a holiday, gained 0.72 percent as almost all sectors advanced. The energy sub-index rose by more than 2 percent, with oil company stocks rising amid the recent rise in crude oil prices.
The financial markets in Australia and New Zealand reopened after the long Easter holidays. Europe will either do the same on Tuesday.
On Tuesday, the U.S. dollar rose against most currencies, while the Canadian dollar was favoured by the rise in oil prices.
During the last few weeks, the dollar has strengthened, mainly due to the increase in Treasury yields over 10 years and the signs of strength of the American economy after the beginning of the year. The latest data showed that U.S. existing home sales fell more than expected in March amid supply constraints.
While other indicators may give an idea of the state of the U.S. economy, Friday's Gross Domestic Product report will provide a clearer picture. Tuesday's session is expected to see an increase in volatility as traders return to the trading desks and as U.S. business results continue to come out.
This week could give a strong indication of whether the dramatic change in trend of central banks, particularly the Federal Reserve, in recent months has been enough to change the dynamics of global growth. The relatively soft tone of monetary policy supports risky assets.
Oil prices approached 2019 highs after Washington announced that all exemptions from Iran sanctions will end in May, putting pressure on importers to stop buying from Tehran. The United States on Monday demanded that Iranian oil buyers stop buying before May 1 or face sanctions, ending six months that allowed Iran's eight biggest buyers, most of them in Asia, to continue importing.
Gold remained stable on Monday, above a minimum of almost two months. Geopolitical risks remain and there is some demand for gold as a safe haven.
European markets are expected to open mixed on Tuesday.
Week begins with more data releases
U.S. stocks fall as week begins with more data releases.
U.S. indices traded lower on Monday, April 22, with Wall Street ready for the busiest week of business results.
The Dow Jones Industrial Average fell 58 points. The decline in materials and real estate caused the S&P 500 to fall 0.1%. The Nasdaq Composite also lost slightly.
Boeing was the biggest contributor to the Dow's losses, after workers at the company's 787 reactor plant complained about poor production and safety practices.
More than 140 S&P 500 companies plan to publish their quarterly results this week. So far, most reports of business results have exceeded expectations.
FactSet data shows that 76.5% of the S&P 500 companies that have made profits have outperformed analysts' estimates.
This week will be very dense in the publication of business results
On Monday 22 April the main European markets were closed due to a public holiday.
Facebook and Amazon, as well as a dozen Dow components such as United Technologies, Coca-Cola, Microsoft and Exxon Mobil, must submit their reports.
Attention will remain focused not only on the benefits, but also on the message that so far has not been very good. It will probably be an important week just for future market direction.
In the beginning of second quarter, the eurozone economy is still at its worst level. The pace of economic growth slowed, for the second month in a row, in April and the private economy of the single currency club countries continues to go through its worst moment since 2014.
The PMI Composite Index of Total Activity in the euro area stood at 51.3 points in April, up from 51.6 in March. Nevertheless, the figure continues to expand.
The manufacturing sector experienced a further economic contraction, while growth in the services sector has slowed according to IHS Markit.
Crude oil hits six-Month high
The reason is that the United States will end exemptions from sanctions on Iran.
Oil prices rose on Monday, after Washington announced that all Iranian oil buyers will have to end their imports, or be subject to U.S. sanctions, as of May 2. The White House confirmed this on Monday morning.
They will no longer grant exemptions from sanctions to any country that is importing Iranian oil.
The measure threatens to remove approximately 1 million barrels per day from the market.
Sri Lanka imposes state of emergency for the entire country
Sri Lanka is imposing an emergency after devastating bombings of hotels and churches.
290 people were killed and more than 500 injured in attacks on two churches and four hotels in and around Colombo, the capital of Sri Lanka.
The emergency law, which gives the police and military extensive powers to arrest and interrogate suspects without a warrant, came into force at midnight on Monday.
Responsibility for the attack has not yet been claimed, but the suspicion focuses on Islamist militants in this Buddhist-majority country.
Investigators said seven suicide bombers participated in the attacks, while a government spokesman said there was an international network involved.
Samsung postpones the launch of its folding phone because of problems on its screen
Samsung postpones the launch event of its Galaxy Fold smartphone, which was originally scheduled for April 24 in Shanghai.
A spokesman confirmed that the event had been cancelled but did not have an official statement to give.
It seems that some problems have been detected with the folding screen of a device that will cost almost 2ooo dollars.
The Samsung device screen can be folded in half and opened again to give users a large screen. Journalists who reviewed the product in recent weeks reported some problems.
CNBC has asked Samsung to clarify whether the postponement of the China event will affect other countries when the device goes on sale in different locations. However, Samsung has not yet given any clarification.
The United States is attacking Huawei and China
The United States and China are competing to build high-speed 5G networks. President Donald Trump doesn't want the United States to stay second.
Trump has introduced initiatives to accelerate the deployment of new wireless networks in the United States, saying the race to 5G is a race America must win.
Last week, Trump said the private sector needs to lead the way in implementing 5G networks.
The 5G network is designed to offer faster speeds and lower delay times than previous wireless networks such as 4G and 3G.
While much has been said about how networks will provide consumers with faster video and game downloads, 5G also represents a major shift to features such as those used by cars without drivers or remote surgery, where fast and reliable Internet connections are required.
China, for its part, has a centralized approach to 5G, driving investments in technology as a government initiative. The challenge of China and Huawei is not just a matter of spies.
[image] The exchange rate is always given for a currency pair. A currency by itself is worthless if it is not compared to another currency or other reference, such as gold. Therefore, whether in a flexible exchange rate or fixed exchange rate...
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