On 13 April, 2015 – Weak mining stocks weighed on European markets

Stocks were mixed Monday as investors waited for earnings reports.
United States
The stock market drifted lower Monday as investors looked ahead to a busy week for corporate earnings and a slew of key economic indicators. The Dow Jones industrials were down 0.4%, the S&P lost 0.5% and the Nasdaq slipped 0.2%.
Investors are braced for mixed earnings news, a result of the stronger dollar and low oil prices that are squeezing revenues. Builders FirstSource said it is buying ProBuild, a supplier of building materials, for roughly US$1.6 billion, aiming to expand its geographic reach. ProBuild Holdings is a private company that runs lumberyards and retail stores across 40 states. The deal is expected to close in the second half of the year. JetBlue Airways surged after the airline reported a 9% increase in passengers last month compared with the same period a year ago.
Alamos Gold and AuRico Gold announced a plan to merge in a deal worth US$1.5 billion. It is the latest merger between gold miners attempting to cut costs in the face of slumping prices for precious metals. Sears Holdings said it has formed a joint venture with mall owner Simon Property Group, the latest move by the struggling retailer to cash in on the value of its real estate. Sears shares rose 1.6%. General Electric retreated after rallying last week on the conglomerate’s plan to divest its banking operation GE Capital over the next two years. Apple shares declined reversing earlier gains that followed reports the Apple Watch may have received about a million orders in its debut. Netflix shares were up after it said Friday it was seeking to increase its share authorization by nearly 30 times as a possible first step towards a stock split.
Gold at the afternoon London fixing dropped US$8.45 to US$1,198.90. Copper futures were down 0.6% to US$2.72. WTI spot crude was up 31 US cents to US$51.95. Dated Brent spot crude was up 10 US cents to US$57.97. The US dollar was up against the euro and the Canadian and Australian dollars. However, it declined against the pound, yen and the Swiss franc. The Dollar Index was virtually unchanged. The yield on US Treasury 30 year bond was unchanged 2.58% while the yield on the 10 year note slipped 2 basis points to 1.93%.
Europe
Stocks were mixed Monday after the strong gains during the previous trading week. Mining stocks were among the weakest performing stocks, after a downgrade on the iron ore sector. The FTSE and SMI were down 0.4% and the DAX lost 0.3%. The CAC however, gained 0.3%. There was little economic data to drive the direction of trading with the exception of weak merchandise trade data from China. Investors are waiting for a significant number of US earnings reports as well as a number of important US economic reports.
Volkswagen retreated on leadership turmoil. Airbus Group advanced after it said over the weekend that it plans to raise its Indian outsourcing to US$2 billion in a bid to forge a stronger industrial bond with India. Dassault Aviation gained after the aircraft maker welcomed the announcement that the Indian government intends to finalize the acquisition of 36 Rafale aircraft.
Miners BHP Billiton, Rio Tinto and Anglo American declined after Citigroup said it expects iron ore prices to fall to US$36 a ton in the third quarter and stay below US$40 for the rest of the year amid waning demand from China. EasyJet declined after the airline announced that it has appointed Andrew Findlay, currently CFO of Halfords, as its new CFO. Pearson was down on a broker downgrade. Tesco dropped after a report that said the supermarket operator faces a bill of £3 billion from its failing stores when it reports results next week.
Asia Pacific
Shares in the Asia Pacific region were mixed Monday with Chinese and Hong Kong shares extending recent sharp gains on expectations for more economic stimulus measures from Beijing.
The Shanghai Composite jumped 2.2% to a fresh seven year high as weak data fanned hopes for more economic stimulus to boost sluggish growth. China’s exports unexpectedly slumped 14.6% in March from a year earlier in yuan terms while imports dropped 12.3% adding to worries about the slowing economy. The Hang Seng added 2.7%, extending gains for an eighth straight session ahead of a slew of Chinese data on economic output, factory activity, retail sales and fixed asset investment due to be released during the Wednesday global market day.
The Nikkei was virtually unchanged (down 2.17 points) after climbing above the 20,000 level on Friday for the first time in 15 years. Automakers including Nissan, Toyota Motor and Honda Motor retreated. SoftBank advanced on the news that Indian e-commerce giant Snapdeal is gearing up for an initial public offering in the US. SoftBank had invested in Snapdeal in October 2014. Fast Retailing advanced while Fanuc was down. Sony edged down after unveiling plans to expand production capacity for image sensors. Mitsubishi Heavy Industries gained after its unit Mitsubishi Aircraft said it would delay the first flight of its MRJ regional jet from this year’s second quarter to September or October. In economic news, Japan’s core machinery orders, a key gauge of capital spending, was down 0.4% in February from the previous month, falling for a second straight month amid uncertainty over the economic outlook,
Both the S&P/ASX and All Ordinaries slipped 0.1% in response to China’s weak merchandise trade data. Fortescue Metals Group dropped after it pledged to maintain its iron ore production at current levels of 165 million tons a year. BHP Billiton and Rio Tinto also retreated. Banks were mixed. The Kospi added 0.5%. The Sensex added 0.6%.
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*
India posts March WPI. The European Central Bank publishes its lending survey for the first quarter. The UK reports consumer and producer prices for March. The Eurozone releases February industrial production. In the US, March PPI and retail sales will be released along with the NFIB survey and February business inventories.
*Note — all releases are listed in local time.
Anne D PickerChief EconomistEconoday