Investors back with holiday blues | Calamatta Cuschieri

Investors hold back, Airbus ramps up production and China plans supply cuts

US markets surrendered earlier gains and closed lower on Tuesday as investors returned from their Memorial Day break with a risk-off mood and looked for fresh catalysts. The Dow Jones Industrial Average lost 237.92 points, or 0.9%, to 25,347.77, while the S&P 500 index retreated 23.67 points, or 0.8%, to 2,802.39. The Nasdaq Composite Index slipped 29.66 points, or 0.4%, to close at 7,607.35.

European markets also closed lower with the pan-European STOXX 600 index falling 0.2%, as financials lost 0.4% and chemicals stocks dropped 1%. German’s DAX moved 0.4% lower together with France’s CAC 40. Italy’s FTSE MIB retreated 0.5% as the country’s banking sector dropped 1.2% on fears of potential fines of 3 billion Euro from the European Commission.

Maltese markers meanwhile posted gains, with the MSE Equity Total Return Index closing up 0.34% at 9,800.561 points. International Hotel Investments Plc led the gains with shares closing up 3.7% at €0.84, followed by Medserv Plc which gained 1.8% to close at €1.13. Malta Properties Company Plc also closed up 0.8% at €0.625.

Airbus ramps up A321 production

French plane maker, Airbus is mobilising staff from outside Germany to assist with a tricky production ramp-up of A321 passenger jets at its plant in Hamburg, responsible for producing the company’s best-selling A321 model. Facing a string of industrial problems, the company’s plant in Hamburg has felt the brunt of a race to meet growing jet demand because it is introducing new versions of the A321 just as overall production is running faster than ever.

Although single-aisle jets are increasingly standardised, manufacturing has been complicated by the fact that planes like the A321 are in demand for long-range trips of up to eight or nine hours as airlines test out new markets. Production has however improved compared to last year, the company’s new operations chief told reporters last week. Airbus aims to increase production of single-aisle jets to 63 a month in 2021 from about 60 now and has been studying the possibility of 71 a month.

China cuts strategic exports

China, the world’s biggest producer of rare earth materials, which are used in a host of applications from smartphones to electric vehicles and wind turbines, is preparing to cut exports of the precious metals to the United States. The US imports about 80% of its rare commodities from China which are critical supplies in the defense, energy, electronics and automobile sectors.

The move to strategically cut off critical supplies to US manufacturing ramps up the tensions between the world’s two biggest economies before an expected meeting between Presidents Xi Jinping and Donald Trump at the G-20 meeting next month.
 

This article was issued by Peter Petrov, junior trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

More in Business Comment
Markets Summary | Calamatta Cuschieri
Business Comment
Calamatta Cuschieri
Markets Summary | Calamatta Cuschieri
Business Comment
Calamatta Cuschieri
Markets Summary | Calamatta Cuschieri
Business Comment
Calamatta Cuschieri
Markets Summary and Airbus Shares | Calamatta Cuschieri
Business Comment
Calamatta Cuschieri