On 28 August, 2015 – Global markets were mixed

Stocks were mixed for the day Friday and for the week despite the daily gyrations.
United States
US stocks were little changed Friday after a week where both the highs and lows were extreme. The Dow Jones industrials slipped 0.1% while the S&P and Nasdaq were up 0.1% and 0.3% respectively. The indices added 1.1%, 0.9% and 2.6% respectively.
Markets jolted investors the first two days in the week on concerns about the health of China’s economy. The rebound Wednesday and Thursday was just as sharp as investors decided to scoop up bargains. The relatively stable Friday trading offered the owners of bruised portfolios some hope that the market was settling down. Markets have been volatile since China decided to weaken its currency earlier this month. Investors interpreted that move as an attempt to bolster a sagging economy. Traders are also jittery about the outlook for US interest rates.
Freeport-McMoRan advanced on news that the activist investor Carl Icahn took an 8.5% stake in the mining company. The stock had already surged Thursday when the company announced cost cuts because of declining copper prices. Big Lots surged after the discount retailer reported better than expected second quarter earnings. It also boosted its full year outlook. Chevron’s gained along with oil prices. Autodesk dropped after the maker of computer aided design software cut its full year profit and revenue forecast.
Remarks from central bankers at the Jackson Hole, Wyoming Kansas City Fed symposium also attracted attention. Fed Vice Chair Stanley Fischer said there were more than two weeks until the meeting and there would be fresh economic data. No decision on interest rates would be made until that time.
Gold at the afternoon London fixing was up US$16.00 to US$1,135.00. Copper futures were up 0.75% to US$2.35. WTI spot crude was up US$2.66 to US$45.22. Dated Brent spot crude was up US$2.49 to US$50.05. The US dollar was up against the euro, pound and the yen. It was virtually unchanged against the Australian dollar. However, it declined against the Canadian dollar and the Swiss franc. The Dollar Index was up 0.4%. The yield on US Treasury 30 year bond was down 2 basis points to 2.91% while the yield on the 10 year note slipped 1 basis point to 2.18%.
Europe
Markets were mixed performance Friday, capping a volatile week of trading. Investors cashed in some profits, following the strong rebound in recent days from the sharp declines of the prior week. Energy stocks were among the best performing stocks, following the rally in crude oil prices yesterday. The FTSE was up 0.9% on the day and 1.0% for the week. The CAC added 0.4% and also was up 1.0% on the week. The DAX retreated 0.2% but added 1.7% from a week ago. The SMI slipped 0.3% and 0.2%.
Investors were cautious at the end of the week despite a second day of gains in the Chinese stock market. After the large directional swings of this trading week, investors are uncertain what lies ahead in the coming days. Traders are awaiting further clues on the interest rate outlook as Federal Reserve officials continue their annual meeting in Jackson Hole, Wyoming.
Volkswagen declined — the carmaker is considering investing around 4.5 billion rand to build new models and infrastructure at its Uitenhage vehicles factory in South Africa. Peugeot, Renault, Valeo and Michelin also declined. Merck was down after it said that it has raised €2.1 billion through issue of bonds to institutional investors to finance its proposed acquisition of US life science company Sigma-Aldrich. Banks Commerzbank and Deutsche Bank were down. In Paris, Technip and Total advanced. InterContinental Hotels Group gained on a broker upgrade. Royal Dutch Shell and BP gained. Banco Santander advanced on a broker upgrade. Jimmy Choo retreated after underwhelming first half results.
Asia Pacific
Chinese stocks continued to recover Friday after the government said that the country’s local pension funds are looking to invest in the stock market. A series of measures to support the recent slide helped improve investor sentiment. The Shanghai Composite was up 4.8% while the Hang Seng declined 1.0%. The ministry of human resources and social security on Friday said that local pension funds will invest 2 trillion yuan, including up to 600 billion yuan in equities, as soon as possible. The People’s Bank of China cut its one year benchmark bank lending rate by 25 basis points, to 4.6%. The recent policies seemed to soothe fears over the fundamental weakness of the world’s second-largest economy. For the week, the Shanghai Composite dropped 7.9% while the Hang Seng was 3.6% lower.
The Nikkei rallied as the yen weakened in response to a slew of data painting a mixed picture of the economy. Retail sales topped expectations with an annual 1.6% increase in July, the annual consumer price inflation flattened after rising for 25 straight months and the jobless rate inched down marginally to 3.3% while household spending slowed again, raising pressure on policymakers to unveil fresh fiscal and monetary stimulus measures to boost growth and conquer years of deflation. The Nikkei was up 3.0% Friday but lost 7.0% on the week.
Both the S&P/ASX and All Ordinaries added 0.6% Friday buoyed by gains in energy and material stocks after oil prices soared over night. Both indices added 1.0% on the week. Miners rallied while banks were largely unchanged. The Kospi rose for a fourth day to log their best weekly gains in nearly three years. The Kospi was up 1.6% taking the week’s gains to 3.3% even as foreign investors extended their selling spree to a 17th straight session. The Sensex added 0.6% on the day but lost 3.6% from last Friday.
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 — Japan posts July industrial production. The Eurozone releases August flash harmonized index of consumer prices. In the US, August Chicago PMI and Dallas Fed manufacturing survey will be released.
Tuesday — August CFLP manufacturing PMI will be posted. August manufacturing PMIs will be reported for China, Japan, India, France, Germany, the Eurozone and the US. The Reserve Bank of Australia announces its monetary policy decision. Germany and the Eurozone release unemployment for August and July respectively. Italy posts revised second quarter GDP. Canada reports second quarter GDP and June monthly GDP. In the US, August ISM manufacturing survey and July construction spending will be released.
Wednesday — Australia releases second quarter GDP. Germany reports July retail sales. The Eurozone releases July producer price index. In the US, August ADP private employment, July factory orders and second quarter productivity & costs will be released. The Federal Reserve publishes its Beige Book in preparation for the FOMC meeting on September 16 and 17.
Thursday — Australia posts international trade and retail sales for July. August composite PMIs will be released for Japan, China, France, Germany and the Eurozone. Services PMIs will be released for India, UK and US. France posts second quarter ILO unemployment. The Eurozone posts July retail sales. The European Central Bank announces its monetary policy decision. The announcement is followed by ECB President Mario Draghi’s press conference. Canada and the US post July international trade balances. August ISM nonmanufacturing PMI is released. Weekly jobless claims, money supply and Fed balance sheet are also on tap.
Friday — Germany posts July manufacturers’ orders. The Eurozone reports revised second quarter GDP. Canada releases its August labour force survey. The US reports August employment situation.
Finance ministers and central bank governors of G20 nations will gather in Ankara, Turkey to discuss global economic affairs. US treasury secretary Jacob Lew and German finance minister Wolfgang Schaeuble are among those expected to attend the meeting.
*Note — all releases are listed in local time.