On 22 October, 2015 – European stocks surged on hints of further stimulus by the European Central Bank

Stocks in the US and Europe rallied after ECB President Mario Draghi’s dovish press conference. His comments were interpreted as pointing to further ease at the December governing council meeting.
United States
Stocks closed sharply higher after some encouraging results from McDonald’s, eBay and other companies. Shares also followed European stocks after the European Central Bank said stimulus could be expanded in December. The euro sank against the dollar. The Dow Jones industrials were up 1.9%, the S&P added 1.7% and the Nasdaq gained 1.65%.
eBay jumped after reporting results that were well ahead of expectations. McDonald’s gained after reporting sales gains in the third quarter. American Express sank after its results fell short of forecasts. Shares of Texas Instruments vaulted after the chip maker reported better-than-expected third-quarter profit and revenue and gave an upbeat outlook for the current quarter. However, several health care stocks were trading lower including Tenet Healthcare and HCA Holdings Universal Health Services. Shares of the PulteGroup, the home builder, sank after the company reported third quarter earnings and revenue that fell short of forecasts. Dow Chemical advanced after releasing its results. United Rentals rose after its results beat expectations and it reaffirmed its revenue forecast. Southwest Airlines and Stanley Black & Decker also advanced after their earnings also exceeded estimates. Southwest and Delta Airlines also advanced. Caterpillar was up even though the company cut its profit guidance for the year. 3M shares gained even though the company cut its earnings forecasts for the year and announced 1,500 job cuts.
Alphabet aka Google reported a 13% rise in quarterly revenue, boosted by strong advertising sales driven by YouTube and mobile search. Consolidated revenue rose to US$18.68 billion in the third-quarter ended September 30, from US$16.52 billion a year earlier. Net income rose to US$3.98 billion or US$5.73 per Class A and B share from US$2.74 billion or US$3.98 per share in the same quarter last year. Amazon.com reported a rare profit for its third quarter, thanks in part to its fast-growing cloud-computing division, while sales surged more than expected. The company posted a profit of US$79 million, or 17 US cents per share. A year earlier, Amazon posted its biggest loss in 14 years as it spent heavily to build out its warehouse network and license music and video content and other projects.
Existing home sales jumped 4.7% in September to an annualized rate of 5.55 million. Jobless claims rose by 3,000 to 259,000 last week and below the 265,000 of the prior week.
Gold at the afternoon London fixing slipped 10 US cents to US$1,167.00. Copper futures were up 0.9% to US$2.38. WTI spot crude was up 25 US cents to US$45.45. Dated Brent spot crude was up 35 US cents to US$48.20. The US dollar was up against the euro, yen, pound, Swiss franc and the Australian dollar. However, it declined against the Canadian dollar. The Dollar Index jumped 1.7%. The yield on US Treasury 30 year bond was down 2 basis points to 2.86% while the yield on the 10 year note was down 1 basis point to 2.02%.
Europe
Stocks in Europe vaulted higher after comments made by European Central Bank President Mario Draghi who suggested that further stimulus measures could be coming in the near future. The FTSE added 0.4% while the CAC, DAX and SMI were 2.3%, 2.5% and 2.2% higher respectively.
The European Central Bank left its key interest rates unchanged at a record low for a 10th policy session in a row. The Governing Council, led by ECB President Draghi, held the refinancing rate at 0.05% following the meeting in Malta. The bank also kept the deposit rate unchanged at minus 0.20% and the marginal lending rate at 0.30%. Mr Draghi set the stage for a possible stimulus expansion in December as policymakers are increasingly concerned over the deteriorating growth and inflation outlook for the euro area. Mr Draghi said the current stance of the Governing Council was not “wait and see” but more “work and assess”.
Volkswagen gained on reports the company has halted the sales of its diesel vehicles equipped with “defeat devices” in Europe. Daimler climbed after it reported record unit sales and revenue in the third quarter. LEG Immobilien advanced after the termination of a business combination agreement with Deutsche Wohnen. In Paris, Publicis sank after cutting its full year revenue outlook. Orange climbed after posting better than expected revenue for the third quarter and lifting its 2015 earnings target. In London, Travis Perkins dropped after the company reported that its Group sales grew by 5.5% during the third quarter. Sales were up 2.6% on a like for like basis. General Merchanting sales grew by 3.3% in the third quarter, 1.7% on a like for like basis.
BP gained after it and China National Petroleum Corporation entered into a framework agreement on strategic cooperation covering potential shale gas exploration and production in the Sichuan Basin and future fuel retailing ventures in China and other international partnerships. Anglo American declined after it said that it was postponing major project investment decisions at its platinum unit until at least 2017 and had cut diamond production in the face of weak demand. Pearson also retreated after several broker downgrades. Its shares set a record one-day loss on Wednesday after saying that lower enrolments at some US colleges and a decline in school textbook purchases in some parts of South Africa would hit full-year results.
Asia Pacific
Stocks were mixed Thursday after Wednesday’s sudden sell-off in Chinese shares rekindled worries about the health of the Chinese economy. While Chinese shares rebounded, lower commodity prices kept investors nervous, before the ECB meeting that would be held later in the global market day.
The Shanghai Composite shrugged off a tepid start to close 1.4% higher. The Hang Seng retreated 0.6% as trading resumed after a public holiday. Sentiment in China was bolstered by liquidity injection into the financial system and reports of a potential merger between China Southern Airlines and Air China. The People’s Bank of China on Wednesday injected 105.5 billion yuan into the banking system using the medium-term lending facility.
The Nikkei retreated 0.6% on profit taking after sharp gains the previous day. Also, the safe haven yen strengthened in late trading amid rising risk aversion weighing on exporter shares. Canon, Honda Motor, Sharp and Panasonic were down. Nidec reversed early gains to end lower. The manufacturer of electric motors and components said it plans to spend more than ¥100 billion over the next few years to meet stronger demand for touch technology used in Apple’s iPhones. Hitachi High-Technologies jumped after Intel said it plans to invest as much as US$5.5 billion in its plant in Dalian, China.
The S&P/ASX added 0.3% and the All Ordinaries were up 0.2%. Santos jumped after the oil & gas producer rejected a A$7.1 billion takeover bid from Scepter Partners saying the offer is opportunistic in nature and does not reflect the fair underlying asset value of the company. Lender Commonwealth Bank advanced after raising variable home loan rates. The other three banks also were higher. BHP Billiton, Rio Tinto and Newcrest tumbled retreated.
The Kospi was down 1.0% on earnings concerns. Indian markets were closed for the holiday Dussehra.
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*
October flash manufacturing PMIs will be released for Japan and the US. Flash composite PMIs will be reported for the Eurozone, Germany and France. Canada posts September consumer prices.
*Note — all releases are listed in local time.