On 29 October, 2015 – Most European markets slid on weak corporate earnings

Shares were mostly lower after investors reacted to the FOMC statement on Wednesday after markets were closed in Asia and Europe. Disappointing US growth data also weighed on investors.
United States
Stocks closed slightly lower after the government said economic growth slowed in the summer as expected and as some companies reported weak earnings. The Dow Jones industrials slipped 0.1% while the Nasdaq lost 0.4%. The S&P was virtually unchanged (down 0.35 point). Investors and traders continued to react to Wednesday’s decision by the Federal Reserve to keep rates near zero. While the statement raised the prospect of a rate increase at the Fed’s next meeting in December, it also toned down earlier concerns about slowing growth around the world.
The US economy slowed sharply in the summer as businesses cut back on their inventories and offset strength in consumer spending. The first estimate of third quarter gross domestic product was up at an annualized pace of 1.5%.
Camera maker GoPro sank after reporting weak earnings. Allergan rose sharply after it confirmed it has held talks with rival Pfizer about a sale. Buffalo Wild Wings was down after the restaurant chain’s profit and sales fell short of expectations. Computer networking company F5 Networks dropped after it reported disappointing fourth quarter revenue and first-quarter projections. Hanesbrands advanced after the company announced strong third-quarter results and raised its profit estimate for the year.
LinkedIn reported a 37.2% jump in quarterly revenue, mainly due to strength in its recruitment services business. However, the net loss attributable to shareholders widened to US$40.5 million, or 31 US cents per share in the third quarter ended September 30 from US$4.3 million or 3 US cents per share a year earlier. Revenue rose to US$779.6 million from US$568.3 million.
Gold at the afternoon London fixing dropped US$31.00 to US$1,148.60. Copper futures were down 1.6% to US$2.33. WTI spot crude was down 16 US cents to US$45.78. Dated Brent spot crude was down 49 US cents to US$48.56. The US dollar was up against the Australian dollar. It was virtually unchanged against the yen. However, it declined against the euro, pound, Swiss franc and the Canadian dollar. The Dollar Index was down 0.4%. The yield on US Treasury 30 year bond was up 9 basis points to 2.96% while the yield on the 10 year note added 8 basis points to 2.17%.
Europe
Most stocks retreated Thursday — investor sentiment took a hit from some weaker than expected earnings. Financial stocks were under pressure after disappointing reports from Deutsche Bank and Barclays. A pull back in the prices of precious metals weighed on the mining sector. The weak opening for US markets further soured the mood among investors. The FTSE lost 0.7%, the CAC slipped 0.1% and the DAX was down 0.3%. However, the SMI added 0.3%.
Investors here had their first opportunity to react to Wednesday’s FOMC announcement which suggested a December interest rate increase remains on the table. Many analysts pointed to the fact that the Fed statement removed a reference to global economic and financial developments potentially restraining economic activity. The Fed’s explicit indication that it will assess progress towards its objectives in determining whether it will be appropriate to raise rates at its “next meeting” was also highlighted.
Deutsche Bank tumbled after posting a steep third quarter loss. The bank said it would suspend dividends for two years as part of efforts to improve returns and capital efficiency. Also, as part of its Strategy 2020, the lender plans to reduce its work force by about 9,000 full-time equivalent positions plus around 6,000 external contractor positions in its Global Technology & Operations infrastructure function. In London, Barclays dropped after reporting a fall in third quarter profits and setting aside £560 million for more customer refunds and litigation.
Deutsche Post DHL retreated after lowering its 2015 EBIT guidance for the second time this year. Lufthansa was down after the company’s net profit for the third quarter climbed 41.5% to €794 million. Sanofi was down after the company said its bottom line climbed to €1.63 billion or €1.25 per share. This was higher than €1.19 billion or €0.95 per share in last year’s third quarter. Air France-KLM weakened after the company’s third quarter net result group share surged to €480 million from €86 million last year. Royal Dutch Shell declined after reporting a loss for the third quarter.
Unexpectedly, Eurozone economic confidence was slightly improved in October. The ESI climbed to 105.9 in October from 105.6 in the previous month. German unemployment declined more than expected in October. The number of unemployed dropped a seasonally adjusted 5,000 to 2.788 million. The unemployment rate was 4.5%.
Asia Pacific
Stocks were mixed Thursday after the FOMC’s policy statement confused investors here. Investors reacted more cautiously to the Federal Reserve’s switch to a more relaxed stance on risks to the United States from global financial and economic developments.
The Shanghai composite added 0.4% while the Hang Seng lost 0.6%. The four-day meeting of more than 200 of the Party’s top leaders, known as fifth plenum, ended today and it is expected that the central leadership could lower China’s GDP growth target for 2015 to 6.5% from 7%.
The Nikkei was up 0.2% in choppy trading. September’s industrial production gain dampened bets that the Bank of Japan will expand stimulus at Friday’s meeting. Industrial production climbed 1% from the previous month in September, after a 1.2% contraction in August. Strong earnings helped lift the Nikkei. Hoya advanced after posting strong half year results and announcing a share buyback. Pharmaceutical firm Shionogi and Okuma jumped after upgrading their annual profit forecasts. However, both Daiwa Securities and Nomura Holdings retreated after reporting double-digit declines in net profit for the September quarter. Nintendo sank after postponing the release of its first mobile game this year to March 2016.
The S&P/ASX and All Ordinaries tumbled 1.3% and 1.2% respectively. The indices were dragged down by consumer staple stocks after supermarket giant Woolworths warned its first-half profit could fall by as much as 35%. Woolworths’ shares slumped as did Wesfarmers. Miners followed iron ore prices lower on concerns over weak demand in China. Newcrest Mining and Evolution Mining declined as gold prices hovered near two-week lows on speculation of a December rate increase by the Fed.
The Kospi was down 0.4% on institutional selling and the South Korean won fell sharply against the dollar as the Fed’s latest policy statement rekindled worries about capital flight. The Sensex lost 0.7% as the Fed statement rekindled worries about capital flight here as well.
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*
Australia releases third quarter producer price index. Japan posts September consumer prices, household spending and unemployment. The Bank of Japan announces its monetary policy decision. Germany releases September retail sales and France reports consumption of manufactured goods. The Eurozone releases October flash harmonized index of consumer prices and September unemployment. In the US, September personal income and spending, October Chicago PMI and final October consumer sentiment will be posted.
*Note — all releases are listed in local time.