On 22 September, 2016 – Global stocks rallied Thursday

The combination of the Bank of Japan’s moves and the Federal Reserve’s staying put invigorated investors.
United States
Stocks advanced Thursday thanks to increased prices for crude oil and other commodities. Real estate companies gained thanks to the prospect of low interest rates. The Dow Jones industrials added 0.5 percent, the S&P added 0.6 percent and the Nasdaq was 0.8 percent higher. The Nasdaq closed at an all-time high of 5,339.52.
Energy companies gained along with the price of oil. Murphy Oil, Transocean and Marathon Oil were higher. The prices of other commodities also rose, which helped materials stocks. Freeport-McMoRan advanced. Red Hat was higher after the company reported better-than-expected results in its second quarter. GoPro, the camera company, gained after the company announced updates to its Hero camera products.
Traders largely shrugged off some disappointing U.S. economic data, with the reports potentially seen as old news in light of the forward-looking nature of the Fed. The National Association of Realtors reported an unexpected decrease in existing home sales in August. Existing home sales were down 0.9 percent on the month to an annualized rate of 5.33 million. The Conference Board’s index of leading economic indicators edged down by 0.2 percent in August. Weekly jobless claims were down 8,000 to 252,000.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$13.00 to US$1,339.10. Copper futures were up 1.6 percent to US$2.19. WTI spot crude was up 79 US cents to US$46.13. Dated Brent spot crude was up 72 US cents to US$47.55. The US dollar was down against the euro, pound, Swiss franc and the Canadian and Australian dollars. However, it advanced against the yen. The Dollar Index was down 0.1 percent. The yield on US Treasury 30 year bond was down 4 basis points to 2.34 percent while the yield on the 10 year note declined 3 basis points to 1.62 percent.
Europe
Stocks rallied in Europe as investors here had their first opportunity to react to the Federal Reserve monetary policy announcement. The Fed left its fed funds interest rate range unchanged at 0.25 percent to 0.50 percent. The Fed’s decision sent the US dollar lower, sparking a rally in commodities. This is turn, triggered gains for mining, gold and energy stocks. Banks and financial stocks also continued to benefit from actions taken by the Bank of Japan. The FTSE was up 1.1 percent, the SMI gained 1.0 percent and both the CAC and DAX added 2.3 percent.
Rocket Internet climbed after it said it had made progress to cut losses at several of its key start-ups in the second quarter. Utilities RWE and E.ON gained. In Paris, power utility EDF was higher after trimming its 2016 earnings outlook, citing lower nuclear output and changes to regulated tariffs. Deutsche Bank, Commerzbank, Société Générale, BNP Paribas and Crédit Agricole advanced. Total and Technip were up on the day.
In London, Rolls-Royce Holdings gained after it appointed Stephen Daintith as its Chief Financial Officer and as an executive director of the company. Oil rig maker Lamprell gained despite reporting a loss in the first-half as a result of its settlement with Ensco. Mitchells & Butlers rose after it posted improved trading results in the most recent eight weeks supported by favorable weather. Glencore, Fresnillo, Randgold Resources, BHP Billiton, Antofagasta, Rio Tinto and Anglo American all gained. Shipping and oil firm AP Moller-Maersk was higher in Copenhagen after deciding to split itself into two companies focused on transport and energy.
Eurozone consumer confidence edged up in September, reversing the decline in previous three months according to the flash consumer confidence index, edging up by 0.3 points to minus 8.2 from minus 8.5 in August. French manufacturing confidence improved in September with the manufacturing confidence index reading at 103, up from 101 in August.
Asia Pacific
Asian stocks were mostly higher Thursday. Oil prices extended overnight gains following the Federal Reserve’s cautious tone about future rate increases. The US dollar hit a near 4-week low against the Japanese yen and London copper held at five-week highs, while gold slipped on profit taking after sharp overnight gains. Japanese markets were closed for the Autumnal Equinox holiday after rallying in the previous session following the Bank of Japan’s decision to steepen the yield curve.
The Shanghai Composite added 0.5 percent led by property developers, after Sunac China Holdings said its subsidiary would buy a 17 percent stake in smaller rival Jinke Property. The Hang Seng index was up 0.4 percent.
Both the S&P/ASX and the All Ordinaries were 0.7 percent higher. The gains were led by miners including BHP Billiton, Rio Tinto and Fortescue Metals Group as iron ore prices held steady above the US$55 a ton threshold. Gold miners Regis Resources, Evolution Mining and Newcrest rallied after gold futures settled higher for the third straight session Wednesday. Energy stocks Woodside Petroleum, Santos and Origin Energy also advanced as crude oil prices surged overnight. Banks ended flat to marginally lower after new Reserve Bank of Australia governor Philip Lowe defended RBA’s monetary policy framework and flagged the potential for interest rates to fall again.
The Kospi was up 0.7 percent amid continued buying by foreign investors.
Looking Forward
Flash manufacturing PMI for September will be released for Japan and the US. Flash September composite PMIs will be reported for the Eurozone, France and Germany. France will post final second quarter gross domestic product. Canada will release July retail sales and August consumer price index.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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