On 18 February, 2016 – Global stocks mixed on profit taking

Crude prices slipped lower at the end of the trading day. 
United States
Stocks retreated after a three day rally thanks to disappointing earnings results. The Dow Jones industrials were down 0.25 percent, the S&P declined 0.5 percent and the Nasdaq lost 1.0 percent.
At least six OPEC nations, including Saudi Arabia, have backed a plan to keep oil production at January’s levels. That would help address a giant supply glut and strengthen prices, which have fallen to their lowest level in about 13 years. Iran, which has not agreed to the deal and had said it wants to keep increasing its production, said it supported any measure to raise oil prices. The deal will not go into effect unless all 13 OPEC members agree to it. Oil prices eased in afternoon trading.
The declines were led by consumer stocks after Walmart reported disappointing results and cut its sales projections. Walmart said its profit slipped in the fourth quarter as sales were weaker than expected. The retailer now says its revenue in 2016 will be about the same as in 2015. The company had expected growth of 2 to 4 percent. In January the company said it would close 269 stores. Kroger and Whole Foods also were lower. Discovery Communications stumbled after it posted disappointing profit and revenue in the fourth quarter. Nvidia, a company that makes graphics chips and processors for phones and tablets, advanced after it reported a stronger quarter than expected.
Financial stocks retreated after posting big gains during the three-day rally. JPMorgan Chase and Bank of America were down. IBM climbed after the company said it would buy Truven Health Analytics for $2.6 billion, expanding the health care capabilities of its Watson cognitive computing system. Shares of the logistics company Ingram Micro rallied after it agreed to be bought by the Chinese shipping company Tianjin Tianhai. The deal values Ingram at about $6 billion or $38.90 per share.
Jobless claims declined to a three month low, a sign that hiring has remained solid despite big swings in the markets. It was the latest sign that the economy was still growing and consumers still strong even though the market has been turbulent.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up 10 US cents to US$1,210.10. Copper futures were down 0.2 percent to US$2.07. WTI spot crude was down 31 US cents to US$30.35. Dated Brent spot crude was down 67 US cents to US$33.83. The US dollar was up against the euro, Swiss franc and the Canadian and Australian dollars. However, it declined against the pound and yen. The Dollar Index was virtually unchanged. The yield on US Treasury 30 year bond was down 6 basis points to 2.62 percent while the yield on the 10 year note declined 7 basis points to 1.74 percent.
Europe
Stocks were mixed Thursday. Although most indices were modestly higher in early trading, a pullback late in the afternoon sent many of them into negative territory. The FTSE retreated 1.0 percent and the SMI lost 0.4 percent. However, the CAC and DAX added 0.1 percent and 0.9 percent respectively.
Mining and resource stocks were under pressure as investors took some profits following Wednesday’s gains. Bank stocks were weak and energy stocks slipped despite the continued rise in crude oil prices. Oil prices began to pare early gains after the US EIA reported that US crude inventories increased by 2.1 million barrels last week.
Deutsche Börse climbed after the stock exchange operator boosted its dividend despite reporting a drop in fourth-quarter profit. RWE and E.ON gained. Deutsche Bank and Commerzbank retreated. Accor advanced after reporting an 11 percent increase in 2015 profit. Air France-KLM surged after it posted its first annual operating profit since 2010 helped by lower fuel costs and growth in passenger traffic. Cap Gemini advanced after reporting a 20 percent increase in annual operating profit. Banks Crédit Agricole, BNP Paribas and Société Générale weakened. Tullow Oil dropped after the oil group said it had experienced problems with a storage vessel at its flagship Jubilee field in Ghana. Mining stocks were under pressure as investors took profits following yesterday’s gains. Barclays, Standard Chartered, Royal Bank of Scotland and HSBC declined. Nestle dropped after the company forecast softer pricing and growth in 2016 after reporting the smallest annual sales gain in six years.
While euro area economic recovery was progressing, downside risks increased since the start of the year, mainly due to global concerns according to the minutes of the European Central Bank governing council’s monetary policy session in January. The ECB minutes said that inflation in the Eurozone continued to be weaker-than-expected, mainly due to the renewed sharp fall in oil prices and persistently subdued underlying price pressures. The minutes also said that there was unanimity in the governing council in seeking a review of the policy stance in March after a thorough analysis of data and also after receiving the latest ECB Staff macroeconomic projections.
British Prime Minister David Cameron was holding “now or never” talks on Thursday to keep Britain in the European Union, with the bloc’s leaders suggesting there are only a few obstacles left to a new membership deal.
Asia Pacific
Most shares rose Thursday after US stocks posted their biggest three day gain since August 2015, buoyed by a jump in oil prices, upbeat US industrial production data and signs the Federal Reserve could slow the pace of US interest rate increases. With oil prices extending overnight gains and the yuan rising for the first time in three days, investors largely shrugged off weak Chinese, Japanese and Australian economic data.
The Shanghai Composite edged down 0.2 percent but the Hang Seng jumped 2.3 percent. While January consumer inflation edged up to 1.8 percent from 1.6 percent the month before fueled by rising food prices ahead of the Lunar New Year, the producer price deflation continued to decline.
The People’s Bank of China said it will conduct open market operations every working day according to a statement posted on its website Thursday. The PBoC said it is taking the step to improve the effectiveness of the operations. It added that it will issue notices on the days that it refrains from using the tool due to insufficient demand. This comes after the PBoC temporarily increased the frequency of the operations to every working day, compared with the twice-weekly practice before the Lunar New Year holidays.
The Nikkei jumped 2.3 percent as the strong rebound in oil prices, upbeat US industrial output data and bullish global stocks helped investors shrug off data showing bigger than expected declines in both exports and imports in January. Exporters closed mostly higher, with Mazda Motor, Honda Motor, Canon, Sony and Sharp Corp rallying. Oil stocks Inpex, JX Holdings and Japan Petroleum also gained. Yokogawa Electric tumbled after it agreed to acquire UK-based KBC Advanced Technologies in a deal valued at ¥30.8 billion.
Australian shares rallied as disappointing jobs figures showing a higher than expected jobless rate and a slump in full-time employment added heat to rate cut speculation. The S&P/ASX and All Ordinaries both added 2.2 percent. Gains were seen across the board, with Rio Tinto, BHP Billiton, Woodside Petroleum and Santos climbing. The big four banks all closed higher.
The Kospi added 1.3 percent as the rally in oil prices and the finance minister’s comments that the government will intervene if currency movements become too exaggerated helped rekindle investors’ risk appetite. The Sensex was 1.1 percent higher although trading remained a little volatile amid weakness in the rupee, which is nearing record lows on continued foreign fund outflows.
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*
Germany posts January producer price index. The UK releases January public sector finances and retail sales. In Canada, January consumer price index and December retail sales will be reported. In the US, January consumer price index will be released.
*Note — all releases are listed in local time.