On 11 August, 2016 – Global stocks mixed

US and European stocks rallied on rising oil prices and strong retail earnings.
United States
For the first time since December 31, 1999 all three major US indices hit all-time highs on the same day. The Dow Jones industrials were up 0.6 percent while the S&P and Nasdaq each added 0.5 percent. Energy companies and retailers led stocks broadly higher. Investors reacted favorably to the latest quarterly results from several big department store chains and other companies. Crude oil prices surged after a forecast that called for a more even balance between supply and demand this year.
The International Energy Agency said it expected that supply and demand for oil would be more in balance the rest of this year. The IEA also projected that global oil demand would not grow as much as it previously expected next year, citing a weaker global economy. The agency now expects demand to rise by 1.2 million barrels a day, slower than the 1.4 million barrels a day seen this year.
Macy’s jumped after it said it would close 100 stores. Kohl’s also climbed after reporting a surprise increase in profits even though it cut its earnings forecast. Nordstrom also advanced — it was slated to report its earnings after the closing bell. JC Penney also rallied. Investors will also be watching July’s retail sales data when it is released Friday. Chesapeake Energy gained after the company agreed to pay nearly $340 million to exit the Barnett Shale in Texas. Alibaba was higher after posting a 59 percent jump in quarterly revenue. Valeant dropped after the Wall Street Journal reported that US federal prosecutors had opened a criminal investigation on the drug maker.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$7.30 to US$1,355.00. Copper futures were up 0.8 percent to US$2.19. WTI spot crude was up US$1.71 to US$43.42. Dated Brent spot crude was up US$1.89 to US$45.94. The US dollar was up against the yen, euro and pound. It was unchanged against the Swiss franc and Australian dollar. It declined against the Canadian dollar. The Dollar Index was up 0.4 percent. The yield on US Treasury 30 year bond was up 4 basis points to 2.27 percent while the yield on the 10 year note was up 5 basis points to 1.56 percent.
Europe
Stocks advanced in choppy trading. Late gains were driven by a reversal in crude oil prices, which turned higher in afternoon trading. Economic data were on the light side, but positive earnings results from Henkel, RWE and Swiss Life helped to drive the markets higher. The FTSE was up 0.7 percent, the CAC gained 1.2 percent, the DAX added 0.9 percent and the SMI was 1.1 percent higher.
RWE advanced after narrowing its second quarter loss thanks to improved performance at its conventional power generation business. Henkel jumped after reporting better-than-expected second-quarter results. In London, TUI, Europe’s largest tour operator, advanced after confirming its profit target this year. Old Mutual sank after reporting an 11 percent decline in first-half IFRS pre-tax profit. Travis Perkins declined on a broker downgrade.
Zurich Insurance gained in Zurich after reporting a smaller than expected decline in second quarter net profit. Swiss Life was higher after reporting an improved profit for the first half of the year despite a challenging market environment. Aegon was lower in Amsterdam after it swung to a quarterly loss. Drinks bottler Coca-Cola Hellenic Bottling Company advanced after reporting higher interim profits. BP and Royal Dutch Shell climbed on higher oil prices. Berkeley Group, Taylor Wimpey and Barratt Developments retreated after the Royal Institution of Chartered Surveyors (RICS) said British housing market activity ebbed in the month following the country’s shock ‘Brexit’ vote to leave the European Union.
Asia Pacific
Shares were mixed in the Asia Pacific on Thursday. Oil continued to slide while investors waited for Friday’s US retail sales report. Markets in Japan were closed for a holiday.
The Shanghai Composite lost 0.5 percent prior to the release of key economic data including industrial production, retail sales and fixed asset investment Friday. However, the Hang Seng was 0.2 percent higher on the day. Shares in Hong Kong Exchanges & Clearing were higher on reports from mainland media that an official announcement from Beijing on the Shenzhen-Hong Kong Connect program, which would allow investors in each exchange to trade in designated securities on the other exchange, could be near.
The S&P/ASX was down 0.6 percent and the All Ordinaries retreated 0.5 percent. Westpac Banking was lower after an increase in bad and doubtful loans in the three months to June 30. ANZ, Commonwealth and NAB also declined. Resource stocks were broadly on lower commodity prices. BHP Billiton, Fortescue, Rio Tinto, Woodside Petroleum and Santos retreated.
The Kospi was up 0.2 percent after the Bank of Korea kept its policy interest rate unchanged at 1.25 percent. The BoK last cut rates in June. The Sensex added 0.3 percent.
The Reserve Bank of New Zealand cut its overnight cash rate (OCR) by 25 basis points to 2.0 percent and indicated that further reductions are likely to push consumer-price inflation higher and tame a strong New Zealand dollar. The Bank cut its inflation forecasts but at the same time lifted its GDP forecast to 3.7 percent growth in 2017 from 3.1 percent previously. The New Zealand dollar, the strength of which has been a problem for the Bank, soared to its highest level since May 2015.
Looking forward
China posts July industrial production and retail sales. First estimates of second quarter gross domestic product will be reported for Germany, Italy and the Eurozone. The Eurozone will also release June industrial production. India releases July consumer prices and June industrial production. In the US, July producer price index and retail sales will be reported along with June business inventories and August preliminary consumer sentiment.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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