On 13 November, 2015 – European markets slid on weaker than expected eurozone GDP data

Stocks retreated Friday on fears that global growth will not meet analysts’ expectations. Disappointing GDP data from the Eurozone along with US retail sales data only added to the gloom.
United States
The stock market slumped to its second biggest weekly loss of the year, breaking six consecutive weeks of gains. Fears were that the holiday shopping season will not meet expectations. This sent retail stocks tumbling. The Dow Jones industrials were down 1.2% on the day and 3.7% on the week. The S&P retreated 1.1% and 3.6% from a week ago. The Nasdaq sank 1.5% and 4.3%.
Retailers ranging from department stores to dollar stores plunged after Nordstrom posted disappointing third quarter results just as Macy’s had done earlier this week. At the same time, commodities prices continued to decline thanks to weak demand and soaring global supplies.
Nordstrom dropped after reporting weaker sales. The company also cut its forecast for the year. Macy’s did the same on Wednesday. The holiday shopping will kick into high gear with Black Friday in two weeks and investors are becoming worried that the latest reports are signs that sales will be weak during the season, which is a crucial moneymaker for retail companies. Macy’s and Nordstrom each hit two year lows Friday. JC Penney’s results were about equal to expectations, but it declined anyhow. GameStop declined. Watchmaker Fossil Group plunged after it posted disappointing earnings Thursday afternoon and also said it will buy activity tracker maker Misfit for US$260 million. Its shares hit their lowest level in five years. Cisco dropped after it gave a flimsy forecast, citing a slowdown in orders and weak spending outside the United States. Apple and Facebook also retreated.
Compounding the worries was a government report showing that US retail spending edged up just 0.1% in October, a bit less than analysts expected. However, the components were better than the headline number. Prices charged by farmers, manufacturers and other producers fell in October. The figures show there is little sign of inflation in the US economy.
The price of oil continued to fall after the International Energy Agency (IEA) said commercial inventories reached almost three billion barrels at the end of September, a record. The agency also said growth in global demand will slow down next year. Oil prices have dropped because demand cannot keep up with ever increasing supplies. The strong dollar makes dollar denominated commodities costlier to buyers using yen, euro and other currencies.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$5.90 to US$1,081.50. Copper futures were down 0.2% to US$2.17. WTI spot crude was down US$1.01 to US$40.74. Dated Brent spot crude was down 72 US cents to US$44.47. The US dollar was up against the euro, Swiss franc and the Canadian dollar. It was virtually unchanged against the yen, pound and Australian dollar. The Dollar Index was up 0.4%. The yield on US Treasury 30 year bond was down 4 basis points to 3.05% while the yield on the 10 year note declined 5 basis points to 2.27%.
Europe
Stocks retreated Friday, capping their poorest weekly performance in two months. Weaker than expected Eurozone GDP data intensified investor expectations for further stimulus measures at the next meeting of the European Central Bank. The strength of the US dollar continued to contribute to the weakness in commodity prices. Mining stocks extended their recent declines, due to falling precious metal prices. The disappointing US retail sales data also sparked weakness in European retailers. The FTSE and CAC lost 1.0% while the DAX declined 0.7% and the SMI was off 0.8%. On the week, The FTSE lost 3.7%, the SMI retreated 2.5% and both the CAC and DAX declined 3.5%.
Volkswagen advanced — the carmaker set a 30 November deadline for staff to tell what they know about its emissions cheating scandal. Heidelberger Druckmaschinen plunged after the printing machines maker reported a loss of €14 million for the first half. Deutsche Bank and Commerzbank retreated as did E.ON and RWE. Bouygues declined after the conglomerate confirmed its full year target after posting 6.9% growth in third quarter earnings. LVMH, Kering and Carrefour finished lower. Rolls-Royce Holdings declined on a brokerage downgrade. Miner BHP Billiton advanced after providing an update on the incident at the Samarco Mineração iron ore operation in Minas Gerais, Brazil on November 5. Syngenta jumped in Zurich, after reportedly rejecting ChemChina’s takeover offer.
Eurozone economic growth eased marginally in the third quarter, intensifying expectations for additional monetary stimulus from the European Central Bank at its December 3 meeting. Third quarter preliminary gross domestic product grew 0.3% from the previous three months, which was weaker than the 0.4% expansion seen in the second quarter. Both Germany and France also grew 0.3% on the quarter.
Asia Pacific
Increasing odds of a December US interest rate increase pushed Asian shares lower. Individual stock indices in Australia, South Korea, India, Taiwan and Hong Kong all lost more than 2% on the week. The exception was the Nikkei — the only index in the region to record a gain.
However, on Friday, the Nikkei lost 0.5% but still managed to hold onto a 1.7% gain on the week. The Japanese yen, which reached its weakest level since late August in recent days, is a boon for the country’s exporters. Utilities paced the declines, with Kansai Electric Power and Chubu Electric Power both retreating. Toshiba slumped on news its US unit Westinghouse had booked write downs totaling US$1.3 billion in fiscal 2012 and 2013. Fast Retailing and Softbank also declined. Mitsubishi UFJ Financial Group advanced on a Nikkei report it plans to buy back around ¥100 billion of own shares.
On Friday, the Shanghai Composite retreated 1.4%, losing just 0.3% on the week. The Hang Seng dropped 2.2% on the day and was 2.1% lower on the week. Sliding oil prices and jitters about the prospect of higher borrowing costs weighed on investors. Chinese banks’ profit growth dropped to 2% in the first nine months from 13% a year earlier because of higher bad debt charges according to data released by the industry regulator.
Australian shares tumbled as mining and energy stocks bore the brunt of a sell-off in commodity prices. The S&P/ASX declined 1.5% while the All Ordinaries lost 1.4%. On the week, the former was down 3.2% and the latter, 3.0%. BHP Billiton dropped, weighed down by the rout in commodity prices and the Brazilian mine disaster. Rival Rio Tinto and Fortescue Metals Group also retreated. Gold miners Newcrest Mining and Evolution Mining dropped as gold prices hit five year lows.
The Kospi retreated 1.0% and 3.3% on the week after various Fed officials on Thursday backed a December rate increase. The Sensex also lost 1.0% Friday and was 2.5% lower on the week.
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*
Monday — The Eurozone reports final October harmonized index of consumer prices. The US posts November Empire State manufacturing survey.
Tuesday — The UK posts October consumer and producer prices. Germany releases November ZEW survey. In the US, October consumer prices and industrial production will be released along with third quarter E-Commerce retail sales.
Wednesday — US October housing starts will be posted. The Federal Reserve publishes minutes from its October FOMC meeting.
Thursday — October merchandise trade is released by Japan. The UK releases October retail sales and November CVI industrial trends survey. The European Central Bank publishes minutes from its October governing council meeting. The November Philadelphia Fed survey along with weekly jobless claims, money supply and Fed balance sheet will be reported.
Friday — Germany posts October producer prices. Canada releases October consumer prices and September retail sales.
*Note — all releases are listed in local time.