On 04 April, 2016 – Stocks mostly lower to start week

Trading was light with several markets closed in Asia for holidays.
United States
US equities declined in quiet trading as investors worked through several company announcements. But the enthusiasm appeared to wane as investors awaited the release of the minutes from the Fed’s March meeting and took a wait-and-see approach ahead of the start of earnings season in just a week’s time. The Dow Jones industrials and S&P were down 0.3 percent while Nasdaq lost 0.5 percent.
Virgin America jumped after the company agreed to be bought by the Alaska Air Group. Shares of Alaska Air retreated as did shares of JetBlue, which had bid for Virgin as well. Tesla Motors advanced after the company announced it had received 276,000 pre-orders for its highly anticipated Model 3. Health care companies were among the biggest gainers. They were helped by news from Edwards Lifesciences, which said its new replacement heart valve product met the goals necessary in a clinical trial. Edwards Lifesciences stock rallied. Vertex Pharmaceuticals also gained.
In economic data, February factory orders dropped 1.7 percent after increasing a revised 1.2 percent in January.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$6.15 to US$1,219.75. Copper futures were down 1.0 percent to US$2.14. WTI spot crude was down US$1.06 to US$35.73. Dated Brent spot crude was down 94 US cents to US$37.73. The US dollar was up against the Swiss franc and the Canadian and Australian dollars. However, it declined against the yen and pound. It was unchanged against the euro. The Dollar Index was down 0.1 percent. The yields on the US Treasury 30 year bond and the 10 year note were unchanged at 2.60 percent and 1.77 percent respectively.
Europe
Stocks were mixed at the close of markets Monday. Shares advanced in morning trading but pared their gains in the afternoon and ended the day mostly modestly higher. The euro area unemployment rate fell to the lowest level since August 2011 and producer prices declined the most in more than six years in February. Eurozone investor confidence improved in April, but came in below expectations. There was little impact from the performance of the Asian markets at the start of the trading week. The FTSE and DAX added 0.3 percent while the CAC was up 0.5 percent and the SMI, 0.6 percent.
Weakness in the U.S. equity markets contributed to some of the late day sell-off in Europe. The US markets began to slide after comments from Boston Fed President Eric Rosengren. The Federal Reserve could raise interest rates faster than markets anticipate if the US economy continues to withstand turbulence overseas, according to Rosengren. Less than a week after Fed Chair Janet Yellen urged caution on raising interest rates, Rosengren joins a chorus regional Fed leaders hinting that normalization should occur sooner than later.
The European Central Bank will continue acting in a forceful manner against risks of low inflation in the euro area according to ECB Executive Board member Peter Praet. “The prolonged period of low inflation we are in today has increased the risks that inflation misses might become persistent, which would be deeply damaging for the economy.” He said “This is why we have reacted so forcefully to secure our objective — and will continue to do so in the future if necessary.”
Merck and Bayer advanced along with Fresenius and Fresenius Medical Care. In Paris, Bouygues Telecom and Orange tumbled after talks between them over a planned takeover of the former’s telecoms unit collapsed on Friday. Iliad and Numericable also were lower. Sanofi finished higher. Anglo American gained after the miner sold its 70 percent stake in an open cut coal mine in Queensland, Australia to a consortium led by Taurus Fund Management for an undisclosed sum. Mondi dropped after the Federal Antimonopoly Service of the Russian Federation said it had initiated an investigation into Mondi Syktyvkar for violations of antimonopoly law over offset paper.
Asia Pacific
Shares were mixed as investors had their first opportunity to respond to Friday’s US employment report. The data underscored the resilience of the US economy and movements in the dollar failed to change investor views on the outlook for US interest rates. Markets in mainland China, Hong Kong and Taiwan were closed for public holidays. However, gains remained capped as oil extended Friday’s losses on doubts over the ability of big oil producing countries to agree on an output freeze.
The Nikkei was down 0.3 percent as the yen strengthened and March sales were mixed for the country’s three big automakers. Meanwhile, Japanese companies’ long-term inflation expectations deteriorated in March from the prior quarter, a central bank survey showed, adding to doubts over the Bank of Japan’s ability to boost growth and inflation. Honda Motor, Nissan and Toyota retreated. Sharp was higher after Foxconn on Saturday formally signed a long-awaited deal to buy control of the Japanese electronics producer.
Both the S&P/ASX and All Ordinaries finished 0.1 percent lower after investors digested disappointing data showing a continued slide in building approvals over the 12 months to February, the static state of retail sales in February and a very subdued private sector reading on consumer inflation. Oil stocks Woodside Petroleum and Santos tumbled after crude futures slumped. Miners were mixed with BHP Billiton and Rio Tinto declining while Fortescue Metals Group advanced. Arrium shares were placed in a trading halt, pending an update regarding its recapitalization plan. NAB and Westpac were up ahead of the RBA’s policy meeting on Tuesday. No change in policy rates is expected.
The Kospi was up 0.3 percent as foreign investors became net buyers in the afternoon. The Sensex was up 0.5 percent amid expectations that the Reserve Bank of India (RBI) will cut interest rates by at least a quarter of a percentage point when it reviews its monetary policy on Tuesday. Solid manufacturing data also underpinned investor sentiment.
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*
Australia posts February merchandise trade balance. The Reserve Banks of Australia and India publish their respective monetary policy decisions. Germany releases February manufacturers’ orders. Composite PMI will be released for the Eurozone, Germany and France. Services PMIs will be released for the UK and US. The Eurozone also posts February retail sales. The US and Canada post February international trade balances. The US also releases February JOLTS and March ISM nonmanufacturing index.
*Note — all releases are listed in local time.

Source: Fidelity

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