Fundamental Analysis
EUR
“It's good if China eases because then, most likely, growth prospects will go higher for China…”
- Pierre Mouton, a fund manager at Notz Stucki & Cie.
The majority of European stocks advanced further on Thursday after a report showed China’s inflation cooled, boosting hopes the national central bank may ease monetary policy.
The Stoxx Europe 600 Index rose 0.40 per cent to 270.27. Germany’s DAX Index slid 0.02 per cent and France’s CAC 40 Index edged higher 0.54 per cent.
“If the figures show mild inflation and economic growth slows down as they have recently, there’s a strong chance that China will add stimulus,” said Pierre Mouton, a fund manager at Notz Stucki & Cie. in Geneva.
“It's good if China eases because then, most likely, growth prospects will go higher for China and subsequently for the world and risk will be on. Because if China eases, demand goes higher and commodities demand goes higher,” said Christian Tegllund Blaabjerg, chief economist at FIH Erhvervsbank.
USD
“The clear decline [in claims numbers] since June provides some corroboration of the better-than-expected payrolls reading last week”
- Jim O'Sullivan, chief US economist at High Frequency Economics
The number of Americans claiming for unemployment benefits declined to 361,000 in the week ended August 4 from 367,000 the week before, said the Department of Labor on Thursday.
“The clear decline [in claims numbers] since June provides some corroboration of the better-than-expected payrolls reading last week. In short, encouraging data for the recovery,” said Jim O'Sullivan, chief US economist at High Frequency Economics.
In a separate report, the Bureau of Economic Analysis said trade deficit shrank to $42.9 billion in June as exports rose and imports fell.
The Standard & Poor's 500 climbed 0.04% to 1,402.80. The Dow Jones Industrial Average slid 0.08%, or 10.45 points, to 13,165.19. The Nasdaq Composite gained 0.25% to 3,018.64.
GBP
“The Greater London housing market is another country compared with the remainder of the U.K.”
- Peter Williams, chairman of Acadametrics
U.K. house prices rose in July to the highest level since 2008 helped by increased property prices in London, said the Acadametrics Ltd. The average cost of a home in the U.K. rose to 225,760 pounds, up by 3.2 per cent from the same period the previous year.
“This month we report stunning growth in some London boroughs,” Peter Williams, chairman of Acadametrics, said in a statement.
“The Greater London housing market is another country compared with the remainder of the U.K.” and “is likely to continue to move further out of line with all or most of the market in the rest of England and Wales.”
The FTSE 100 Index rose 0.10 per cent, or 5.59 points to 5,851.51. The broader FTSE All-Share Index climbed 0.13 per cent.
CHF
“The performance here is that Nestlé slightly accelerated its volume growth in the second quarter, a unique result in the sector”
- Analysts at Vontobel Research
Swiss stocks advanced on Thursday after Nestlé SA, the world largest food company by sales, reported earnings that beat analysts’ forecasts.
The Swiss blue-chip index SMI, a measure of the largest and most actively traded companies gained 0.73%, or 47.29, to 6,505.29. The broader Swiss Performance Index advanced 0.70%, or 41.83 points, to 6,016.03.
“The performance here is that Nestlé slightly accelerated its volume growth in the second quarter, a unique result in the sector,” said analysts at Vontobel Research in a note.
JPY
“Investors are selling shares to lock in profit from this week’s gain”
- Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co.
Japanese stocks lost ground on Friday after company earnings came in worse than expected.
The Nikkei 225 Stock Average fell 0.97 per cent, or 87.16 points, to 8,891.44. The broader Topix Index retreated 0.67 per cent, or 5.05, to 746.79.
“Investors are selling shares to lock in profit from this week’s gain,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo.
“Earnings at domestic-demand focused companies aren’t bad, but those depending on external demand are being hurt by the yen’s appreciation and European debt problems.”
