Trading was lethargic Friday with several markets closed to celebrate Lunar New Year.
United States
Stocks drifted between small gains and losses Friday as investors weighed both company earnings and new US economic data. The Dow Jones industrials were down 7.13 points, the S&P down 0.1 percent and the Nasdaq up 0.1 percent. But for the week, the three indices advanced. The Dow was up 1.3 percent, the S&P gained 1.0 percent and the Nasdaq added 1.9 percent. Energy companies declined along with the price of crude oil. Health care stocks posted the biggest gains.
Fourth quarter gross domestic product increased at an annualized pace of 1.9 percent after expanding 3.5 percent in the third quarter. For the year 2016, GDP grew 1.6 percent, the lowest since 2011 and down from 2.6 percent in 2015. December durable goods orders were down 0.4 percent thanks to volatile airplane orders. However core orders but were up 0.8 percent excluding transportation.
Starbucks was down a day after the coffee chain reported weak sales growth and cut its sales forecast for the year. Chevron also reported weaker than expected results. Colgate-Palmolive tumbled after its fourth-quarter sales missed estimates. The company’s 2017 forecast also disappointed investors. Microsoft gained after the company reported stronger than expected quarterly results largely due to its focus on online services and business software rather than its legacy Windows operating system. Wynn Resorts rallied after it reported revenue that beat expectations. Intel advanced after the company beat earnings and revenue expectations.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$4.85 to US$1,184.85. Copper futures were up 0.6 percent to US$2.69. WTI spot crude was down 61 US cents to US$53.17. Dated Brent spot crude was down 72 US cents to US$55.52. The US dollar was up against the pound, yen and the Canadian dollar. However, it declined against the euro, Swiss franc and Australian dollar. The Dollar Index was up 0.1 percent. The yields on both the US Treasury 30 year bond and 10 year note were down 2 basis points to 3.06 percent and 2.48 percent respectively.
Europe
Stock indices were mixed on the last day of the week. Investor sentiment sagged after US GDP data were weaker than anticipated. The FTSE added 0.3 percent but the CAC lost 0.6 percent and both the DAX and SMI retreated 0.3 percent. The indices were also mixed for the week. The FTSE and CAC slipped 0.2 percent while the DAX and SMI were up 1.6 percent and 1.3 percent respectively. Investors were focused on Washington where UK Prime Minister Theresa May met with US President Donald Trump.
Bank stocks were among the weakest after UBS reported disappointing results. Deutsche Bank, Commerzbank, Crédit Agricole, BNP Paribas and Société Générale also finished lower. Automakers Volkswagen, Daimler and BMW declined. Publicis Groupe rose after it appointed Arthur Sadoun to succeed Maurice Lévy as chairman and Chief Executive officer effective June 1, 2017. Tesco and Booker Group, the UK’s largest food wholesaler, surged after they reached an agreement on the terms of a recommended share and cash merger. EasyJet declined on a broker downgrade.
BT reported an operating profit of £729 million for its third quarter. Revenue was up 32 percent. The firm announced that the head of its European division is leaving after an accounting scandal that sank its shares earlier this week. Its shares began reversing the downward trend on Friday.
Asia Pacific
Most stock indices advanced Friday although overall gains were muted amid a deepening rift between the US and Mexico and before the release of US fourth quarter advance GDP data later in the global market day. While higher oil prices supported energy stocks, trading volumes were relatively thin with markets in China, South Korea and Taiwan closed for the start of Lunar New Year.
The Nikkei and Topix both were up 0.3 percent. On the week the former was up 1.7 percent and the latter, 1.0 percent. The yen was weaker after the Bank of Japan surprised market participants by increasing it’s buying in five- to 10-year JGBs in an attempt to bring down bond yields. December core consumer prices declined at the slowest annual pace in nearly a year. The CPI was down 0.2 percent from the same month a year ago. Exporters ended narrowly mixed. Toshiba rose ahead of its board vote to consider selling part of its chip business. Inpex and JX Holdings rose. Fanuc was higher after upgrading its full-year earnings forecast.
Both the S&P/ASX and All Ordinaries were up 0.7 percent after traders returned to their desks after a national holiday Thursday. For the week, the indices increased 1.0 percent. Financials closed broadly higher, with the big four banks gaining along with Macquarie Group and insurer QBE Insurance Group. Oil & gas producer Santos advanced along with Origin Energy. Retailer Woolworths rallied on a broker upgrade.
The Hang Seng the half-day session edged down 0.1 percent but was up 2.1 percent for the week. The Shanghai Composite, Kospi and Taiex were closed for the Lunar New Year celebrations. The Sensex added 0.6 percent and was up 3.1 percent on the week.
Looking Forward

Central Bank activities

Jan 31

Japan

Bank of Japan Monetary Policy Announcement

Feb 1

United States

Federal Reserve Monetary Policy Announcement

Feb 2

UK

Bank of England Monetary Policy Announcement

The following indicators will be released this week…

Europe

Jan 30

Eurozone

EC Consumer & Business Confidence (January)

Jan 31

Eurozone

Gross Domestic Product (Q4.2016 flash)

Harmonized Index of Consumer Prices (January flash)

Unemployment Rate (December)

Germany

Unemployment Rate (January)

France

Gross Domestic Product (Q4.2016 flash)

Consumption of Manufactured Goods (December)

Feb 1

Eurozone

Manufacturing PMI (January)

Germany

Manufacturing PMI (January)

France

Manufacturing PMI (January)

UK

Manufacturing PMI (January)

Feb 3

Eurozone

Services & Composite PMI (January)

Germany

Services & Composite PMI (January)

France

Services & Composite PMI (January)

UK

Services PMI (January)

Asia Pacific

Jan 30

Japan

Retail Sales (December)

Jan 31

Japan

Household Spending (December)

Unemployment (December)

Industrial Production (December)

Feb 1

Japan

Manufacturing PMI (January)

China

CFLP Manufacturing PMI (January)

India

Manufacturing PMI (January)

Feb 2

Australia

Merchandise Trade Balance (December)

Feb 3

China

Manufacturing PMI (January)

Americas

Jan 30

United States

Personal Income & Spending (December)

Pending Home Sales (December)

Jan 31

Canada

Monthly Gross Domestic Product (November)

Industrial Product Price Index (December)

United States

S&P/Case Shiller House Price Index (November)

Chicago PMI (January)

Consumer Confidence (January)

Feb 1

United States

Manufacturing PMI (January)

ISM Manufacturing Index (January)

Construction Spending (December)

ADP Private Employment (January)

Feb 2

United States

Initial Unemployment Claims (week ending prior Saturday)

Feb 3

United States

Employment Situation (January)

Factory Orders (December)

ISM Nonmanufacturing Index (January)

Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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