On 13 October, 2017 - Stocks advanced in Asia and the US but were mostly lower in Europe

US stop indices continue to reach new all time highs.

United States

US stocks edged higher Friday to close at record highs yet again. Investors were helped by upbeat sentiment and retail sales data as well as gains in technology shares. The Dow Jones industrials and S&P were up 0.1 percent and the Nasdaq added 0.2 percent. For the week, the Dow gained 0.4 percent and the Nasdaq and S&P were 0.2 percent higher. The S&P and the Dow closed higher for the fifth straight week and the Nasdaq for the third.

Netflix advanced in anticipation of its earnings release on Monday. Expedia also was higher. Tiffany and home improvement retailer Lowe's rose. Shares of big banks were mixed following reports from Bank of America and Wells Fargo. Bank of America was up after its profit topped estimates thanks to higher interest rates and a drop in costs. But Wells Fargo retreated after reporting lower-than-expected revenue for the fourth straight quarter due to a decline in mortgage banking revenue.

Apple and Facebook advanced. Health insurers and hospital operators skidded after President Donald Trump said he will stop government payments to insurance companies under the Affordable Care Act. Centene, Molina Healthcare and Anthem were down along with Tenet Healthcare and Community Health System. A strong forecast from HP helped technology companies. Retailers also advanced.

Retail sales were up a monthly 1.6 percent in September after a small decline in August. Much of the gain came from auto and gasoline sales. Auto sales jumped as people living in the Southeast and Gulf Coast replaced vehicles that were destroyed by hurricanes Harvey and Irma, while gas prices increased due to temporary shortages in those areas. But other sales also increased by a solid amount. The University of Michigan’s preliminary October consumer sentiment index hit its highest since January 2004. Consumer prices recorded their biggest increase in eight months as hurricanes Harvey and Irma boosted demand.

These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$3.65 to US$1,293.90. Copper futures were up 0.4 percent to US$3.13. WTI spot crude was up 85 US cents to US$51.45. Dated Brent spot crude was up 92 US cents to US$57.17. The US dollar was up against the euro and the Canadian dollar. It declined against the yen, pound, Swiss franc and the Australian dollar. The Dollar Index was virtually unchanged (down 0.04 percent). The yield on the US Treasury 30 year bond was down 4 basis points to 2.81 and the 10 year note declined 5 basis points to 2.27 percent.

European markets

European markets were mixed, fluctuating between small gains and losses over the course of the trading day. A surge in Chinese imports provided a boost to mining stocks. Positive US economic data also helped narrow losses. The FTSE and CAC were down 0.3 percent and 0.2 percent respectively. The DAX edged up 0.1 percent and the SMI was 0.2 percent higher. For the week, The FTSE added 0.2 percent, the DAX gained 0.3 percent and the SMI was 0.6 percent higher. The CAC slipped 0.2 percent.

Bayer sold off some of its operations as part of its continuing efforts to gain approval for its proposed acquisition of Monsanto. BASF has signed an agreement to acquire significant parts of seed and non-selective herbicide businesses of Bayer. The all-cash purchase price is €5.9 billion. BASF slid while Bayer rose. Airbus fell after the US Federal Aviation Administration issued an emergency order requiring airlines to inspect engines on roughly 120 Airbus A380 superjumbo jets world-wide.

GKN tumbled after the engineering business reported weak margin for its third quarter, despite good organic sales growth. The company now expects management profit before tax for fiscal 2017 to be slightly above 2016. Ashmore Group rallied after the specialist Emerging Markets asset manager reported growth in first-quarter assets under management. Investment management firm MAN Group increased on higher funds under management. BHP Billiton, Rio Tinto and Glencore advanced. In Zurich Julius Baer and Swiss Life climbed along with UBS and Credit Suisse. The bank stocks benefitted from the solid earnings reports from US competitors JP Morgan, Bank of America and Citigroup this week.

Asia Pacific

Asian shares closed mostly higher on Friday. Strong Chinese merchandise trade data added to evidence of strength in the economy.

The Shanghai Composite and Hang Seng both edged up just 0.1 percent Friday. For the week, the former added 1.2 percent and the latter, 0.1 percent. China’s September merchandise trade balance narrowed to US$28.47 billion. On the year, exports were up 8.1 percent and imports jumped 18.7 percent.

The S&P/ASX was up 0.3 percent and the All Ordinaries added 0.4 percent Friday reflecting gains by healthcare stocks after the federal government announced plans for proposed healthcare reforms. For the week, both indices added 1.8 percent. Health insurance companies rose after the federal government announced plans to release a raft of proposed health insurance changes that promise cheaper premiums and easier access to mental healthcare. NIB Holdings and Medibank Private advanced. Mining stocks including BHP Billiton, Rio Tinto and Fortescue Metals advanced on news of strong iron ore imports by China in September. Banks including ANZ Banking, Westpac, National Australia Bank and Commonwealth Bank also were higher. Oil stocks Woodside Petroleum, Santos and Oil Search recovered from early losses despite lower crude oil prices.

The Nikkei and Topix added 1.0 percent and 0.5 percent respectively boosted by optimism that Prime Minister Shinzo Abe's ruling party will win the general elections on October 22. On the week, the Nikkei was up 2.2 percent and the Topix, 1.3 percent. Fast Retailing gained after it reported a record profit for the fiscal year ended in August. Kobe Steel tumbled after the company's data scandal revealed that 30 companies outside Japan including General Motors, Tesla, Boeing and Airbus, received aluminium and other products with falsified specifications. Among automakers, Toyota and Honda declined.

The Kospi was down 1.14 points, pulling back from all-time recording highs recorded earlier this week as investors booked profits. On the week, the Kospi was up 3.3 percent. The Sensex was up 0.8 percent and 1.9 percent.

Looking Forward

Central Bank activities

Oct 18

United States

FOMC Beige Book Published

The following indicators will be released this week...

Europe

Oct 16

Eurozone

Merchandise Trade (August)

Oct 17

Eurozone

Harmonized Index of Consumer Prices (September final)

 

Germany

ZEW Survey (October)

 

Italy

Merchandise Trade (August)

UK

Consumer Price Index (September)

 

Producer Price Index (September)

Oct 18 UK

Labour Market Report (September)

Oct 19

UK

Retail Sales (September)

Asia Pacific

Oct 16

China

Consumer Price Index (September)

 

 

Producer Price Index (September)

Oct 19

Japan

Merchandise Trade Balance (September)

 

Australia

Labour Force Survey (September)

 

China

Gross Domestic Product (Q3.2017)

 

 

Retail Sales (September)

 

 

Industrial Production (September)

Americas

Oct 16

United States

Empire State Manufacturing Survey (October)

Oct 17

United States

Import/Export Prices (September)

Industrial Production (September)

NAHB Survey (October)

Oct 18

Canada

Manufacturing Sales (August)

United States

Housing Starts (September)

Oct 19 United States

Initial Unemployment Claims (week ending prior Saturday)

Philadelphia Fed Index (October)

Oct 20

Canada

Consumer Price Index (September)

 

Retail Sales (August)

United States

Existing Home Sales (September)

Global Stock Markets

Global Stock Markets

*Note — all releases are listed in local time.










Source: Fidelity

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