On 15 October, 2015 – European stocks rose on speculation that the US will maintain interest rates for some time

Stocks rebounded globally from declines incurred earlier in the week on positive earnings reports.
United States
Stocks rallied Thursday as investors responded to some positive earnings surprises. The Dow Jones industrials were up 1.3%, the S&P added 1.5% and the Nasdaq climbed 1.8% higher.
Investors focused on third quarter earnings. Citigroup climbed after it reported that its earnings jumped in the third quarter as the bank continued to cut expenses and clean up its books in the wake of the financial crisis. KeyCorp also gained. However, hospital shares slumped after HCA said its earnings would fall short of projections. Netflix declined after it reported late Wednesday that it is adding fewer US viewers than it hoped.
The Fed is back in focus as the main driver in financial markets. Though its rate-setting panel chose not to raise interest rates in September, most traders thought a December increase was likely. Those expectations have taken a bit of a battering after a run of soft data.
Weekly jobless claims dropped to the lowest level in 42 years. That suggests employers remain confident enough in the economy to hold onto their workers. However, a Fed survey on Wednesday showed that manufacturing was struggling, in part because of the strength of the dollar. September consumer prices excluding food and fuel rose more than forecast in September, propelled by rising rents. Plunging energy costs weighed on the headline CPI and decreased by the most since January.
Fed Bank of New York President William C. Dudley said today that he favors raising interest rates later this year if his forecast is met. Debate among policy makers has gone increasingly public in recent days, with cautious comments by Fed governors Lael Brainard and Daniel Tarullo who argued for patience on liftoff.
Gold at the afternoon London fixing was up US$10.35 to US$1,184.25. Copper futures were up 0.6% to US$2.43. WTI spot crude was up 12 US cents to US$46.76. Dated Brent spot crude was down 44 US cents to US$48.71. The US dollar was up against the yen, euro and the Swiss franc. It was virtually unchanged against the pound. However, it declined against the Canadian and Australian dollars. The Dollar Index was up 0.7%. The yield on US Treasury 30 year bond was up 3 basis points to 2.87% while the yield on the 10 year note was up 4 basis points to 2.02%.
Europe
Stocks rebounded after declining Wednesday as investors had their first opportunity to react to the Federal Reserve’s Beige Book, which was released after the European markets closed. The report had investors speculating that the Federal Reserve will be forced to maintain interest rates for some time. The FTSE added 1.1%, the CAC gained 1.4%, the DAX advanced 1.5% and the SMI was 0.9% higher.
Volkswagen declined after the German automotive watchdog, the Federal Motor Transport Authority, ordered the company to recall 2.4 million diesel vehicles equipped with pollution-cheating software. Fresenius, Fresenius Medical Care and Merck advanced. In Paris, Sanofi also increased. BNP Paribas, Crédit Agricole and Société Générale rallied.
In London, Unilever climbed after reporting higher sales for the third quarter. The company also raised its sales outlook for the year. WH Smith surged after it announced full year results. Man Group jumped after the hedge fund operator issued a trading update. Burberry, which reported flat revenues for the first half, plunged. Syngenta reported nearly unchanged sales for the third quarter on a currency neutral basis. ARM Holdings gained on encouraging results from Taiwan Semiconductor Manufacturing and a brighter outlook for US chip maker Linear Technologies. Hargreaves Lansdown advanced on a broker upgrade.
Asia Pacific
Asian stocks gained Thursday. Investors took disappointing US retail sales and producer price data in their stride, believing that weakness in the US will prompt the Federal Reserve to postpone an interest rate increase a while longer.
The Shanghai Composite was up 2.3% and the Hang Seng added 2.0% as weak trade and inflation data released earlier this week boosted hopes that policymakers will unveil more fiscal and monetary stimulus to boost growth. A key meeting of Chinese Communist Party leaders to discuss the next five year plan will be held in Beijing from October 26 to 29.
The Nikkei added 1.2% as it advanced for the first time in three days as the dollar recouped some of its losses against the yen and investors increased their bets the Bank of Japan will step up the pace of easing at its October 30 meeting. Takeda Pharmaceutical advanced after it joined forces with University College London to identify and validate new gene targets for treating neurodegenerative disease. Asahi Kasei dropped after announcing its subsidiary hadn’t properly installed foundation piles at an apartment complex in Yokohama.
The S&P/ASX was up 0.6% and the All Ordinaries added 0.7%. BHP Billiton advanced. The company has issued hybrid securities worth about US$6.5 billion in dollars, euros and pounds to refinance its debt. Rio Tinto advanced before unveiling quarterly production figures, while Fortescue Metals Group jumped after the release of its September quarter production report. Whitehaven Coal dropped after the company said metallurgical coal prices will stay depressed this year. Australia’s jobless rate remained steady at 6.2% last month, although the number of jobs fell by 5,100 from the previous month.
The Kospi was up 1.2%. The Bank of Korea kept its benchmark interest rate unchanged at 1.5%. The Sensex added 0.9% after weak US retail sales and producer price data helped reinforce the view that the US Federal Reserve will delay a rate increase into next year.
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*
Italy posts August merchandise trade and the Eurozone reports August merchandise trade and final September harmonized index of consumer prices. The US releases September industrial production, August JOLTS and Treasury international capital along with October preliminary consumer sentiment.
*Note — all releases are listed in local time.