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While you were sleeping: Rally on deal to end US government shutdown

Tuesday 23rd January 2018

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Wall Street gained, touching fresh record highs, as US senators agreed on a deal to end the government shutdown after three days. 

In 1.19pm trading in New York, the Dow Jones Industrial Average gained 0.3 percent, while the Nasdaq Composite Index rallied 0.7 percent. In 1.04pm trading, the Standard & Poor’s 500 Index added 0.4 percent.

The three benchmark indexes climbed to record highs.

Investors are focused on a slew of corporate results slated for release this week, with more than 300 companies reporting earnings including Netflix, Starbucks, McDonald’s, Caterpillar and Intel.

“In the coming days, we have far more reporting quarterly results, discussing the tone of the current quarter and offering their view on tax legislation benefits to be had," Chris Versace, chief investment office of Tematica Research, wrote in a note.

The Dow moved higher as gains in shares of Goldman Sachs and those of Verizon Communications, recently up 2 percent and 1.7 percent respectively, outweighed declines in shares of Nike and those of General Electric, recently down 1.4 percent and 1percent respectively.

In Europe, Germany’s DAX Index rose 0.2 percent, while France’s CAC40 Index gained 0.3 percent.

The UK’s FTSE 100 index fell 0.2 percent.

Some analysts predict a rally in Europe's value shares amid rising bond yields and an improving economy, according to Bloomberg

“Europe’s is a big value index, and with the pick-up in bond yields, the value rotation is just starting,” Emmanuel Cau, an equity strategist at JPMorgan Chase in London, told Bloomberg.

Meanwile, shares of Ocado Group soared after Canada’s Sobeys agreed to license the British online grocer’s technology.

“We are delighted to be working with one of the leaders in North American grocery retailing. Sobeys is a highly successful and much admired Canadian business and we are proud that they have chosen Ocado Solutions to partner with to build their online grocery business,” Tim Steiner, CEO of Ocado Group, said in a statement. 

Investors were delighted too. Shares of Ocado, which signed a deal with France’s Groupe Casino in November, closed 27.5 percent higher in London. 

“After many years of waiting, Ocado has announced two deals in the space of three months, validating the commercial viability of its offer,” Berenberg analyst Dusan Milosavljevic said by email, Bloomberg reported. 

Sobeys, Canada’s second-largest food retailer, operates more than 1,500 stores across the country.

“Sobeys intends to play to win in Canadian online grocery shopping,” Michael Medline, CEO of Sobeys, said in a statement. “This unique and innovative Sobeys and Ocado experience will offer consumers the biggest selection, freshest products and most reliable delivery available anywhere on the planet.”

(BusinessDesk)

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