Some highly mixed trading moves from Asia overnight. Japanese stocks fell slightly (Nikkei -0.16%) along with the Asia Dow (-0.18%). However the Hang Seng surged +1.50% to 33,143.98 with banks very much in the ascendant: China Construction Bank Corp and Bank of China climbed +5.3% and +4.4%. Tech player Tencent saw a +2.5% rise.
Some of the volatility can be blamed on the extreme mixed messages emerging from the President Trump administration pitching tent in Davos briefly. Trump appears to have jumped tracks claiming “ultimately” he wants a strong dollar.
The remarks are in complete contrast to US Treasury Secretary Steve Mnuchin’s words, espousing a weak currency for trade advantage (something Trump has also advocated). Contrary signals? Confusion? Entirely par for the course. Jumping on Trump’s acknowledgement, the spot dollar soared then fell back (currently 88.92, 7.15am).
More drama also on the UK side with Theresa May having to slap chancellor Philip Hammond down after his ‘soft Brexit’ remarks yesterday. Hammond’s hope to stay “as close as possible” to the EU enraged Brexiteers with Tory whips making their feelings clear to No 10. The pound is unscathed though, up +0.7% to 1.425 and +0.15% higher against the dollar to 1.1434. UK GDP Q4 numbers emerge at 9.30am.
- UK FTSE 100 7,615.84 -0.36%
- DAX 13,298.36 -0.87%
- CAC 40 5,481.21 -0.25%
- Euro Stoxx 600 398.56 -0.56%
- Dow 26,071.72 +0.21%
- S&P 500 2,810.30 +0.44%
- Nasdaq 7,336.38 +0.55%
- Nikkei 225 23,631.88 -0.16%
- Gold 1,353.20 -0.73%
- Oil WTI 63.40 +0.05%
Soros warns on FAANG stocks
Last night billionaire investor George Soros took aim at Google and Facebook, accusing them of threatening democracy – and also warning that tax oversight and regulation would overtake them eventually.
"It takes a real effort to assert and defend what John Stuart Mill called 'the freedom of mind',” Soros said. And he went on: "There is a possibility that once lost, people who grow up in the digital age will have difficulty in regaining it."
Several FAANG (Facebook, Amazon, Netflix and Alphabet) stocks are due to report shortly. Analyst Daniel Ives told CNBC he remains strong on tech stocks for 2018, including Facebook.
“Facebook is on a trajectory to have another solid quarter in 4Q on the MAU [monthly average users] front and has strong momentum heading into 2018 on this all-important growth driver for the business, despite lingering clouds from the recent News Feed overhaul."
Lloyds boss bullish on UK economy
On the cusp of UK GDP data (this morning, 9.30am) Lloyds boss Antonio Horta Osorio said he was confident of the UK's economic resilience. The devaluation of the pound has provided a boost to exports in the manufacturing sector he told the BBC earlier in Davos, "and also the income that British companies get from their foreign assets is larger in pounds so the net impact is around 1.5%."
Horta Osorio says he would not be surprised if GDP growth year-on-year was slightly higher than 1.5%.
Breaking news: Nobel prize-winning economist Robert Shiller says Bitcoin is highly unlikely to be a permanent part of the financial landscape. "I tend to think of Bitcoin as an experiment," he told an audience in Davos. "It is an interesting experiment, but it’s not a permanent feature of our lives."