On 08 October, 2015 – European markets advanced despite weaker-than-expected German exports

Stocks were mixed in the Asia Pacific region and gained in Europe. US shares advanced after the release of the FOMC minutes from its September meeting.
United States
US stocks closed higher Thursday as investors saw further signs of dovishness in the Federal Reserve September meeting minutes which shed light on its decision to keep interest rates near zero. The Dow Jones industrials were up 0.8%, the S&P gained 0.9% while the Nasdaq was up 0.4%.
The energy sector posted the biggest gains on the day. That came after US crude oil prices soared, surpassing the US$50 a barrel mark for the first time since July. GoPro sank on a broker downgrade citing weak demand for GoPro’s most recent innovations. Shares of the cloud computing and data storage company EMC advanced after it was reported that Dell and a private equity firm were in advanced talks to buy it. Deutsche Bank declined after the bank said it would take US$6.5 billion in write-downs for its corporate and investment banking divisions.
The Federal Reserve published the minutes of its FOMC meeting held in September. The minutes helped explain why the Fed did not increase its fed funds rate as expected. According to the minutes, many FOMC members warned that negative developments overseas may have increased the risks to America’s growth and inflation outlook. The committee agreed to wait for further economic evidence before pulling the trigger on higher interest rates.
At the meeting, members largely stuck with their view that an increase in rates was likely to be merited before the end of the year, arguing that global factors including a possible China slowdown and stock market turbulence should have only a small or fleeting impact on the U.S. recovery. But they agreed that given the new uncertainties overseas, they should wait for extra evidence that the economy had not deteriorated rather than increase rates in September.
Alcoa reported third quarter profit of US$44 million. On a per-share basis, the company said it had net income of 2 US cents. Earnings, adjusted for non-recurring costs and restructuring costs, were 7 US cents per share. The results did not meet expectations. The company posted revenue of US$5.57 billion in the period, also missing forecasts.
Gold at the afternoon London fixing was down US$4.60 to US$1,140.00. Copper futures were down 0.5% to US$2.35. WTI spot crude was up US$1.88 to US$49.69. Dated Brent spot crude was up US$1.93 to US$53.26. The US dollar was down against the euro, pound, Swiss franc and the Canadian and Australian dollars. It was virtually unchanged against the yen. The Dollar Index down 0.4%. The yield on US Treasury 30 year bond was up 6 basis points to 2.95% while the yield on the 10 year note added 3 basis points to 2.10%.
Europe
Stocks advanced Thursday. They were under pressure in early trading, following the release of another weaker than expected German economic report. Germany’s exports declined the most in over six years in August, raising concerns over global demand. The FTSE was up 0.6%, the SMI rebounded 0.4% and both the CAC and DAX added 0.2%.
The Bank of England maintained its key interest rate at 0.5% where it has been since March 2009. The BoE also maintained its asset purchase ceiling at £375 billion. The vote was eight to one. The majority of members judged that the current stance of monetary policy remained appropriate, while one member preferred a 25 basis point increase. The European Central Bank reaffirmed its bond buying program in the minutes from its last meeting.
Volkswagen declined after the company’s US CEO testified before the US Congress about the recent emission scandal. Deutsche Bank dropped after it announced that it will take billions in charges for the third quarter and now expects a third quarter loss of €6.2 billion. The company may cut or eliminate its common dividend for fiscal 2015. Deutsche Lufthansa gained on a broker upgrade. In Paris, Michelin and car parts maker Valeo advanced. Société Générale and BNP Paribas retreated. In London, Tullow Oil gained after the company announced that it has reached agreement with the Government of Gabon over its licenses in the Onal Complex Fields. Following negotiations, Tullow has regained its 7.5% stake in the Onal Complex producing fields and the Ezanga block, formerly the Omoueyi exploration block. Fiat Chrysler Automobiles climbed in Milan after reporting a tentative agreement with the workers union in the US.
Germany’s exports declined the most in more than six years in August, suggesting that a slowdown in emerging economies, especially China, is hurting global demand. Exports plunged a seasonally adjusted a monthly 5.2% in August, reversing a 2.2% increase in July. This was the biggest decline since January 2009, when it slid 6.9%. At the same time, imports dropped 3.1%, in contrast to a 2.3% rise seen a month ago.
Asia Pacific
Stocks indices were mixed Thursday. Investors took profits after the International Monetary Fund warned of fresh shocks to global financial stability and called for an urgent policy upgrade to ensure better growth prospects.
Chinese shares rallied as trading resumed after the Golden Week holidays. The Shanghai Composite climbed 3.0%, playing catch-up with a global rally, while the Hang Seng retreated 0.7% on profit taking after climbing 8% during the October 1 to October 7 National Day holiday break in mainland.
The Nikkei lost 1.0% as the yen strengthened and weak core machinery orders raised concerns about the economy. The dollar eased against the yen as investors waited for minutes from the Fed’s September meeting and speeches from Fed officials John Williams, James Bullard and Narayana Kocherlakota for further clues on the outlook for Fed policy. Japan’s core machinery orders, a leading indicator of capital expenditures, unexpectedly dropped 5.7% in August, casting doubts on the strength of the economic recovery. Another report showed that Japan’s current account logged a surplus of ¥1,653 billion in August, marking the 14th straight surplus, boosted by the primary income account as well as the turnaround in the service balance.
Both the S&P/ASX and All Ordinaries added 0.2%. Strong gains in China’s stock markets also boosted investor sentiment. Miners were mixed with BHP Billiton and Rio Tinto advancing after their shares rose sharply in London overnight. However, gold miner Newcrest Mining and Evolution Mining tumbled as gold futures fell from a two week high on a firmer dollar. The Kospi added 0.7% while the Sensex retreated 0.7%.
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*
French and Italian August industrial production will be reported. Canada posts September labour force survey. In the US, September import/export prices and August Wholesale trade will be released.
*Note — all releases are listed in local time.