European Close Market Briefing – 09/11/2017 – by Arjun Lakhanpal

November 9, 2017 by

In European Equity Markets stocks closed in negative territory on Thursday, as a flurry of corporate earnings for the third quarter triggered sharp price  moves,  many negative,  across some sectors and bourses.   Vestas the world’s largest maker of wind turbines was the worst performer of the STOXX 600, falling over 17 percent as it lowered its 2017 profit margin outlook. British luxury brand Burberry was another big loser, down about 10.8 percent after first-half results, while Hikma Pharmaceuticals lost 5.9 percent after lowering 2017 revenue guidance for its generics business for a third time. Italy’s biggest insurer, Generali was flat after keeping its guidance unchanged.

In Currency Markets sterling fell for a third consecutive day on Thursday as growing political turbulence surrounding Prime Minister Theresa May’s government sapped institutional investors’ demand for British assets. While the dollar has been generally weak against its rivals, the British currency stood out for its weakness across the board, falling against the Japanese yen and the euro. The pound fell 0.1 percent against the dollar to $1.3104. It is 1.6 percent below last Thursday’s level when the BoE raised interest rates for the first time in more than a decade, and is hovering above a one-month low of $1.3040 hit lat Friday. Against the euro, sterling weakened 0.3 percent to 88.69 pence.

In Commodities Markets oil prices rose nearly 1 percent on Thursday, supported by supply cuts by major exporters as well as continuing concern about political developments in Saudi Arabia.  Brent crude oil was up 59 cents or 0.9 percent to $64.08 a barrel, still close to Tuesday’s intra-day high of $64.65, which was the highest since June 2015. U.S. light crude was up 46 cents or 0.8 percent at $57.27, just shy of this week’s more than two-year high of $57.69 a barrel. Saudi Arabia plans to cut its crude exports by 120,000 barrels per day in December compared with November, slashing allocations to all regions, a spokesman for the energy ministry told Reuters on Thursday.

In US Equity Markets the S&P and the Nasdaq were on track to post their biggest one-day percentage losses in about two weeks as doubts on whether Republican would be a able to pulloff their promised tax-cut plan weighed on the markets.  Nine of the 11 major S&P sectors were lower, with the technology index’s 0.84 percent loss leading the decliners. Technology has been the best performing S&P sector so far this year with a 37 percent rise, despite concerns of stretched valuations. Kohl’s was down 3.8 percent after the department store operator’s quarterly profit missed estimates, while its upmarket rival Macy’s  rose 6.6 percent after its profit came in above expectations.

In Bond Markets U.S. Treasury yields rose marginally on Thursday, with 10-year yields bouncing from near three-week lows, as traders prepared for $15 billion worth of 30-year bonds, the last part of this week’s $64 billion November refunding. The yield curve steepened a tad from its flattest level in a decade as traders await the U.S. Senate version of a proposal to rewrite the federal tax code, which might add significantly to future government borrowing to finance possibly steep tax cuts. The Republican-backed bill from the Senate is expected to be released later on Thursday, while the 30-year bond auction is scheduled for 18:00 GMT.