On 04 October, 2017 – Global stocks were mixed despite positive economic data
Investors waited for key economic data to be released on Friday.
United States
US stocks barely edged upward Wednesday but managed to close at new record highs. The Dow Jones industrials and S&P each added 0.1 percent while the Nasdaq was virtually unchanged (up 2.92 points). Other markets were relatively quiet, with little movement across bonds and commodities. Traders were reluctant to make more significant moves prior to the release of the monthly jobs report Friday.
The ADP private payrolls for September were up an estimated 135,000, down from the revised 228,000 in August. Expectations were for a low number because of the damage done by hurricanes Harvey and Irma. September ISM nonmanufacturing index jumped to 59.8 from 55.3 in August as orders and employment continued to rise according to this report.
Mylan surged after federal regulators approved its generic version of Teva’s multiple sclerosis drug. Office Depot plunged after it said it wants to broaden its business beyond traditional office products and announced a $1 billion purchase of CompuCom Systems. The company also cut its operating profit for this year. Wells Fargo was down after the bank said it would refund some mortgage rate lock extension fees. Utilities stocks including American Electric Power and Public Service Enterprise Group posted strong gains.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$3.00 to US$1,274.25. Copper futures were down 0.2 percent to US$2.96. WTI spot crude was down 58 US cents to US$49.84. Dated Brent spot crude was down 27 US cents to US$55.73. The US dollar was down against all of its major counterparts including the yen, euro, pound and the Canadian and Australian dollars. It was virtually unchanged against the Swiss franc. The Dollar Index was down 0.2 percent. The yield on the US Treasury 30 year bond was up 1 basis point to 2.87 percent while the 10 year note was down 1 basis point to 2.32 percent.
European markets
Stocks were mixed Wednesday — concerns over further political upheaval in Spain had investors in a negative mood. Traders were also in a cautious mood ahead of speeches from both Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi. Investors were also looking forward to Friday’s US employment data for September. The FTSE was down 0.53 point, the CAC slipped 0.1 percent, the DAX added 0.5 percent and the SMI was up 0.23 point. However, the Spanish IBEX tumbled 2.9 percent and the MIB was 1.4 percent lower.
The European Central Bank asked banks to set aside more cash to fully cover loans that are classified as bad from the start of next year and also to submit strategies to reduce the huge pile of bad debt.
In Frankfurt, ThyssenKrupp tumbled after it said that workers will be equally represented following the planned merger of its European steel operations with Tata Steel’s. BMW, Daimler and Volkswagen climbed after releasing their respective US sales figures. Royal Dutch Shell declined after the company cancelled the $900 million sale of its stake in a Thai gas field to Kuwait Foreign Petroleum Exploration Company. Tullow Oil retreated after oil extended losses on signs of higher output. Tesco dropped after posting second-quarter sales below estimates.
Royal Mail was down after workers voted in favor of an industrial action. Spanish banks declined after King Felipe VI said Catalan authorities deliberately bent the law with “irresponsible conduct” and said the state needs to ensure Spain’s constitutional order and rule of law. Financial stocks were under pressure In Zurich. Swiss Life, Zurich Insurance and Swiss Re declined along with Julius Baer and UBS. Credit Suisse however edged higher. Nestlé advanced while Novartis and Roche slipped.
Eurozone retail sales declined for the second straight month in August. Retail sales volume was down a monthly 0.5 percent following a 0.3 percent drop in July. The euro area private sector ended the third quarter strongly as output growth accelerated to a four-month high, underpinned by new orders in September, final data from IHS Markit showed Wednesday. Eurozone composite output index rose to 56.7 in September from 55.7 a month ago. The UK services sector growth improved with a reading of 53.6, up from August’s 11-month low of 53.2.
Asia Pacific
Asian stocks were mixed Wednesday as the dollar rally stalled and oil prices extended losses on signs of higher output. Markets in South Korea and China were closed for the Harvest Festival and National Day, respectively. Taiwan was closed for the Med-Autumn Festival.
The Nikkei edged up 0.1 percent and the Topix added 0.10 point. Japan Display shares soared after reports that the company had developed methods to mass-produce lower-cost organic light-emitting diode (OLED) screens.
The S&P/ASX tumbled 0.9 percent and the All Ordinaries lost 0.8 percent thanks to sliding oil prices that pulled down energy stocks and a falling currency environment that spurred concerns about growth and inflation. Banks ANZ, NAB, and Westpac retreated while Commonwealth managed to increase. Rio Tinto and Fortescue Metals Group declined. In the energy sector, Woodside Petroleum, Santos, Oil Search, Origin Energy and Beach Energy all were lower. On the economic front, the latest survey from the Australian Industry Group revealed that the country’s services sector continued to expand in September, albeit at a slightly lower pace with a PMI of 52.1, down from 53.0 in August.
The Sensex added 0.6 percent after the Reserve Bank of India (RBI) left its key interest rates unchanged as widely expected, but slashed the statutory liquidity ratio (SLR) by 50 basis points to spur banks into lending more.
Looking Forward
Australia releases August merchandise trade balance and retail sales. India posts September services PMI. The European Central Bank publishes minutes from its last governing council meeting. In Canada, August merchandise trade balance will be released. In the US, August international trade and factory orders along with weekly jobless claims, Fed balance sheet and money supply will be posted.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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