On 18 September, 2017 – Global stock indices were higher as geopolitical concerns ebbed

On 18 September, 2017 – Global stock indices were higher as geopolitical concerns ebbed
Investors also waited for the FOMC and Bank of Japan policy decisions.
United States
US stocks advanced Monday as risk appetite continues to climb thanks to healthy corporate earnings and expectations the Federal Reserve will keep interest rates low for now. The Dow Jones industrials were up 0.3 percent, the S&P added 0.15 percent and the Nasdaq, 0.1 percent. Investors will be looking for the details of the Fed’s plan to reduce its $4.2 trillion portfolio of Treasuries and mortgage-backed securities, nearly a decade after the global financial crisis. Investors will also listen closely to Fed Chair Janet Yellen’s views on inflation as they look for clues on the timing of the next rate increase.
There was little reaction the National Association of Home Builders’ report which was affected by the recent hurricanes. The report said the NAHB/Wells Fargo Housing Market Index dropped to 64 in September from a downwardly revised 67 in August. According to NAHB, the recent hurricanes have intensified members concerns about the availability of labor and the cost of building materials.
Technology stocks such as Microsoft and Alphabet were under pressure late in the session after Amazon said it would move to charging businesses in one-second increments for use of its servers. Microsoft and Alphabet retreated. JP Morgan and Goldman Sachs were higher. Caterpillar and General Electric advanced. Mattel and Hasbro fell on concerns that retailer Toys “R” Us, a major customer, could be filing for bankruptcy before the holiday sales season. Chipotle Mexican Grill sank as customers on social media disliked one of the company’s new products.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$10.75 to US$1,312.10. Copper futures were up 0.7 percent to US$2.97. WTI spot crude was unchanged at US$49.89. Dated Brent spot crude was down 17 US cents to US$55.45. The US dollar was up against most of its major counterparts including the yen, pound, Swiss franc and the Canadian and Australian dollars. The currency declined against the euro. The Dollar Index was up 0.1 percent. The yields on both the US Treasury 30 year bond and 10 year note were up 3 basis points to 2.80 and 2.23 percent respectively.
European markets
European stocks advanced Monday as geopolitical concerns continued to ease. Early strength also came from a surge in Portuguese stocks. A rally in euro-area peripheral bonds was sparked after S&P Global Ratings raised Portugal’s credit rating to investment grade with a stable outlook. However, after the solid start, the markets began to back off their early highs around midday and remained range-bound throughout the afternoon. Traders are looking to the Federal Reserve’s two day monetary policy meeting, which will begins Tuesday. The FTSE was up 0.5 percent, the SMI gained 0.2 percent and both the CAC and DAX were 0.3 percent higher.
Utilities EDF and Fortum rallied on broker upgrades. BAE Systems jumped after signing a deal to supply 24 Typhoon fighter jets to Qatar. Ryanair retreated after the low-cost airline announced plans to cancel between 40 and 50 flights every day up until 20 September. Fingerprint plunged in Stockholm after the smartphone component maker warned of lower revenue in the third quarter, saying fingerprints are currently experiencing a cautious market.
Adecco finished higher, extending the gains of the previous week. Julius Baer, UBS and Credit Suisse were higher. Nestlé and Roche advanced but Novartis declined. Telecom Italia was up as speculation grew over how the Italian government plans to end its row with Vivendi, the biggest shareholder in the Italian firm. The French conglomerate ended lower on the day.
Final August harmonized index of consumer prices advanced 1.5 percent on the year after increasing 1.3 percent in July. The HICP still remains well below the European Central Bank’s target of below, but close to 2 percent.
Asia Pacific
Asian stocks rose broadly on Monday as geopolitical worries eased and investors looked ahead to the US Federal Reserve and Bank of Japan’s monetary policy meetings later this week. Markets in Japan were closed for respect for the aged public holiday.
The Shanghai Composite was up 0.3 percent after the release of stronger-than-expected bank loan data for August. The Hang Seng jumped 1.3 percent.
Both the S&P/ASX and All Ordinaries added 0.4 percent. Energy stocks including Oil Search and Santos climbed after data showed a falling US rig count. WorleyParsons jumped to post its biggest intraday gain in more than three weeks.
The Kospi added 1.3 percent after reports that Samsung Electronics and SK Hynix will make a profit of 47 trillion to 48 trillion won in the semiconductor sector this year. The Sensex added 0.5 percent as the weekend passed with no new provocation by North Korea and investors looked ahead to the FOMC and BoJ’s monetary policy board meetings later this week for clues on the direction of monetary policy.
Looking forward
The Reserve Bank of Australia publishes minutes of its monetary policy meeting of September 5. Second quarter residential property prices will be released. Germany releases September Zew survey. Canada reports July manufacturing sales. In the US, August housing starts and import/export prices along with second quarter current account will be released. The Federal Reserve monetary policy meeting begins.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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