On 26 September, 2017 – Global stock indices gyrated around the unchanged mark in the last week of the third quarter

Geopolitical concerns once again weighed on investors.
United States
US stocks edged up Tuesday as technology shares rebounded from Monday’s losses. Fed Chair Janet Yellen boosted expectations of a December fed funds interest rate increase. The Dow Jones industrials were down 0.1 percent, the Nasdaq added 0.2 percent and the S&P was virtually unchanged (up 0.18 point).
Federal Reserve chair Janet Yellen, in an address to the National Association for Business Economists, said that policymakers ought to be careful of “moving too gradually” on monetary policy despite “significant uncertainties” over inflation dynamics. She said that monetary policymakers may need to recalibrate their expectations to adjust for transitory and idiosyncratic factors that have weighed on the Fed’s goal of 2 percent inflation, despite low unemployment.
She acknowledged that “some key assumptions underlying the Fed’s outlook could be wrong in ways that imply that inflation will remain low for longer than currently projected.” While Ms Yellen acknowledged that a “gradual” path to monetary policy tightening was prudent, she cautioned against waiting too long to raise interest rates again — underscoring the Fed’s signal from its latest meeting that another rate rise may be in the cards before the end of 2017.
Consumer confidence declined in September to a reading of 119.8 from the downwardly revised August reading of 120.4. Weakness in the hurricane states of Texas and Florida negatively affected the reading. New home sales in August dropped to an annualized rate of 560,000 annualized rate after an upwardly revised rate of 580,000 in July. Sales in the South, which is by far the largest region for housing, fell a monthly 4.7 percent to a 307,000 rate and an annual decline of 9.2 percent.
Apple rose after four straight sessions of losses to help prop up the three major indexes, after a broker upgrade. Micron rallied in after hours after earnings beat expectations. Darden Restaurants retreated after the Olive Garden parent said it expected the negative effects on sales and earnings from Hurricane Irma to be about double that from Hurricane Harvey. Red Hat climbed after the Linux distributor’s quarterly profit came in above estimates and the company raised its full-year forecast.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$6.75 to US$1,300.05. Copper futures were down 0.58 percent to US$2.92. WTI spot crude was down 29 US cents to US$51.93. Dated Brent spot crude was down 58 US cents to US$58.44. The US dollar was up against all of its major counterparts including the yen, euro, pound, Swiss franc and the Australian dollar with the exception of the Canadian dollar. The Dollar Index was up 0.4 percent. The yield on the US Treasury 30 year bond was up 3 basis points to 2.78 percent and 10 year note was up 1 basis point to 2.23 percent.
European markets
European indices were mixed Tuesday moving in a sideways pattern throughout the trading session. Investor sentiment continued to be affected by the results of the German election over the weekend, as well as concerns over the escalating tensions between the US and North Korea. The FTSE was down 0.2 percent and the SMI lost 0.3 percent. The CAC was virtually unchanged (up 1.63 points) and the DAX added 0.1 percent.
RWE rose after launching a tender offer for hybrid bonds. Real estate firm Deutsche Wohnen jumped after launching a new convertible bond offering of €800 million due 2026. EasyJet and Carnival advanced. Insolvent airline Air Berlin said it expects to conclude talks with easyJet and Lufthansa about a possible sale by the middle of next month. Thomas Cook Group retreated after replacing its CFO.
ABB was down in Zurich after announcing a supply and technology partnership with Northvolt. Nestlé advanced after confirming its mid-single digit organic growth target by 2020. Swatch and Credit Suisse finished higher. Roche and Novartis were down. Royal Dutch Shell and Eni advanced thanks to rising crude prices. Siemens might decide to pursue a multibillion-dollar rail merger with Alstom and was flat while Alstom advanced. Carrefour was up on vague market talk of a possible takeover bid from Amazon. Rolls Royce and Burberry were down.
Asia Pacific
Most Asian stock indices were lower Tuesday. Investors were cautious amid the heightened geopolitical tensions surrounding the Korean Peninsula.
The Shanghai Composite edged up 0.1 percent after declining for three consecutive days. Gains in property developers and resource stocks led advances. The Hang Seng added 12.67 points.
The Nikkei was down 0.3 percent as a stronger yen weighed on exporters and tech stocks also moved lower, tracking losses among their US peers overnight. The Topix was down 0.08 point. Advantest, Tokyo Electron and Murata Manufacturing along with Apple suppliers Taiyo Yuden and Nitto Denko dropped after Apple fell overnight following a report that the company has told suppliers to scale back shipments of parts for its upcoming iPhone X. Nippon Telegraph and Telephone advanced after the company said that it will buy back up to 30 million of its own shares, or 1.5 percent of outstanding stocks. Japan Post Holdings was up after it set the price for its follow-up share sale at ¥1,322 per share, a 2 percent discount to Monday’s closing price of ¥1,349.
Prime Minister Shinzo Abe said Monday that he will dissolve the lower house of parliament on Thursday and call a snap election for next month. The minutes from the Bank of Japan’s July monetary policy committee meeting indicated that the monetary policy board would stick with their current policy framework despite the recent developments in consumer inflation continuing to be relatively weak.
Both the S&P/ASX and All Ordinaries retreated 0.2 percent even though energy stocks rallied after oil prices jumped to their highest for more than two years on Monday. Miners BHP Billiton and Fortescue Metals Group retreated along with banks ANZ and Commonwealth. Oil Search, Santos and Woodside Petroleum jumped after oil prices rose Monday after Turkey threatened to shut down Kurdish crude shipments through its territory.
The Kospi was down 0.3 percent with tech stocks coming under heavy selling pressure after reports that Apple suppliers were asked to scale back shipments of parts for its upcoming iPhone X. The Sensex declined for a sixth consecutive trading session Tuesday edging 0.1 percent lower.
Looking forward
The Eurozone reports August M3 money supply. The UK’s September CBI distributive trades report is released. In the US, August durable goods orders and pending home sales index will be released.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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