Morning market bulletin

Rob Morgan rounds up the latest market and company news.

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  1. Rob Morgan

In the US, volatility remained high on Friday as stocks retreated following Thursday’s rally. The S&P 500 was down 0.3%, the Dow Jones Industrial Average down 0.4% and the Nasdaq 225 fell 0.15%. The CBOE Volatility Index climbed to its highest level since August.

Treasury yield curves tightened again, to their tightest levels in a decade, triggering concerns around economic growth among some commentators.

On Friday, the Federal Reserve Bank of Dallas President Robert Kaplan said that the government’s debt borrowing levels are ‘historically high’, and possibly unsustainable. He argued that proposed tax reforms could help improve the situation, but that fiscal changes may also be necessary.

Shares in sports retailers jumped on better than expected earnings. Footlocker was up 28.3%, Shoe Carnival up 29.7% and Hibbett Sports up 15.2%.

Clothes retailers also reported strongly. Abercrombie & Fitch finished the Friday up 23.9%, and competitor Gap was up 7%.

These strong earnings figures among brick and mortar names will encourage some analysts, although many remain concerned over the rise of online and the increasing impact of Amazon.

Overnight Chinese and Hong Kong  equities reversed losses as markets took a closer look at plans to curb shadow banking, but Japanese equities remained lower.

This morning the euro and Germany’s DAX index are under pressure as Chancellor Angela Merkel’s bid to form a new government collapsed on a dispute over migration policy. Merkel is still likely to be at the centre of any coalition government but there is an outside chance of fresh elections. UK equity indices anticipated to open lower.

Stocks to watch

Royal Dutch Shell: Head of oil trading Mike Muller has stepped down after 29 years with company, according to a company announcement issued on Friday.

Mediclinic: the South African private hospital group does not intend to make an offer for the rest of Britain's Spire Healthcare, the company said after discussions with some of Spire's directors.

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