Apple Results, Jobs Report to Steer Markets
November 03 2017 - 8:46AM
Dow Jones News
By David Hodari and Riva Gold
-- Jobs report to steer rate expectations
-- Apple jumps in premarket trading
-- Spanish stocks drop on political tensions
Technology companies led gains in global stock markets Friday
after Apple reported better-than-expected results, although market
moves were muted ahead of the U.S. jobs report.
S&P 500 futures and the Stoxx Europe 600 were both up 0.1%
after a torpid trading session in Asia.
Nasdaq-100 futures rose 0.4% and global technology companies
moved higher after Apple said late Thursday that it delivered its
best quarterly growth in two years.
Apple shares jumped 3.9% in premarket trading after climbing
around 45% so far in 2017, playing a large role in this year's
rally in U.S. stocks. A close for Apple above $174.24 on Friday
would take its market value over $900 billion for the first
time.
Global technology shares mostly moved higher in concert, also
supported by upbeat results from Alibaba and other U.S. tech giants
earlier this week. In Europe, shares of chip-gear firm ASML Holding
rose 1.2%, chip maker Infineon Technologies rose 1.8% and
semiconductor maker STMicroelectronics rose 2%. In Taiwan, shares
of Largan Precision were up 3.6% and Hon Hai Precision Industry up
0.4%.
Investors across the globe were preparing for the U.S. nonfarm
payrolls report, due before the U.S. market open on Friday. The
report is a key indicator of the strength of the economy and a
strong showing would help smooth the way for the Federal Reserve to
raise interest rates when it meets Dec. 13 and again in 2018.
Economists surveyed by The Wall Street Journal predicted 315,000
jobs were created in October. After September numbers that showed
the first monthly drop in seven years -- attributed to the
hurricane effect -- "expectations are quite high" for the October
reading, said OM Financial client adviser Stuart Ive.
The WSJ Dollar Index, which weighs the U.S. currency against a
basket of 16 others, ticked 0.1% higher ahead of the report as
investors continued to parse the details of a Republican tax bill
and the nomination of Fed governor Jerome Powell to be the next
chairman of the central bank.
The Dow industrials fell more than 80 points Thursday after a
detailed summary of the tax plan was reported, but the blue-chip
index climbed later in the session to end higher.
"We think tax reform is more likely than the market thinks it
is," said Jon Adams, investment strategist with BMO Global Asset
Management, noting expectations for a tax cut in 2018 are one of
the reasons for the asset manager's modest preference for equities
over bonds.
Still, "this is a very fluid process and it's likely that there
will be a lot of change to what is currently being proposed," he
added.
U.S. 10-year government bond yields edged up to 2.353% from
2.347% Thursday. German 10-year government bond yields edged down
to 0.360% from 0.369%. Yields move inversely to prices.
In Europe, shares of Renault rose 4.4% after the French
government said it was selling part of its stake in the company.
That helped offset declines in the banking sector, with shares of
Société Générale down 3.1% after it said its third-quarter profit
fell significantly.
Spanish bank shares also fell, dragging Spain's IBEX 35 down
1.3%. A prosecutor asked a Spanish court on Thursday to issue an
arrest warrant for Carles Puigdemont, the leader of Catalonia's
secessionist movement who fled to Belgium to escape authorities in
Spain.
"I don't think [Catalonia] is played out yet -- the [request
for] arrests have probably inflamed the situation and there's no
doubt going to be a populist response to arrests," said Gautam
Batra, head of investments at Mediolanum Asset Management.
The British pound edged up 0.2% to $1.3086 after its biggest
daily decline since June. The Bank of England on Thursday raised
interest rates for the first time in more than 10 years but
signaled that further increases weren't imminent, causing the pound
to slump 1.4% against the U.S. dollar.
"More important than the decision were the comments during the
press conference and inflation report, which were quite dovish,"
said Markus Stadlmann, chief investment officer at Lloyds Banking
Group. "There are so many moving parts with regards to the economic
situation for the U.K. at the moment that for investors, we have to
take it step by step."
Asia-Pacific equities were little changed ahead of the U.S. jobs
report, with Japanese markets closed for a holiday.
Chinese tech giant Tencent rose 1.7% to a fresh record after
peer Alibaba reported positive quarterly results. The gain helped
Hong Kong's Hang Seng Index -- of which Tencent is the largest
component -- rise 0.3%.
Australia's S&P/ASX 200 gained 0.5% to finish at its highest
since April 2015 as commodity-price gains lifted materials and
mining companies. Steel and key steel ingredient iron ore were
among the leaders in this week's metals rebound, while nickel
jumped 23% over the past month on expectations that rising demand
from electric-vehicle producers will tighten supplies.
-Lucy Craymer contributed to this article
Write to David Hodari at David.Hodari@dowjones.com and Riva Gold
at riva.gold@wsj.com
(END) Dow Jones Newswires
November 03, 2017 08:31 ET (12:31 GMT)
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