On 5 March, 2015 – Shares advanced in Europe and the US thanks mainly due to ECB remarks

Shares advanced in Europe and the US thanks mainly due to ECB President Mario Draghi’s remarks during his post-meeting press conference. Stock indices in Asia were mixed.
United States
Stocks were modestly higher Thursday after two days of declines. Investors remained cautious as they waited for Friday’s employment report, which is expected to be a big factor in influencing the timing of a Federal Reserve interest rate increase. The Dow Jones industrials were up 0.2%, the S&P added 0.1% and the Nasdaq was 0.3% higher.
European news was some help to US markets but higher than expected weekly jobless claims partially offset the news. Initial jobless claims rose to 320,000 in the latest week, above the 300,000 estimate. January new orders for factory goods unexpectedly declined for a sixth month, a sign of weakness in the manufacturing sector. Earlier in the day, the European Central Bank raised growth and inflation targets and announced it would start its new government bond-buying program of €60 billion a month on March 9.
Biogen Idec advanced. AbbVie said it would buy Pharmacyclics for about US$21 billion, giving it access to what is expected to be one of the world’s top selling cancer drugs and expanding its reach in the profitable oncology field. Pharmacyclics advanced while AbbVie retreated. Kroger was up after it reported a 23% increase in quarterly profit and forecast full year earnings above expectations. Joy Global, a manufacturer of mining equipment, dropped after the company said that the worldwide slump in commodity prices continues to hurt its business. Costco Wholesale gained after saying its fiscal second quarter profit increased 29%, helped by a US$57 million tax benefit.
Gold at the afternoon London fixing was up US$2.50 to US$1,202.00. Copper futures were down 0.2% to US$2.65. WTI spot crude was down 64 US cents to US$50.89. Dated Brent spot crude was up 8 US cents to US$60.63. The US dollar was up against all of its major counterparts including the euro, yen, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was up 0.6%. The yield on US Treasury 30 year bond was unchanged at 2.72% while the yield on the 10 year note slipped 1 basis point to 2.11%.
Europe
Stocks advanced after the European Central Bank provided additional details about its quantitative easing program. The FTSE gained 0.6%, the CAC advanced 0.9%, the DAX was up 1.0% and the SMI added 0.5%.
At ECB President Mario Draghi’s press conference he announced the particulars on how the quantitative easing program announced in January will work together with updated staff economic forecasts. With regards to the former, monthly bond purchases (private and public) totaling €60 billion will begin on March 9 and, as previously signaled, run at least through September 2016 and longer if deemed necessary. The ECB also raised its forecast for European economic growth in 2015 to 1.5% from 1%.
Meanwhile, the Bank of England kept its key interest rate at a record low of 0.5% for the sixth straight year and left quantitative easing unchanged. No change is expected from the BoE given looming national elections to be held the first week of May.
Kloeckner climbed after the company turned to a profit in the fiscal year. Carrefour gained after it reported increased profit for the year. Aviva advanced after it reported a rise in operating profits. Friends Life was up after it topped forecasts ahead of their planned merger. Delhaize gained before the company reported fourth quarter results today. ITV climbed on a broker upgrade. Swatch rose even after Tiffany won a Dutch court ruling setting in a case against the Swiss watch maker. Lonza was up after Bristol-Myers Squibb received FDA approval for the drug Opdivo, which was developed by Lonza.
Asia Pacific
Share indices were mixed thanks in part to declines in US stocks on Wednesday. China’s economic woes kept investors cautious ahead of a European Central Bank (ECB) meeting later in the Thursday global market day and US employment data due on Friday.
The Nikkei edged up 0.3% although trading volumes remained relatively thin ahead of the ECB interest rate meeting and the US employment data due out Friday. The index was up on optimism about a domestic economic recovery and corporate earnings. Exporters including Nissan Motor, Canon, Fanuc and Hitachi advanced aided by a slightly weak yen. Nikon rallied after unveiling its new D7200 camera geared toward photography and videography enthusiasts. Sharp was up on a report the embattled electronics maker’s president would meet main creditors on Thursday to ask for a new round of financial support. Sony gained on news it sold 20.2 million units of PlayStation 4 as of March 1. Machinery maker Komatsu ended flat and Hitachi Construction Machinery retreated after China lowered its 2015 economic growth target.
Both the S&P/ASX and All Ordinaries were virtually unchanged after declining for two consecutive sessions. Retail stocks including Woolworths, and Myer Holdings advanced. Miners were mixed while banks ended virtually unchanged. The big four banks failed to recover from the RBA induced disappointment. Reserve Bank of Australia’s deputy governor Philip Lowe said today that the interest rate cut is less effective in spurring the economy than in the past, but it led to a weakened exchange rate and encouraged housing construction. Australia’s trade deficit widened more than expected to A$980 million in January, as a weaker Aussie dollar caused imports to accelerate faster than exports. Australian retail sales were up 0.4% in January from the previous month, matching expectations, after a 0.2% increase in December.
The Shanghai Composite was down 0.9% and the Hang Seng dropped 1.1% after China lowered its annual gross domestic product growth target to around 7% this year, the lowest level in 15 years, reflecting the awareness of an economic new normal of slower growth in the economy.
 Global Stock Market Recap

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.
Looking forward*
Germany posts January industrial production while France posts January merchandise trade. The Eurozone posts revised fourth quarter GDP. US and Canada release January international trade. The US reports February employment situation. The US moves to Daylight Savings Time on Sunday, March 8.
*Note — all releases are listed in local time.
Anne D Picker
Chief Economist
Econoday