On 13 May, 2015 – Global markets were mixed amid weak economic data

Stocks were mixed Wednesday thanks to disappointing economic news out of China and the US.
United States
US shares drifted in afternoon trading Wednesday, with little change. Investors weighed data that showed weak US retail sales data and a batch of corporate deals and earnings news. The Dow Jones industrials and S&P were virtually unchanged (down 7.74 points and 0.35 of a point respectively) while the Nasdaq added 0.1%.
The biggest economic news involved April retail sales which were unchanged on the month after increasing an upwardly revised 1.1% in March, disappointing analysts. Steady hiring has yet to lead to significantly higher incomes. Many investors are looking at the weak retail sales numbers as an indication that the Federal Reserve will not take action to increase the fed funds rate before September.
Owens-Illinois, which makes beer and wine bottles, jumped after saying it would buy a glass container business from the Mexican company Vitro. Natural gas company Williams Partners soared after gas infrastructure company Williams Companies announced an agreement to buy the public equity of Williams Partners in a stock deal valued at US$13.8 billion. DuPont sank after billionaire investor Nelson Peltz’s Trian Fund lost a proxy fight against the chemical maker.
EZchip Semiconductor tumbled after the network processor delivered a disappointing customer update. Artic Cat declined after announcing its latest financial results, which included revenue that fell short of forecasts. Macy’s said its profit slumped 13% in the first quarter as the department store chain faced delayed merchandise shipments from the West Coast port slowdown, severe winter weather and lower spending by international tourists.
After markets closed, Cisco Systems reported a 5.1% rise in quarterly revenue, helped by demand for its switching equipment and routers. The company’s net profit rose to US$2.44 billion or 47 US cents per share in the third quarter ended April 25 from US$2.18 billion or 42 US cents per share a year earlier. Revenue increased to US$12.14 billion from US$11.55 billion.
Gold at the afternoon London fixing was up US$19.00 to US$1,210.50. Copper futures were down 0.1% to US$2.93. WTI spot crude was down 51 US cents to US$60.24. Dated Brent spot crude was down 23 US cents to US$66.63. The US dollar was down against all of its major counterparts including the euro, yen, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was down 1.1%. The yield on US Treasury 30 year bond was up 6 basis points to 3.07% while the yield on the 10 year note was up 3 basis points to 2.29%. 
Europe
European stocks surrendered early gains Wednesday after weak US retail sales data dragged down the US currency against the euro. A stronger euro is generally seen as bad for companies in the Eurozone, which generate a big chunk of their revenues from overseas. The FTSE was up 0.2% and the SMI managed a 0.1% gain. However, both the DAX and CAC dropped, 1.1% and 0.3% respectively. The DAX is packed with exporters highly sensitive to currency strength. Earlier, optimism that improving growth should boost company earnings had supported markets. Markets were also unsettled by signs that a bond selloff in the Eurozone may have farther to run.
Although Eurozone growth came in marginally below expectations at 0.4% on the quarter, the figure marked the fastest expansion since the second quarter of 2013.
UBS dropped, extending its losses from the previous session. Media reports emerged yesterday, stating that UBS and four other large banks may soon face US criminal charges for manipulation of foreign exchange rates. Credit Suisse also retreated. Clariant, Sonova and Holcim declined. Roche advanced but Novartis and Nestle retreated. Transocean climbed thanks to the increase in crude oil prices. Galenica and Julius Baer advanced as did Actelion and Swiss Life.
Asia Pacific
Most shares advanced Wednesday with the exception of mainland Chinese and Hong Kong where stocks retreated in response to weak economic data that served to highlight the fragile nature of the Chinese economy. Global bond markets steadied and oil extended overnight gains on signs the US supply glut is easing.
The Shanghai Composite and the Hang Seng both were down 0.6%. The decline was led by banks and brokerages, as weak data and liquidity worries ahead of a slew of new share listings overshadowed expectations that China stocks will be included in the MSCI index as soon as next month. April industrial production was up 5.9% on the year, up from March’s 5.6% gain but weaker than expectations. Annual growth in retail sales slowed to 10% in April from 10.2% in March, easing for the third straight month, while fixed-asset investment grew 12% during January to April, the weakest pace of growth in more than 14 years.
The Nikkei climbed 0.7% after official figures showed Japan’s current account surplus rose to ¥2,795.3 billion in March, helped by an improvement in the trade balance and increased oversees investment income. Toshiba jumped on bargain hunting after dropping more than 20% over the past week. Fast Retailing, Inpex and Mitsui Fudosan gained. Toyota Motor and Nissan retreated after saying they would recall some 6.5 million vehicles globally to replace potentially faulty airbags. Sharp tumbled on a Nikkei report that the electronics maker intends to reduce its capital to ¥500 million instead of a previously planned cut to ¥100 million. Casio
Australian shares rose for a second consecutive session, with retailers pacing the gainers after the federal budget offered generous tax breaks for small businesses. The S&P/ASX and All Ordinaries both were up 0.7%. Banks and miners were mixed. The Kospi added 0.8% after figures from Statistics Korea showed the country’s unemployment rate held steady as expected at 3.7% in April. The Sensex rebounded 1.4% after dropping 2.3% on Tuesday. Moody’s said monsoons and global financial volatility will pose additional risks to India’s growth this year, but GDP will likely average around 7.5% over the next 18 to 24 months due to reform-induced improvements in the business environment.
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*
The table below demonstrates that while we may experience some short-term weakness in markets, the longer-term performance remains encouraging.
*Note — all releases are listed in local time.