US: Stocks rally shows sign of fatigue as FedEx sinks

[NEW YORK] Global stocks were mixed on Wednesday, with Wall Street's rally showing signs of fatigue as FedEx shares dived on disappointing earnings.

Major US indices notched a string of records in recent sessions following last week's initial US-China trade agreement. But only the Nasdaq managed to eke out another new peak on Wednesday while the Dow and S&P 500 both retreated slightly.

Some analysts saw the weak FedEx results as having an outsized impact. The shipping company lost more than 10 percent as it missed analyst estimates due in part to high costs for e-commerce investments and complained of the drag from "weak global economic conditions."

"I am wondering if the news from FedEx has not caused investors to second guess expected growth in the global economy in the coming year, since transportation stocks tend to be leading indicators," said Sam Stovall, chief investment strategist at CFRA Research.

Investors appeared unperturbed by an impending vote in the House of Representatives to impeach President Donald Trump, in part because the effort is unlikely to result in Mr Trump's removal from office after a trial in the Republican-controlled Senate.

"US traders continue to keep one eye on impeachment proceedings, but even when the president does eventually suffer the ignominy of being indicted we can remain confident that the overall result will still end in failure for the Democrats, given the control of the Senate wielded by Republicans," said Chris Beauchamp, chief market analyst at IG.

UPBEAT GERMAN DATA

London edged higher as the pound continued to retreat, while Paris and Frankfurt both declined.

The closely-watched Ifo institute's monthly German business climate index climbed 1.2 points to 96.3 this month, its strongest reading since June and higher than forecasts from analysts surveyed by Factset.

Germany's powerful industrial sector has suffered from questions over trade conflicts, notably between the US and China, and Brexit.

But uncertainty has receded in recent days amid word the White House and Beijing have a deal, while a resounding election victory for Prime Minister Boris Johnson has cleared the way for Britain's departure from the EU with a deal and a months-long transition period.

LBBW bank economist Uwe Burkert saw the improved Ifo reading as a "conciliatory closure to a messed-up year."

"Let's hope now that with the easing of tensions over Brexit and the trade conflict, growth in industry will find its feet again," he said.

On the corporate front, French carmaker PSA and US-Italian rival Fiat Chrysler said they had agreed terms on a merger to create the world's fourth largest automaker as the sector grapples with the difficult and costly transition to cleaner and more sustainable mobility.

Shares in PSA climbed 1.5 per cent to 22.45 euros in Paris trading, while shares in Fiat Chrysler ended nearly unchanged in Milan at 13.60 euros.

AFP