On 30 October, 2015 – Most global markets declined on Friday but advanced for the month of October

Expectations of more stimulus from the European Central Bank in December helped buoy shares. However, expectations of more stimulus from the Bank of Japan were unfulfilled.

United States

Stocks drifted lower Friday after economic data suggested that the economy is still sluggish. But the outlook for future growth improved and fears waned that a slowing Chinese economy would hamper the US economy. Strong corporate earnings in some sectors such as health care and telecommunications also helped propel the market back to positive for the year after a swoon in August and a rocky September. The Dow Jones industrials and S&P declined 0.5% while the Nasdaq lost 0.4%. The three indices added 0.1%, 0.2% and 0.4% respectively on the week. Most of the gains over the past month have come from the largest publicly traded companies, including Apple, Alphabet — the parent company of Google — and Amazon.com.

Chevron said profits fell almost two-thirds. It also said it will eliminate around 10% of its jobs, or up to 7,000 positions, and will also slash capital and exploration spending as it deals with lower oil prices that are cutting deeply into profit. Valeant Pharmaceuticals declined again Friday as controversy around its drug prices and sales practices climbed. On Thursday, the two largest pharmacy benefits management companies in the US — CVS and Express Scripts — cut ties with a Valeant linked specialty pharmacy called Philidor. AbbVie jumped after better than expected profit and a strong long term outlook. LinkedIn and Expedia advanced after results beat estimates.

September consumer spending inched up 0.1% in part because consumers were spending less on gasoline as energy prices retreated.

Gold at the afternoon London fixing declined US$6.25 to US$1,142.35. Copper futures were down 0.15% to US$2.32. WTI spot crude was up 53 US cents to US$46.59. Dated Brent spot crude was up 76 US cents to US$49.56. The US dollar was down against all of its major counterparts including the euro, yen, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was down 0.2%. The yield on US Treasury 30 year bond was down 4 basis points to 2.92% while the yield on the 10 year note declined 3 basis points to 2.14%.

Europe

Stocks were mixed on the day but all declined for the week. The markets got off to a positive start, but quickly slipped into negative territory. However, most pared their losses before the close. The FTSE and DAX were down 0.5% while the SMI lost 0.2%. The CAC added 0.2%. For the week, The FTSE retreated 1.3% and the CAC was down 0.5%. The DAX and SMI advanced 0.5% and 0.3% respectively.

Eurozone consumer prices were unchanged in October, offering little relief to the European Central Bank who is increasingly concerned over the lack of inflationary pressure in the region. Adding to the worries, unemployment remained high despite a marginal decline in September. The ECB aims to keep inflation 'below, but close to 2%'. After leaving rates and the size of asset purchases unchanged this month, ECB President Mario Draghi strongly hinted that the bank may boost its stimulus in December.

RWE and E.ON gained as did Merck and Fresenius. In Paris, Renault surged after reporting third quarter results. Airbus reported increased profit for the third quarter and announced a production increase for its Single Aisle Family. The company also reported a €1 billion share buyback. BNP Paribas gained after reporting increased profit for the third quarter. Crédit Agricole and Société Générale also advanced. International Consolidated Airlines retreated after it reported third quarter results. Royal Bank of Scotland was down after the company's third quarter adjusted operating profit was reported as £842 million compared to £2.05 billion in the previous year. Barclays dropped for a second day after reporting a decrease in its third quarter profit on Thursday.

Asia Pacific

Most Asian shares retreated Friday except those in Japan. They increased on hopes for fiscal policy stimulus after further help from the Bank of Japan did not materialize. A cautious mood prevailed as investors continued to mull the potential impact of any US rate increase on emerging markets.

The Nikkei was up 0.8% and hit a two month high as investors took the Bank of Japan's policy decision to leave policy unchanged in their stride. For the week, the index advanced 1.4%. Shionogi climbed after the pharmaceutical firm said it would launch the world's first one day treatment for influenza in Japan as early as 2018. Panasonic rallied after its second quarter profit beat estimates. Sony shares ended largely unchanged despite the company reporting improved financials for its fiscal second quarter. Japan's consumer price index slipped 0.1% on the year marking a second straight month of declines. Household spending fell 0.4% on the year and growth in housing starts slowed more than expected. The jobless rate held steady at 3.4% in the month, in line with expectations.

The Shanghai Composite slipped 0.1% as the fifth plenum of the Chinese Communist Party endorsed a new five year economic plan and said it would aim for "medium-high economic growth." The Hang Seng was down 0.8%. On the week, the former was down 0.9% while the latter was 2.2% lower.

The S&P/ASX was down 0.5% while the All Ordinaries lost 0.4%. For the week, the former was down 2.1% and the latter declined 1.9%. Banks and miners retreated. The Kospi was 0.2% lower on the day and down 0.5% for the week. The Sensex declined 0.7% and 3.0% on the week. Sentiment was also dampened after Moody's Analytics cautioned Prime Minister Narendra Modi that the country may lose domestic and global credibility if he doesn't rein in various BJP members. On prospects of future rate cuts, Moody's said that further rate cuts in 2015 are unlikely.

Looking forward

Monday — Final October manufacturing PMIs will be released for China, Japan, India, Switzerland, Eurozone, France, Germany, Spain, the UK and US. In the US, the ISM manufacturing index also will be released along with September construction spending.

Tuesday — The Reserve Bank of Australia announces its monetary policy decision. The US releases September factory orders.

Wednesday — Australia posts September merchandise trade balance and retail sales. October services PMIs will be released for India, Japan, the UK and US. Composite PMIs will be posted for the Eurozone, Germany and France. The Eurozone posts September producer price index. The US and Canada release September international trade data. The US also posts October ADP private employment report and the ISM nonmanufacturing report.

Thursday — Germany releases September manufacturing orders. Eurozone posts September retail sales. The Bank of England announces its monetary policy decision, releases the minutes from the meeting and publishes its Quarterly Inflation Report. The US reports its quarterly productivity & costs data along with the weekly jobless claims, money supply and Fed balance sheet data.

Friday — Germany and the UK post September industrial production while France reports September merchandise trade. In the US, the October employment situation report will be released. Canada’s labour force survey for October also will be reported.

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.