On 12 August, 2016 – Global stocks mostly advance for the week
Stocks were mixed Friday in Europe and the US after US retail sales data disappointed.
United States
Stocks were mixed Friday thanks to surprisingly weak retail sales and a sharp drop in producer prices. Materials companies were down but energy companies climbed with the price of oil. The Dow Jones industrials were down 0.2 percent but up 0.2 percent on the week. The S&P slipped 0.1 percent Friday and added 0.1 percent on the week. The Nasdaq closed at a new high, gaining 0.1 percent on the day and 0.2 percent for the week.
Nordstrom shares rose on larger than expected profit while Dillard’s was down on weak sales at existing stores. J.C. Penney advanced on a narrower loss and improved sales. Ryerson Holding plunged to its lowest closing level in almost three months. Dow Chemical and DuPont tumbled. Both Exxon Mobil and Chevron advanced. Huntington Bancshares and KeyCorp were lower on the day. Weyerhaeuser declined on a broker downgrade. Yahoo! climbed following Alibaba Group Holding higher for a second day. Nvidia advanced to a record after the company forecast sales that topped estimates. Cigna and Anthem advanced after the U.S. government said it is open to settlement offers in its antitrust case against the companies’ merger.
US July retail sales were virtually unchanged after jumping an upwardly revised 0.8 percent in June. Excluding a jump in auto sales, retail sales were 0.3 percent lower after advancing by an upwardly revised 0.9 percent in June. July producer prices unexpectedly dropped 0.4 percent after climbing by 0.5 percent in June. Excluding food and energy prices, core producer prices declined 0.3 percent following a 0.4 percent increase in June. A separate report from the University of Michigan showed that consumer sentiment improved by less than expected in the preliminary reading for August.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$2.80 to US$1,352.20. Copper futures were down 2.2 percent to US$2.15. WTI spot crude was up US$1.00 to US$44.49. Dated Brent spot crude was up 93 US cents to US$46.97. The US dollar was up against the pound and Australian dollar. However, it declined against the yen, euro and Canadian dollar. It was unchanged against the Swiss franc. The Dollar Index was down 0.3 percent. The yield on US Treasury 30 year bond was down 4 basis points to 2.23 percent while the yield on the 10 year note declined 5 basis points to 1.51 percent.
Europe
Stocks were little changed Friday but recorded a positive week overall. Economic data from China and the United States disappointed, muting investor sentiment even though data from the Eurozone was largely positive. The FTSE (up 1.31 points) and SMI (down 1.10 points) were virtually unchanged on the day. On the week though, the FTSE was up 1.8 percent and the SMI was 1.2 percent higher. The CAC edged down 0.1 percent while the DAX lost 0.3 percent. The indices were up 2.0 percent and 3.3 percent respectively on the week.
Real estate firm Deutsche Wohnen was up after reporting a rise in its funds from operations for the first-half of 2016 and lifting 2016 outlook. Talanx tumbled after large claims and currency volatility weighed on its second-quarter earnings growth. In London, Restaurant Group soared after the pub and restaurant chain operator has announced the departure of CEO Danny Breithaupt with immediate effect and appointed Andy McCue as new CEO. Mining were weak after some disappointing data from China. BHP Billiton, Glencore, Anglo American and Antofagasta retreated. AP Moeller-Maersk was higher after the container shipping firm curtailed its capital expenditure plans for 2016 after reporting a sharp drop in second-quarter net profit.
Eurozone second quarter economic growth slowed to 0.3 percent as France and Italy failed to expand. Eurozone June industrial production climbed 0.6 percent on the month, in part reversing a 1.2 percent drop in May. Germany’s second quarter GDP was up 0.4 percent on the quarter, down from first quarter’s growth of 0.7 percent.
Asia Pacific
Shares in the Asia Pacific region mostly advanced Friday after the Dow, S&P and Nasdaq closed at all-time highs Thursday. Oil prices climbed and the yen weakened against the US dollar in the wake of a rise in US bond yields amid hawkish interest-rate comments from a senior Federal Reserve official. Investors shrugged off disappointing Chinese data for industrial production and retail sales that slowed more than expected in July.
The Shanghai Composite jumped 1.6 percent while the Hang Seng added 0.8 percent. China’s July industrial production was up 6.0 percent from a year earlier and slower than the 6.2 percent increase in June. Property investment growth continued to slow, retail sales grew less than expected and growth in fixed-asset investment slipped to its lowest level in more than 16 years in the latest sign that an economic recovery is losing momentum at the start of the third quarter. On the week, the Shanghai Composite was up 2.5 percent and the Hang Seng added 2.8 percent.
The Nikkei was up 1.1 percent Friday and 4.1 percent for the week. Sharp Corp soared after China’s anti-monopoly authorities approved its takeover by Taiwan’s Hon Hai, or Foxconn. Toshiba advanced after it recorded its first operating profit in six quarters thanks to restructuring efforts. Shikoku Electric Power climbed after restarting its Ikata nuclear reactor. Japan Display retreated after it forecast an operating loss.
The S&P/ASX was up 0.4 percent while the All Ordinaries added 0.5 percent. On the week, the former was up 0.6 percent while the latter was 0.7 percent higher. BHP Billiton, Origin Energy and Santos advanced while Westpac dropped to extend Thursday’s losses after it revealed a rise in bad and doubtful loans. James Hardie Industries reported a 45 percent surge in first-quarter profit and forecast higher full-year earnings. Baby Bunting jumped after surpassing its full-year expectation.
The Kospi inched up 0.1 percent Friday and gained 1.6 percent on the week.
Looking forward
The UK releases February retail sales and March CBI distributive trades survey. In the US, February durable goods orders and weekly jobless claims, Fed balance sheet and money supply will be reported.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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