On 02 February, 2016 – Stocks slid on tumbling oil prices

However, the US recovered losses to finish virtually flat. 
United States
US stocks tumbled along with crude oil prices and dour earnings from energy companies. BP profits dropped to $5.91 billion from $12.13 billion the year before. ExxonMobil reported a 58 percent plunge in fourth quarter profits to $2.78 billion. The Dow Jones industrials were down 1.8 percent, the S&P dropped 1.9 percent and Nasdaq tumbled 2.2 percent.
This is a busy week for economic data and particularly in the United States, where the week will end with monthly payroll figures on Friday. So far, the numbers have not impressed. On Monday, the Institute for Supply Management said its gauge of factory activity pointed to a contraction, while China’s official survey found that manufacturing had fallen to its lowest level in more than three years.
Bank stocks declined on worries that oil prices will cause more energy loans to go bad, and that the slowing economy might affect their bottom line. JPMorgan Chase, Bank of America and Citigroup retreated. Chevron declined. Alphabet, the recently formed parent company of Google, advanced after the company’s results handily beat forecasts late Monday. With Tuesday’s gains, Alphabet is now the largest publicly traded company by market value, overtaking Apple. Mattel rose after the company reported higher profit and revenue in the company’s closely watched fourth quarter. It was helped by sales of Barbie dolls. Goldman Sachs Group sank the most since 2012, driving a rout in banking stocks as yields on 10-year Treasury notes slid below 1.86 percent.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$2.00 to US$1,128.50. Copper futures were down 0.3 percent to US$2.05. WTI spot crude was down US$1.67 to US$29.95. Dated Brent spot crude was down US$1.55 to US$32.69. The US dollar was up against the pound, and the Canadian and Australian dollars. However, it declined against the yen and euro. The Swiss franc was virtually unchanged. The Dollar Index was down 0.3 percent. The yields on US Treasury 30 year bond and the 10 year note declined 10 basis points to 2.67 percent and 1.86 percent respectively.
Europe
European markets dropped sharply for a second day. Monday’s weak Chinese manufacturing report caused a pullback in crude oil prices which extended into today. Concerns about oversupply also weighed on crude prices as rumored talks between Russia and OPEC regarding production cuts have failed to materialize. The FTSE lost 2.3 percent, the CAC dropped 2.5 percent, the DAX retreated 1.8 percent and the SMI was 1.4 percent lower. Energy and material stocks were among the hardest hit while financial stocks also took a hit. Disappointing earnings reports from energy giant BP and Swiss bank UBS also contributed to the negative mood among investors.
Infineon Technologies dropped after the auto and industrial chip maker confirmed its FY16 outlook after reporting a 30 percent increase in first quarter operating profit. SAP declined after it agreed to pay nearly $3.9 million to settle a bribery probe. Banks including Deutsche Bank, Commerzbank, Société Générale, BNP Paribas and Crédit Agricole were down. RWE and E.ON finished lower. Total and Technip tumbled. In London, BP plummeted after it reported a $2.2 billion loss in the fourth quarter of last year, hit by heavy impairments and restructuring costs.
Royal Dutch Shell weakened after S&P reduced the company’s credit rating by one notch. BG Group and Tullow Oil also slid. BHP Billiton dropped after S&P lowered the company’s credit rating by one notch and cautioned it could cut again if the miner continues with its progressive dividend policy. Anglo American, Glencore, Rio Tinto and Fresnillo retreated. However, J Sainsbury climbed after it agreed to buy Argos owner Home Retail Group. UBS fell in Zurich after it reported a net outflow of 3.4 billion Swiss francs at its wealth management business for the fourth quarter.
The Eurozone jobless rate declined to 10.4 percent in December from 10.5 percent in November. This was the lowest since September 2011. A year ago, the unemployment rate was 11.4 percent. German unemployment declined more than expected in January. The jobless rate fell to a record 6.2 percent from 6.3 percent in December.
Asia Pacific
Most Asian shares declined Tuesday after U.S. crude oil prices retreated Monday and January surveys of global factory activity painted a clouded picture of the economic recovery. Oil prices extended losses in Asian deals, pressured by weak manufacturing reports, a U.S. forecast calling for warm weather through mid-February and doubts about the possibility of a coordinated cutback on production.
The Shanghai Composite gained 2.3 percent after the People’s Bank of China guided the yuan to its highest fix in almost a month and pumped more money into the financial system to avoid a possible cash crunch ahead of next week’s Lunar New Year holidays. The Hang Seng however, was 0.8 percent lower.
The Nikkei retreated 0.6 percent as shares pulled back from a four week high reached Monday as the yen firmed and oil prices declined on concerns over Chinese growth. Realty stocks Mitsui Fudosan and Sumitomo Realty were down after two days of strong gains. Exporters Panasonic, Nissan Motor, Toshiba and Sony declined. Steelmaker Nisshin Steel and energy explorer Inpex tumbled. Mitsubishi UFJ Financial Group was up despite providing below-Street guidance for full-year earnings. Sharp was up after the Bloomberg said the company plans to decide between competing bailout offers this week.
Both the S&P/ASX and All Ordinaries lost 1.0 percent after the Reserve Bank of Australia left its cash rate at 2.0 percent as widely expected, choosing to wait and see if the recent financial turbulence will affect the domestic economy. Downbeat consumer confidence data also weighed on investor sentiment. BHP Billiton declined on a rating service downgrade. Rio Tinto, which has seen its credit rating placed on a negative watch, also retreated.
The Kospi was down 0.9 percent. The Sensex closed 1.2 percent lower. As widely expected, the Reserve Bank of India (RBI) kept its key policy rates unchanged, seeking to wait for the government’s budget statement at the end of February. The RBI’s 5 percent inflation target by March 2017 will face some risks from monsoon uncertainty and execution of the 7th Pay Panel recommendations.
Global Stock Markets

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*
January composite PMIs will be released for Japan, France, Germany and the Eurozone. Services PMIs will be posted for China, the UK and US. The Eurozone also posts December retail sales. In the US, January ADP employment report and the ISM Non-manufacturing index will be reported.
*Note — all releases are listed in local time.