On 20 May, 2015 – European markets advanced despite ongoing concerns regarding Greece

Shares were mixed globally during the Wednesday global market day. US stocks showed little reaction to the latest set of FOMC minutes.
United States
Stocks ended flat on Wednesday as minutes from April’s Federal Reserve meeting did little to change expectations of when the Bank may raise interest rates. Both the Dow Jones industrials and S&P inched down 0.1% while the Nasdaq was virtually unchanged.
Yahoo! climbed after affirming plans to spin off a stake in Alibaba Group Holding. Cablevision Systems jumped on speculation that an agreement by Europe’s Altice to acquire control of Suddenlink Communications may spur more deals in the cable industry. Time Warner Cable climbed to a record. The company, whose merger with Comcast was called off last month, has received a takeover approach from French billionaire Patrick Drahi’s Altice. Southwest Airlines declined to a six month low to lead a decline among air carriers. JetBlue Airways, United Continental Holdings and American Airlines Group also were lower. Lowe’s retreated after reporting first quarter profit that trailed estimates.
The Federal Reserve published minutes from its most recent FOMC meeting held in late April when monetary policy was left unchanged. At that time, many FOMC members believed it would be premature to raise interest rates in June and that a bump in inflation was being offset by a weaker labor market and softer data. Participants described the slow start to the year as mostly caused by temporary factors such as a cold winter and disruptions at West Coast ports. However, they generally predicted a rebound.
There was also a discussion about whether the Fed should press to increase inflation above its current target of 2%. But there was little sign that such doubts were gaining traction in the internal debate about the timing of a Fed funds rate increase, which has been barely above zero since December 2008. The minutes also said that Fed officials were confident in their ability to raise interest rates without disrupting financial markets.
Gold at the afternoon London fixing was down US$3.80 to US$1,210.50. Copper futures were down 0.3% to US$2.83. WTI spot crude was up 83 US cents to US$58.82. Dated Brent spot crude was up 84 US cents to US$64.86. The US dollar was up against the euro, yen and Australian dollars. However, it declined against the pound, Swiss franc and Canadian dollar. The Dollar Index was up 0.3%. The yield on US Treasury 30 year bond was down 2 basis points to 3.06% while the yield on the 10 year note was down 3 basis points to 2.26%. 
Europe
Most European stock markets gained Wednesday for a second day. Yesterday’s rally was sparked by comments from comments from Benoît Cœuré, who said the ECB would moderately frontload its bond purchase activity in May and June. Today’s gains were limited by continued concerns over the situation in Greece. The FTSE was up 0.2% and the CAC and SMI both increased 0.3%. The DAX was virtually unchanged (down 4.86 points).
The European Central Bank’s Governing Council is meeting today to discuss whether to raise the collateral requirements for the emergency loans it gives to the Bank of Greece. The council is meeting in Frankfurt to decide whether to tighten the rules for the Emergency Liquidity Assistance, or ELA, for Greece. However, analysts expect ECB policymakers not to take any decision that could trigger a crisis. However, pressure is mounting on the ECB to get tough with Greece as the country veers towards a default amid the ongoing political crisis.
Bank of England policymakers unanimously voted to keep the monetary policy stance unchanged at the meeting held early this month and suggested that next action would be an increase in its Bank Rate, but such a move is unlikely until 2016. The Monetary Policy Committee unanimously voted to hold the key interest rate at a record low of 0.5% and its asset purchase program ceiling at £375 billion. For two members, the immediate policy decision remained finely balanced between voting to hold or increase the Bank Rate.
Bayer declined after Bayer HealthCare and its development partner Janssen Pharma announced results from the VENTURE-AF Trial. Deutsche Wohnen declined after reporting key figures for the first quarter. Both E.ON and RWE advanced. Vivendi advanced. The company is reportedly set to acquire over an 8% stake in Telecom Italia, which would make it the largest shareholder in the company. Crédit Agricole and Société Générale gained on the day. Burberry dropped after it cut its profit guidance. Marks & Spencer declined after the company reported a full year profit before tax of £600 million, up 3.4% from £580.4 million in the previous year. Vodafone climbed after Liberty Global Chairman John Malone said a tie-up with the telecom giant would be a great fit for his company. Altice surged in Amsterdam after the company announced entry into the US market with the acquisition of Suddenlink.
Barclays and Royal Bank of Scotland were among several major banks to plead guilty on Wednesday to trying to manipulate foreign exchange rates. Six banks were fined a total of nearly US$6 billion in a settlement that substantially ends a global probe into misconduct in the US$5-trillion-a-day market. UBS gained in Zurich after announcing a settlement with US regulators. Barclays and RBS shares were up as traders expressed relief that the fine was now out of the way.
Asia Pacific
Asian stocks were mixed Wednesday even though stocks in Tokyo rallied sharply to hit a fresh 15-year high thanks to the better than expected GDP data. Falling oil prices buoyed investor sentiment in India and Chinese shares extended recent gains after the release of ‘Made in China 2025’ campaign, while Australian shares slid to a 3-1/2-month low, dragged down by resource stocks.
The Nikkei hit a fresh 15-year high, with sentiment bolstered by a weaker yen and upbeat gross domestic product data showing robust growth in the first quarter of 2015. Japan’s real GDP grew at an annualized pace of 2.4% in the first quarter of 2015, expanding for a second straight quarter and exceeding forecasts for an increase of 1.6%. That was its fastest pace in a year. On a quarterly basis, GDP grew 0.6%, more than a 0.4% gain expected by analysts. However, it should be noted that inventory accumulation was the primary contributor to growth.
Exporters closed on a mixed note with Canon and Panasonic gaining while Sony dropped and Sharp retreated. Sumitomo Realty & Development, Bridgestone, Daiichi Sankyo, Hitachi Construction Machinery and Kansai Electric Power all advanced. Kyushu Electric Power climbed after announcing a joint project with Mitsubishi Corp to build a geothermal power plant in Japan’s Kumamoto Prefecture by 2029. Nomura Holdings rose after announcing plans to buy back up to 25 million of its own shares. Takata tumbled after the beleaguered auto parts supplier said it would double a recall of potentially defective air bags to nearly 34 million vehicles in the US.
Both the S&P/ASX and All Ordinaries slipped 0.1% with resource stocks bearing the brunt of the selling on the back of broad-based weakness in commodity prices. BHP Billiton, Rio Tinto and Fortescue Metals Group slumped as iron ore prices slipped for a sixth day to hit a fresh two-week low. Fitch cut its iron ore price predictions to US$50 per ton and said prices could stay low for several years amid increasing supply, weak Chinese demand and the slower than expected closure of high cost mines. The big four banks also retreated.
The Shanghai Composite increased 0.7% after China unveiled an ambitious plan to enhance the competitiveness of its manufacturing sector and make it a competitive global player by 2025. The Hang Seng was down 0.4% despite a record close in the US on Tuesday and continued gains in mainland Chinese markets. The Kospi added 0.9%, its highest level since April 29, led by gains in brokerage and pharmaceutical stocks. The Sensex was up 0.7% supported by gains in technology and financial stocks.
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*
May flash PMIs will be released for China, Japan, Eurozone, France, Germany and the US. The UK posts April retail sales and May CBI industrial trends. The European Central Bank publishes minutes from its recent meeting. In the US, the May Philadelphia Fed and Kansas City Fed indices, April existing home sales and leading indicator index and weekly jobless claims, money supply and Fed balance sheet will be released.
*Note — all releases are listed in local time.