On 08 June, 2017 – Stocks were mixed as investors waited for the election results from the UK
As expected the ECB left policy unchanged.
United States
Stocks fluctuated around the unchanged mark for most of the day but finally ended on the positive side. The Nasdaq added 0.4 percent, climbing to a record high. The Dow Jones industrials were up 8.84 points and the S&P was 0.65 points higher. The lackluster performance came as traders focused on former FBI Director James Comey’s testimony before the Senate Intelligence Committee.
Steel stocks including Ryerson and Olympic Steel (ZEUS) rallied. The strength among steel stocks came as comments from Commerce Secretary Wilbur Ross suggested the administration is preparing new steel import restrictions. Utility stocks declined after European Central Bank upgraded its growth forecast for the euro area even though it suggested its stimulus plan will remain in place. Valeant Pharmaceuticals, which reached a deal to sell its iNova Pharmaceuticals unit, advanced.
Nordstrom jumped after the department store operator said that some members of the controlling Nordstrom family have formed a group to consider taking the company private. Alibaba gained after the company said it expects revenue growth of 45 to 49 percent in the 2018 fiscal year. Yahoo advanced while Advance Auto Parts retreated. Financial stocks including JP Morgan and Goldman Sachs Group gained. Yahoo jumped on reports that about 2,100 people at the firm and at AOL will lose their jobs after Verizon Communications completes its acquisition of Yahoo.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$17.90 to US$1,273.10. Copper futures were up 2.5 percent to US$2.61. WTI spot crude was down 12 US cents to US$45.60. Dated Brent spot crude was down 22 US cents to US$47.84. The US dollar was up against the yen, euro, pound and Swiss franc. The Australian dollar was virtually unchanged while currency declined against the Canadian dollar. The Dollar Index was up 0.3 percent. The yield on US Treasury 30 year bond was up 1 basis point to 2.85 percent while the yield on the 10 year note was up 2 basis points to 2.19 percent.
5 PM ET US — The first exit polls indicate that although the Conservatives won the UK election, they have lost their majority. The polls suggest the Conservatives are on track to win 314 seats — 17 seats less than they held prior to the election. Labour won 266 seats and the Liberal Democrats, 14. That means the Tories are shy of a majority and means that there could be a hung parliament. The pound declined after the poll results were announced.
Europe
The European markets were mixed Thursday. Investors were cautious as they waited for the results of today’s election in the UK. Polls will close at 10 p.m. local time, or 5 p.m. Eastern Time in the US. Traders also kept a close eye on the testimony of former FBI Director James Comey before Congress. The FTSE was down 0.4 percent and the SMI lost 0.7 percent. The CAC was virtually unchanged (down 1.29 points) while the DAX was 0.3 percent higher.
The European Central Bank left its key interest rates and quantitative easing programs unchanged for a 10th successive policy session. However, the ECB made a subtle change to its forward guidance by omitting the mention of lower interest rate levels in the future. “The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases,” according to the ECB. Further it said “If the outlook becomes less favorable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the program in terms of size and/or duration.” European Central Bank upgraded the region’s growth outlook and lowered its the inflation projections.
Both RWE and E.ON advanced. Heidelberger Druckmaschinen rallied after the company took over the coatings and pressroom chemicals operations in the EMEA region of its strategic partner Fujifilm Europe BV. Rocket Internet declined after Swedish investment company Kinnevik said it is selling its remaining 6.6 percent stake in the German e-commerce company. Euler Hermes advanced after Bloomberg reported that German insurer Allianz is exploring a plan to take the French credit insurance company private. Petrofac was higher after it signed a long-term framework agreement with Petroleum Development Oman. Berendsen jumped after the company agreed to a takeover offer from French laundry services group Elis.
First quarter gross domestic product was revised upward to 0.5 percent on the quarter and 1.9 percent from the same quarter a year ago on domestic spending. Germany’s industrial production advanced a monthly 0.8 percent in April. The French merchandise trade deficit increased in April from a month earlier as exports fell faster than imports.
Asia Pacific
Asian stocks were mixed on Thursday as investors waited for three upcoming events and next week’s Federal Reserve meeting. Thursday’s events include the European Central Bank monetary policy announcement, the UK snap national election and the testimony of former FBI Director James Comey before the Senate Intelligence Committee. Most regional markets reversed early losses after Chinese merchandise trade data beat estimates.
Both the Shanghai Composite and Hang Seng were up 0.3 percent after May Chinese exports and imports data topped expectations. Exports advanced 8.7 percent on the year in dollar terms while imports climbed 14.8 percent.
Both the Nikkei and Topix lost 0.4 percent. The yen edged higher in late Asian trading on a Bloomberg report that the Bank of Japan was re-calibrating its communications to acknowledge it is thinking about how to handle a withdrawal from its monetary stimulus. Exporters were mixed with automakers Honda, Toyota and Mazda retreated while Toshiba rallied after reports that it is set to name the buyer of its coveted semiconductor unit next week. Revised GDP data indicated that the economy grew at a much slower pace than previously estimated. GDP was up 0.3 percent on the quarter, down from the first estimate of 0.5 percent.
The S&P/ASX was up 0.2 percent and the All Ordinaries were 0.1 percent higher thanks to encouraging Chinese data and a rebound in oil prices in Asia. It helped investors shrug off disappointing merchandise trade data released earlier in the day. The April trade surplus narrowed much more than expected, as exports declined much faster than imports due to a steep decline in coal exports in the wake of Cyclone Debbie. Energy shares including Oil Search, Beach Energy and Woodside Petroleum retreated after oil prices slumped nearly 5 percent overnight on data showing an unexpected increase in US inventories of crude and gasoline stocks. Mining stocks were mixed despite weak iron ore and copper prices.
The Kospi edged up 0.1 percent. The Sensex retreated 0.2 percent.
Looking forward
China releases May consumer and producer price indices. Germany and the UK post April merchandise trade data. France and the UK release April industrial production. Canada releases May labour force survey. The US reports wholesale trade data.
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]