On 30 August, 2017 – Stocks advanced thanks to positive economic data that offset geopolitical concerns

Analysts will parse the heavy schedule of economic data on tap this week.
United States
US shares advanced Wednesday after stronger-than-expected US economic growth outweighed geopolitical concerns about the escalating tensions between the United States and North Korea and the aftermath of Hurricane Harvey. The Dow Jones industrials edged up 0.1 percent while the S&P added 0.5 percent and the Nasdaq closed 1.1 percent higher. The S&P was up for the fourth straight day — its longest such streak since late May.
Second quarter gross domestic product was revised to an annualized growth of 3.0 percent, up from the initial estimate of 2.6 percent. It was the strongest quarter since 2015. Robust consumer spending as well as strong business investment contributed to the upward adjustment. Also contributing to the positive mood was ADP’s estimate of private employment gains of 237,000 in August.
The US president has said that he wants to see the US corporate tax rate drop to 15 percent. However, he offered no new tax plan, leaving the proposal in the hands of Congress.
H&R Block dropped after the tax preparation service provider reported a bigger-than-expected loss. AeroVironment rallied after the drone maker reported a smaller-than-expected loss and revenue that beat estimates. Analog Devices was up after the chipmaker’s quarterly earnings and forecast exceeded expectations. Microchip Technology, Advanced Micro Devices and Applied Materials gained. Brown-Forman rallied after the Jack Daniel’s parent exceeded profit expectations. Apple shares closed up at a record high.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$10.15 to US$1,308.50. Copper futures were down 0.5 percent to US$3.09. WTI spot crude was down 47 US cents to US$45.97. Dated Brent spot crude was down US$1.28 to US$50.72. The US dollar was up against all of its major counterparts including the yen, euro, pound, Swiss franc and the Canadian and Australian dollars. The dollar index was up 0.6 percent. The yields on both the US Treasury 30 year bond and the 10 year note were up 1 basis point to 2.75 percent and 2.14 percent respectively.
Europe
European markets rebounded Wednesday following Tuesday’s sell-off after North Korea fired a missile over Japan. However, concerns over potential instability in the region have relaxed after US President Donald Trump’s measured response to the launch. Risk appetites returned Wednesday, as traders left safe havens. The FTSE and SMI were up 0.4 percent while the CAC and DAX gained 0.5 percent.
Bertrandt jumped after the engineering specialist reported a slight increase in revenues for the first nine months of the year. Broadcaster RTL was higher after its second quarter revenue beat expectations. In Paris, medical equipment supplier Biomerieux surged after raising its sales and operating income targets for 2017. Petrofac declined after announcing its half-year results. Insurer Baloise climbed in Zurich after reporting strong first-half results.
Clariant advanced while Lonza gained on a broker upgrade. Swiss Life advanced following the losses of the previous day. Kühne + Nagel finished higher along with Adecco. Nestlé, Roche and Novartis were higher on the day. Among financials, HSBC, Barclays and Standard Chartered were up. Precious metals miners Randgold Resources and Fresnillo slipped after Tuesday’s gains.
August Eurozone economic confidence reached its highest level in more than 10 years. The economic confidence index rose to 111.9 from 111.3 in July. German consumer prices rose for a fourth straight month in August and at the fastest pace in as many months. The consumer price index climbed 1.8 percent on the year after increasing 1.7 percent in July. Shop prices in the United Kingdom were down 0.3 percent on year in August, the British Retail Consortium said on Wednesday after contracting 0.4 percent in July.
Asia Pacific
Asian shares rebounded from Tuesday’s losses on Wednesday as the concerns triggered by North Korea’s missile firing eased somewhat. North Korea’s launch of a ballistic missile over Hokkaido Island into the sea on Tuesday had triggered steep losses in the markets.
The Shanghai Composite was down 1.60 points — losses in the banking sector offset gains in airline stocks in the wake of a resurgent yuan, which hit a 14-month high against the US dollar on stronger institutional and corporate dollar sales. The Hang Seng jumped 1.2 percent.
The Nikkei rebounded 0.7 percent and the Topix added 0.6 percent thanks to a weaker yen that helped exporters and solid retail sales data. Hitachi, Sony, Panasonic and Canon advanced. Dunlop Sports soared on news that it would merge with Sumitomo Rubber Industries. July retail sales were up 1.9 percent from a year ago. This is the ninth consecutive annual increase in retail sales. Seasonally-adjusted retail sales rose 1.1 percent on the month.
Both the S&P/ASX and All Ordinaries were virtually unchanged Wednesday with the former adding 0.71 points and the latter, 0.22 points. Telstra tumbled as shares went ex-dividend and the company dropped a plan to securitize payments from the National Broadband Network. Ramsay Health Care dropped despite the company meeting its full-year guidance. Rising copper and nickel prices helped lift mining stocks.
The Kospi was up 0.3 percent after shrugging off early losses as geopolitical tensions ebbed. The Sensex rebounded 0.8 percent as jitters over North Korea eased somewhat. Trading activity remained somewhat muted due to heavy rainfall in Mumbai and the expiry of derivative contracts due on Thursday.
Looking forward
Japan releases July industrial output. China posts August CFLP manufacturing PMI. Australia releases second quarter private new capital expenditures. Germany posts July retail sales and August unemployment rate. The Eurozone releases August flash harmonized index of consumer prices and July unemployment rate. India posts second quarter gross domestic product. Canada releases second quarter gross domestic product and monthly GDP for June. In the US, July personal income and spending, August Chicago PMI, July pending home sales index and the weekly jobless claims, fed balance sheet and money supply will be released.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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