European shares fell on Monday, trimming gains made in the previous session. German software maker SAP fell 5.8 per cent after cutting its full-year profit outlook. The news hit the tech sector with the STOXX 600 Technology sector falling 2.4 per cent. German sportswear firm Adidas rose 3.6 per cent after the Wall Street Journal reported that an investor group was planning a bid to buy Adidas's Reebok unit. The FTSEurofirst 300 index lost 0.5 per cent. The UK FTSE fell 0.7 per cent and the German Dax lost 1.5 per cent. And Australia's major miners were weaker in London trade with shares in BHP Billiton down by 1.4 per cent while Rio Tinto lost 0.6 per cent.
US sharemarkets recovered after early losses on Monday. The S&P 500 and Nasdaq advanced, but disappointing results from IBM kept the Dow under pressure. IBM slumped by 7.2 per cent after third quarter earnings fell well short of expectations. IBM is looking to overhaul its business units. According to Thomson Reuters data, 87 companies on the S&P 500 have reported quarterly earnings with 63.2 per cent beating analyst expectations (in line with the last two decades). The Dow Jones initially fell by 120 points before recovering to close up by 19 points or 0.1 per cent with the S&P 500 index up by 0.9 per cent while the Nasdaq rose by 57 points or 1.4 per cent.
US treasury prices rose on Monday (yields lower) as weaker European equities and speculation that the Federal Reserve may delay rate hikes supported demand for safe-haven government bonds. US two-year yields fell by 3 points to 0.355 per cent while US 10-year yields lost 1 point to 2.187 per cent.
Major currencies rose against the greenback over European and US sessions on Monday. The Euro rose from lows near $US1.2735 to highs near $US1.2810, ending US trade near $US1.2805. The Aussie dollar rose from lows near US87.50c to highs near US87.95c ending the US session near US87.85c. And the Japanese yen strengthened from ¥107.35 per US dollar to ¥106.80, ending US trade near ¥106.85.
World oil prices eased on Monday, as concerns about over supply and sluggish demand pushed oil back towards last week’s four-year low. Traders waited on the OPEC meeting on November 27 with speculation of a potential cut in OPEC oil production. Brent crude fell by US80c to $US85.35 a barrel while the US Nymex crude price fell by 4c to $US82.71 a barrel.
Base metal prices were mixed on the London Metal Exchange on Monday. Nickel led the declines down 2.1 per cent with zinc (down 1.6 per cent) and copper (down 1.2 per cent) also weaker. On the flip side Tin managed to eke out a 0.3 per cent gain. Gold rose on Monday with the Comex gold futures quote up by $US5.70 an ounce or 0.5 per cent to $US1,244.70 per ounce. Iron ore was up by US60c on Monday or 0.7 per cent to $US81.20 a tonne.
Ahead: In Australia, weekly consumer sentiment and September imports data is released. In China, economic growth & monthly economic data are released at 1pm AEDT. In the US, data on existing home sales is issued.
Craig James is chief economist at CommSec.