On 25 August, 2016 – Global stocks mostly lower

Trading was light as investors waited for Friday’s speech by Fed Chair Janet Yellen.
United States
Stocks inched lower Thursday as investors focused on the upcoming speech by Fed Chair Janet Yellen Friday morning. Fed watchers will be looking for the direction of future Fed policy. Stocks were also weighed down by a drop in consumer and healthcare stocks, while financials rose modestly after two more Federal Reserve officials outlined reasons for an interest rate increase. The Dow Jones industrials were down 0.2 percent while the S&P and Nasdaq slipped 0.1 percent. Once again, volume was light.
Consumer discretionary stocks including Dollar Tree and Dollar General as well as Signet Jewelers declined. However, Tiffany rallied after the jeweler’s quarterly profit unexpectedly increased. Healthcare stocks declined for a second straight day. St. Jude Medical retreated after short-selling firm Muddy Waters said it bet that the shares would fall because of cyber security vulnerabilities in the company’s cardiac devices. HP also retreated after the company beat expectations for its fiscal third quarter-earnings but gave an outlook for the current quarter that disappointed investors. Mylan declined after it responded Thursday to a backlash against over price increases for its EpiPen emergency allergy treatment by promising to reduce the costs that some patients pay, though the drug maker stopped short of saying it would roll back prices or limit future increases.
Comments from Kansas City Fed President and voting member Esther George, as well as Dallas Fed President Robert Kaplan, followed the hawkish tone set by key Fed policymakers in recent days.
July durable goods orders surged 4.4 percent on the month after tumbling 4.2 percent in June. Excluding a jump in orders for transportation equipment, durable goods orders were up 1.5 percent in July after edging down by 0.3 percent in June. A separate report from the Labor Department showed another modest drop in initial jobless claims in the week ended August 20th. The report said initial jobless claims edged down 1,000 to 261,000.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$5.95 to US$1,321.30. Copper futures were virtually unchanged at US$2.08. WTI spot crude was up 54 US cents to US$47.31. Dated Brent spot crude was up 59 US cents to US$49.64. The US dollar was up against the yen, pound and Swiss franc. It was down against the euro and Australian dollar. The currency was unchanged against the Canadian dollar. The Dollar Index was virtually unchanged. The yield on US Treasury 30 year bond was up 3 basis points to 2.27 percent while the yield on the 10 year note was up 2 basis points to 1.58 percent.
Europe
Stock indices retreated Thursday. An unexpected drop in German August business confidence weighed on investor sentiment. Traders also remained reluctant to make any major moves before Friday’s speech by Federal Reserve Chair Janet Yellen. Yellen is due to speak at the Kansas City Fed’s monetary policy symposium in Jackson Hole, Wyoming, and traders will be looking for clues regarding the outlook for interest rates in her remarks. The FTSE was down 0.3 percent, the DAX declined 0.9 percent and both the CAC and SMI were 0.7 percent lower.
Deutsche Lufthansa retreated along with auto makers Volkswagen, Daimler, BMW, Peugeot and Renault.
Merck KgaA, Fresenius and Fresenius Medical Care were lower. In London, CRH advanced after it reported that its basic earnings per share for the first half of the year surged. Just Eat dropped on a broker downgrade. Entertainment One declined after ITV dropped its bid to acquire the company. Healthcare stocks Shire, Hikma Pharmaceuticals and AstraZeneca were lower. Miners Glencore and Anglo American retreated. Advertising group WPP extended its rally from the previous session after a spate of broker upgrades following the company’s results on Wednesday.
August German business confidence dropped unexpectedly to a 6-month low. The business sentiment index dropped to 106.2 in August from 108.3 in July. French manufacturing confidence weakened unexpectedly in August. The manufacturing sentiment dropped to 101 from 103 in July. Spain’s second quarter gross domestic product climbed 0.8 percent on the quarter.
Asia Pacific
Stock indices were mixed as traders stayed on the sidelines as they waited for Fed Chair Janet Yellen’s speech on Friday morning in the US.
The Nikkei slipped 0.2 percent thanks to the yen’s strength in the Asian session. The Bank of Japan released July corporate services price index which was up 0.4 percent from a year ago after increasing 0.2 percent in June. Utility, housing, food, chemical, resource and pharmaceutical stocks came under selling pressure while financial stocks advanced. Inpex and Sumitomo Metal Mining tumbled. Recruit Holdings declined after the company said some of its existing stockholders are looking to offload shares. Automotive exporters Nissan Motor and Mazda Motor were higher on the day.
The Shanghai Composite lost 0.6 percent. However, the Hang Seng was virtually unchanged (up 6.09 points). In Hong Kong, oil companies were under pressure after releasing disappointing earnings. Cnooc retreated after the company posted a 7.7 billion yuan net loss, compared with a 14.7 billion yuan net profit in the first half last year. PetroChina declined after its first-half net profit plunged 98 percent from a year earlier.
Both the S&P/ASX and All Ordinaries were down 0.4 percent. The Kospi was virtually unchanged (down 0.84 point). The Sensex lost 0.8 percent.
Looking forward
Japan posts July consumer price index. France and the UK report revised second quarter gross domestic product. The Eurozone releases July M3 money supply. In the US, second estimate of second quarter gross domestic product will be released along with preliminary July international trade in goods and final August consumer sentiment. Fed Chair Janet Yellen speaks at the Kansas City Fed symposium in Jackson Hole, Wyoming.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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