On 22 March, 2016 – Focus on Belgium
Stocks were mixed in the aftermath of the terrorist attacks in Brussels.
United States
After recovering from an early move higher, stocks showed a lack of direction over the course of the trading session on Tuesday. The major averages bounced back and forth across the unchanged line before ending the day mixed. Trading was choppy trading throughout the session as some traders are already away from their desks ahead of the Easter holiday.
US stock indexes closed mostly lower as airlines, cruise companies and travel booking sites such as Royal Caribbean and Priceline declined following the terrorist attacks in Belgium. The Dow Jones industrials were down 0.2 percent, the S&P ebbed 0.1 percent lower and the Nasdaq added 0.2 percent. A lack of major US economic data also kept some traders on the sidelines ahead of reports on new home sales and durable goods orders later in the week.
Energy and materials companies moved lower while health care and technology stocks gained ground. Several travel related companies were down as investors weighed the potential fallout from the Belgium attacks. Carnival, American Airlines Group and Delta Air Lines retreated. Expedia also closed lower. Transocean tumbled a day after management said it did not expect drilling to increase any time soon. The outlook also weighed on other drilling companies. Ensco and Helmerich & Payne slid. Staples climbed, recovering some of its losses from a day earlier when a court hearing over the office supply chain’s proposed merger with Office Depot began.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$12.25 to US$1,082.25. Copper futures were virtually unchanged at US$2.29. WTI spot crude was down 6 US cents to US$41.46. Dated Brent spot crude was up 30 US cents to US$41.84. The US dollar was up against the yen, euro, pound and Swiss franc. However it retreated against the Canadian and Australian dollars. The Dollar Index was up 0.3 percent. The yield on US Treasury 30 year bond was unchanged at 2.72 percent while the yield on the 10 year note was up 2 basis points to 1.94 percent.
Europe
European markets were under pressure Tuesday after multiple terrorist attacks were carried out in Belgium. However, the markets pared their losses over the course of the trading day with the majority managing to turn positive. The FTSE and CAC edged up 0.1 percent and the DAX added 0.4 percent. The SMI was virtually unchanged.
Travel and leisure stocks retreated following the attacks as did lodging and luxury goods companies. Investors left riskier investments in favor of safe havens. Thomas Cook sank after the holiday firm reported a two percent dip in winter bookings and said that summer holiday bookings are lower than this time last year due to volatile market conditions. TUI, International Consolidated Air Group and Intercontinental Hotels Group also weakened. In Paris, hotel group Accor and Air France-KLM were lower. Deutsche Lufthansa also declined. Banks including Deutsche Bank, Commerzbank, Société Générale, BNP Paribas and Crédit Agricole finished lower. LVMH and Kering weakened.
Flash composite PMI for the Eurozone climbed to a 3-month high of 53.7 from 53.0 in February. Germany’s March flash composite PMI reading was 54.1 for a second month. France’s composite PMI climbed to 51.1, up from 49.3 in February driven by services activity. German business confidence improved for the first time in four months in March, propped up by domestic demand. The Ifo Business Climate indicator rose to 106.7 from 105.7 in February. UK consumer prices were up 0.3 percent from a year ago in February.
Asia Pacific
Shares were mixed Tuesday after oil prices rose overnight and the dollar bounced back following some hawkish commentary from several Federal Reserve officials. Markets here were closed before the terrorist blasts in Brussels.
The Shanghai Composite was down 0.6 percent on profit taking after posting strong gains the previous day on news of regulators loosening controls on margin lending. It was the first decline in eight days after the People’s Bank of China issued a clarification, saying recent comments by Governor Zhou Xiaochuan encouraging individuals to invest personal savings in the stock market were “misinterpretations.” The Hang Seng slipped 0.1 percent.
The Nikkei rallied 1.9 percent thanks to the weaker yen as trading resumed after a holiday. Automakers Honda Motor, Mazda, Nissan and Toyota rallied. Embattled air bag manufacturer Takata gained on a Nikkei report that it plans to sell Irvin Automotive Products, a US-based company acquired by it in 1989. Sharp tumbled after reports that Taiwan’s Foxconn is seeking to reduce its planned investment into the loss-making Japanese electronics maker. Japan’s manufacturing activity deteriorated for the first time in 11 months in March. The manufacturing PMI dropped to 49.1 from 50.1 in the previous month.
The S&P/ASX was virtually unchanged while the All Ordinaries added 0.1 percent. In economic releases, home price growth in Sydney fell in the December quarter for the first time in three years amid a regulatory crackdown and easing demand as prices climbed to a record. However, prices in the eight capital cities were up 0.2 percent on the quarter at 8.7 percent from the same quarter a year ago.
The Kospi was up 0.4 percent as foreign investors extended their buying streak into a ninth straight session. The Sensex was up 0.2 percent in a choppy trading session.
Global Stock Markets
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 US posts February new home sales and weekly MBA mortgage applications and EIA petroleum status report.
*Note — all releases are listed in local time.
Source: Fidelity
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