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U.S stocks mixed Procter & Gamble lifts Dow; May’s ease on key Brexit demand lifts EUR; ASX200 lower on political worries

Oct 22, 2018 | Market Updates

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U.S markets ended mixed on Friday, the Dow was lifted by an earnings beat from Procter & Gamble, its shares surged by 8.8%. The Dow Jones ended Friday 64.89 pts higher and added 0.4% for the week making its first weekly gain in 4 weeks. The S&P500 closed 1 point lower as declines in health care and consumer discretionary offset a 2.3% gain in consumer staples. The Nasdaq lost 36 points after Facebook, Amazon and Netflix all pulled back.

“The rising rates, rising volatility and the moves in currencies were a wake-up call” for investors, said Gibson Smith, founder of Smith Capital Investors. “Earnings should be supportive of stocks,” but the market is entering a period where it is “realizing the economy is in stronger footing.”

European shares where weight down by disappointing 3rd quarter results. Auto stocks along with travel and leisure were the worst-performing sectors amid corporate news, Michelin lost over 7%.

The Italian government has defended its 2019 budget priorities after the European Commission sent a letter to Rome, arguing that the financial plans seems to point to a “particularly serious non-compliance with the budgetary policy obligations laid down” in European rules. Italy must reply to the European Commission by Monday.- CNBC – Brexit – European leaders and the British Prime Minister Theresa May said on Thursday that they are working hard to overcome the ongoing impasse in Brexit talks. However, May’s idea to extend the transition process has sparked a wave of criticism back in London, where some lawmakers want to see a break-up from the EU as soon as possible. – CNBC The DAX lost 35 points while the FTSE closed 22.81 points higher.

Oil recovered on Friday price supported by signs of increasing demand in China. Currently, China is the worlds 2nd largest oil consumer. Despite the rebound prices still headed towards their 2nd weekly decline. The main shock U.S stockpile jump that rattled buyers midweek. USOUSD closed 78 cents higher at 69.49.

Gold continues to hold its line despite being unable to freely break higher. Again on Friday buyers tested 1230before being knocked back. This morning price remains bullish trading $2 higher. The EUR and GBP finished week on strong note to the USD and JPY after Bloomberg News reported that British Prime Minister Theresa May is ready to drop a key Brexit demand in order to make a deal for Britain to leave the European Union (EU). The EUR surged closing 61 pips higher to the USD and 110 pips higher to the Yen. Weak Canadian data supported the USDCAD as it jumped back from a 60 pip decline to close 15 pips higher.

This morning the Yen and USD are making gains to risk. The AUDUSD 12 pips lower while the Yen is pushing the majors lower. The ASX200 is trading 40 points lower amid fresh uncertainties in the country’s political outlook.

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Sources; CNBC – Bloomberg – All times are AEDT -44

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