Global indices are poised for quarterly losses, apart from the FTSE 100
Global equity markets are poised to post quarterly declines. In APAC, the Nikkei 225 recorded a third straight month of losses, a second negative month in a row for Hang Seng and S&P/ASX200.
Global equity markets
Global equity markets are poised to post quarterly declines. In the Asia-Pacific region (APAC), the Nikkei 225 recorded a third straight month of losses, a second negative month in a row for Hang Seng and S&P/ASX200. On exception, though, the FTSE 100 is on track to post quarterly gains.
The US. dollar
The USD strength is the main reason for the loss of value on the equity markets. The greenback has jumped on expectations that the U.S. economy will remain more resilient to higher interest rates than other economies, after the Federal Reserve last week warned that it may hike rates further and is likely to hold them higher for longer.
The USD index has eased from a 10-month high but remains on track for an 11th straight weekly gain. Gold is poised to record its biggest monthly fall since February, set for a nearly 4% decline this month and its second consecutive quarterly drop.
Japan economy overview
In Japan, industrial output was unchanged in August from the previous month. Economists had anticipated a 0.8% fall as typhoons disrupted automaker production and other industries. Motor vehicle production was nonetheless affected, falling 3.9%. Retail sales also came in better than expected, up 7% in August year-over-year (YoY). The unemployment rate remains at 2.7%. Traders remain on guard for potential intervention from the Japanese authorities in the JPY as it holds near 11-month lows against the US dollar.
German retail sales
In the UK, final estimates of GDP in the second quarter remained at 0.2% quarter-on-quarter (QoQ). On an annual basis, the British economy expanded by 0.6%. In Germany, retail sales fell more than anticipated in August, by 2.3% year-on-year (YoY). A bit later this morning, the unemployment rate is poised to remain at 5.7%. Over in the US, the core Personal Consumption Expenditures (PCE) price index.
The market sees it decelerate to 3.9% in August YoY, down from 4.2% the previous month. Personal income and spending are expected to rise in August, both by 0.4% on a monthly basis.
Nike
NIKE's first quarter earnings beat Wall Street estimates, sending its shares up about 8% in extended trading. Nike reported a profit of 94 cents per share, easily beating estimates of 75 cents per share. Nike posted total revenue of $12.94 billion in the quarter, marginally missing analysts' estimates of $12.98 billion. The group didn't give a precise forecast for the second quarter. It only said it expected second-quarter revenue to be up slightly. Analysts had anticipated a 2.1% rise to $13.59 billion. The company maintains its annual forecasts.
Nike's inventories fell 10% during the quarter, indicating the company was successful in reducing excess product ahead of the holiday season. There is some good news for investors who feared that NIKE would be forced to steepen discounts.
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