On 10 August, 2016 – Global stocks mixed

A drop in energy prices sent most stock indices lower.
United States
US stocks retreated Wednesday thanks to a slide in energy companies as oil retreated. Banks and health care companies also weighed but consumer-focused stocks bucked the trend. Earnings from retailers, restaurant chains and other companies caught investors’ attention. The Dow Jones industrials were down 0.2 percent, the S&P retreated 0.3 percent and the Nasdaq was 0.4 percent lower. Trading volume was light.
Perrigo sank after the pharmaceuticals company cut its guidance for the year, citing growing competition and falling prescription drug prices. Wendy’s declined after the hamburger chain said a crucial sales measure fell sharply in its latest quarter. SunPower tumbled after the company said its power plant business is struggling as it faces growing competition and project delays. Michael Kors slid after the clothing company forecast weaker sales for the current quarter and lowered its outlook for sales at established stores. Fossil Group and Ralph Lauren surged after the retailers delivered strong quarterly results. Walt Disney gained after the company said Tuesday that it would pay $1 billion to acquire a stake in BAMTech while its earnings were slightly below expectations. Yelp was up after the online review site posted better-than-expected quarterly profits and strong revenue projections.
Energy stocks declined following a report from the Energy Information Administration (EIA) that showed stockpiles of US crude unexpectedly climbing in the latest week. Adding to the bearish trade was the OPEC’s latest monthly oil market report that showed that Saudi Arabia’s oil output climbed to a record level last month adding to the glut of supply. The news dimmed hopes for a production freeze at the OPEC’s informal September meeting. Some investors are skeptical that the informal meeting will yield an agreement to address low prices.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$6.70 to US$1,347.70. Copper futures were up 0.95 percent to US$2.17. WTI spot crude was down US$1.33 to US$41.44. Dated Brent spot crude was down US$1.13 to US$43.85. The US dollar was down against all of its major counterparts including the yen, euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was down 0.6 percent. The yield on US Treasury 30 year bond was down 2 basis points to 2.23 percent while the yield on the 10 year note declined 3 basis points to 1.51 percent.
Europe
Most stock indices declined Wednesday as investors took the opportunity to take profits after the recent run up. Mixed earnings results, weakness in crude oil prices and disappointing French industrial output data also dampened the mood among investors. The FTSE added 0.2 percent but the CAC and DAX retreated 0.4 percent and the SMI was 0.2 percent lower.
The results of the EU referendum would have a negative effect on capital spending, hiring and turnover over the coming year, the Agents’ summary of business conditions published by the Bank of England indicated Wednesday. Data showed that consumer spending growth eased further with seasonal weather likely to have been a significant factor. Consumer caution had increased prior to and since the referendum.
E.ON sank after it experienced a first-half net loss in the wake of an impairment charge for its conventional power unit Uniper. Steel maker Salzgitter dropped after reporting a sharp decline in its first-half profit. Airline Air Berlin declined after posting a wider loss in the second quarter of 2016. In London, insurer Prudential advanced after its first-half operating profit topped estimates. Legal & General and Admiral also advanced. G4S shares soared after the security firm maintained its dividend after reporting a jump in first half earnings and revenue.
Entertainment One surged after it rejected a takeover bid from ITV. Shares of ITV also advanced. Smith & Nephew declined on a broker downgrade. Rolls-Royce increased on a broker upgrade. BP and Royal Dutch Shell slipped on weaker oil prices after a global supply glut weighed on the energy market and analysts said that talks of a potential producer meeting to discuss propping up prices was unlikely to have any impact on supplies.
French industrial production decreased for the second straight month in June due to the weakness in both manufacturing and construction. Industrial output fell 0.8 percent on the month after declining 0.5 percent in May.
Asia Pacific
Shares in the Asia Pacific region were mixed thanks to lower oil prices. The yen strengthened and investors were cautious before the upcoming release of Chinese data for July.
The Shanghai Composite was down 0.2 percent as investors awaited industrial output, fixed asset investment and retail sales data to be released Friday. The Hang Seng was up 0.1 percent.
The Nikkei slipped 0.2 percent as the yen increased in value against the US dollar and investors moved to the sidelines ahead of a public holiday in Japan on Thursday. Investor reaction to better-than-expected core machinery orders data was muted. Core machine orders surged 8.3 percent in June on the month after falling for two straight months. Nippon Yusen KK, Mitsubishi Motors, Dai-ichi Life Insurance, Sumco, J Front Retailing, Showa Denko KK and Bridgestone tumbled while Hitachi Construction Machinery and Daikin Industries climbed. Cosmetics maker Shiseido plunged after lowering its annual profit forecast.
The S&P/ASX declined 0.2 percent while the All Ordinaries slipped 0.1 percent as commodities inched lower and disappointing corporate earnings took the shine off upbeat consumer confidence and housing finance data. BHP Billiton, South32, Rio Tinto and Fortescue Metals Group declined after proposals for a new Australian mining tax. AGL Energy was lower after it swung to a full-year net loss of A$408 million. Origin Energy, Oil Search and Santos retreated.
The Kospi was virtually unchanged (up 0.86 point). The Sensex tumbled 1.1 percent to register their worst decline in over six weeks.
Looking forward
Italy and France release consumer price indices. Italy also posts June merchandise trade data. In the US, July import and export prices plus the weekly jobless claims, money supply and Fed balance sheet.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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