On 24 June, 2015 – European markets retreated on weak German business confidence

Stocks in Europe and the US swooned as optimism about a resolution to the Greek crisis faded. However, talks between the creditors and Greece will continue during the Thursday global market day.
United States
Stocks closed lower Wednesday, dropping in a broad decline as the outcome of negotiations between Greece and its international creditors remained up in the air prompting investors to drop riskier assets. Stocks retreated after two days of gains amid declines in raw material and railroad shares. The Dow Jones industrials were down 1.0% while both the S&P and Nasdaq lost 0.7%.
Greek Prime Minister Alexis Tsipras recently announced tax and reforms proposals, which market participants took as a sign of progress. Creditors demanded sweeping changes to the proposals on Wednesday, adding fresh uncertainty to talks aimed at unlocking aid to avert a debt default next week. Germany downplayed the chances of an imminent deal with Greece as Prime Minister Alexis Tsipras’s government rejected the latest terms set by creditors to unlock bailout aid. The signs of fresh cracks between the sides dampened optimism from earlier in the week that had sent stocks higher globally.
The final revision of first quarter gross domestic product indicated that the U.S. economy contracted at an annualized rate of 0.2% from a previously reported 0.7% drop, thanks primarily to less slowing in consumer spending.
Monsanto was down after the company signaled low corn and soybean prices are likely to persist beyond 2015 as it prepares for potentially reduced revenue by cutting expenses. DuPont and Vulcan Materials declined. Kansas City Southern, CSX and Union Pacific were down as were JB Hunt Transport Services and Con-way. Banks retreated after reaching their highest level in more than seven years on Tuesday. Citigroup, KeyCorp, Bank of America and Goldman Sachs Group were lower. GM declined while Ford increased after an analyst switched preference between the two automakers, saying Ford has a “superior growth outlook.”
Netflix was little changed after rallying as much as 3.7% on a stock split announcement. Shares of the online subscription video service pared gains after Carl Icahn said he had exited his Netflix stake. Peabody Energy tumbled — Cable One will replace Peabody in the S&P MidCap 400 Index after the close of trading on June 30. Sysco advanced after its planned US$3.5 billion takeover of US Foods was blocked by a federal judge, bringing relief to investors concerned about the company undertaking an ambitious merger. Homebuilder Lennar advanced after the company reported results that beat expectations. Other home builders such as Pulte, D.R. Horton and Toll Brothers also rose.
Gold at the afternoon London fixing was down US$4.25 to US$1,173.75. Copper futures were up 0.3% to US$2.62. WTI spot crude was down 72 US cents to US$60.29. Dated Brent spot crude was down 85 US cents to US$63.60. The US dollar was up against the pound and the Canadian and Australian dollars. However, it declined against the yen, euro and the Swiss franc. The Dollar Index slipped 0.1%. The yield on US Treasury 30 year bond was down 5 basis points to 3.15% while the yield on the 10 year note lost 4 basis points to 2.37%.
Europe
Most European markets retreated Wednesday. The FTSE inched up 0.1% while the CAC edged down 0.2%. Both the DAX and SMI lost 0.6%.
The optimism for a Greek debt deal that propelled the markets higher earlier this week quickly fizzled and reverted back to worries of a potential Greek default and a Greek exit of the Eurozone. Greece and its creditors were holding crucial talks in Brussels. The troika — the European Union, European Central Bank and the International Monetary Fund reportedly presented Greece with a set of counterproposals. Greece is faced with a €1.5 billion payment to the IMF at the end of month. The country has indicated that it will not be able to make the payment without further aid.
RWE increased but E.ON was down. Automakers BMW, Volkswagen and Daimler also declined. Bouygues sank after the conglomerate rebuffed an offer for its telecom unit from rival group Altice saying it can revive profits alone while a sale would face antitrust hurdles and risk jobs at the French company. Altice retreated. Orange and Cap Gemini finished lower. Total and Technip climbed. Next advanced on a broker upgrade. Wm Morrison Supermarkets and J Sainsbury both gained. BHP Billiton was higher on a broker upgrade as was Royal Dutch Shell. Belgian food retailer Delhaize and Dutch supermarket chain Ahold have agreed to combine their businesses. Both companies declined on the news.
German business confidence weakened to a four-month low in June as the Greek crisis weighed on the current situation assessment and expectations of companies. The Ifo business confidence index declined to a four-month low of 107.4 in June from 108.5 in May.
Asia Pacific
Asian mostly advanced Wednesday. Investors hoped that an agreement would be reached between Greece and its international creditors this week that should help Greece service its debt before the June 30 deadline when it has to repay €1.6 billion to the International Monetary Fund.
The Shanghai Composite rallied 2.5% after gaining 2.0% Tuesday. Investors bought stocks that had been pummeled last week as a result of a flood of new share offerings that drained liquidity from the market. The Hang Seng added 0.3% extended gains for a fourth consecutive session on hopes Greece would avoid a looming debt default and possible euro exit.
The Nikkei advanced 0.3% and closed at its highest since December 1996. Sentiment was bolstered by a weak yen amid continued optimism about the Greek debt deal and expectations of an interest rate increase at the Federal Reserve’s September meeting. Kawasaki Kisen Kaisha, Itochu, Asahi Glass and Nippon Soda climbed. Also gaining on the day were Mitsubishi UFJ Financial, Fast Retailing, Softbank and Rakuten. Panasonic slipped on reports it was closing production of fluorescent lights in Indonesia. Konica Minolta slumped after the company announced today that it has signed a definitive agreement to acquire US measurement equipment maker Radiant Vision Systems for about ¥30 billion.
Both the S&P/ASX and All Ordinaries ended little changed after trading in positive territory for most of the day. Banks were mixed with NAB, Commonwealth and ANZ closing up while Westpac edged down. Both BHP Billiton and Rio Tinto retreated after predictions that iron ore prices will fall below US$50 a metric ton. The Kospi added 0.2% after the government said it is considering a package of measures to help cope with the effects of the outbreak of Middle East Respiratory Syndrome and an economic slump. The Sensex snapped an eight-day winning streak after Greek Prime Minister Alexis Tsipras said some creditors had rejected the country’s latest proposals to end a stand-off over debt and avoid a damaging default. The index lost 0.3%.
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 releases CBI distributive trends for June. The US posts May personal spending and income and June Kansas City Fed survey along with weekly jobless claims, money supply and fed balance sheet.
Anne D PickerChief EconomistEconoday