On 24 August, 2017 – Stocks were mixed global in muted trading
Investors were waiting to hear from central bank leaders on Friday.
United States
Investors waited cautiously for monetary policy comments from the central banker gathering in Jackson Hole, Wyoming for the Kansas Fed’s annual symposium. Friday’s program highlights speeches from both Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi and both will be scrutinized for hints on future monetary policy. Neither is expected to give fresh guidance. The Dow Jones industrials and Nasdaq slipped 0.1 percent while the S&P was 0.2 percent lower. Trading was choppy.
Amazon said it will begin cutting prices on products sold at Whole Foods as soon as its acquisition of the grocer is completed on Monday. The spectre of a price war in an industry where margins are already notoriously slim sent shares of Kroger and Sprouts Farmer tumbling. Supervalu and Ingles Markets also retreated. Target, Costco and Walmart were down as well. JM Smucker was lower after posting disappointing results and lowering its earnings forecast.
Dollar Tree advanced after the retailer’s profit and comparable sales beat estimates. Signet Jewellers surged after the company issued results and said it would buy an online jeweller. American Airlines, United Continental and Delta Air Lines were down. Hormel Foods was lower after it said pork and beef costs caused it to narrowly miss earnings expectations. The company also lowered its guidance. Calvin Klein parent PVH gained after it raised its outlook for earnings and revenue.
The day’s economic data were mixed. Weekly jobless claims edged up 2,000 to 234,000 after declining 12,000 the week before. July existing home sales retreated 1.3 percent on the month but were up 2.1 percent from a year ago. Oil prices slipped amid concerns over US Gulf Coast refineries that shut operations as Hurricane Harvey was nearing the coast of Texas.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$2.35 to US$1,289.00. Copper futures were up 1.8 percent to US$3.06. WTI spot crude was down 79 US cents to US$47.62. Dated Brent spot crude was down 38 US cents to US$52.19. The US dollar was up against the yen, euro and the Australian dollar. However the US dollar was unchanged against the Swiss franc and pound. The currency declined against the Canadian dollar. The Dollar Index was up 0.1 percent. The yield on US Treasury 30 year bond was up 3 basis points to 2.77 percent while the yield on the 10 year note was up 2 basis points to 2.19 percent.
Europe
European markets were mixed on Thursday with investors trading cautiously prior to the start of the Kansas City Fed’s economic policy symposium in Jackson Hole, Wyoming. Fed Chair Janet Yellen and European Central Bank President Mario Draghi are both scheduled to speak at the conference on Friday. Traders will be listening to their speeches closely for any clues regarding future monetary policy in the US and Eurozone. The FTSE was up 0.3 percent and the DAX edged up 0.1 percent. The CAC was down 2.26 points while the SMI lost 0.2 percent. Lufthansa was lower after the airline formally submitted a proposal to acquire parts of the insolvent Air Berlin. Alstom advanced after winning a €135 million maintenance contract in Sweden. CRH rallied after the building materials group reported higher profit in its first half with improved sales and announced the sale of its Americas Distribution business. Provident Financial rebounded from steep losses earlier in the week. WPP rebounded from Wednesday’s tumble.
Dixons Carphone plunged after the mobile phone retailer warned of a steep fall in full-year profit, saying increasing numbers of customers are not opting to upgrade their handsets. Sunrise Communications jumped in Zurich after posting strong second quarter results. Lonza climbed on a broker upgrade. Richemont, Swatch and Givaudan advanced. Both Roche and Novartis retreated. British American Tobacco and Reckitt Benckiser were higher. EasyJet declined on a broker downgrade.
French manufacturing sentiment index improved to 111 in August from revised 108 in July. This was the highest since December 2007. The UK’s second estimate of gross domestic product was unchanged from the preliminary estimate. GDP was up 0.3 percent on the quarter and 1.7 percent from the same quarter a year ago. British retailers reported the biggest drop in retail sales since July 2016 and orders placed on suppliers declined considerably from the previous year according to the CBI Distributive Trades Survey. The retail sales balance plunged to minus 10 percent in August from plus 22 percent in July.
Asia Pacific
Asian indices were mixed Thursday after US and European indices retreated overnight. Renewed geopolitical tensions and uncertainty over US political risks kept underlying sentiment cautious. Investors were also keeping a watch on the events as they unfold at the Kansas City Fed symposium.
The Shanghai Composite was down 0.5 percent as investors booked profits after recent gains on optimism over state-owned enterprise restructuring. The Hang Seng added 0.4 percent in post-typhoon trading.
Japanese shares hit a 3-1/2-month low as steelmakers succumbed to heavy selling after reports of price cuts along with US President Donald Trump’s comments on NAFTA and the debt ceiling prompted haven demand for the yen. The Nikkei was down 0.4 percent and the Topix was 0.5 percent lower. Nippon Steel and Sumitomo Metal declined after reports that it has agreed with Toyota Motor to lower prices for steel due to declining costs. Nisshin Steel, Kobe Steel and JFE Holdings tumbled. Mitsubishi Heavy Industries dropped following a report that the MRJ commercial jet the company is developing had engine trouble during a test flight.
The S&P/ASX added 0.1 percent while the All Ordinaries were 0.2 percent higher. Miner South32 advanced after it swung to an annual profit and lifted its dividend. Alumina jumped after posting stronger-than-expected first-half results. Both BHP Billiton and Rio Tinto also closed higher. Santos edged up after the firm reported half-year net profit that was higher than anticipated. Newcrest Mining and Evolution Mining advanced after gold prices edged higher overnight.
The Kospi gained 0.4 percent. The Sensex edged up 0.1 percent.
Looking forward
Japan releases July consumer price index. Germany posts revised gross domestic product and the August Ifo Survey. In the US, durable goods orders for July are released. Both Fed Chair Janet Yellen and ECB President Mario Draghi are scheduled to speak at the Kansas City symposium in Jackson Hole, Wyoming.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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