On 16 April, 2015 – Concerns over Greece dragged European markets down

Stocks were mixed Thursday. Concerns regarding Greece heightened once again. Mixed US earnings and economic data left investors wondering about the path of Fed interest rates.
United States
Stocks fluctuated throughout much of the day Thursday as traders weighed upbeat earnings news against some disappointing economic data. The major averages spent much of the session bouncing back and forth across the unchanged line before closing slightly lower. The Dow Jones industrials were down 6.84 points while both the S&P and Nasdaq sagged 0.1%.
Netflix soared after announcing a surge in subscribers in the latest quarter. Citigroup was up after reporting stronger earnings as its legal costs declined. Citigroup reported a 16% jump in quarterly profit as legal and restructuring costs plunged. The bank’s adjusted net income rose to US$4.82 billion or US$1.52 per share in the first quarter ended March 31 from US$4.15 billion or US$1.30 per share a year earlier.
Goldman Sachs Group reported a 41% increase in first quarter profit, helped by a burst of trading activity in January when the Swiss National Bank removed its cap on the Swiss franc. Goldman said its net income applicable to common shareholders rose to US$2.75 billion or US$5.94 per share for the quarter ended March 31 from US$1.95 billion or US$4.02 per share in the same period of 2014. Revenue from trading fixed income, currencies and commodities rose 10% to US$3.13 billion. Shares of Etsy, an online marketplace for handmade goods and crafts, were up 88% at US$30.10 in their debut on Thursday. SanDisk declined after its forecast.
American Express reported a 6.3% increase in quarterly profit helped by higher spending by card holders and an increase in net interest income. Net income attributable to common shareholders rose to US$1.51 billion or US$1.48 per share for the first quarter ended March 31 from US$1.42 billion or US$1.33 per share a year earlier. Total revenue, net of interest expense, was down 2.7% to US$7.95 billion. Net interest income increased 8.2% to US$1.48 billion.
March housing starts advanced but by not as much as analysts expected. Weekly jobless claims were up, also disappointing analysts.
Gold at the afternoon London fixing was up US$11.45 to US$1,204.35. Copper futures were up 2.4% to US$2.78. WTI spot crude was up 16 US cents to US$56.55. Dated Brent spot crude was up 57 US cents to US$63.89. The US dollar was down again against all of its major counterparts including the euro, yen, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index dropped 1.1%. The yield on US Treasury 30 year bond was up 2 basis points to 2.57% while the yield on the 10 year note was unchanged at 1.89%.
Europe
Stocks here were down across the board. Continued concerns over the Greek situation weighed on investor sentiment. The Financial Times reported today that the Greek government asked the International Monetary Fund to delay its loan repayment, but was denied. Greece’s loan repayment of €195.1 billion is due on May 1. The FTSE was down 0.5%, the CAC declined 0.6%, the SMI retreated 0.3% and the DAX dropped 1.9%.
The situation in Greece continued to weigh on investor sentiment. Standard & Poor’s Ratings Services cut its credit ratings on Greece deeper into junk territory saying it expects the country’s debt and other financial commitments to be “unsustainable” without deep economic reform.
New passenger car registrations in the European Union increased for the nineteenth consecutive month in March and at the fastest pace in one year. New car registrations climbed 10.6% on the year to 1,604,107 units. In February, sales had risen 7.3%. The latest rate of growth was the highest since March last year.
Banks including Crédit Agricole, BNP Paribas, Société Générale, Commerzbank and Deutsche Bank were down on the day. Automakers Volkswagen, BMW and Daimler also retreated. However, Renault increased on reports that it will hold an emergency Board meeting on Thursday. The meeting was called as the French government moves to increase its stake in the company. Peugeot also gained. Unilever climbed after issuing first quarter sales figures. SAB Miller increased while peer Diageo decreased after both issued trading statements today. Standard Chartered, HSBC and Lloyds Banking Group retreated. Nestle advanced. The company is scheduled to report results on Friday. Positive reports from its competitors Danone and Unilever have translated into gains for Nestlé. Pearson dropped after the Los Angeles Times reported that the Los Angeles Unified School District was seeking a refund from Apple over a bungled US$1.3 billion effort to supply students with iPads with curriculum material from Pearson.
Asia Pacific
Stocks were mostly higher Thursday thanks to gains in oil prices and solid earnings from some major US companies underpinning sentiment. After a positive start, markets across the region gave up some early gains to end on a mixed note. While Chinese and Hong Kong shares continued their upward momentum, Japanese shares ended on a flat note. The Australian market snapped a three-day losing streak, led by gains in resource stocks, while Seoul shares extended gains for the fifth day on optimism about the corporate earnings outlook.
The Nikkei edged up 0.1% after trading in negative territory earlier in the day, weighed down by the yen’s rise against the dollar. Fast Retailing and Fanuc declined while SoftBank advanced. Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial rallied. Automakers Honda Motor, Mazda and Suzuki Motor also gained. Toyota Motor was up after the company unveiled plans to build new factories in Mexico and China. Sharp climbed on a Nikkei report that it plans to implement a host of streamlining measures.
The S&P/ASX and All Ordinaries gained 0.7% after three consecutive sessions of declines on higher commodity prices underpinning sentiment and positive US trading during the Wednesday global market day. Fortescue Metals jumped after the miner reduced its quarterly cash costs by nine% and lifted production by one%. BHP Billiton rallied while Rio Tinto ended little changed with a positive bias. The Australian economy added 37,700 jobs in March, more than double the 15,000 jobs gain forecast, pushing the unemployment rate down to 6.1%, its lowest level since December.
The Shanghai Composite jumped 2.7% as hopes for fresh stimulus outweighed cautious comments from China’s securities regulator about the risks of margin trading. The Hang Seng gained 0.4% buoyed by gains in mainland shares. The Kospi added 0.9% with large-cap shares pacing the gains on the back of ample liquidity and optimism over earnings. The Sensex retreated 0.5% as investors fretted that a rebound in oil prices will add to inflation and limit the room for further interest rate cuts.
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*
The UK posts its March labour market report. The Eurozone releases the final harmonized index of consumer prices. Both Canada and the US release their respective March consumer price indices. Canada also posts February retail sales. The US reports preliminary consumer sentiment and March leading indicators.
*Note — all releases are listed in local time.
Anne D PickerChief EconomistEconoday