Stocks were mixed Friday and for the week in light summertime trading.
United States
Stocks were mostly lower Friday after giving up modest gains following a generally upbeat assessment of the economy from the Federal Reserve chair Janet Yellen. The Dow Jones industrials were down 0.3 percent, the S&P retreated 0.2 percent while the Nasdaq added 0.1 percent. The three indices were down 0.8 percent, 0.7 percent and 0.4 percent respectively on the week. Phone companies and utilities led the list of declining stocks, while health care and technology companies rose.
Ms Yellen said in her Jackson Hole speech that the Fed was moving toward raising interest rates, citing a solid job market and an improved outlook for the economy and inflation. But she stopped short of signaling any timetable for the next increase.
Design software company Autodesk advanced after the company reported a small profit, beating expectations of a loss. Consolidated Edison and PG&E declined. Ulta Salon Cosmetics & Fragrance sank the most since November after its current quarter outlook disappointed. Alere declined after suing Abbott Laboratories to compel the completion of their pending $5.8 billion takeover deal, claiming the medical-device maker failed to get US antitrust clearance in an effort to scuttle the contentious transaction. Abbott was little changed. Herbalife declined after it was reported that Carl C. Icahn, the company’s biggest shareholder and defender, has been trying to unload his stake.
Second quarter gross domestic product was revised downward to an annualized growth of 1.1 percent from the originally reported 1.2 percent. Final August University of Michigan consumer sentiment unexpectedly slipped from July.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$2.55 to US$1,318.75. Copper futures were up 0.1 percent to US$2.08. WTI spot crude was up 31 US cents to US$47.64. Dated Brent spot crude was up 25 US cents to US$49.92. The US dollar was up against all of its major counterparts including the yen, euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was up 1.0 percent. The yield on US Treasury 30 year bond was up 2 basis points to 2.29 percent while the yield on the 10 year note was up 5 basis points to 1.63 percent.
Europe
After a weak start Friday, the markets gained after some solid German and French consumer confidence data. However, the markets rallied in the afternoon after Fed Chair Janet Yellen said in her speech to the Kansas City Fed symposium in Jackson Hole, Wyoming that the case for another interest rate increase has strengthened. The FTSE and SMI were up 0.3 percent, the CAC gained 0.8 percent and the DAX added 0.6 percent. For the week, the FTSE retreated 0.3 percent but the CAC, DAX and SMI added 0.9 percent, 0.4 percent and 0.5 percent respectively.
Volkswagen climbed on a Bloomberg report that the car maker will spend about $1.2 billion to compensate its 652 US auto dealers for losses caused by its diesel cheating scheme. BMW and Daimler advanced along with Peugeot and Renault. In Paris, Vivendi was lower after it logged a steeper than expected decline in second quarter profits. The media company also unveiled plans to cut €300 million in costs from its pay-TV unit Canal Plus. In London, Restaurant Group advanced after it announced a major overhaul of its operations after posting a pre-tax loss in the first half. Amec Foster Wheeler gained on a broker upgrade as did BAE systems.
France’s gross domestic product stagnated in the second quarter according to the second estimate after expanding 0.7 percent in the first quarter. France’s consumer confidence improved unexpectedly in August rising to 97.0 in August from 96.0 in the previous month. The UK economy expanded 0.6 percent in the second quarter after rising 0.4 percent in the first quarter. British business investment increased in the second quarter, marking the first growth since the third quarter of 2015. Business investment rose 0.5 percent from the first quarter, when it declined 0.6 percent.
Asia Pacific
Asian shares were mixed Friday and for the week. On Friday, investors waited to hear what Fed Chair Janet Yellen would say in her Jackson Hole speech which would be delivered after markets here closed for the week. Oil prices fell in Asia on renewed doubts over whether there would be OPEC action to freeze output at an informal meeting in September.
The Shanghai Composite edged up 0.1 percent while the Hang Seng added 0.4 percent. On the week, the Shanghai Composite was down 1.2 percent while the Hang Seng slipped 0.1 percent.
The Nikkei was down 1.2 percent Friday and 1.1 percent for the week. July consumer prices dropped for a fifth consecutive month mainly due mainly to declining crude oil prices. Core consumer prices excluding only fresh food dropped 0.5 percent in July from a year earlier — the biggest decline in more than three years. Exporters bore the brunt of the selling, with Canon, Sony, Toshiba, Mazda Motor, Honda, Advantest and Toyota retreating. Gaming company Capcom and chemical and cosmetics company Kao advanced in reaction to share buyback announcements.
The S&P/ASX was down 0.5 percent while the All Ordinaries shed 0.4 percent. For the week, the former was down 0.2 percent while the latter lost 0.3 percent. The big four banks declined as did BHP Billiton and Rio Tinto. Coca-Cola Amatil slumped after its first-half pre-tax earnings in Australian beverages market dropped by almost 2 percent. Mayne Pharma rallied after its full-year profit rose more than four-fold. Super Retail Group jumped after its full-year adjusted profit beat estimates.
The Kospi was down 0.3 percent and was down 0.9 percent for the week. The Sensex was 0.2 percent lower Friday and down 1.0 percent on the week.
Looking forward

The following indicators will be released this week…

Europe

August 29

Germany

Retail Sales (July)

August 30

Eurozone

EC Consumer & Business Sentiment (August)

August 31

Eurozone

Harmonized Index of Consumer Prices (August flash)

Unemployment Rate (July)

Germany

Unemployment Rate (August)

France

Consumption of Manufactured Goods (July)

Sep 1

Eurozone

Manufacturing PMI (August)

France

Manufacturing PMI (August)

Germany

Manufacturing PMI (August)

UK

Manufacturing PMI (August)

Sep 2

Italy

Gross Domestic Product (Q2.2016 final)

UK

Construction PMI (August)

Asia/Pacific

August 30

Japan

Household Spending (July)

Consumer Price Index (July)

Unemployment Rate (July)

August 31

Japan

Industrial Production (July)

Sep 1

Japan

Manufacturing PMI (August)

China

Manufacturing PMI (August)

CFLP Manufacturing PMI (August)

Americas

August 29

United States

Personal Income and Spending (July)

August 30

Canada

Industrial Product Price Index (July)

United States

Consumer Confidence (August)

August 31

Canada

Gross Domestic Product (Q2.2016)

Monthly GDP (June)

United States

ADP Private Employment (August)

Chicago PMI (August)

Sep 1

United States

Initial Unemployment Claims (week ending prior Saturday)

Manufacturing PMI (August)

ISM Manufacturing Survey (August)

Construction Spending (July)

Sep 2

Canada

International Trade (July)

United States

International Trade (July)

Employment Situation (August)

Factory Orders (July)

Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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