On 17 October, 2016 – Global stocks mostly down to begin the week

Investors were wary of risk before the ECB announcement Thursday.
United States
US stocks wavered between small gains and losses Monday as investors parsed latest company earnings reports. Energy stocks were down on lower crude oil prices. Utility shares however, were trading higher. The Dow Jones industrials, S&P and Nasdaq all lost 0.3 percent on the day.
Devon Energy declined. Hasbro rose after the company delivered better-than-expected revenue in its latest quarter. However, Mattel edged down. Supervalu climbed after the company agreed to sell its Save-A-Lot unit to the Canadian private equity firm Onex for $1.37 billion. Bank of America said its third-quarter profits rose nearly 6 percent from a year earlier, helped by strong results in investment banking and trading.
September industrial production edged up by 0.1 percent after falling by a revised 0.5 percent in August. Expectations were for a 0.2 percent increase. October Empire State general business conditions index slid to negative 6.8 in October from negative 2.0 in September. Expectations were for an increase in the index.
Federal Reserve Vice Chairman Stanley Fischer warned that economic stability could be threatened by low interest rates and noted the central bank is “very close” to its employment and inflation targets, but said it was “not that simple” for the Fed to raise rates.
Bank of America said third quarter net income was up 7 percent from a year ago to $4.96 billion. Netflix revenue rose 31.7 percent to $2.29 billion as the company added many more subscribers in the third quarter than expected as new original shows kept subscribers to the service. Analysts on average had estimated 309,000 additions. The company added 3.20 million subscribers in its international markets, compared with the average analyst estimate of 2.01 million.
International Business Machines reported its smallest drop in quarterly revenue in more than four years, helped by continued growth in the company’s cloud and analytics businesses. The company’s revenue marginally fell to $19.23 billion in the third quarter ended September 30 from $19.28 billion a year earlier. Net income fell to $2.85 billion or $2.98 per share from $2.95 billion or $3.01 per share.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$3.05 to US$1,254.80. Copper futures were down 0.3 percent to US$2.10. WTI spot crude was down 43 US cents to US$49.92. Dated Brent spot crude was down 40 US cents to US$51.55. The US dollar was down against the yen, euro, pound, Swiss franc and the Australian dollar. It was virtually unchanged against the Canadian dollar. The Dollar Index was down 0.3 percent. The yields on both the US Treasury 30 year bond and the 10 year note were down 4 basis points to 2.52 percent and 1.76 percent respectively.
Europe
Stocks retreated Monday — investors were cautious before Thursday’s European Central Bank policy decision and uncertainty about the health of the global economy. And US economic data disappointed. The continued strength of the US dollar weighed on commodity prices including crude oil. The FTSE was down 0.9 percent, the CAC declined 0.5 percent, the DAX slid 0.7 percent and the SMI dropped 1.1 percent.
The decline in the pound acted as a shock absorber for the economy according to Bank of England Deputy Governor Ben Broadbent on BBC Radio 5 live. “Having a flexible currency is an extremely important thing especially in an environment when your economy faces a shock that is different to your trading partners.” Broadbent said inflation would probably rise above the 2 percent BoE target in the next few years.
Deutsche Bank slipped on reports that the lender is considering options such as scaling back US operations as part of a wider overhaul to lower costs. Both Total and Technip were lower. In London, Pearson tumbled after the company reported a 7 percent decline in underlying organic sales during the first nine months of the year. Royal Dutch Shell, BP and Tullow Oil declined. Hennes & Mauritz was lower in Stockholm after its September group sales increased by just 1 percent, hit by unreasonably warm weather. Banca Popolare di Milano dropped and Banco Popolare gained in Milan after the banks received shareholder approval for their merger. Marine Harvest sank in Oslo after cutting its 2016 output guidance.
The final Eurozone harmonized index of consumer prices confirmed inflation of 0.4 percent on the year — the highest level since late 2014.
Asia Pacific
Shares were mixed to begin the new week. While a weakening yen aided sentiment in Japan during Asian trading hours, Chinese shares declined before the slew of data to be released on Wednesday. Underlying sentiment remained somewhat cautious after global bond yields rose in the wake of comments from Federal Reserve Chair Janet Yellen on the economy. In a speech in Boston Friday, Yellen offered an argument for running the U.S. economy hot for a period to ensure moribund growth doesn’t become an entrenched feature of the business landscape.
Chinese shares fell the most in three weeks after a sudden bout of afternoon selling in dollar-denominated B shares amid weakness in the yuan, which hit a fresh six-year low against the US currency. The Shanghai Composite was down 0.7 percent while the Hang Seng retreated 0.8 percent, dragged down by gaming shares.
The Nikkei and Topix added 0.3 percent and 0.4 percent respectively as the yen hovered near a three-week low against the dollar amid expectations of a US rate increase before the end of the year. Panasonic climbed after the electronics manufacturer and Tesla agreed to collaborate for manufacturing solar cells and modules in New York. Tokyo Electric Power tumbled after a candidate opposed to the restart of a nuclear plant won a regional election.
The S&P/ASX was down 0.8 percent and the All Ordinaries lost 0.9 percent after Fed Chair Janet Yellen on Friday voiced concerns about weakening US economic potential. Big banks were mixed while miners BHP Billiton and Rio Tinto ended lower. Energy stocks including Oil Search, Woodside Petroleum and Santos declined after oil prices edged lower in Asia. Crown Resorts plunged after China detained 18 of its employees for gambling-related offences. Rival Star Entertainment tumbled as well. Evolution Mining retreated after saying it would pay up to A$10 million to Newcrest Mining for the Marsden copper-gold project in central NSW.
The Kospi was up 0.2 percent on foreign buying. The Sensex declined 0.5 percent prior to earnings reports, China’s data and the ECB’s monetary policy decision on Thursday.
Looking Forward
The Reserve Bank of Australia publishes minutes from its most recent monetary policy meeting. The European Central Bank publishes its lending survey. The UK releases its September consumer and producer price indices. In the US, the September housing market index will be released along with August Treasury international capital.
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]