On 09 November, 2015 – European markets slid on worrisome developments in Greece

Most stock indices retreated Monday. Investors were worried about global growth given poor Chinese merchandise trade data released over the weekend and higher expectations of an interest rate increase by the Federal Reserve in December.
United States
Stocks tumbled as investors worried that the global economy could be slowing just as last week’s better than expected US jobs report appeared to open the way to the first rate increase from the Federal Reserve in nearly a decade. The Dow Jones industrials, S&P and Nasdaq all were down 1.0%. Investors had shrugged off the threat of higher rates on Friday, focusing instead on a robust jobs report that signaled the US economy may be ready to withstand tighter monetary policy. That sentiment reversed Monday in the absence of any additional data and after American equities ended last week near the highest level in three months.
Securities that bet on which way the Fed will move interest rates show roughly a 70% chance the central bank will raise rates. This follows Friday’s nonfarm payroll jump of 271,000 jobs in October, more than even the most bullish forecasts. The unemployment rate dropped to 5%, the lowest in seven years. The possibility of higher interest rates has been pushing bond yields higher.
Priceline slumped after the company’s outlook for the fourth quarter, a typically strong period for travel companies, came in short of analysts’ expectations. Caterpillar declined as did IBM and Nike. Mallinckrodt shares sank after Citron Research said the company had significantly “more downside” than Valeant Pharmaceuticals International. Last month, the firm issued a report questioning Valeant’s business practices. Valeant shares advanced. Norfolk Southern and Apache rallied on merger speculation while utility shares had the best performance among S&P 500 groups after plunging Friday.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up 70 US cents to US$1,189.60. Copper futures were down 0.6% to US$2.23. WTI spot crude was down 28 US cents to US$44.01. Dated Brent spot crude was down 16 US cents to US$47.26. The US dollar was down against the euro, pound, Swiss franc and the Canadian dollar. It was virtually unchanged against the yen and Australian dollar. The Dollar Index was virtually unchanged. The yield on US Treasury 30 year bond was up 3 basis points to 3.12% while the yield on the 10 year note added 2 basis points to 2.35%.
Europe
Stocks retreated Monday. Investor sentiment was wounded by disappointing Chinese merchandise trade data released over the weekend and the OECD’s decision to slash its outlook for next year. Traders are also keeping an eye on some worrisome developments in Greece and Portugal. The FTSE declined 0.9%, the CAC was down 1.5%, the DAX lost 1.6% and the SMI retreated 1.0%.
Eurozone finance ministers refused to release a €2 billion tranche of loans to Greece at its meeting in Brussels after they failed to reach an agreement on several reforms. However, a deal could potentially be reached later this week. Investors are also keeping an eye on the situation in Portugal, where a vote tomorrow could potentially remove the center right government from power, due to opposition from the Socialist party.
The slowdown in the emerging markets and weaker international trade has raised downside risks to the world growth outlook and a smooth re-balancing in China. The OECD said that more robust investment in advanced economies is required to boost activity as it lowered its forecasts for global growth. Global growth was forecast to be around 2.9% this year, slightly less than the 3% seen in September, and which would be the weakest since 2009 according to its latest bi-annual Economic Outlook. The OECD slashed the growth outlook for next year to 3.3% from 3.6%. The group projects global growth at 3.6% in 2017.
China’s exports fell for the fourth straight month in October providing little support to economic growth, while imports plunged on weak domestic demand. October exports decreased 6.9% on the year while imports plummeted18.8%.
Continental, which released financial figures, sank. Both RWE and E.ON weakened. Renault dropped on reports that the French government is opposed to a merger between Renault and Nissan. Peugeot also declined. Barclays gained. Bank of England Governor and Chair of the G20’s Financial Stability Board, Mark Carney said there is no new major overhaul of capital reforms getting underway in the banking sector. Intercontinental Hotels retreated after stating that it is not considering a potential sale or merger.
Asia Pacific
Shares were mostly lower with only those in Japan and China increasing thanks to a weaker yen and stimulus hopes respectively. The Shanghai Composite added 1.6% and the Nikkei 2.0%.
The decline in Chinese exports increased to 6.9% from a year ago after sinking 3.7% in September. At the same time, imports plunged 18.8% from last year, leaving a record trade surplus of US$61.6 billion. Yet the Shanghai Composite hit an 11-week high on expectations that policymakers will unveil more fiscal and monetary stimulus to stimulate domestic demand. Banks and brokerages paced gains after a securities regulator said it plans to resume initial public offerings by the end of the year. The Hang Seng lost 0.6%.
The Nikkei hit a 2 1/2 month high, adding to a three-day winning run as the yen continued to decline against the US dollar after Friday’s better than anticipated US employment after markets here were closed. Exporters took the lead, with Canon and Sony rallying. Toshiba however dropped after posting a second quarter operating loss. Fast Retailing and Mitsubishi UFJ Financial advanced as did Honda and Toyota. Toyota said it would invest US$1 billion over five years in a new US subsidiary for artificial intelligence research.
Australian shares tumbled to hit a one-month low as US rate increase fears and weak Chinese data fueled concerns over global growth. The S&P/ASX and All Ordinaries were down 1.8% and 1.7% respectively. BHP Billiton continued to fall following the tragedy in Brazil on Friday. Rival Rio Tinto and Fortescue Metals Group also declined. Gold miners Evolution Minding and Newcrest were down as gold prices hovered near three month lows after the release of robust US jobs report. Banks retreated. The Kospi lost 0.8% and the Sensex was 0.5% lower. The Sensex retreated after Prime Minister Narendra Modi’s party sustained a surprise defeat in a key state election. Analysts fear that the defeat will embolden opposing political parties and slow Mr. Modi’s planned economic overhaul.
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*
Australia reports September home loans. China releases October consumer and producer price indices. France and Italy post September industrial production. In the US, October NFIB and import/export prices will be released along with September wholesale trade.*Note — all releases are listed in local time.