Investors studied earnings reports and waited for the Federal Reserve and Bank of Japan policy announcements.
United States
A rebound in the prices of oil and natural gas helped drive gains for energy and financial companies, offsetting a slide in technology stocks. This left the Dow Jones industrials up 0.1 percent while the S&P was virtually unchanged. The Nasdaq however, lost 0.8 percent on the day. For the week, the Dow was up 0.6 percent, the S&P gained 0.5 percent and the Nasdaq retreated 0.6 percent. Trading was listless for much of the day. As was the case for much of the week, investors were mostly focused on company earnings and energy prices.
Disappointing earnings from Microsoft, Google parent Alphabet and other big names sent tech stocks lower. Southwestern Energy, Range Resources and Chesapeake Energy climbed. Norfolk Southern jumped after the railroad operator slashed costs during its latest quarter. Quarterly results from several companies failed to impress traders. American Airlines Group was down after the company said weaker fares and labor costs cut into its revenue in the first quarter. Starbucks retreated after the coffee chain reported disappointing sales growth for the first three months of the year. McDonald’s slipped after the company’s first quarter profit came in above expectations. General Electric declined after the company reported growth in revenue and core earnings for its first quarter, though profit in its industrials business slid on declines in its transportation, power and oil & gas segments.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$6.00 to US$1,243.25. Copper futures were up 0.6 percent to US$2.27. WTI spot crude was up 55 US cents to US$43.73. Dated Brent spot crude was up 58 US cents to US$45.11. The US dollar was up against the yen, euro, Swiss franc and the Australian dollar. However, it declined against the pound and Canadian dollar. The Dollar Index was up 0.5 percent. The yield on US Treasury 30 year bond was up 1 basis point to 2.71 percent while the yield on the 10 year note was up 2 basis points to 1.89 percent.
Europe
Most European stocks declined for a second day after increasing the first three days of the week. The increases stalled Thursday following the announcement from the European Central Bank. The ECB maintained its rates as expected and offered no indications whether further easing measures were in the pipeline. The FTSE tumbled 1.1 percent, the CAC was down 0.3 percent and both the DAX and SMI lost 0.6 percent. For the week, the FTSE declined 0.5 percent but the CAC, DAX and SMI added 1.7 percent, 3.2 percent and 1.2 percent respectively.
Weakness among the automakers dragged the European markets lower. Investors were concerned that the emission scandal could spread to more car makers. Daimler tumbled after reporting a drop in its first quarter profit and the opening of an investigation into its emissions testing process at the request of the US Department of Justice. Volkswagen weakened after reaching an agreement with the US Environmental Protection over the diesel emission scandal. Renault and Peugeot dropped on concerns that the emission scandal could spread to more car makers. PSA Peugeot Citroen offices have been raided by anti-fraud squad as part of a probe into emissions.
Kering declined after its first quarter sales trailed expectations. Burberry was down after French peer Kering reported a slowdown in growth at its premium Gucci brand. Aerospace group Zodiac Aerospace jumped on a report that aircraft engine maker Safran is considering an offer for the company. Safran shares declined. In London, J Sainsbury climbed after a broker upgrade. Premier Foods declined after entering into a “relationship agreement” with Japanese noodle maker Nissin Food Holdings. Darty advanced as the bidding war for the electrical retailer intensifies.
Eurozone April flash composite PMI, which combines manufacturing and services, fell to a two month low of 53 from 53.1 in March. Germany’s composite output index fell to a 9-month low of 53.8 in April from 54.0 in March. The composite flash PMI for France rose to 50.5 in April from 50.0 in March. Mining stocks such as Anglo American and Rio Tinto retreated.
Asia Pacific
Most Asian stocks declined Friday after US shares retreated overnight thanks to disappointing earnings updates from Travelers, Mattel and Verizon. While Google parent Alphabet, Microsoft, Visa and Starbucks all posted disappointing quarterly results after the US closing bell Thursday, a rebound in oil prices in Asia helped limit losses across the region. Both Brent and US crude futures were up in Asian trading after top OPEC officials indicated that members could revive discussions of freezing oil production along with non-OPEC producers in June.
The Nikkei added 1.2 percent after a late day rebound on reports that Bank of Japan officials are considering lending to banks at negative rates. The news in turn sent the yen to a two week low against the US dollar. Canon, Honda Motor, Nissan, Panasonic and Toyota gained. Toshiba was up on a Nikkei report that the electronics giant plans to book record impairment charges of ¥300 billion on its US nuclear Westinghouse for the year ended March 31. Mitsubishi Motors plunged to extend losses for a third straight session on reports the US auto safety authorities were seeking information regarding the Japanese automaker’s fuel cheating admission. Japan’s April flash manufacturing PMI dropped to 48.0 from 49.1 in the previous month as two earthquakes on the island of Kyushu halted production.
The Shanghai Composite was up 0.2 percent but ended the week down 3.9 percent, marking its worst weekly loss since late January. The Hang Seng was down 0.7 percent but added 0.7 percent for the week.
Both the S&P/ASX and All Ordinaries were down 0.7 percent on profit taking in mining and energy stocks overshadowed gains in the banking sector. On the week, the former was up 1.5 percent and the latter, 1.4 percent. BHP Billiton and Fortescue Metals Group retreated on profit taking after recent gains. Rio Tinto tumbled after launching cash tenders to buy back up to A$1.5 billion of debt due in 2017 and 2018. Santos closed lower despite reporting a rise in oil production and sales for the first quarter. Woodside Petroleum Origin Energy was lower. Banks ANZ, NAB and Westpac advanced.
The Kospi was down 0.3 percent but was virtually unchanged on the week. Shares fell on institutional selling even as foreign investors extended their buying streak for the eighth consecutive session. The Sensex slipped 0.2 percent on the day but added 0.8 percent on the week.
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*
Central Bank activities

April 27

United States

FOMC Announcement

New Zealand

Reserve Bank of New Zealand Monetary Policy Announcement

April 28

Japan

Bank of Japan Monetary Policy Announcement

The following indicators will be released this week…

Europe

April 25

Germany

Ifo Business Survey (April)

April 27

Eurozone

M3 Money Supply (March)

Germany
Retail Sales (March)

UK

Gross Domestic Product (Q1.2016 first estimate)

April 28

Eurozone

EC Consumer and Business Survey (April)

 
Germany
Unemployment (April)

April 29

Eurozone

Gross Domestic Product (Q1.2016 first estimate)

 
Harmonized Index of Consumer Prices (April flash)

France

Gross Domestic Product (Q1.2016 first estimate)

 

Consumption of Manufactured Goods (March)

Asia/Pacific

April 28

Japan

Unemployment (March)

 

 

Industrial Production (March)

 

Household Spending (March)

 

Consumer Price Index (March)

 

Retail Sales (March)

Americas

April 25

United States

New Home Sales (March)

April 26

United States

Durable Goods Orders (March)

 
 
Consumer Confidence (April)

April 27

United States

International Trade in Goods (March)

April 28
United States

Initial Unemployment Claims (week ending prior Saturday)

Gross Domestic Product (Q1.2016 first estimate)

April 29
Canada

Monthly Gross Domestic Product (February)

 

 

Industrial Product Price Index (March

United States

Personal Income & Spending (March)

 
Chicago PMI (April)

 

Consumer Sentiment (April final)

*Note — all releases are listed in local time.

Source: Fidelity

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