On 31 January, 2017 – Global stocks down for second day

Weak earnings and mixed economic data along with the looming FOMC policy decision sent investors to the sidelines.
United States
The Dow Jones industrials were down 0.5 percent while the S&P slipped 0.1 percent. The Nasdaq was virtually unchanged (up 1.07 points). Weak earnings reports and mixed economic data sent shares lower. While no change is expected from the FOMC tomorrow, investors remain cautious ahead of its announcement. In January, the Dow was up 0.5 percent, the S&P added 1.8 percent and the Nasdaq was 4.3 percent higher.
Industrial companies were lower while health care companies climbed. Goldman Sachs and Boeing retreated on profit taking. Under Armour tumbled after investors were disappointed with its fourth-quarter report, which included higher expenses. Under Armour also issued a weak full-year forecast and said its chief financial officer is leaving. United Parcel Service sank after the company forecast an annual profit that did not meet expectations. UPS expects to earn no more than $6.10 per share this year. FedEx also declined. Simon Property Group and GGP both traded higher after their quarterly reports. ExxonMobil came under pressure after reporting fourth quarter earnings that came in below estimates.
Apple reported a bigger-than-expected rise in iPhone sales for the holiday quarter but forecast current-quarter revenue below estimates as customers hold back on phone upgrades in anticipation of the launch of the 10th-anniversary iPhone. Apple sold 78.29 million iPhones in the first quarter ended December 31, up from 74.78 million last year, marking the first quarterly growth in iPhone sales in a year. The company forecast total revenue of between $51.5 billion and $53.5 billion for the current quarter. Apple’s net income fell to $17.89 billion or $3.36 per share in the quarter from $18.36 billion or $3.28 per share a year earlier. Revenue rose 3.3 percent to $78.35 billion in the quarter.
Conference Board’s January consumer confidence index fell to 111.8 from a revised 113.3 in December.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$20.00 to US$1,212.80. Copper futures were up 2.7 percent to US$2.73. WTI spot crude was up 22 US cents to US$52.85. Dated Brent spot crude was up 47 US cents to US$55.70. The US dollar was down against all of its major counterparts including the yen, euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index dropped 0.7 percent. The yields on both the US Treasury 30 year bond and 10 year note were down 4 basis points to 3.05 percent and 2.45 percent respectively.
Europe
Stocks retreated on the last day of January. Shares advanced during the first few hours of trading recovering some of Monday’s losses from the previous session but later declined into negative territory following the weak opening in US markets. The FTSE was down 0.3 percent, the CAC declined 0.7 percent, the DAX lost 1.3 percent and the SMI was 0.4 percent lower. The indices were mixed for the month of January. The FTSE and CAC were down 0.6 percent and 2.3 percent respectively while the DAX and SMI added 0.5 percent and 0.9 percent.
Earnings were mixed as investors pondered the effects of the Trump presidency on the global economy. A large number of economic reports in Europe were released including Eurozone GDP, inflation and unemployment data. Traders also waited for central bank announcements during the week. The Bank of Japan maintained its monetary policy today and upgraded its economic outlook. The Federal Reserve has begun its 2-day policy meeting and will announce its decision after the European close Wednesday. The Bank of England will announce its policy decision on Thursday.
Deutsche Bank was lower after the lender agreed to pay $425 million (£340 million) to settle an investigation over alleged money laundering in Russia. In London, Ocado advanced after the online supermarket reported a rise in full-year profits and said it was well positioned for growth. Royal Dutch Shell slipped after it agreed to sell a package of UK North Sea assets to Chrysaor for a total of up to $3.8 billion. H&M group gained in Stockholm after reporting increased fourth quarter profit thanks to increased online sales. Givaudan, a manufacturer of fragrance and flavor products, tumbled in Zurich after reporting slower sales growth in the fourth quarter. UPM plummeted in Helsinki after issuing a cautious outlook for 2017.
Eurozone fourth quarter gross domestic product was up 0.5 percent when compared to the previous quarter and was up 1.8 percent from the same quarter a year ago. The December Eurozone unemployment rate fell to the lowest in more than seven years. The jobless rate dropped to 9.6 percent from revised 9.7 percent in November. This was the lowest since May 2009. January flash harmonized index of consumer prices was up 1.8 percent from a year ago following 1.1 percent increase in December.
Asia Pacific
Asian stocks fell broadly Tuesday after Donald Trump fired Acting Attorney General Sally Yates Monday night, adding to concerns surrounding the unpredictability and protectionist trade stance of the new U.S. President. Lower oil prices and the Bank of Japan’s status-quo monetary policy decision also kept investors on edge before the FOMC announcement on Wednesday. Markets in Hong Kong, Mainland China and Taiwan were closed for the Lunar New Year holidays.
The Nikkei dropped 1.7 percent and the Topix tumbled 1.4 percent. Shares tumbled as the yen strengthened against the US dollar and euro and the Bank of Japan kept its policy unchanged at its first meeting of the year. For the month of January, the Nikkei was down 0.4 percent while the Topix was up 0.2 percent.
The BoJ raised its economic growth forecasts but left its inflation forecasts largely unchanged. GDP growth was revised up from 1.0 percent to 1.4 percent for fiscal year 2016 which ends on March 31, from 1.3 percent to 1.5 percent for fiscal year 2017 and from 0.9 percent to 1.1 percent for fiscal year 2018. However, the BoJ maintained its cautious stance on inflation. The BoJ now sees consumer price inflation of minus 0.2 percent for fiscal 2016, down from its November outlook of minus 0.1 percent. Its inflation forecast for 2017 was kept at 1.5 percent, while that for fiscal 2018 was held at 1.7 percent. December industrial production grew 0.5 percent and the unemployment rate remained steady at 3.1 percent while household spending fell and housing starts growth eased unexpectedly to its lowest level in four months.
Both the S&P/ASX and All Ordinaries were 0.7 percent lower. BHP Billiton and Rio Tinto declined. Fortescue Metals Group climbed after signaling stronger dividend payouts. Iluka Resources retreated after flagging loss on impairments. Oil Search, Beach Energy, Origin Energy and Woodside Petroleum dropped as oil futures extended losses on worries over rising US output. In January, both indices were down 0.8 percent.
Looking Forward
Japan and India release January manufacturing PMI. China posts CFLP manufacturing PMI. Manufacturing PMIs for the Eurozone, France, Germany and the UK will also be reported. In the US, January ADP private employment will be released. January manufacturing PMI will be released along with the ISM manufacturing index and December construction spending. The FOMC will make its monetary policy announcement.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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