On 10 August, 2017 - Global markets tumbled on geopolitical worries

Economic data were uninspiring in the UK and US.

United States

Stocks moved sharply lower Thursday on heightened geopolitical concerns between the US and North Korea. Tepid earnings and mixed economic data added to the downward pressures. The Dow Jones industrials were down 0.9 percent, the S&P declined 1.4 percent and the Nasdaq tumbled 2.1 percent.

July producer prices for final demand were down 0.1 percent on the month and were up 1.9 percent from a year ago. Excluding food and energy prices, the index was also 0.1 percent lower and was up 1.8 percent on the year. Weekly initial jobless claims crept up to 244,000, an increase of 3,000 from the previous week's revised level of 241,000.

Cempra declined. Synacor fell sharply after the internet content provider reported better than expected second quarter results but provided disappointing guidance. Nvidia, which was expected to report earnings after the close, retreated.

Macy’s declined after it reported a smaller-than-expected dip in quarterly comparable sales. Sales at Macy's stores open more than 12 months, including sales in departments licensed to third parties, fell 2.5 percent. Net income rose to $116 million in the second quarter ended July 29 from $11 million a year earlier. Net sales fell 5.4 percent to $5.55 billion.

Kohl's reported better-than-expected quarterly profit and comparable sales helped by a sales boost in the final month of the quarter and cost cuts. Sales at Kohl's stores open for more than a year fell for the sixth straight quarter to 0.4 percent. The company's net income rose to $208 million in the second quarter ended July 29 from $140 million a year earlier. Net sales fell 1 percent to $4.14 billion.

Nordstrom said that second-quarter net sales rose 3.5 percent on the year to $3.71 billion. Comparable sales rose 1.7 percent during the quarter. Net earnings were $110 million.

Blue Apron Holdings tumbled even though it beat second-quarter revenue expectations but reported wider-than-expected losses in its first report as a public company. It reported a net loss of $31.6 million after net income of $5.5 million in the year-earlier period. Revenue was $238.1 million, up from $201 million in the year-earlier period.

These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$13.35 to US$1,284.40. Copper futures were down 0.8 percent to US$2.90. WTI spot crude was down US$1.11 to US$48.45. Dated Brent spot crude was down 92 US cents to US$51.78. The US dollar was up against the pound and the Canadian and Australian dollars. It declined against the yen, euro, and Swiss franc. The Dollar Index was down 0.1 percent. The yield on US Treasury 30 year bond was down 4 basis points to 2.78 percent while the yield on the 10 year note was down 5 basis points to 2.20 percent.


European stocks ended Thursday's session solidly in negative territory, extending the losses of the previous session. Investors remain in a nervous mood as tensions between the United States and North Korea continue to escalate. Traders continue to exit riskier investments in favor of safe havens. The FTSE tumbled 1.4 percent, the CAC declined 0.6 percent, the DAX dropped 1.1 percent and the SMI was 0.9 percent lower.

Hannover Re declined despite reporting an increase in first-half profit and affirming its FY outlook. Lanxess dropped after it said its second-quarter profit plunged 96 percent to €3 million from last year's €75 million, hurt by one-time exceptional charges. Henkel sank after it reported weaker than expected second quarter results. Heidelberger Druckmaschinen jumped after its first-quarter loss narrowed to €16 million from last year's €37 million due to lower financing costs.

ThyssenKrupp advanced after the company backed its FY outlook after posting better-than-expected third-quarter results. Wireless operator SFR rallied after Altice raised its stake in the company. Glencore declined after its first-half earnings trailed estimates. Rio Tinto and Anglo American declined as they went ex-dividend. Other stocks that went ex-dividend were BT, Royal Dutch Shell, BP, Lloyds, GSK and AstraZeneca. They took about 41 points of the FTSE.

Beverage bottler Coca-Cola HBC surged 9 after posting solid first-half earnings. Homebuilders dropped after a survey showed UK house prices in July rose at the slowest rate since early 2013 due to political uncertainty and the impact of tax changes. Barratt Developments, Taylor Wimpey lost 2.98 percent and Persimmon all retreated. Adecco Group was lower in Zurich after posting muted growth in second-quarter net income. Altice climbed after Reuters reported that the telecom conglomerate and its US cable unit are in the early stages of working on an offer to buy Charter Communications.

French industrial production declined a monthly 1.1 percent reversing a 1.9 percent rise in May. UK industrial production grew more than expected in June largely due to higher oil and gas output. Output expanded 0.5 percent on the month after staying flat in May. The UK visible trade deficit widened to a 9-month high in June. Trade in goods resulted in a shortfall of £12.72 billion in June compared to £11.31 billion deficit in May.

Asia Pacific

Stocks retreated Thursday as geopolitical tensions persisted; the yen stayed firm and oil struggled for direction after rising on Wednesday on EIA data showing a sharp decline in crude inventory for sixth week in a row. Investors looked ahead to US producer and consumer inflation data for additional clues on the Fed's rate outlook.

The Shanghai Composite dropped 0.4 percent after material stocks succumbed to profit taking after recent sharp gains. The Hang Seng was down 1.1 percent.

The Nikkei was down 8.97 points and the Topix declined 0.65 point. Mitsubishi UFJ Financial, Sumitomo Mitsui Financial and Dai-ichi Life Holdings declined after US Treasury yields fell to a six-week low on Wednesday. Shiseido jumped after upgrading its net profit forecast for 2017.

Both the S&P/ASX and All Ordinaries slipped 0.1 percent thanks to geopolitical tensions, subdued inflation data and mixed earnings updates. The big four banks closed narrowly mixed while Rio Tinto shares dropped on going ex-dividend. Wealth manager AMP tumbled after it reported a 15 percent decline in first-half net profit. AGL Energy dropped despite reporting turnaround results for the year to June 30. Gold miners Evolution Mining and Newcrest Mining rallied after gold held steady near two-month highs on safe haven demand. Virgin Australia Holdings jumped after the airline posted a smaller annual net loss. Australia's inflationary expectations declined in August according to the Melbourne Institute. The expected inflation rate fell by 0.2 percentage points to 4.2 percent in August from 4.4 percent in July.

The Kospi declined 0.4 percent amid selling by foreign investors given the tensions with North Korea. The Sensex dropped 0.8 percent. There has been a the crackdown on shell companies, a stand-off in the Doklam area of the Sikkim sector between Indian and Chinese troops for seven weeks and now the rising tensions between the US and North Korea that have sapped investors' appetite for risk.

Looking forward

Germany, France and Italy post July consumer price index data. Hong Kong releases second quarter gross domestic product. India reports June industrial production. In the US, July consumer price index will be released.

Global Stock Markets

Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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