On 13 September, 2016 – Stocks stumbled

Investors continued to be unsettled about Fed interest rate policy.
United States
Stocks ended the day sharply lower as investors worried that the global economy would grow at a slower rate. The International Energy Agency said it expected slower growth in demand for oil this year. That pushed the price of oil down and sent shares of energy companies solidly lower. Shares of banks and phone companies also retreated. The Dow Jones industrials were down 1.4 percent, the S&P lost 1.5 percent and the Nasdaq was 1.1 percent lower.
Oil prices fell after the International Energy Agency said it believed that global demand for oil would grow by 1.3 million barrels a day in 2016, which was 100,000 barrels below the previous forecast. The biggest reason for the change was a more pronounced economic slowdown during the third quarter of the year. Exxon Mobil, Chevron, Murphy Oil and Transocean slid along with Baker Hughes. Anadarko Petroleum agreed to pay $2 billion to buy Freeport-McMoRan’s deepwater assets in the Gulf of Mexico. Both companies declined. Intersil agreed to be bought by Renesas of Japan. The offer valued Intersil at $22.50 per share or $3.05 billion. Intersil rallied.
Wells Fargo and Goldman Sachs declined. Shares of phone companies also sank as higher bond yields made them less appealing. Verizon and AT&T shares retreated. Apple however was higher after T-Mobile said preorders for Apple’s newest iPhones were the strongest it had seen so far. Weight Watchers International slumped after the weight loss company said its chief executive would step down at the end of the month.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down 95 US cents to US$1,323.65. Copper futures were up 0.1 percent to US$2.10. WTI spot crude was down US$1.28 to US$45.01. Dated Brent spot crude was down US$1.16 to US$47.16.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 0.5 percent. The yield on US Treasury 30 year bond was up 5 basis points to 2.45 percent while the yield on the 10 year note was up 6 basis points to 1.71 percent.
Europe
After initially rising when markets here opened, stocks reversed direction and retreated. Markets had followed US stocks higher after some dovish comments from Federal Reserve board member Lael Brainard on Monday. However, the uncertainty about US interest rates weighed on investor sentiment. A weak opening in US markets combined with sliding oil prices accelerated the declines. The FTSE was down 0.5 percent, the CAC retreated 1.2 percent and both the DAX and SMI lost 0.4 percent.
E.ON extended Monday’s losses after it spun off its traditional gas and coal operations into a separate firm. RWE also was lower. In Paris, Air Liquide jumped after the company launched a share capital increase with preferential subscription rights to existing shareholders for a gross amount of about €3.283 billion. Both Total and Technip declined. In London, JD Sports Fashion advanced after it posted record half-year profits, but warned of some “uncertainties” over the next two or three years due to Brexit fallout. Hilton Food Group climbed after reporting good volume and profit growth in the 28 weeks to July 17. Associated British Foods declined on a broker downgrade. Tullow Oil and Royal Dutch Shell finished lower.
Chinese economic data were stronger than anticipated while data out of Europe was mixed. German ZEW business expectations reading was 0.5 for a second month in September. The current conditions reading slipped to 55.1 from 57.6 in August. UK inflation remained stable and factory gate prices accelerated in August. August consumer prices were up 0.6 percent from a year ago for a second month. August PPI output prices were up 0.8 percent on the year after increasing 0.3 percent in July while input prices jumped 7.6 percent after a revised 4.1 percent increase the month before. In China, both industrial production and retail sales increased more than anticipated.
Asia Pacific
Stocks were mixed Tuesday despite Federal Reserve board member Lael Brainard’s dovish comments and positive data from China, Japan and South Korea. While the dollar was flat against the yen in late Asian trade, oil dropped after closing nearly 1 percent higher overnight on hopes of a deal between Saudi Arabia and Russia to stabilize crude output at this month’s OPEC meeting.
The Shanghai Composite edged 0.1 percent higher while the Hang Seng retreated 0.3 percent. China’s August industrial output growth improved to 6.3 percent on the year from 6.0 percent in July, marking the fastest expansion since March when output climbed 6.8 percent. Retail sales advanced 10.6 percent on the year after 10.2 percent in July, while fixed asset investment growth held steady at 8.1 percent during January to August — it was forecast to ease to 7.9 percent.
The Nikkei was up 0.3 percent despite a firmer yen and policy uncertainty prior to next week’s Bank of Japan monetary policy meeting, which coincides with the Fed’s policy review. A government survey released today showed that big Japanese manufacturers have turned optimistic about business conditions in the third quarter. Renesas Electronics rallied after it agreed to buy Intersil for about $3.2 billion. Banks led losses, with Mitsubishi UFJ Financial, Mizuho Financial Group and Sumitomo Financial all declining.
Australian shares reversed early gains to end slightly lower. Both the S&P/ASX and All Ordinaries were down 0.2 percent — losses among energy stocks overshadowed gains in the mining sector. Energy stocks such as Origin Energy, Oil Search and Santos retreated after oil prices resumed their downward spiral in Asian trade in reaction to a bearish-tilted monthly OPEC report. Fortescue Metals Group rose after saying it would repay US$700 million of its debt. BHP Billiton and Rio Tinto also advanced.
The Kospi was up 0.4 percent after worries over a Fed rate increase eased and data showed the country’s trade surplus narrowed more than anticipated in August. The Sensex was closed for a holiday.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

Fidelity disclaimer:

The objective of this page is to present users with objective news, information, data and guidance on personal finance topics drawn from a diverse collection of sources including affiliated and non-affiliated financial services publications. Content is not intended to provide tax, legal, insurance or investment advice and should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or investment by any Fidelity entity or any third-party.

Jesmond Mizzi Financial Advisors Disclaimer:

This article, does not intend to give investment advice and the contents therein should not be construed as such. Jesmond Mizzi Financial Advisors Limited is licensed to conduct investment services by the MFSA and is a Member Firm of the Malta Stock Exchange. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information contact Jesmond Mizzi Financial Advisors Limited at 67, Level 3, South Street, Valletta, or on Tel: 21224410, or email [email protected]