On 9 March, 2015 – US indices posts solid gains, shares mixed elsewhere

Shares were mixed globally on US interest rate fears. US stocks rebounded from Friday’s losses to post solid gains on Monday.
United States
US stocks bounced back Monday, helped by a couple of billion dollar deals, while Apple ended slightly higher after the long anticipated unveiling of its watch. The Dow Jones industrials were up 0.8%, the S&P added 0.4% and the Nasdaq gained 0.3%. Industrial and technology companies led advances. A bull market for stocks reached its sixth anniversary. On this day in 2009, the S&P bottomed out at 676.53 after slumping nearly 60% in 18 months in the wake of financial crisis, housing market collapse and the Great Recession. Since then, the index has tripled thanks to a recovering economy and record company earnings.
GM will buy back US$5 billion in company stock and avert proxy fight. The move addresses how GM will spend some of its US$25 billion in cash reserves, some of which is money left from the 2009 government bailout. Macerich, a real estate investment trust that specializes in retail properties, climbed after Simon Property made a hostile bid of US$16 billion in cash and stock for the company. Alcoa will buy titanium maker RTI in deal worth US$1.5 billion, expanding reach in aerospace. The deal for RTI International Metals will give Alcoa more exposure to defense and aerospace markets. McDonald’s was up as investors shrugged off the disclosure that same store sales fell by a greater than expected 4% in February. Tesla Motors was down after the company announced it will cut jobs in China amid disappointing performance in the country.
The European Central Bank started its €60 billion per month bond buying program Monday. The Bank hopes the purchases will stimulate the Eurozone economy and get inflation back to the bank’s target of just below 2%.
Gold at the afternoon London fixing dropped US$7.25 to US$1,168.50. Copper futures were up 2.2% to US$2.67. WTI spot crude was up 41 US cents to US$50.02. Dated Brent spot crude was down US$1.16 to US$58.57. The US dollar was up against the yen and the Australian dollar. It was virtually unchanged against the euro and Swiss franc. However, it declined against the pound and Canadian dollar. The Dollar Index was down 0.2%. The yields on US Treasury 30 year bond and 10 year note were down 4 basis points to 2.80% and 2.20% respectively.
Europe
Most share indices declined Monday. Investors were cautious before a meeting of Eurozone finance ministers in Brussels. The new list of reforms submitted by Greece is set to dominate the agenda. However, they are unlikely to reach a decision on approving the Greek proposals, which is crucial for the country to access further creditor support. The FTSE and CAC retreated 0.5% and the SMI lost 0.4%. The DAX however, advanced 0.3%.
Investor caution ahead of a meeting of Eurozone finance ministers in Brussels today was largely responsible for the pull back. The new list of reforms submitted by Greece is set to dominate the agenda. However, they are unlikely to reach a decision on approving the Greek proposals. There was little economic data released today and no economic data from the United States.
Bayer, ThyssenKrupp and K+S gained. Deutsche Börse and SAP declined. Unibail-Rodamco was down on a broker downgrade. Air France-KLM was up after reporting traffic data for February. Shares of Orange, Bouygues, EDF and Schneider Electric retreated. WPP advanced after reporting increased annual profit. Glencore gained on a broker upgrade. Richemont and Swatch were down ahead of Apple’s announcement later in the global market day. Novartis was up while Roche and Nestle were down. Julius Baer, Credit Suisse and UBS retreated. CRH, the leading producer of asphalt for highway construction in the United States, declined. Land Securities and British Land were down.
Asia Pacific
Stock indices were mostly lower thanks to weak commodity prices and fears that an interest rate increase in the United States is imminent. Focus was on Friday’s US employment report that showed non-farm payroll employment jumped by 295,000 jobs in February against expectations for an increase of about 230,000 jobs. The unemployment rate slid to a six year low of 5.5%, indicating continued progress in the labor market. The upbeat jobs report caught some investors off-guard and stoked speculation that a rate hike could be in the offing as soon as June.
Chinese shares reversed early declines to end sharply higher as gains in banks outweighed losses among brokerage stocks. Agricultural Bank of China, Bank of China and Industrial Bank jumped after the China Securities Regulatory Commission said it is considering issuing brokerage licenses to banks. The Shanghai Composite was up 1.9% while the Hang Seng slipped 0.2%. China’s February trade surplus hit a record high as exports grew and imports plunged.
The Nikkei lost 1.0% after fourth quarter gross domestic product was revised lower and US interest rate increase fears weighed on investor sentiment. Nippon Express, Sumitomo Metal Mining, Mitsumi Electric, Daiichi Sankyo, Nippon Electric Glass, Sumitomo Realty & Development and Kansai Electric Power retreated. Exporters including Canon, Honda Motor, Sharp, Fanuc, Hitachi, Panasonic, Mazda Motor and Sony were lower. However, Japan Display was up on news that it will build a new US$1.4 billion liquid crystal display (LCD) manufacturing plant to supply smartphone screens for Apple. Fourth quarter GDP expanded at an annualized pace of 1.5%, down from the original estimate of 2.2%.
Both the S&P/ASX and All Ordinaries lost 1.3%. Miners dropped after the price of iron ore slid on Friday. Iron ore prices fell almost 2% to a fresh low not seen since 2009 Friday on the back of fears of weaker than expected economic growth in China. The Kospi was down 1.0% on expectations of a US interest rate increase sapped investors’ appetite for risk. The Sensex tumbled 2.1% on US interest rate expectations.
Global Stock Market Recap

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.
Looking forward*
China releases February consumer and producer price indices. France and Italy post January industrial output. In the US, February NFIB small business optimism index and January JOLTS and wholesale trade will be posted.
*Note — all releases are listed in local time.
Anne D Picker
Chief Economist
Econoday