On 9 April, 2015 – Most global markets rallied; energy prices rebounded

Markets in Europe and the US rallied as energy prices rebounded from Wednesday’s sharp drop. Shares in the Asia Pacific and in Europe reacted to minutes of the most recent FOMC meeting which were released after these markets were closed.
United States
US stocks closed higher on Thursday with energy shares leading the advance as crude oil rebounded after yesterday’s sharp decline. Investors bet that companies would top lowered expectations this earnings season. The Dow Jones industrials were up 0.3%, the S&P added 0.4% and the Nasdaq was 0.5% higher. Trading activity was muted as investors waited for first quarter reports.
Walgreens Boots was up after its income beat analysts’ forecasts. Alcoa posted a first quarter profit that beat expectations, but its revenue fell short. The company is striving to transform itself from an aluminum maker into a supplier for the auto and aerospace industries, making it less sensitive to swings in commodity prices. Analysts were disappointed by the outlook for the company’s rolled products, which include sheets used for drinks and food cans. Bed Bath & Beyond slumped after reporting earnings for its fiscal fourth quarter that were below the expectations. Home Depot retreated. Costco Wholesale was down after releasing March sales numbers that were lower than expected. The company’s sales are subject to falling gas prices and foreign exchange pressure. Health care companies including Mylan NV, Express Scripts Holding, Johnson & Johnson and Merck advanced.
Gold at the afternoon London fixing dropped US$12.45 to US$1,194.80. Copper futures were down 0.2% to US$2.73. WTI spot crude was up 25 US cent to US$50.67. Dated Brent spot crude was up US$1.09 to US$56.64. The US dollar was up against all of its counterparts including the euro, yen, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was up 1.4%. The yield on the US Treasury 30 year bond was up 8 basis points to 2.60% while the yield on the 10 year note was up 5 basis points to 1.95%.
Europe
Stocks rebounded from Wednesday’s losses as investors had their first opportunity to react to the minutes from the most recent Federal Reserve meeting, which were published after markets here were closed for the day. The FTSE and DAX added 1.1% while the CAC gained 1.4% and the SMI was 1.6% higher.
The minutes showed that Federal Reserve officials are divided over when to begin raising interest rates. Several participants said that the economic data and outlook were likely to warrant beginning the process of raising rates in June. However, others said conditions would not be appropriate to begin raising rates until later in the year due to the effects lower energy prices and the dollar’s appreciation have on inflation. The Fed noted that a couple of participants suggested that the economic outlook likely would not call for liftoff until 2016.
Investors continue to watch for developments in Greece. Investors were relieved by confirmation that Greece had met a debt repayment to the International Monetary Fund despite the country’s cash crunch. It paid about €450 million Thursday. Greece is also due to pay €194 million to private bondholders on April 17, followed by a further €80 million payment to the European Central Bank on April 20. Meanwhile, Greek Prime Minister Alexis Tsipras did not ask for financial aid from Russia during talks in Moscow according to Russia’s President Vladimir Putin. Talks were focused on a possible Russian investment in energy and other projects.
As anticipated, the Bank of England kept its key rate unchanged at 0.5% and its asset purchase program ceiling at £375 billion.
BMW, Volkswagen and Daimler advanced. Lafarge climbed after the cement giant and Swiss peer Holcim approved the appointment of Eric Olsen as the future CEO of LafargeHolcim. Holcim also was higher. Renault and Peugeot gained. In London, Burberry climbed on a broker upgrade. UK Oil and Gas Investments soared after the company made a significant onshore oil discovery in Southern England. BHP Billiton retreated on a broker downgrade.
Asia Pacific
Stocks were mixed Thursday after the minutes of the Federal Reserve’s March meeting showed officials were divided over whether they would raise interest rates in June or later. The Nikkei neared the 20,000 threshold and Chinese money continued to pour into Hong Kong, while Seoul shares ended flat after muted reaction to the monetary policy announcement. Chinese shares succumbed to selling pressure on concerns the recent rally may have gone too far, too fast.
The Hang Seng jumped 2.7% as it extended gains for a sixth session, buoyed by record inflows from the Chinese mainland through the Shanghai-Hong Kong Stock Connect scheme. An article in the state-run China Securities Journal headlined “Go! Buy Hong Kong Stocks!” also sparked a buying frenzy. The Hang Seng soared over 6% early in the session before paring gains. The Shanghai Composite was down 0.9% as valuation concerns triggered profit taking after recent sharp gains.
The Nikkei was up 0.7% to a fresh 15-year high amid optimism over corporate earnings. Japan Tobacco, Fujifilm Holdings, Tokyo Electric Power, Yahoo Japan, Eisai and Nissan Motor climbed. Fast Retailing gained before reporting quarterly results later on Thursday. The operator of Uniqlo clothing stores raised its forecast for annual profit by 20% after posting strong results for the six months through February. Exporters were mixed with Honda Motor, Fanuc and Sony increasing while Hitachi and Sharp Corp retreated. Inpex Corp and JX Holdings declined.
Both the S&P/ASX and All Ordinaries were down 0.5%. Woodside Petroleum, Santos and Oil Search were down after oil prices dropped Wednesday, pressured by data showing a large increase in US crude inventories and record Saudi output. The Kospi was virtually unchanged (down 0.39 point) after the Bank of Korea held its key interest rate steady at 1.75% and downgraded its outlook for both economic growth and inflation. The Sensex added 0.6% after Moody’s changed India’s outlook to positive from stable, saying it expects the actions of policymakers will enhance the country’s economic strength over coming years.
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*
China posts March consumer and producer price indices. India. France and the UK release February industrial production. Canada reports March labour force survey and housing starts. The US posts March import/export prices and Treasury budget.
*Note — all releases are listed in local time.
Anne D PickerChief EconomistEconoday