On 14 May, 2015 – European stocks rallied following a turnaround in the bond market

Stocks were mixed in the Asia Pacific region but rallied in Europe and the US.
United States
Stocks surged in afternoon trading Thursday sending the S&P to a new closing high. Traders said there was no single catalyst behind Thursday’s advance, pointing instead to signs of stability in other markets that have been rocked by volatile trading in recent sessions. That calm has prompted some investors to buy US stocks. Both the Dow Jones industrials and S&P added 1.1 percent while the Nasdaq was 1.4 percent higher.
The Labor Department said that fewer people applied for unemployment aid last week, pushing the four week average down to its lowest level since April 2000. Applications are a proxy for layoffs, so the low level is evidence that Americans are enjoying more job security. It is also a sign that employers are confident enough in the economy to hold on to their employees, despite signs of sluggish growth.
Ctrip.com International surged after the Chinese travel services company reported better than expected first-quarter financial results and a positive outlook. Perry Ellis International advanced after the clothing maker’s first quarter earnings trumped expectations. The company also raised its earnings guidance for the year. Shake Shack jumped after the burger chain raised its outlook for revenue for the year. However, Kohl dropped after the retailer reported that its first quarter revenue and a key sales measure fell short of forecasts, even though the company posted a better than expected profit for the quarter. Puma Biotechnology slumped after the company reported results from a breast cancer drug study that fell just short of expectations. Microsoft and Apple gained. Computer Sciences was up after a report that the company plans to split in two. Consumer staples and health care companies in the S&P 500 advanced more than 1.3 percent.
Gold at the afternoon London fixing was up US$14.50 to US$1,225.00. Copper futures were down 0.3% to US$2.92. WTI spot crude was down 77 US cents to US$59.73. Dated Brent spot crude was down 22 US cents to US$66.59. The US dollar was up against the Canadian and Australian dollars. It was virtually unchanged against the yen. However, it declined against the euro, pound and the Swiss franc. The Dollar Index was down 0.3%. The yield on US Treasury 30 year bond unchanged at 3.07% while the yield on the 10 year note declined 5 basis points to 2.24%. 
Europe
Markets advanced Thursday after a turnaround in the bond market. The unexpected decrease in US weekly jobless claims also contributed to the reversal. Several markets were closed for the Ascension Day holiday, including Switzerland, Sweden and Denmark. The FTSE was up 0.3 percent, the CAC gained 1.4 percent and the DAX rallied 1.8 percent.
The European Bank for Reconstruction and Development (EBRD) said the European Central Bank’s monetary policy easing has lifted the outlook for central and southeastern European economies. However, prospects further to the east of the transition region have worsened due to the ECB’s quantitative easing. In the latest Regional Economic Prospects, the EBRD projected overall stagnation in 2015 across all 35 countries covered and a meagre expansion of just 1.4 percent in 2016. Quantitative easing by the ECB, the weaker euro and lower oil costs also are benefiting economies in southeastern Europe. However, the deep recession in Russia is having a larger than expected negative spillover effect on countries with which it has strong economic links. Greece, the EBRD’s newest recipient country, has been badly hit by fears that the country may default on its external debt obligations and exit the Eurozone. Greece is expected to stagnate this year before expanding 2 percent next year.
Deutsche Börse sank but both Salzgitter and ThyssenKrupp gained. ArcelorMittal, LVMH and L’Oréal also were higher. Aggreko retreated after stating that underlying trading profit for the first half is expected to be lower than last year principally due to higher mobilization costs. GlaxoSmithKline declined on a broker downgrade. ITV was down after the company’s first quarter total external revenue increased 14% to £665 million from £585 million last year. 3i Group climbed after the company said its profit for the year advanced to £700 million from £517 million last year. The company reported a 14 percent increase in net asset value. TalkTalk Telecom Group gained after the company’s full year pre-tax profit came in at £95 million up from £74 million last year. Hikma Pharmaceuticals advanced after it reiterated its guidance for 2015. The company continues to expect full year revenue growth of around 6% in constant currency.
Asia Pacific
Stocks were mixed Thursday as surprisingly weak US retail sales data (released during the Wednesday global market day) suggested the US economy is struggling to maintain growth momentum. While the data eased fears of an early increase in US interest rates, another increase in global bond yields and continuing worries about Greece’s precarious financial situation kept investors in a defensive mood.
The Nikkei lost 1.0 percent with sentiment hurt by a relatively stronger yen and weakness in global bond markets. Exporters Sharp, Fanuc, Sony and Panasonic declined. Both Fast Retailing and Softbank retreated. Banks also ended broadly lower, with Mitsubishi UFJ Financial, Mizuho Financial and Sumitomo Mitsui Financial declining. Automakers were mixed with Toyota slipping while Mazda and Nissan advanced. Toyota and Nissan said they would recall about 6.5 million vehicles globally to replace potentially faulty airbag inflators made by Takata. Shares of Takata slumped. Toshiba was up after the company gave a ¥50 billion estimate for a profit write down over three years related to a probe into accounting irregularities, easing concerns of a larger impact. Konica Minolta soared after announcing a share buyback.
Both the Shanghai and Hang Seng edged up 0.1 percent on hopes that policymakers will unveil more fiscal and monetary stimulus in coming months to energize the Chinese economy. Both the S&P/ASX and All Ordinaries lost 0.3 percent, dragged down by miners on further weakness in iron ore prices. BHP Billiton, Rio Tinto and Fortescue Metals dropped as did Santos and Oil Search on worries about the outlook for global fuel demand. The big four banks also retreated. The Kospi added 0.3 percent ahead of the Bank of Korea’s policy meeting Friday. The Sensex was down 0.2 percent even though data showed WPI inflation fell to a new low of minus 2.65 percent in April, bolstering the case for an interest rate cut by the Reserve Bank of India.
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*
In the US, May Empire State manufacturing survey will be posted along with April industrial production and May preliminary consumer sentiment. March Treasury international capital also will be released.
*Note — all releases are listed in local time.