The power of speech | Calamatta Cuschieri

Global markets were mixed during Wednesday’s session, with investors’ worldwide holding off any major moves ahead of Donald Trump’s widely anticipated press conference, his first as US President-elect. In Europe, stocks closed in the green, with the FTSE 100 reached yet another record high. Telecom, energy and industrials lifted the index. Meanwhile, stocks in the US saw early gains turn into losses as Trump’s comments weighed on the healthcare sector.

It’s green across Europe

European markets enjoyed a day in positive territory during the mid-week session. Topping the benchmark was supermarket giant Sainsbury’s whose shares jumped 3.8% on the news that total retail sales were up 0.8% in the 15 weeks ended 7 January. Sainsbury’s bought Home Retail Group plc, the parent of Argos, last year. Same-store sales at the home and general retailer rose 4% in the Christmas-related quarter.

Also having a good day were shares in automobiles. Volkswagen was among the best performers with shares soaring 3.4% after the German automaker confirmed it has agreed to pay $4.3 billion in penalties to the US Justice Department and customers to settle charges that it used special software to cheat on diesel emissions tests.

Elsewhere, oil prices rose for the first time this trading week were buoyed by news that Saudi Arabia has cut oil supply to Asia. However, gains were limited by continuing investor doubt that OPEC producers would adhere to output reductions. Crude oil rose 2.75% to trade at $52.22 a barrel.

Trump speaks, markets fall

Trump roiled markets on Wednesday with his first press conference since July as he addressed issues from Russian hacking, to drug prices and the fate of his family business. Investors looked to this press conference for details on the timing and scope of planned policies that will set the tone on financial markets in 2017.

Healthcare and biotech stocks were particularly whacked after Trump complained about the US government’s inability to negotiate prices despite being the biggest purchaser of drugs in the world.  

The President-elect lashed out at pharmaceutical companies, saying they were "getting away with murder" with respect to drug prices. Drug pricing has become a lightning rod for criticism with several drug makers coming under federal investigation for price gouging.

Shares of Pfizer and Amgen were among those hit the hardest. Shares in both companies sank 2.5% during Wednesday’s session.

This article was issued by Rebecca Naudi, Investment Manager at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is 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.