On 27 April, 2016 – Global stocks mixed

Investors were cautious before the FOMC and Bank of Japan meetings.
United States
Stocks were mixed Wednesday as weakness in technology companies weighed on investors. Energy companies continued to rise as the price of oil reached its highest point since November. The Dow Jones industrials were up 0.3 percent and the S&P gained 0.2 percent. However, the Nasdaq retreated 0.5 percent.
Apple declined after it said that its quarterly revenue fell for the first time in more than a decade as iPhone sales declined compared with a year ago. Twitter sank after the company reported revenue that fell short of forecasts and issued a disappointing outlook. Diamond Offshore Drilling gained as did Halliburton and Oneok. Yahoo will add four directors backed by the activist investment firm Starboard Value. That ends a potential proxy fight between Yahoo and Starboard. Boston Scientific advanced after the company swung to a profit in the first quarter and earnings and sales were better than expected. It also raised its projections for the year. Edwards Lifesciences’ profit was better than expected and sales surged past estimates. Edwards, a heart valve maker, also raised its profit and sales forecasts for the year. Buffalo Wild Wings tumbled after the company’s sales fell short of projections.
Chipotle Mexican Grill declined after the company posted its first loss as a public company along with weak sales as sales at older stores plunged after an E. coli outbreak and a norovirus scare. Anthem declined after it reported strong results for the first quarter but gave back some of its recent gains. Boeing gained even though its quarterly profit was short of analysts’ forecasts as a charge for cost overruns on refueling tankers overshadowed improvements in cash flow and the company’s 787 Dreamliner production. United Technologies advanced after its profit beat estimates as it cut costs to overcome sluggishness in China.
As expected, the Federal Reserve kept its fed funds rate range at 0.25 percent to 0.5 percent but appeared on course to increase rates later this year. Esther L. George, the president of the Federal Reserve Bank of Kansas City, dissented for the second consecutive meeting. The FOMC said that labor market conditions were improving and inflation had picked up while domestic economic growth had slowed. The FOMC pointed to several areas of weakness in the domestic economy. It said household spending had “moderated,” and business investment and export activity remained “soft.” However, the Fed noted that household income continued to rise and that consumer sentiment remained positive. Housing construction is increasing and, most important, the statement underlined continued strength of job creation. The statement also suggested that the Fed’s concerns about global economic weakness had eased. The Fed’s last statement, in March, described global conditions as a headwind for domestic growth. The April statement said merely that the Fed continues to monitor global economic and financial developments.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$5.70 to US$1,247.40. Copper futures were down 0.7 percent to US$2.23. WTI spot crude was up US$1.19 to US$45.23. Dated Brent spot crude was up US$1.39 to US$47.13. The US dollar was up against the pound, yen and the Australian dollar. However, it declined against the euro and Swiss franc. It was virtually unchanged against the Canadian dollar. The Dollar Index was virtually unchanged. The yield on US Treasury 30 year bond was down 5 basis points to 2.71 percent while the yield on the 10 year note dropped 8 basis points to 1.86 percent.
Europe
Stocks mostly advanced Wednesday even though trading got off to a weak start. Investors remained cautious ahead of today’s monetary policy announcement from the Federal Reserve. Concerns over Greece and some mixed corporate financial results also contributed to the cautious mood. Rising crude oil prices helped the majority of the markets turn positive in the afternoon. The FTSE and CAC added 0.6 percent, the DAX advanced 0.4 percent and the SMI gained 0.2 percent.
Stocks dropped sharply in Greece as it became clear that negotiations between the country and its international creditors are not going as smoothly as hoped. The two sides have reached an impasse due to a demand for further austerity measures. Eurogroup chairman Jeroen Dijsselbloem has postponed a planned meeting on the country’s bailout that had been provisionally scheduled for Thursday.
Adidas advanced after the company lifted its full year profit forecast once again after reporting a 35 percent jump in first-quarter operating profit. Munich Re declined after a profit warning. RWE and E.ON were higher. In Paris, STMicroelectronics climbed after reporting in-line results for the first quarter. Cap Gemini rallied after confirming its 2016 outlook. Total advanced after its quarterly profit beat estimates. Peugeot Citroën retreated as the car maker posted a 1.4 percent declined in first-quarter revenue, weighed down by negative currency effects.
Standard Chartered was down after a negative broker report. Barclays finished higher after reporting a 25 percent drop in first quarter profit. The lender said it is in talks to sell its French retail banking operations to financial services private equity firm AnaCap Financial Partners. Banco Santander gained in Madrid after reporting a smaller than expected 5 percent drop in first-quarter net profit. GlaxoSmithKline was up as improving margins and growing demand for new drugs lifted the company’s underlying earnings by 14 percent in the first quarter, keeping it on course to achieve a promised return to growth in 2016. UK preliminary gross domestic product was up 0.4 percent from a quarter ago and was up 2.1 percent from the same quarter a year ago.
Asia Pacific
Most Asian stocks ended lower in lackluster trading as the yen strengthened and weak earnings results from Apple put pressure on technology stocks. A sharp overnight rally in oil prices and positive Chinese industrial profits data failed to lift investor sentiment ahead of key central bank decisions from the Federal Reserve and the Bank of Japan.
The Nikkei was down 0.4 percent, declining for a third consecutive session, with a strengthening yen, disappointing earnings and jitters ahead of the BoJ decision weighing on investors. iPhone parts maker Alps Electric, Mitsumi and Murata Manufacturing were down after Apple posted its worst quarterly financial results in more than a decade. Canon retreated after reporting a drop in first quarter profit and downgrading its full-year profit and sales forecasts. Steelmaker JFE Holdings tumbled after warning it is facing a tough year ahead. Toshiba advanced after saying it would write down the goodwill value of its nuclear power-plant business, including its US subsidiary Westinghouse Electric. Nomura Holdings eased on a report that it expects about $600 million to $700 million of annual cost savings from restructuring its European equities business and cutting jobs there and in the Americas. Mitsubishi Motors was down on reports its top two executives are likely to resign over the manipulation of fuel economy data.
Both the S&P/ASX and All Ordinaries lost 0.6 percent. Shares were dragged down by banks as tepid consumer price inflation data signaled weak pricing pressure and opened the door to a potential rate cut from the Reserve Bank of Australia next week. First quarter CPI was down 0.2 percent on the quarter, reversing a 0.4 percent rise in the previous quarter. However, the RBA’s preferred measures — the trimmed mean and weighted median — were up 0.2 percent and 0.1 percent on the quarter. The big four banks declined. Fortescue Metals Group dropped after the iron ore miner said it would repay another A$577 million of 2019 debt, saving A$48 million in annual interest. BHP Billiton and Rio Tinto retreated.
The Shanghai Composite was down 0.4 percent even as positive industrial profits data boosted hopes the economic recovery is gaining momentum. Profits of China’s major industrial firms climbed an annual 11.1 percent in March, up from a 4.8 percent rise in the prior period. The Hang Seng retreated 0.2 percent. The Kospi slipped 0.2 percent thanks to weak earnings reports. The Sensex added 0.2 percent.
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 Bank of Japan announces its monetary policy decision. Japan reports March data for unemployment, industrial production, retail sales, household spending and consumer prices. German April unemployment and March final CPI will be released. April EC economic sentiment will also be reported. In the US, preliminary first quarter gross domestic product and weekly jobless claims, money supply and Fed balance sheet will be released.
*Note — all releases are listed in local time.

Source: Fidelity

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