Investors reacted to political events with caution.
United States
Stock indices edged lower Friday in choppy trading — investors were disappointed by the March employment report, the US airstrike in Syria and a Federal Reserve official’s comments on trimming the Fed’s balance sheet. The Dow Jones industrials were virtually unchanged (down 6.85 points), the S&P retreated 0.1 percent and the Nasdaq also was virtually unchanged (down1.14 points). The three indices were also down for the week. The Dow lost 7.12 points, the S&P retreated 0.3 percent and the Nasdaq was 0.6 percent lower.
March employment increased by a much lower than expected 98,000 jobs — the fewest since last May thanks to bad weather. However, wage growth edged up and the unemployment rate fell to 4.5 percent from 4.7 percent in February.
New York Fed President William Dudley discussed developing plans for trimming the Fed’s balance sheet. That is when the Fed will stop replacing bonds that expire in its portfolio. To be determined is how to execute the reduction and how far the balance sheet would ultimately shrink. Dudley also said that it is likely to bring “little” pause to the Fed’s pace of interest rate increases.
Investors bought shares of defense companies following a US strike on a Syrian air base. Raytheon, which manufactures Tomahawk cruise missiles, advanced along with Lockheed Martin and Northrop Grumman.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$13.95 to US$1,266.45. Copper futures were down 0.4 percent to US$2.65. WTI spot crude was up 54 US cents to US$52.24. Dated Brent spot crude was up 35 US cents to US$55.24. The US dollar was up against the yen, euro, pound, Swiss franc and the Australian dollar. The currency declined against the Canadian dollar. The Dollar Index was up 0.4 percent. The yield on US Treasury 30 year bond was up 2 basis points to 3.01 percent while the yield on the 10 year note was up 4 basis points to 2.38 percent.
Europe
Most European indices advanced in choppy trading as investors turned more risk averse. Geopolitical concerns shook investor confidence after the US carried out a military strike against a Syrian airbase in retaliation for Syrian President Assad’s use of chemical weapons on a rebel town. Gold stocks rallied on their safe haven appeal and energy stocks climbed on rising crude oil prices. But banks and miners were under pressure. Traders were also concerned by the weaker than expected US employment report. The FTSE was up 0.6 percent and the CAC gained 0.3 percent. Both the DAX (down 5.83 points) and SMI (up 2.54 points) finished virtually unchanged. For the week, the FTSE was up 0.4 percent and the CAC added 0.2 percent. The DAX lost 0.7 percent and the SMI retreated 0.2 percent.
Deutsche Bank and Commerzbank were lower. Standard Life advanced after the insurer said it is considering moving its European Union hub to Dublin. Gold miner Randgold Resources jumped as gold prices hit five-month high on safe-haven demand. Fresnillo also advanced. Lloyds Banking Group declined after the company said it has set aside a further £100 million to compensate customers who lost money in a fraud scandal. BAE Systems advanced. Randgold Resources and Fresnillo gained. Wolseley slipped on a broker downgrade. ITV also declined on a broker downgrade. Tesco and Sainsbury both advanced on broker upgrades.
Eurozone house prices grew at the sharpest pace in just over nine years in the fourth quarter of 2016. Prices accelerated 4.1 percent in the December quarter from 3.4 percent in the third quarter. Germany’s February industrial production was up a monthly 2.2 percent for a second month. Germany’s exports grew at a slower pace in February, while imports declined for the first time in five months. Exports were up 0.8 percent on the month while imports were down 1.6 percent. As a result, the trade surplus increased to a seasonally adjusted €21 billion from €18.9 billion in January.
The French trade deficit narrowed in February as imports decreased and exports increased. February UK industrial production declined unexpectedly. Industrial output dropped 0.7 percent on the month. The UK visible trade deficit widened to a five-month high in February. The visible trade deficit increased unexpectedly to £12.46 billion in February from £11.97 billion in the prior month.
Asia Pacific
Shares in this region were mixed thanks to escalating geopolitical worries. Investors were waiting for word from the meeting between the US and Chinese presidents. Traders were also waiting for the US employment report which would be released after markets here were closed for the week.
The Shanghai Composite was up 0.2 percent Friday and 2.0 percent for the week. The Hang Seng was virtually unchanged (down 6.42 points) on the day but added 0.6 percent for the week.
The Nikkei was up 0.4 percent while the Topix added 0.6 percent. However for the week the indices were down 1.3 percent and 1.5 percent respectively. Seven & I Holdings advanced after the retailer signed a pact with Texas-based Sunoco LP to expand its US market share. Energy explorer Inpex, Japan Petroleum and JX Holdings rallied. Toshiba was up after reports that it has received offers of at least ¥2 trillion for its memory chip unit. Airline stocks were lower.
Both the S&P/ASX and All Ordinaries edged up 0.1 percent. Both indices were virtually unchanged on the week. The big four banks were mixed while miners Rio Tinto and Fortescue Metals Group retreated. Energy stocks such as Origin Energy, Oil Search, Santos and Woodside Petroleum advanced along with oil prices in Asian deals following the US cruise missile attack against Syria. Gold miners Evolution, Newcrest and Northern Star Resources climbed as gold prices hit five-month high. The Reject Shop plummeted after the retailer warned its full-year profit will drop by almost a third.
The Kospi was virtually unchanged (down 1.02 points). On the week, the Kospi was down 0.4 percent. The Sensex tumbled 0.7 percent Friday but added 0.3 percent for the week.
Looking Forward

Central Bank activities

April 12

Canada

Bank of Canada Monetary Policy Announcement

The following indicators will be released this week…

Europe

April 11

Eurozone

Industrial Production (February)

Germany

ZEW (April)

UK

Consumer Price Index (March)

Producer Price Index (March)

April 12

UK

Labour Market Report (March)

April 13

Germany

Consumer Price Index (March)

France

Consumer Price Index (March)

Italy

Consumer Price Index (March)

Asia Pacific

April 12

Japan

Producer Price Index (March)

Machine Orders (February)

China

Consumer Price Index (March)

Producer Price Index (March)

India

Consumer Price Index (March)

Industrial Production (February)

April 13

Australia

Labour Force Report (March)

China

Merchandise Trade Balance (March)

Americas

April 10

Canada

Housing Starts (March)

United States

Import/Export Price Indexes (March)

April 13

Canada

Manufacturing Sales (February)

Initial Unemployment Claims (week ending prior Saturday)

Producer Price Index (March)

Consumer Sentiment (April preliminary)

April 14

United States

Consumer Price Index (March)

Retail Sales (March)

Business Inventories (February)

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]