However, most global indices retreated for the week.
United States
US stocks inched higher Friday but were down on the week. On Friday, financial stocks rallied after some of the largest banks reported strong third quarter results. Technology and industrial stocks made big gains as investors were pleased with economic reports from the United States and China. The Dow Jones industrials were up 0.2 percent while both the S&P (up 0.43 point) and Nasdaq (up 0.83 point) were virtually unchanged. On the week, the three indices retreated 0.6 percent, 1.0 percent and 1.5 percent respectively.
JPMorgan Chase and Citigroup’s results were better than expected. JPMorgan set aside more money to cover loans that could go bad, but it reported a big gain in deposits and originated more mortgages. Citigroup reported better results from its consumer banking business. Both banks advanced. Goldman Sachs also gained. Although Wells Fargo’s results were solid, there were signs its sales practice scandal was starting to affect its business. Fewer people came to its banks, opened checking accounts and applied for credit cards. The stock was lower on the day.
GE and Honeywell advanced. Apple, eBay, Microsoft and Intel also gained. HP declined after it said it would cut 3,000 to 4,000 jobs over the next three years as demand for those products continued to fall. Infosys was lower after it cut its annual revenue projections after its second-quarter sales fell short of estimates. Twitter declined after Salesforce.com ruled out bidding for Twitter. Salesforce.com shares jumped. Mylan and Perrigo declined.
September retail sales were up 0.6 percent as spending on restaurants, cars and gas improved after retreating in August. However, department store sales were lower as consumers continued to do more shopping online. Both Kohl’s and Macy’s were down. August business stockpiles and sales grew, which is a sign that economic growth could strengthen over the last few months of the year. September producer prices were up as the cost of energy and food increased, but inflation appeared to remain limited.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$9.30 to US$1,251.75. Copper futures were down 0.5 percent to US$2.11. WTI spot crude was down 9 US cents to US$50.35. Dated Brent spot crude was down 8 US cents to US$51.95. The US dollar was up against the yen, euro, pound and Swiss franc. It declined against the Canadian and Australian dollars. The Dollar Index was up 0.7 percent. The yield on US Treasury 30 year bond was up 8 basis points to 2.56 percent while the yield on the 10 year note was up 6 basis points to 1.80 percent.
Europe
Stocks rebounded after three days of losses on Friday. Financial stocks benefited from earnings reports from the three major US banks. Automakers jumped after the release of European car sales data and mining stocks received a boost from the Chinese inflation data. The FTSE was up 0.5 percent, the CAC added 1.5 percent, the DAX gained 1.6 percent and the SMI was 1.1 percent higher. For the week, both the FTSE and SMI retreated 0.4 percent while the CAC and DAX increased 0.5 percent and 0.9 percent respectively.
Europe’s passenger car sales volume rose to its highest September level on record, according to the European Automobile Manufacturers’ Association. Passenger car registrations increased 7.2 percent in September from the prior year to 1.45 million units. Nonetheless, the pace of increase was slower than August’s 10 percent growth. Mining stocks benefited from China’s inflation data — the CPI accelerated more than expected in September and producer prices increased for the first time since 2012 on higher commodity prices.
According to Bank of England Governor Mark Carney, the BoE is willing to tolerate above target inflation to support growth and employment after ‘Brexit’. The bank is “willing to tolerate a bit of overshoot in inflation over the course of the next few years” in order to avoid an increase in unemployment and, “to cushion the blow”, the BoE Governor added.
AG was down even though it confirmed outlook for fiscal 2016, citing the growing relevance in key markets, increasing maintenance revenues and a strong project pipeline. However, quarterly results were lower. Automakers Volkswagen, Daimler, BMW and Renault rallied. Banks including Commerzbank, Deutsche Bank, BNP Paribas, Société Générale and Crédit Agricole advanced. Tesco climbed after it resolved a dispute with Unilever over pricing. However, Unilever retreated. Royal Bank of Scotland, Barclays, Standard Chartered and HSBC were higher. Fiat Chrysler was up after it reported that its September sales totalled nearly 90,900 units, an increase of 14.2 percent from the previous year.
Asia Pacific
Asian stock indices were mostly higher Friday, erasing some losses from the previous day, as stronger than expected Chinese inflation data eased worries about the health of the country’s economy. The data followed China’s merchandise trade data that dampened global sentiment the day before.
The Shanghai Composite edged up 0.1 percent and was 2.0 percent higher for the week. September’s consumer price index was up 1.9 percent on the year — higher than expected. The producer price index increased 0.1 percent on the year for the first time since 2012 thanks to higher commodity prices. The Hang Seng added 0.9 percent on the day but dropped 2.6 percent on the week.
Both the S&P/ASX and All Ordinaries were virtually unchanged Friday. For the week, the S&P/ASX lost 0.6 percent and the All Ordinaries was 0.5 percent lower. Among the major miners, BHP Billiton, Rio Tinto, Newcrest Mining and Evolution Mining retreated. Banks ANZ, National Australia and Westpac declined while Commonwealth Bank of Australia inched slightly higher. News Corp shares declined despite news that the company is reportedly close to completing an acquisition of subscription news channel Sky News for A$20 million to A$25 million.
The Nikkei was up 0.5 percent and the Topix added 0.4 percent. On the week, the Nikkei was virtually unchanged while the Topix edged 0.3 percent lower. Exporters Toshiba, Sony, Panasonic and Canon advanced along with Toyota and Honda. Fast Retailing gained after it said it expects operating profit for the full year to rise 38 percent.
The Kospi was up 0.4 percent on the day but lost 1.5 percent for the week. The Sensex edged up 0.1 percent and was 1.4 percent lower for the week.
Looking Forward

October 19

Canada

Bank of Canada Monetary Policy Announcement

United States
Federal Reserve Beige Book Published

October 20
Eurozone
European Central Bank Monetary Policy Announcement

The following indicators will be released this week…

Europe

October 17

Eurozone

Harmonized Index of Consumer Prices (September final)

October 18

UK

Consumer Price Index (September)

Producer Price Index (September)

October 19

UK

Labour Market Report (September)

October 20

Germany

Producer Price Index (September)

UK

Retail Sales (September)

Asia/Pacific

October 19

China

Gross Domestic Product (Q3.2016)

Industrial Production (September)

Retail Sales (September)

October 20

Australia

Employment and Unemployment (September)

Americas

October 17

United States

Empire State Survey (October)

Industrial Production (September)

October 18
Canada

Manufacturing Sales (August)

United States

Consumer Price Index (September)

October 19

United States

Housing Starts (September)

October 20
United States

Initial Unemployment Claims (week ending prior Saturday)

Philadelphia Fed Survey (October)

Existing Home Sales (September)

October 21

Canada

Consumer Price Index (September)

Retail Sales (August)

Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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