On 16 October, 2017 - Investors will have their fill of earnings reports this week

Shares advanced in Asia and the US but were mixed in Europe.

United States

US shares closed at another record high Monday. Financial shares recovered from last week's losses and higher oil prices lifted energy shares. The Dow Jones industrials were up 0.4 percent, the S&P gained 0.2 percent and the Nasdaq was 0.3 percent higher. The markets continued to benefit from recent upward momentum, which has propelled stocks higher thanks to optimism about the economic outlook and the possibility of major tax reform.

Investors had a chance to react to Federal Reserve Chair Janet Yellen’s comments on Sunday at the Group of 30 International Banking Seminar. Despite subdued inflation, Yellen reiterated her belief that additional gradual interest rate increases will likely be appropriate over the next few years. "My best guess is that these soft readings will not persist, and with the ongoing strengthening of labor markets, I expect inflation to move higher next year," Yellen said.

October Empire State manufacturing survey indicated that business activity continued to expand strongly in the month of October. The general business conditions index climbed to 30.2 in October from 24.4 in September, with a positive reading indicating growth in regional manufacturing activity.

JPMorgan and Bank of America led gains in bank stocks, tracking a climb in US Treasury yields which benefits banks. Apple shares rose on a broker upgrade. Nordstrom retreated after the retailer said it suspended plans to go private until after the holiday season.

Netflix added more subscribers than expected in the third quarter as original shows such as the latest season of “Narcos” helped attract more viewers. The company added 4.45 million subscribers in its international markets in the quarter ended September 30, compared with the 3.69 million expected. Netflix added 850,000 subscribers in the United States, compared with the average analyst estimate of 810,000. Netflix had forecast total subscriber additions of 4.4 million for the quarter.

These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$9.40 to US$1,303.30. Copper futures were up 3.40 percent to US$2.24. WTI spot crude was up 42 US cents to US$51.87. Dated Brent spot crude was up 68 US cents to US$57.85. The US dollar was up against all of its major counterparts including the yen, euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was up 0.2 percent. The yield on both the US Treasury 30 year bond was up 1 basis point to 2.82 percent while the 10 year note was up 3 basis points to 2.30 percent.

European markets

European markets were mixed with little change Monday. Investors struggled with uncertainty after Catalonia's President Carles Puigdemont failed to clarify his position on the region's independence from Spain. The euro weakened and commodity prices surged after another solid assessment of economic growth in China. The data also provided a boost to shares of mining stocks. The FTSE slipped 0.1 percent and the SMI lost 0.4 percent. The CAC and DAX edged up 0.2 percent and 0.1 percent respectively.

Daimler rose after announcing a new structure for its Mercedes-Benz car division and its truck and bus businesses. Carrefour Group rallied after appointing Matthieu Malige as its new CFO. Airbus declined after its CEO Chief executive officer told Handelsblatt that he would be prepared to step down if he was "no longer part of the solution", as the aircraft maker deals with ongoing corruption probes.

ConvaTec plunged after the medical technology company lowered its full-year organic revenue growth target, citing supply issues in the third quarter. Mining stocks turned in a strong performance thanks to some positive Chinese economic data. Rio Tinto, Glencore, Anglo American and Antofagasta advanced. Kuehne + Nagel sank after the logistics company posted financial results that fell short of expectations. LafargeHolcim declined after a broker downgrade. Nestlé and Roche declined in Zurich but Novartis climbed.

Asia Pacific

Asian stocks were mostly higher Monday as commodity prices advanced, Chinese inflation data for September met expectations and finance ministers from around the world expressed their desire for lower interest rates at a weekend meeting of the International Monetary Fund.

The Shanghai Composite was down 0.4 percent even though inflation data matched forecasts and People's Bank of China Governor Zhou Xiaochuan said the economy is set to achieve 7 percent growth in the second half of the year on rapid growth in household consumption. The Hang Seng advanced 0.8 percent. Chinese GDP, industrial output and retail sales data will be released Thursday (local time) while President Xi Jinping will give a speech on Wednesday at the 19th Communist Party Congress in Beijing.

The Nikkei and Topix were up 0.5 percent and 0.6 percent respectively — the yen stayed flat against the US dollar amid expectations that Shinzo Abe will win another majority in the House of Representatives election on October 22. SoftBank Group was higher after reports that it has reached a broad agreement to merge its US unit Sprint with T-Mobile US. Banks Mitsubishi UFJ Financial, Mizuho Financial Group and Sumitomo Mitsui Financial advanced.

Both the S&P/ASX and All Ordinaries were up 0.6 percent led by material stocks after base metals prices broadly rallied last week thanks to strong Chinese import data. BHP Billiton and Rio Tinto along with Mineral Resources and Galaxy Resources rallied. Gold miner Evolution Mining advanced after reporting increased production during the September quarter. Energy stocks also saw widespread gains after crude oil futures rallied nearly 2 percent on Friday amid hopes for strong demand from the US and China.

The Kospi gained 0.3 percent. The Sensex added 0.6 percent with sentiment boosted by encouraging quarterly earnings from Reliance Industries, merger & acquisition news in the telecom sector and favorable comments on the Indian economy from the World Bank and IMF. Investors also cheered data which showed that India's annual wholesale price inflation unexpectedly eased to 2.60 percent in September after accelerating in the previous two months.

Looking forward

The UK posts consumer and producer price indices for September. Germany reports October ZEW survey. The Eurozone releases final September harmonized index of consumer prices. In the US, September import/export prices and industrial production will be released. August Treasury international capital will also be posted.

Global Stock Markets

Global Stock Markets

*Note — all releases are listed in local time.










Source: Fidelity

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