Global Market Report - January 21

Morningstar UK
Updated
Diversification Means Investing Overseas Too

Asia

Markets in Asia were generally positive at the start of the new trading week, despite data showing a slowdown in Chinese economic growth.

The Shanghai Composite Index nudged above 2,600 points after a modest daily gain, while Hong Kong’s Hang Seng consolidated its position above 27,000 points.

China GDP in the fourth quarter met expectations for a year on year rise of 6.4%, but this was the slowest growth since the early 1990s and a further sign that the trade spat with the US is harming activity.

The Bank of Japan meets this week and is expected to leave interest rates on hold at -0.1%. Japan’s Shinzo Abe is expected to attend Davos this week.

Europe

Stock markets in the Eurozone were modestly lower on Monday despite Asia’s gains. But the UK’s FTSE 100 inched forward as the 7,000 points levels looms closer. Theresa May returns to Parliament this week to try to convince MPs that her "plan B" is workable. In terms of currency moving news, this week's sees UK job numbers and Government borrowing figures.

Tomorrow Germany’s ZEW survey will give a greater insight into sentiment in Europe’s largest economy. Recent data has not been encouraging, showing that Germany is on the brink of recession.

The European Central Bank meets on Thursday and is expected to hold rates. January marks a watershed in that the ECB stopped its monthly bond purchase programme from the start of the new year.

North America

US markets are closed today for Martin Luther King Jr. Day.

This week sees results from Dow Jones stalwarts Johnson & Johnson (JNJ), IBM (IBM), Procter & Gamble (PG) and Ford (F). Comcast (CMCSA) also reports.

The ongoing US government shutdown is having a knock-on effect on economic data releases.

Assuming there is no disruption, provisional data for durable goods orders are due on Friday for December. Weekly jobless claims are due as usual on Thursday as well as manufacturing and services PMI indices.

JP Morgan’s (JPM) Jamie Dimon and BlackRock’s (BLK) Laurence Fink are attending the World Economic Forum in Davos, Switzerland.

Next week the Federal Reserve is due to meet. After four interest rate rises in 2018, the Fed is expected to hold rates this month. US GDP for the fourth quarter is also due on the same day.