On 15 May, 2017 – Disappointing US data ignored

A possible agreement on oil production curbs boosted crude prices and shares.
United States
US stocks were higher Monday thanks in large part to rising crude oil prices. The Dow Jones industrials were up 0.4 percent while the S&P and Nasdaq added 0.5 percent. Both the S&P and Nasdaq closed at new record highs. The global cyber attack boosted technology stocks as well. Oil hit its highest in more than three weeks after Saudi Arabia and Russia said supply cuts needed to last into 2018, a step toward extending an OPEC-led deal to support prices for longer than originally agreed. Some investors however were surprised by the lack of market concern about a successful missile test by North Korea and a cyber attack that disrupted operations at car factories, hospitals, shops and schools.
Johnson & Johnson and Cisco Systems rallied after broker upgrades. Shares of cyber security firms including FireEye, Symantec and Palo Alto Networks jumped. Cisco’s increase was also partly thanks to its security technology business. Exxon and Chevron were boosted by higher oil prices. Patheon moved sharply higher after the Dutch drug ingredient maker agreed to be acquired by Thermo Fisher Scientific for $35 per share in cash. Ryerson, Olympic Steel and Cliffs Natural Resources all advanced.
Activity in the New York manufacturing sector has unexpectedly seen a modest contraction in the month of May. The New York Fed said its general business conditions index fell to a negative 1.0 in May from a positive 5.2 in April, with a negative reading indicating a contraction in regional manufacturing activity. Homebuilder confidence unexpectedly improved in May according to the National Association of Home Builders. The report said the NAHB/Wells Fargo Housing Market Index rose to a reading of 70 in May after pulling back to 68 in April.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$2.05 to US$1,233.30. Copper futures were up 0.7 percent to US$2.54. WTI spot crude was up US$1.08 to US$48.92. Dated Brent spot crude was up US$1.03 to US$51.87. The US dollar was up against the yen but declined against the euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was down 0.2 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 1 basis point to 2.34 percent.
Europe
Most stock indices advanced to begin the new trading week. Commodity related stocks — primarily mining and energy stocks — were among the best performers. Crude oil prices advanced after Russia and Saudi Arabia agreed to extend their supply quota plan by nine months. The FTSE and DAX were up 0.3 percent and the CAC gained 0.2 percent. However, the SMI slipped 0.2 percent.
RWE rallied after the utility confirmed its optimistic forecast for 2017 after posting first-quarter core profit slightly above expectations. Copper producer Aurubis climbed after confirming its full-year earnings outlook. Renault was higher after the carmaker stopped production at several sites Saturday after being affected by Friday’s ransomware attack. Oil majors BP and Royal Dutch Shell gained as crude prices rose above $52 a barrel after Russia and Saudi Arabia said supply cuts needed to last into 2018. Miners Anglo American, Glencore, BHP Billiton and Antofagasta advanced.
Vivendi was virtually unchanged after it made a £2.3 billion offer to acquire a 60 percent stake in French advertising group Havas. BHP Billiton advanced after launching a global rebranding exercise. Cyber security group Sophos surged to a record high after a massive ransomware worm caused damage across the globe over the weekend. TUI tumbled after it reported a first-half group loss attributable to shareholders of €362.9 million compared to a loss of €448.9 million in the prior year.
Italy’s consumer price index climbed 1.9 percent on the year in April, slightly faster than the 1.8 percent increase reported earlier. In March, prices had increased 1.4 percent. Greece’s economy contracted for the second straight quarter at the start of 2017. First quarter flash GDP contracted 0.1 percent on the quarter but slower than the 1.2 percent decline registered a quarter ago.
Asia Pacific
Stocks were mixed — oil prices jumped but weak US economic data raised a question mark over the extent of Fed tightening. However, investors took weak Chinese data, geopolitical worries and the WannaCry ransomware cyberattack in their stride.
The Nikkei slipped 0.1 percent while the Topix was virtually unchanged (down 0.71 point). Exporters retreated and the yen held steady following the cyber attack and weak US data.
The Shanghai Composite was up 0.2 percent as concerns over regulatory tightening ebbed and upbeat talk on trade and infrastructure investment at a top-level conference in China helped investors shrug off disappointing data. The Hang Seng added 0.9 percent. China’s industrial production growth eased at a faster-than-expected pace in April. Output climbed an annual 6.5 percent, slower than the 7.6 percent increase in March, while retail sales surged 10.7 percent in the month but below the 10.9 percent gain in March. Fixed asset investment also grew at a slightly slower pace of 8.9 percent in April.
Both the S&P/ASX and All Ordinaries were virtually unchanged (up 1.50 points and down 2.56 points respectively). The big four banks were higher. BHP Billiton advanced after launching a global rebranding. Rio Tinto and Fortescue Metals Group however retreated. Energy stocks were mixed, with Woodside Petroleum finishing marginally lower, while Santos, Oil Search and Origin Energy were higher.
The Kospi was up 0.2 percent and the local currency strengthened against the US dollar despite a selling spree by foreign investors after the cyber worm attack and North Korea claimed it had successfully conducted a newly developed mid-to-long range missile test.
The Sensex was up 0.4 percent, hitting fresh record highs on Monday as tepid inflation data boosted hopes of an interest rate cut by the Reserve Bank of India. India’s consumer inflation eased to its lowest level in at least five years in April, while the wholesale price inflation slowed to 3.85 percent from 5.29 percent, separate reports released on Friday showed. Industrial output figures also painted a healthier picture of the domestic economy.
Looking Forward
The Reserve Bank of Australia posts minutes of its monetary policy meeting held earlier this month. Italy and the Eurozone post first quarter gross domestic product. The Eurozone also releases March merchandise trade balance. The UK releases April consumer and producer price indices. Germany reports the May ZEW survey. In the US, April housing starts and industrial production will be released.
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]