On 29 May, 2015 – European markets slid on continued concerns over Greece

Most stock indices declined Friday and for the week. Greece and the downward revision to US first quarter GDP data weighed on investor sentiment.
United States
After coming under pressure in early trading, stocks continued to decline throughout the trading day. The indices fluctuated as the day progressed but remained firmly in negative territory. The Dow Jones industrials and S&P both lost 0.6% while the Nasdaq was 0.5% lower. For the week, the Dow retreated 1.2%, the S&P declined 0.9% and the Nasdaq was 0.4% lower. The weakness reflected continued concerns about the outlook for the ongoing debt negotiations for Greece and disappointing US economic data.
While Greek officials have expressed optimism about reaching an agreement with the country’s international creditors, European officials have been far more pessimistic. International Monetary Fund Managing Director Christine Lagarde told a German newspaper it is “very unlikely” a comprehensive solution will be reached in the coming days. Lagarde also acknowledged that a Greek exit from the Eurozone is a “possibility” but said it would “probably not be an end to the euro.”
The second estimate of US first quarter gross domestic product was revised downward to indicate that economic activity contracted an annualized rate of 0.7%. A Chicago business survey declined to a reading of 46.2 while May consumer sentiment was revised upward from the mid-month preliminary reading but it was still below April’s reading.
Humana advanced after The Wall Street Journal reported that the health insurance company has hired investment bankers to potentially sell the company. GameStop, a video game retailer, advanced after it posted results that exceeded analysts’ estimates, helped by the sale of recently released video game titles. Altera gained after a report that it is nearing a deal with Intel.
Gold at the afternoon London fixing was up US$6.40 to US$1,191.40. Copper futures were down 1.4% to US$2.73. WTI spot crude was up US$2.62 to US$60.30. Dated Brent spot crude was up US$2.98 to US$65.56. The US dollar was up against the yen, pound and the Canadian and Australian dollars. However, it declined against the euro and the Swiss franc. The Dollar Index was virtually unchanged. The yields on both the US Treasury 30 year bond and 10 year note slipped 1 basis point to 2.88% and 2.12% respectively.
Europe
Stocks retreated Friday and for the week. Once again the news was dominated by the back and forth between Greece and its creditors, with no clear progress or an end in sight. Disappointing US GDP data also weighed on markets. The FTSE was down 0.8% (and 0.7% on the week), the CAC declined 2.5% (down 2.6% from a week ago), the DAX lost 2.3% (down 3.4%) and the SMI retreated 1.7% (down 1.2%).
While Greek officials have expressed optimism about reaching an agreement with the country’s international creditors, European officials have been far more pessimistic. Greece’s creditors have reportedly demanded that the country make hard commitments and overhaul its finances in order to seal an agreement by June 5 when the next payment to the IMF becomes due. International Monetary Fund Managing Director Christine Lagarde told a German newspaper it is “very unlikely” a comprehensive solution will be reached in the coming days.
Volkswagen, Daimler and BMW finished lower. Bayer, Merck and Sanofi declined. Deutsche Lufthansa and Airbus dropped. Axa and Allianz retreated. Associated British Foods climbed on a broker upgrade. Vodafone gained after Reuters reported that some of the largest investors in the company have warmed to the idea of a combination with Liberty Global. Telecity Group declined after it agreed to be acquired by US based Equinix, for £2.35 billion. Macromac tumbled after the Malaysia based developer of mobile content and web-based marketing solutions reported a sharp decline in fiscal 2014 profit despite higher revenues. Syngenta gained in Zurich amid reports that the agrochemical maker has rejected an unsolicited US$45 billion takeover offer from Monsanto.
Asia Pacific
Asian shares were mixed Friday as Chinese stocks swung widely in volatile trading after Thursday’s sharp sell-off. While Australian shares rallied on the back of strong performance by banks and miners, the major markets elsewhere across the region showed lackluster movements before the release of key US economic data (which was released after markets here closed) that could provide fresh hints on the timing of a possible interest rate increase by the Federal Reserve.
The Shanghai Composite briefly dropped more than 4% before turning higher and then once again slipping into negative territory to end the session down 0.2%. The index had plunged 6.5% Thursday as worries about a liquidity squeeze and stake sales of two state-owned banks by a Chinese sovereign wealth fund rattled investors. The Hang Seng slipped 0.1% after tumbling more than 2% the day before. On the week, the Shanghai Composite lost 1.0% and the Hang Seng, 2.0%.
The Nikkei was up for an eleventh straight day with a renewed decline in the yen underpinning sentiment. The index swung between gains and losses before edging up 0.1% to another fresh 15-year closing high and its longest winning streak since February 1988. The Nikkei added 1.5% on the week. Pacific Metals, Mitsui Engineering & Shipbuilding, Mitsubishi Materials, Kubota and Toshiba advanced. Yahoo Japan jumped after the online retailer announced a partnership with Chinese e-commerce giant Alibaba Group Holding. ANA Holdings gained in the wake of reports that European jet maker Airbus and US lessor Intrepid have both threatened to block ANA from acquiring a 16.5% stake in Skymark. The slew of economic data released was mixed. The jobless rate dropped to an 18-year low, housing starts increased for the second straight month and industrial output was up 1.0% in April from the previous month, marking the first increase in output in three months. However, household spending unexpectedly slumped and consumer inflation was muted at 0.4%.
Both the S&P/ASX and All Ordinaries added 1.1% Friday. For the week they gained 2.0% and 1.9% respectively. A weaker Australian dollar, higher commodity prices and rate cut hopes helped investors shrug off weak US stock performance. The four big banks and miners advanced. The Kospi added 0.2% but was down 1.5% on the week. The Sensex rallied 1.2% but slipped 0.5% from a week ago.
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*
Monday — May CFLP and Markit manufacturing PMIs will be posted. Manufacturing PMIs will also be reported for Japan, India, the Eurozone, Germany, France Italy, the UK and US. In the US, May ISM manufacturing index and April construction spending also will be released.
Tuesday — Both the Reserve Bank of Australia and the Reserve Bank of India will publish their respective monetary policy decisions. Germany reports its May unemployment rate. The Eurozone releases its flash May reading of the harmonized index of consumer prices and April producer price index. The US releases April factory orders.
Wednesday — Australia posts first quarter gross domestic product. May composite PMIs will be released for China, Japan, India, Eurozone, France and Germany. Services PMIs will be reported for the UK and US. In the Eurozone, April unemployment and retail sales will be released. The European Central Bank publishes its monetary policy decision. Both the US and Canada report their respective international trade balances for April. In the US, May nonmanufacturing ISM will be posted and ADP reports its estimate of May private employment. The Federal Reserve publishes its Beige Book in preparation for its FOMC meeting to be held on June 16 and 17.
Thursday — April merchandise trade and retail sales will be released for Australia. The Bank of England announces its monetary policy decision. France posts first quarter unemployment. In the US, first quarter productivity & costs will be posted along with weekly jobless claims, money supply and Fed balance sheet.
Friday — Germany reports April manufacturers’ orders. The Eurozone posts revised first quarter gross domestic product. Canada releases May labour force survey. The US reports the May employment situation.
*Note — all releases are listed in local time.