On 15 September, 2015 – European markets rallied on strong automobile and energy stocks

Stocks were mixed in the Asia Pacific region but advanced in Europe and the US as investors waited for Thursday’s FOMC announcement. Economic data were mixed in both Europe and the US.
United States
Stocks rallied Tuesday after data showed healthy growth in consumer spending which, however, did little to remove uncertainty about whether the Federal Reserve will end seven years of near-zero interest rates Thursday. The Dow Jones industrials were up 1.4%, the S&P gained 1.3% and the Nasdaq added 1.1%. The gains were led by industrial stocks.
August retail sales were up a slightly less than expected 0.2% after advancing 0.7% in July. However, industrial production retreated 0.4% on the month as automakers scaled back after a surge the month before and a stronger dollar weighed on demand from overseas customers.
Speculation has increased that the Fed will delay raising rates as China ignited concern that its slowdown could weigh on global growth. While investors remain confident the FOMC will increase borrowing costs this year, traders are pricing in just a 30% chance of action on Thursday, down from 48% before China’s currency devaluation last month. Odds of a move at the December gathering are 62%.
Gold at the afternoon London fixing was up US$1.15 to US$1,105.95. Copper futures were up 0.9% to US$2.43. WTI spot crude was up 65 US cents to US$44.65. Dated Brent spot crude was up 26 US cents to US$46.63. The US dollar was up against the euro, yen, pound and the Swiss franc. However, it declined against Canadian and Australian dollars. The Dollar Index was up 0.4%. The yield on US Treasury 30 year bond was up 11 basis points to 3.06% while the yield on the 10 year note added 10 basis points to 2.28%.
Europe
Stocks advanced thanks to a rally in afternoon trading. The strong performance of the US markets fueled the late surge in Europe. Automakers and energy stocks were among the best performers, while utilities were weak. Energy stocks climbed on the news that the US House of Representatives will vote on a bill to lift the country’s ban on oil exports in a few weeks. The FTSE was up 0.9%, the CAC gained 1.1%, the DAX added 0.6% and the SMI was 1.2% higher.
Markets fluctuated earlier in the day. The weak performance of the Chinese stock market and disappointing German ZEW survey weighed on investor sentiment while US reports were in line with expectations for the most part. Investors continue to attempt to read how the data could potentially impact the Federal Reserve’s decision on interest rates later this week.
Evotec advanced after it increased its guidance for the current year. Both E.ON and RWE retreated. BMW finished higher. The company halted its press conference at the Frankfurt Motor Show after its Chief Executive Officer Harald Krueger fainted during a presentation on stage. He was able to walk while being escorted off stage. Daimler and Volkswagen advanced. Saint-Gobain climbed after the company said it has signed an agreement to sell its US distribution business Norandex to ABC Supply.
EDF dropped on a broker downgrade. Both Total and Technip were up on the day. In London, Kingfisher was down after reporting lower pre-tax profit for the first half of the year. WM Morrison Supermarkets and Sainsbury declined. ARM Holdings gained. The company, which was holding its investor day, outlined certain investments that would result in additional revenues and operating costs. Experian increased on a broker upgrade. BP and Royal Dutch Shell were up. Credit Suisse climbed in Zurich on reports that it will pay more than US$80 million to settle state and federal authorities’ allegations that it didn’t fully disclose to its clients how it operated its dark pool.
German economic confidence weakened for the sixth consecutive month in September to its lowest level in 10 months according to ZEW. UK consumer price index was unchanged on the year in August.
Asia Pacific
Stocks were mixed Tuesday as investors waited for the Federal Reserve’s policy announcement due during Thursday’s global market day. China’s stock-market turmoil, tumbling oil prices, a leadership change in Australia and the Bank of Japan’s decision to refrain from expanding stimulus also weighed on the markets.
Chinese stocks succumbed to selling pressure once again as investors grew apprehensive about Beijing’s ability to shore up short-term growth and fend off growing deflationary pressures. The benchmark Shanghai Composite lost 3.5% after tumbling over 4% in the afternoon session. The index declined 2.7% on Monday in response to weak industrial production and fixed-asset investment data. The Hang Seng was 0.5% lower on worries about slowing mainland growth.
Japanese shares pared early gains as the Bank of Japan refrained from boosting stimulus, disappointing some who had expected the Bank to unveil further measures. The BoJ maintained its current policy — it left its key interest rate range at zero to 0.1% and said it would continue to buy JGBs at an annual pace of ¥80 trillion. The Nikkei added 0.3%, rising for the first time in four days after having lost nearly 1.6% the day before. The Nikkei briefly jumped over 350 points in early trade on expectations of a fresh bout of stimulus. Mobile carrier Softbank, NTT DoCoMo and KDDI retreated, extending Monday’s losses after Prime Minister Abe called for lower phone rates. Toshiba dropped after posting a net loss of ¥12.3 billion for the first quarter on weak PC and TV sales. Fast Retailing, Fanuc and Toyota Motor advanced.
The S&P/ASX lost 1.5% and the All Ordinaries retreated 1.4% as investors reacted to a sudden change in political leadership and minutes from the Reserve Bank of Australia’s September meeting showed that downside risks to the economic outlook had increased from overseas developments. Both miners and the big banks declined.
The benchmark S&P/ASX 200 index tumbled 78.1 points or 1.53% to 5,018, a one-week low, while the broader All Ordinaries index closed down 73.90 points or 1.44% at 5,047. The big four banks fell between 1.5% and 2.6%. Miners BHP Billiton, Rio Tinto and Fortescue closed down between 1.3% and 2.2%. The Sensex was down 0.6% as nervousness ahead of the Federal Reserve’s policy announcement due Thursday prompted traders to book some profits after the previous session’s rally. The Kospi added 0.3%.
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 Eurozone releases the final August harmonized index of consumer prices. The UK reports August labour market data. In the US, August consumer prices, September housing market index and July Treasury international capital will be released.
*Note — all releases are listed in local time.