On 14 November, 2016 – Global stocks were mixed

US bond yields continued to rise in expectations of higher inflation.
United States
Stocks were mixed with the indices trading around the unchanged mark. The S&P was virtually unchanged (down 0.25 point) while the Nasdaq lost 0.4 percent. The Dow Jones industrials edged 0.1 percent higher. Bond yields climbed to their highest levels this year, pointing to higher interest rates and bigger profits for banks from lending. Investors have been selling bonds, pushing yields higher, on expectations that the spending plans of President-elect Donald Trump will lead to higher inflation. A lack of major US economic data also kept some traders on the sidelines ahead of the release of several key reports in the coming days.
Shares of technology companies including Apple, Facebook and Microsoft fell sharply. Shares of Alphabet, the parent company of Google, also tumbled. Tech stocks have struggled over the last few days as investors wondered if Mr. Trump’s policies would hurt their sales in China and other markets overseas.
Bank stocks continued to surge, rising in part because of the big jump in bond yields since the election. Bank of America and JPMorgan Chase continued to rally. Samsung will buy Harman International for $8 billion, or $112 per share. Harman makes products for connected cars including audio systems and safety and entertainment features. Digi International soared after the company said it received an offer from Belden, a communications equipment company. Digi said it rejected the bid of $13.82 per share or about $359 million because it was too low.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$22.85 to US$1,213.60. Copper futures were up 0.4 percent to US$2.52. WTI spot crude was down 29 US cents to US$43.63. Dated Brent spot crude was down 12 US cents to US$44.63. The US dollar was up against the yen, euro, pound, Swiss franc, yuan and the Canadian dollar. It was virtually unchanged against the Australian dollar. The Dollar Index was up 0.7 percent. The yield on US Treasury 30 year bond was up 6 basis points to 3.00 percent while the yield on the 10 year note was up 9 basis points to 2.24 percent.
Europe
The European markets got off to a strong start Monday, but weakened late in the morning after crude oil prices continued to tumble. However, the European markets did manage to hold onto modest gains despite the lackluster performance of US stocks. Markets have rushed into concluding that the U.S. economy is poised for more growth on an expansionary budget policy. The FTSE added 0.3 percent, the CAC gained 0.4 percent and both the DAX and SMI added 0.2 percent.
Siemens gained after it agreed to buy design automation and industrial software provider Mentor Graphics for $37.25 per share in cash, which represents an enterprise value of $4.5 billion. Utility RWE retreated after reporting a drop in nine-month adjusted net income. In Paris, AXA climbed after the insurer said it has entered into an agreement with Marsh to sell Bluefin Insurance Group. In London, Taylor Wimpey jumped after the house builder remained confident of strong sales in the ‘robust’ UK housing market, despite the implication of Brexit being unclear.
Glencore advanced on a broker upgrade. William Hill increased after it reported a six percent net revenue growth in the second half and said it expects fiscal year operating profit to be at the top end of its previous guidance. Novartis slipped in Zurich on news the pharmaceutical company is considering the sale of its struggling Alcon eye care division. Barclays, Royal Bank of Scotland and HSBC were higher on hopes of a relatively lighter regulation in the United States and expectations that a rise in inflation could prompt the U.S. Federal Reserve to be aggressive in raising interest rates. Miners BHP Billiton, Rio Tinto and Anglo American advanced.
September Eurozone industrial production declined 0.8 percent on the month after increasing a revised 1.8 percent in August.
Asia Pacific
Stocks mostly retreated Monday with the exception of those in Japan. Both the Nikkei and Topix posted strong gains thanks to a weaker yen and better-than-expected third quarter GDP data. Investor sentiment remained subdued as commodities dipped and a slew of Chinese data painted a mixed picture.
The Shanghai Composite was up 0.4 percent to a 10-month high as investors pored over a slew of data and the yuan sank to nearly a 6 1/2-year low. The Hang Seng however, sank 1.4 percent. October mainland industrial output was up 6.1 percent on the year for a second month. Retail sales were up 10.0 percent on the year. Canon, Panasonic, Sony, Honda, Nissan, Hitachi and Mazda rallied as the US dollar climbed above the 107-yen level to its highest level since June. Banks Mitsubishi UFJ Financial, Mizuho Financial and Sumitomo Mitsui Financial gained after benchmark 10 year US Treasury yields bounced above 2.20 percent for the first time in 2016.
Both the S&P/ASX and All Ordinaries lost 0.5 percent as oil and copper prices slid on a stronger US dollar, reflecting uncertainty about president-elect Trump’s foreign policy stance. Miners fell modestly while oil majors ended narrowly mixed. Banks were also mixed.
The Kospi was down 0.5 percent amid selling by foreign investors after prosecutors notified President Park Geun-hye’s office of their plans to question her over a deepening political scandal. Indian markets are closed for a public holiday.
Looking Forward
The Reserve Bank of Australia publishes minutes of its monetary policy meeting earlier this month. Germany and the Eurozone release their flash third quarter gross domestic product data. The Eurozone will also post September merchandise trade. November ZEW will be posted. In the UK, producer and consumer price indices for October will be released. In the US, October retail sales and import/export prices will be released along with November Empire State manufacturing survey. September business inventories will also be reported.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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