On 22 May, 2017 – Stock indices were mixed in quiet trading
There was little economic or corporate news to give the markets guidance.
United States
Stocks were up to begin the week, boosted by technology and defense companies. They were up after the United States and Saudi Arabia signed a multi-billion dollar arms deal. The Dow Jones industrials were up 0.4 percent, the S&P gained 0.5 percent and the Nasdaq was 0.8 percent higher.
Shares of defense firms General Dynamics, Raytheon and Lockheed Martin all hit record highs before easing. Boeing also rallied. Tech shares were the day’s best performers, with Amazon, Microsoft and Apple the biggest drivers on the S&P and the Nasdaq. Ford was up after the automaker named James Hackett as chief executive, responding to investors’ growing unease about its stock price and prospects. Qualcomm and Cisco Systems advanced along with Adobe systems and Autodesk.
Swiss specialty chemicals maker Clariant and Huntsman are merging to create a company with a market value of $13.8 billion. The company will call itself HuntsmanClariant and Clariant shareholders will own 52 percent of the new company. Huntsman stock declined but Clariant stock rose in Switzerland. Blackstone Group moved sharply higher after the private equity firm and the Public Investment Fund of Saudi Arabia announced they are launching a $40 billion investment vehicle to finance infrastructure renovation in the US. Amgen came under pressure after the company said it does not expect its experimental osteoporosis drug Evenity to win FDA approval this year amid concerns about heart safety.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$6.85 to US$1,258.85. Copper futures were up 0.8 percent to US$2.60. WTI spot crude was up 40 US cents to US$50.73. Dated Brent spot crude was up 18 US cents to US$53.79. The US dollar was up against the yen and the pound. The currency was down against the euro and the Canadian and the Australian dollars. The dollar was virtually unchanged against the Swiss franc and yuan. The Dollar Index was down 0.3 percent. The yield on US Treasury 30 year bond was up 1 basis point to 2.91 percent while the yield on the 10 year note was up 2 basis points to 2.25 percent.
Europe
Stocks were mixed Monday with the indices fluctuating around the unchanged mark. There was little new economic or corporate news to act upon. The continued rise in crude oil prices and a weaker euro provided a slight lift to investor sentiment. The FTSE was up 0.3 percent and the SMI was 0.7 percent higher. The CAC was virtually unchanged (down 1.52 points) while the DAX retreated 0.2 percent.
According to the Bundesbank’s monthly report, Germany’s strong growth is likely to continue in the spring. In the first quarter, the economy expanded 0.6 percent, following the fourth quarter’s 0.4 percent growth. The bank said the construction sector would continue to flourish and the service sector is expected to continue to expand.
Clariant advanced in Zurich. The specialty chemicals company and US-based Huntsman Corporation have agreed to combine in a merger of equals through an all-stock deal. Cement giant LafargeHolcim jumped after appointing a new chief executive. Insurer Aegon advanced in Amsterdam after it agreed to sell its two largest US runoff businesses. Novartis and Nestlé both were higher. Marks & Spencer gained. Micro Focus declined on a broker downgrade. Burberry advanced on a broker upgrade. Miners Antofagasta and Rio Tinto were up on stronger metals prices.
Asia Pacific
Stocks were mostly higher — the yen weakened and crude oil futures climbed above the $50 a barrel on expectations that major oil producing nations might extend their production cuts beyond an agreed-on June deadline when they meet on May 25. Investors shrugged off news that North Korea fired another ballistic missile on Sunday.
The Shanghai Composite declined 0.5 percent as worries over slowing economic growth and tighter regulations continued to worry investors. The Hang Seng however, went in the opposite direction and gained 0.9 percent despite the unveiling of fresh measures to curb rising property prices.
The Nikkei was up 0.4 percent and the Topix was up 0.5 percent in thin trading after April merchandise trade data showed the country’s exports expanded for a fifth consecutive month aided by higher shipments of semiconductors and steel. The April merchandise trade surplus declined to ¥481.7 billion from ¥614.7 billion. Exports were up 7.5 percent from a year ago after increasing 12.0 percent in March. Imports jumped 15.1 percent after 15.8 percent the month before. SoftBank was up after the telecommunications giant closed the first round of a planned $100 billion investment fund. Oil majors Inpex, JX Holdings and Japan Petroleum rallied.
The S&P/ASX was up 0.8 percent and the All Ordinaries added 0.7 percent. Miners BHP Billiton, Rio Tinto and Fortescue Metals Group were higher after iron ore prices rose on Friday. Alumina gained after it appointed former BHP Billiton executive Mike Ferraro as its new CEO and managing director. Energy majors Woodside Petroleum, Origin Energy and Oil Search rallied as oil prices climbed toward $51 a barrel. Westpac rose despite the bank saying the federal budget’s new bank levy would cost it about $370 million a year or around $260 million after tax. Commonwealth Bank and NAB closed higher.
The Kospi was up 0.7 percent. The Sensex added 0.3 percent after the government said it expects inflation to fall by 2 percent on implementation of the goods and services tax (GST).
Looking forward
Japan posts flash manufacturing PMI for May. Germany releases May Ifo survey and first quarter GDP. May flash composite PMIs will be reported for the Eurozone, Germany, France and the US. The US posts April new home sales.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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