On 06 September, 2016 – Global stocks mixed

Shares gained in Asia, retreated in Europe and were slightly higher in the US.
United States
Stocks edged higher in post-Labor Day weekend trading. Several deals were announced. The Dow Jones industrials were up 0.2 percent, the S&P added 0.3 percent and the Nasdaq closed at a new record high with a gain of 0.5 percent. Investors bought government bonds, sending prices higher and yields lower.
Bayer raised its offer for Monsanto to $55.8 billion, while Enbridge of Canada agreed to buy Spectra Energy for $28 billion. Industrial and medical device company Danaher will buy the molecular diagnostics company Cepheid for $53 per share or about $4 billion. Cepheid rallied while Danaher declined. Shares of the AES Corporation and NextEra Energy advanced. EOG Resources gained after it said it would buy the oil and natural gas company Yates Petroleum for about $2.3 billion, mostly in stock.
Bank stocks took the biggest losses. Those stocks tend to suffer when interest rates are low because it makes it harder for banks to earn money from lending. Lincoln National and Citigroup retreated. Navistar surged after the company announced an investment from a unit of Volkswagen. The companies are also creating a joint venture that will help them source parts, and they will share technology. Volkswagen Truck & Bus will pay $256 million for a 16.6 percent stake in Navistar. Navistar stock rose while Cummins was lower.
The ISM said its nonmanufacturing index tumbled to 51.4 in August from 55.5 in July, falling to its lowest level since February of 2010. New orders and hiring grew at a slower rate and exports fell. Service companies accounted for almost all the job creation in the United States last month.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$10.90 to US$1,337.25. Copper futures were up 0.7 percent to US$2.09. WTI spot crude was up 42 US cents to US$44.86. Dated Brent spot crude was down 22 US cents to US$47.30. 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 dropped 1.15 percent. The yield on US Treasury 30 year bond was down 4 basis points to 2.24 percent while the yield on the 10 year note dropped 6 basis points to 1.54 percent.
Europe
Stocks retreated — investors were cautious before Thursday’s European Central Bank monetary policy meeting. Early struggles in US markets made a negative impact on afternoon trading in Europe. The losses accelerated after the release of the weaker than expected ISM nonmanufacturing report. The reversal in crude oil prices was another factor that weighed on the markets. Investors initially reacted positively to the news that an unofficial agreement by Saudi Arabia and Russia had been reached to help stabilize oil prices. The FTSE dropped 0.8 percent, the CAC lost 0.2 percent and the SMI slipped 0.1 percent. The DAX inched up 0.1 percent.
Fresenius increased after the health-care provider agreed to acquire IDC Salud Holding S.L.U., Spain’s largest private hospital operator, for €5.76 billion on a cash and debt-free basis. Bayer gained after it raised its offer for Monsanto to $65 billion or $127.50 per share. General Electric announced its plans to acquire Sweden’s Arcam AB and Germany’s SLM Solutions Group, suppliers of equipment for additive manufacturing, also called 3D printing, for $1.4 billion. SLM and Arcam shares soared.
In Paris, Airbus Group rose after signing deals worth $6.5 billion with Vietnam carriers. Ingenico Group tumbled after slashing its full-year targets amid a temporary market decline in the US. In London, International Consolidated Airlines Group advanced along with easyJet after reporting increases in August passenger traffic. Redrow advanced after the homebuilder proposed a 67 percent increase in its full year dividend after reporting a 23 percent increase in pre-tax profits for 12 months ended June. Berkeley Group gained after reiterating its profit guidance through to 2018. Standard Chartered and Provident Financial declined on broker downgrades.
Final second quarter Eurozone gross domestic product was confirmed at 0.3 percent on the quarter and was up 1.6 percent from the same quarter a year ago. Germany’s factory orders recovered in July as the weakness in domestic demand was offset by strong foreign orders. July factory orders were up 0.2 percent and were down 0.7 percent on the year. Sports Direct rose after it said it would overhaul its employment practices and would offer directly employed shop workers the option of switching from ‘zero hours’ contracts to ones with a guaranteed minimum amount of work.
Asia Pacific
Most Asian stock indices advanced after oil prices rallied and the Reserve Bank of Australia kept its policy interest rate at 1.5 percent as anticipated. Trading activity remained relatively subdued in the wake of the Labor Day holiday in the US on Monday. Benchmark US crude futures were up more than 1 percent in Asian deals after Russian President Vladimir Putin said he supports an output freeze deal coordinated with OPEC producers.
The Shanghai Composite was up 0.6 percent led by gains in consumer and industrial stocks. The Hang Seng also added 0.6 percent a day after Fitch Ratings affirmed the sovereign ratings of Hong Kong at ‘AA’, with stable outlook.
The Nikkei was up 0.3 percent after the yen weakened against the US dollar. On Monday the yen climbed following a speech from BoJ Governor Haruhiko Kuroda. Sumitomo Chemical, Dai-ichi Life Insurance, Nippon Suisan Kaisha and Shiseido gained. Kyowa Hakko Kirin jumped after the release of positive results for its asthma drug in late-stage clinical trial results. Amada Holdings retreated after a Nikkei report that the metalworking machinery marker will lower its payout ratio target.
Both the S&P/ASX and All Ordinaries retreated 0.3 percent after the Reserve Bank of Australia maintained its policy interest rate at 1.5 percent and offered no guidance about whether another rate cut is near. Banks were mixed. ANZ closed flat, Commonwealth and Westpac were lower while NAB advanced. Energy stocks closed mostly lower. Miners BHP Billiton, Rio Tinto and Fortescue Metals Group were higher.
The Kospi added 0.3 percent on easing concerns of an imminent increase in US interest rates. The Sensex jumped 1.6 percent on renewed buying by foreign investors.
Looking forward
Australia reports second quarter gross domestic product. Germany and the UK post July industrial production. The Bank of Canada announces its monetary policy decision. In the US, July JOLTS will be released. The Federal Reserve publishes its Beige Book in preparation for its FOMC meeting on September 21 and 22.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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