On 03 September, 2015 – European markets rallied on hopes for further stimulus measures

Stocks in Europe rallied while those in the US exhibited caution ahead of Friday’s employment report.
United States
The US market rally faded and the key indices were slightly changed as investors awaited Friday AM US ET employment report release and a long holiday weekend. They also took into account comments from the European Central Bank governing council members who said they are willing to provide more stimulus to the region’s economy if needed. The Dow Jones industrials and S&P both inched up 0.1% while the Nasdaq retreated 0.3%. The telecom sector was the best performing industry while the technology and healthcare sectors ended the day in the red.
Analysts think Friday’s employment report for August could play a big role in guiding the Fed’s decision on interest rates when the FOMC meets September 16 and 17. Expectations are that US employers created 223,000 jobs last month and that the unemployment rate fell to 5.2%. Weekly jobless claims rose more than forecast to an eight week high, representing a pause in a trend of more muted firings. The August ISM nonmanufacturing index showed growth as service industries hovered near their strongest readings in a decade.
Joy Global, a company that makes heavy machinery used in mining, dropped after the company posted results that were far lower than expected. The company also cut its full year forecasts. Like other equipment makers in the energy and materials industries, Joy has been hurt by low prices for metals and other commodities that have diminished demand for equipment to extract those resources.
Gold at the afternoon London fixing was down US$9.75 to US$1,128.00. Copper futures were up 1.9% to US$2.37. WTI spot crude was up 60 US cents to US$46.85. Dated Brent spot crude was up 29 US cents to US$50.79. The US dollar was up against the euro, pound, Swiss franc and the Australian dollar. However, it declined against the yen and the Canadian dollar. The Dollar Index was up 0.5%. The yields on both the US Treasury 30 year bond and the10 year note were down 2 basis points to 2.94% and 2.17% respectively.
Europe
Stocks advanced Thursday — concerns over China were put aside with a 2-day holiday shuttering the Chinese and Hang Seng stock markets. Dovish comments from ECB President Mario Draghi at his post ECB General Council monetary policy meeting and hints that the Bank may consider further stimulus measures provided a shot in the arm to the markets. The FTSE was up 1.8%, the CAC gained 2.2%, the DAX added 2.7% and the SMI was 1.7% higher on the day.
The European Central Bank left its interest rates unchanged at 0.05%. Recent data suggest that an economic recovery is continuing, albeit at a sluggish pace. However, lower oil prices, the stronger euro and the Chinese slowdown pose negative risks to the outlook. The ECB lowered its economic growth and inflation outlook for the euro area, citing more downside risks that have emerged recently and said that it was ready to extend its quantitative easing program beyond the September 2016 deadline if needed.
Fresenius Medical Care and Fresenius advanced. Daimler, BMW and Volkswagen finished higher as did Peugeot and Renault. Deutsche Bank and Commerzbank advanced. EDF declined after the utility said its new-generation EPR nuclear reactor under construction in northern France has been delayed again. The cost is now estimated to have more than tripled from the original estimate. In London, easyJet climbed after lifting its profit forecast for the year. Peer International Consolidated Airlines Group also advanced. ARM Holdings rose after reporting a collaboration with IBM on Internet of Things. Wm Morrison Supermarkets jumped on reports that Christo Wiese may be interested in buying the company. Rio Tinto gained — the company remains confident that global demand for steel will continue to grow despite the slowdown in China. Glencore, Anglo American, BHP Billiton and Fresnillo gained.
Asia Pacific
Most Asian stocks advanced following Wednesday’s rebound in US shares. Markets in China and Hong Kong were closed for a holiday on both Thursday and Friday. Now investors here are focusing on the US employment report which will be reported after markets here have closed for the week. The data are expected to have a strong influence on the Federal Reserve’s upcoming decision on interest rates.
Both the S&P/ASX and All Ordinaries lost 1.4%. Banks led the declines. Myer Holdings, the country’s largest listed department store chain, slumped to a record low after saying it would sell A$221 million in new shares to cut debt and invest in a turnaround. Disappointing economic data followed on the heels of weaker than anticipated growth in the second quarter. July retail sales surprised, slipping 0.1%. Expectations were for an increase of 0.4%.
The Nikkei advanced 0.5% thanks to a weaker yen. MS&AD Insurance Group Holdings gained on a broker buy recommendation. NTT DoCoMo climbed on a broker upgrade. Toyota Motor and Nissan Motor advanced. Toshiba gained after the Yomiuri newspaper said the company will likely report long delayed earnings as early as this week. The company has twice postponed releasing its earnings for the 2014-15 financial year amid a probe into improper accounting. The Kospi was virtually unchanged while the Sensex rebounded 1.2%.
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*
Germany posts July manufacturers’ orders. The Eurozone reports revised second quarter GDP. Canada releases its August labour force survey. The US reports August employment situation. Finance ministers and central bank governors of G20 nations will gather in Ankara, Turkey to discuss global economic affairs. US treasury secretary Jacob Lew and German finance minister Wolfgang Schaeuble are among those expected to attend the meeting.
*Note — all releases are listed in local time.