On 26 June, 2017 – Most stock indices advanced as oil prices stabilized

Investors are waiting for the deluge of economic data later in the week.
United States
The S&P and the Dow Jones industrials closed up slightly Monday but a decline in technology stocks sent the Nasdaq lower as investors turned to more defensive sectors. The Dow was up 0.1 percent, the S&P added 0.77 point and the Nasdaq retreated 0.3 percent. Technology stocks, which have been under pressure as investors worry about stretched valuations.
Microsoft, Amazon and Alphabet weighed on the S&P as well as the Nasdaq. Qorvo, Skyworks Solutions and Nvidia retreated. The utilities and the four-company telecommunications services sector index were the S&P’s best performers. Several real estate investment trusts were trading higher as investors sought out stocks that pay high dividend yields. Pandora Media rose following reports that the streaming music service’s founder and CEO Tim Westergren is stepping down. Supervalu gained after the grocery store operator said its chief financial officer would step down.
San Francisco Fed President John Williams said the Fed needs to raise rates gradually or the economy runs the risk of overheating. New York Fed chief William Dudley said recent narrowing of credit spreads, record stock prices and falling bond yields could encourage the Fed to continue tightening U.S. policy.
May durable goods orders disappointed but had a muted effect on the markets. Orders were down a monthly 1.1 percent. Excluding transportation, orders managed to edge up 0.1 percent. Core capital goods orders (nondefense excluding aircraft) slid 0.2 percent.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$10.45 to US$1,245.25. Copper futures were up 0.1 percent to US$2.64. WTI spot crude was up 43 US cents to US$43.44. Dated Brent spot crude was up 39 US cents to US$45.93. The US dollar was up against the yen, euro, pound and Swiss franc. It declined against the Canadian and the Australian dollars. The currency declined against the Canadian dollar. The Dollar Index was up 0.2 percent. The yields on both the on US Treasury 30 year bond and the 10 year note were down 1 basis point to 2.69 percent and 2.13 percent respectively.
Europe
European stock indices mostly advanced to begin the week. Bank stocks led the way higher after Italy moved to shore up confidence in its fragile banking system. The Italian government agreed to bail out two banks in the Venice region, Veneto Banca and Banca Popolare di Vicenza, at a cost of €5.2 billion after the European Central Bank ruled that those banks were “failing or about to fail.” However, the markets pared their gains in afternoon trading. The FTSE and DAX were up 0.3 percent, the CAC gained 0.6 percent and the SMI was up 1.0 percent.
Allianz rose after selling its 90 percent stake in regional bank Oldenburgische Landesbank to US private equity firm Apollo. Volkswagen gained after its Slovak unit reached an agreement with a trade union on salary increase. Nordex climbed after receiving an order for ten N131/3900 turbines from Turkey. Capita advanced after selling its fund administration business to Link Group for £888 million. Vodafone slid — its New Zealand unit and Sky Network TV have decided to terminate an agreement relating to their proposed merger.
BHP Billiton slipped after approving US$184 million in initial funding for the South Flank sustaining mine project in the central Pilbara, Western Australia. Nestlé surged after activist investor Daniel Loeb’s Third Point LLC hedge fund took a $3.5 billion stake in the company. Unilever and Diageo were also higher. Intesa, Italy’s largest retail bank and UniCredit rose after the Italian bank bailout. Both Roche and Novartis were lower. Credit Suisse and UBS advanced on broker upgrades. HSBC and Barclays were higher as well as banking stocks which were in demand. BP and Royal Dutch Shell also advanced.
June Ifo business confidence index climbed to 115.1 from 114.6 in May. The reading reached its highest level on record since 1991. UK mortgage approvals declined to an eight-month low in May. The number of mortgages approved in May totaled 40,347, the lowest since September 2016.
Asia Pacific
Shares in Asia were higher Monday in holiday-thinned markets. India, Indonesia, Malaysia and Singapore were closed to celebrate the end of Ramadan. While underlying sentiment remained supported by optimism about global growth, falling US Treasury yields drove down the US dollar before Europe and US post inflation data.
The Shanghai Composite climbed 0.8 percent after reports that index provider MSCI could substantially raise the future weighting of China ‘A’ shares in its emerging markets benchmark. The Hang Seng also advanced 0.8 percent.
Both the Nikkei and Topix edged up 0.1 percent as the yen was little changed against its rivals and oil prices rose on short-covering after posting losses for five weeks in a row. Toshiba tumbled after the stock has been demoted from the first to the second section of the Tokyo Stock Exchange. Takata was suspended from trading after the company filed for bankruptcy.
Both the S&P/ASX and All Ordinaries were 0.1 percent higher. Banking stocks continued to struggle on concerns over the bank tax levy and the housing market. Food and grocery wholesaler Metcash jumped after the company resumed shareholder payouts. Retailers Wesfarmers and Woolworths advanced. Rio Tinto and South32 gained while the big four banks ended on a mixed note after a second Australian state said it was open to charging its own bank tax.
The Kospi was up 0.4 percent on expectations for strong second-quarter earnings.
Looking forward
The US releases June consumer confidence and Richmond Fed manufacturing index. There is a full calendar of Federal Reserve speakers including Chair Janet Yellen and Reserve Bank Presidents including John Williams, Patrick Harker and Neel Kashkari.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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