On 13 April, 2016 – Global stock markets rally

Better than expected export data from China cheered investors.
United States
US markets were higher Wednesday with banks making the biggest gains after JPMorgan Chase posted quarterly results that weren’t as bad as analysts had anticipated. The Dow Jones industrials were up 1.1 percent, the S&P gained 1.0 percent and the Nasdaq added 1.5 percent.
JPMorgan said its first-quarter profit fell because of weak results in its investment banking business. Its profit and revenue were bigger than analysts had expected, however, and the stock advanced. Bank of America, Wells Fargo, Citigroup and Morgan Stanley rallied. CSX gained despite saying its profit fell as demand for coal got weaker and CSX hauled less freight, but expenses fell, partly because fuel costs dropped. Titan Machinery was up after it said it took a smaller loss than investors expected. However, shares of consumer goods companies fell after March retail sales declined. Americans have been cautious about their spending this year even though gas prices are low and jobs are growing. Reynolds American and Altria retreated. Tyson Foods and Clorox declined. Hormel and Campbell Soup also were down.
The retail sales report showed that spending on autos decreased, but auto suppliers were higher as investors continued to expect sales growth. Both BorgWarner and Garmin advanced. Delphi Automotive gained after the auto parts supplier said it had resolved a dispute with the Internal Revenue Service that could have resulted in some of its businesses paying higher taxes. Two years ago, the IRS argued that some of Delphi’s businesses were based in the United States and should be taxed accordingly. Delphi said Wednesday that the agency had agreed that that was not the case. Peabody Energy filed for Chapter 11 bankruptcy protection. Several other coal companies have gone bankrupt recently as environmental, technological and economic changes ripple through the industry.
The Federal Reserve published its Beige Book in preparation for its FOMC meeting in two weeks. Growth was described as modest to moderate. Consumer spending was described as moderate with construction and real estate continuing to expand. The labor market continues to grow. The factory sector was described as increasing. Price pressures were low and, despite the uptick for oil, they continue to weigh on energy and mining output. There were some reports of wage pressures.
Regulators ordered five US banks to make significant revisions to their so-called living wills by October 1 or face potential regulatory sanctions. JPMorgan, Wells Fargo, Bank of America, Bank of New York Mellon and State Street were found by the Federal Reserve and the Federal Deposit Insurance Corp. to have plans for a possible bankruptcy that do not meet the legal standard laid out in the 2010 Dodd-Frank law, which requires that firms have credible plans to go through bankruptcy at no cost to taxpayers. They said those firms had until October to present plans that regulators find acceptable or the agencies or regulators could impose higher capital requirements, restrictions on growth or activities or other sanctions.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$8.85 to US$1,245.75. Copper futures were up 0.9 percent to US$2.17. WTI spot crude was down 64 US cents to US$41.53. Dated Brent spot crude was down 67 US cents to US$44.02. The US dollar was up against all of its major counterparts including the yen, euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was up 0.9 percent. The yields on both the US Treasury 30 year bond and 10 year note were down 1 basis point to 2.58 percent and 1.76 percent respectively.

Europe
European markets recorded solid gains Wednesday. Stronger than expected March Chinese exports drove the markets higher and at the same time eased investor concerns over the health of the global economy. Mining and resource stocks were among the best performing stocks thanks to the Chinese data. China’s exports climbed at the fastest pace in a year while imports declined at a slower pace. Banks also turned in a strong performance after US bank JPMorgan reported better than expected quarterly earnings. The FTSE and SMI jumped 1.9 percent, the CAC rallied 3.3 percent and the DAX added 2.7 percent.

Deutsche Bank, Commerzbank, Société Générale, Crédit Agricole and BNP Paribas all recorded healthy gains. ThyssenKrupp and Salzgitter advanced. Volkswagen, Daimler and BMW gained. Total and Technip were higher. Mining stocks turned in a strong performance thanks to the better than expected Chinese export data. Anglo America, BHP Billiton, Rio Tinto, Glencore and Antofagasta all were up on the day.

Tesco retreated after the supermarket chain made some downbeat comments on the outlook after reporting annual earnings that beat estimates. Premier Foods tumbled after US spice maker McCormick said it would not be making a takeover bid for the company. Banks including Standard Chartered, Barclays, HSBC, Royal Bank of Scotland and Lloyds Banking Group advanced. Italian banks UniCredit and Intesa Sanpaolo rallied after Italy’s Economy Minister Pier Carlo Padoan told financial daily Il Sole 24 Ore that there is no risk the bailout fund will be blocked by European authorities.
February Eurozone industrial production declined a more than expected 0.8 percent on the month after jumping a revised 1.9 percent.
Asia Pacific
Asian shares advanced with sentiment bolstered by a weak yen, an overnight rally in oil prices and upbeat Chinese merchandise trade data.
The Shanghai Composite was up 1.4 percent and the Hang Seng roared 3.2 percent higher as upbeat merchandise trade figures before Friday’s release of first quarter GDP data raised hopes that China’s slowdown might not be quite as severe as initially feared. While March Chinese exports grew 18.7 percent on the year in yuan terms, the contraction in imports slowed to 1.7 percent, beating expectations by a wide margin after an 8 percent decline in the previous month. The data were heavily influenced by the low base due to seasonal distortions around the Lunar New Year holiday. In US dollar terms, exports were up 11.5 percent while imports slumped 7.6 percent on the year.
The Nikkei jumped 2.8 percent as the yen slid from recent peaks against the dollar and Chinese trade data softened growth worries. Automakers and banks surged higher for a second day with Honda Motor, Nissan, Toyota, Mitsubishi UFJ Financial Group and Mizuho Financial rallying. China-sensitive Komatsu and Hitachi Construction Machinery both advanced. Sun Corp shares jumped after its Israeli subsidiary Cellebrite signed an agreement to provide additional support to European law enforcement agency Interpol’s global efforts to fight cybercrime.
The S&P/ASX was up 1.6 percent while the All Ordinaries added 1.5 percent after a solid rally in energy and mining shares after the release of the Chinese trade data. Woodside Petroleum, Origin Energy and Santos advanced after crude oil prices jumped to hit their highest level since November on Tuesday. BHP Billiton and Rio Tinto climbed as iron ore prices approached $60 a ton. Fortescue Metals Group climbed after saying it may beat its full-year export guidance. The big four banks all advanced.
Indian shares posted strong gains on Wednesday, as data showing a fall in retail inflation to a six-month low in March, two percent growth in factory output after three months of contraction and forecasts for normal monsoon rains this year bolstered investor confidence in the economy and opened room for further rate cuts. The Sensex jumped 1.9 percent. The Kospi was closed for a holiday

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*
Australia posts March labour force survey. The Eurozone releases final March harmonized index of consumer prices. The Bank of England announces its monetary policy decision. In the US, March consumer prices along with weekly jobless claims, money supply and Fed balance sheet will be reported.
*Note — all releases are listed in local time.

Source: Fidelity

Fidelity disclaimer:

The objective of this page is to present users with objective news, information, data and guidance on personal finance topics drawn from a diverse collection of sources including affiliated and non-affiliated financial services publications. Content is not intended to provide tax, legal, insurance or investment advice and should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or investment by any Fidelity entity or any third-party.

Jesmond Mizzi Financial Advisors Disclaimer:

This article, does not intend to give investment advice and the contents therein should not be construed as such. Jesmond Mizzi Financial Advisors Limited is licensed to conduct investment services by the MFSA and is a Member Firm of the Malta Stock Exchange. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information contact Jesmond Mizzi Financial Advisors Limited at 67, Level 3, South Street, Valletta, or on Tel: 21224410, or email [email protected]