On 29 August, 2017 – Shares in Europe and Asia declined as geopolitical worries escalated

But US shares, after initially declining, were up on the day.
United States
Stocks rebounded from early steep losses and finished higher on Tuesday. The US dollar was down to its lowest level in two and a half years, helping industrial and technology exporters. Investors bought bonds, traditionally considered safe assets, after North Korea launched a midrange ballistic missile that crossed over northern Japan and fell into the Pacific Ocean. The Dow Jones industrials and Nasdaq added 0.3 percent while the S&P was up 0.1 percent.
Industrials companies rose, including defense contractors. Raytheon and Lockheed Martin advanced. Technology including Apple and Applied Materials were higher. Insurers such as MetLife declined as investors wondered if Hurricane Harvey will lead to big losses for them. Companies that drill for oil in the Gulf or onshore in Texas were down as investors worried about potential lost production. Anadarko Petroleum and Apache retreated.
Finish Line forecast weak second-quarter results and the retailer cut its forecasts for the rest of the year. Under Armour, Foot Locker and Nike were down. Best Buy had a solid second quarter and raised its forecasts for the year, but its stock sank after CEO Hubert Joly said he does not think the chain’s sales will stay as strong as they were in the most recent quarter. United Technologies gained after The Wall Street Journal reported the company was near a deal to buy Rockwell Collins for more than $20 billion.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$33.35 to US$1,318.65. Copper futures were up 0.39 percent to US$3.10. WTI spot crude was down 18 US cents to US$46.39. Dated Brent spot crude was up 6 US cents to US$51.95. The US dollar was up against the yen, and the Canadian and Australian dollar. The currency was virtually unchanged against the euro, pound and Swiss franc. The Dollar Index was up 0.1 percent. The yield on US Treasury 30 year bond was down 2 basis points to 2.74 percent while the yield on the 10 year note was down 3 basis points to 2.13 percent.
Europe
Stocks retreated Tuesday after North Korea launched a ballistic missile that passed over Japan. The missile launch reignited geopolitical worries among investors, sending them in search of safe havens. Gold stocks were among the few gainers as traders turned more risk averse. The FTSE and CAC were down 0.9 percent, the DAX lost 1.5 percent and the SMI was 0.6 percent lower.
ProSiebenSat.1 Media sank after the company said it expects third quarter 2017 revenues for its Broadcasting German-speaking segment to decline by a mid-single digit percentage compared to the prior year’s €472 million. CapGemini declined despite striking a major deal with McDonald’s. GlaxoSmithKline and British American Tobacco retreated.
Renault retreated after announcing a new joint venture in alliance with Nissan Motor and Dongfeng Motor Group to design and build electric vehicles in China. WPP Group slid after its wholly-owned operating company AKQA acquired a majority stake in digital agency DIS/PLAY in Denmark. Randgold Resources and Fresnillo climbed along with the price of gold. Persimmon, Taylor Wimpey and Barratt Developments declined.
German consumer confidence will strengthen in September according to GfK. The forward-looking consumer sentiment index rose to 10.9 in September from 10.8 in August. Second quarter gross domestic product expanded 0.5 percent on the quarter and 1.7 percent from a year ago. July consumer spending in France was up 0.7 percent on the month after falling 0.7 percent in June.
Asia Pacific
Asian stocks fell broadly on Tuesday and safe-haven assets climbed after North Korea launched a ballistic missile that passed over Japan, reigniting geopolitical worries. The missile flew over the northern Japanese island of Hokkaido at 6:06 am local Japanese time, according to Japan’s state broadcaster NKH.
Chinese shares shrugged off declines elsewhere to end 0.1 percent higher as investors looked ahead to the latest readings on the country’s manufacturing and service sectors. The Hang Seng however was down 0.4 percent.
In Japan, shares fell as the yen surged to four-month highs against the US dollar and data on household spending and employment painted a mixed picture of the economy. While household spending unexpectedly fell in July, the jobless rate held steady at a seasonally adjusted 2.8 percent in the month. The Nikkei was down 0.4 percent while the Topix slipped 0.1 percent. Prime Minister Shinzo Abe described the missile launch by North Korea as “an unprecedented, serious and grave threat” to Japan, adding that he and U.S. President Donald Trump are in complete agreement to raise pressure on North Korea.
Both the S&P/ASX and All Ordinaries were down 0.7 percent as the country’s big banks extended Monday’s losses after the Australian Prudential Regulation Authority launched an independent inquiry into Common Wealth Bank. The big four banks declined with Commonwealth hitting a nine-month low during intra-day trading. Big miners ended mixed while gold miners Evolution, Newcrest and Northern Star Resources rallied.
The Kospi was down 0.2 percent as investors waited to see how the US President and the United Nations Security Council would respond to North Korea’s latest nuclear and missile provocations. The index fell as much as 1.6 percent in early trading. The Sensex tumbled 1.1 percent.
Looking forward
Japan releases July retail sales. Eurozone flash EC economic sentiment will be reported. August preliminary consumer prices for Germany will be released. In the US, second estimate of second quarter gross domestic product will be released along with corporate profits. August ADP private employment report will be posted.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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