On 14 April, 2016 – Global stocks continued to advance

Investors were cautious as they waited for Chinese growth data along with earnings reports.
United States
After moving sharply higher over the course of the two previous sessions, stocks showed a lack of direction throughout the trading day on Thursday. Stocks wavered as investors absorbed the latest batch of earnings reports. The Dow Jones industrials edged up 0.1 percent while both the S&P (up 0.36 point) and Nasdaq (down 1.53 points) were virtually unchanged.
Bank stocks rose as the companies continued to report their first-quarter results. Bank of America, First Republic Bank and Fifth Third Bank gained. Wells Fargo retreated after its profit fell as it set aside more money to cover its struggling portfolio of oil and gas loans. Airline stocks were up after Delta said the low cost of fuel had bolstered its business.
However, Tech stocks fell after dour projections from Seagate Technology. Seagate Technology said its third-quarter profit margins and revenue would be lower than expected. The company said demand was lower for some kinds of hard disk drives. Western Digital and NetApp also declined. Delta Air Lines’ first quarter profit rose 27 percent, helped by low fuel costs. American Airlines, United, JetBlue and Southwest also climbed. Pier 1 Imports declined after it gave a shaky outlook for the first half of its fiscal year. Pier 1 said it expected “pressure” on its profit and sales because of marketing expenses, including a return to TV advertising as well as price markdowns.
Private equity firm Carlyle Group is in serious talks to buy a package of oilfield-services businesses from Halliburton and Baker Hughes that could be valued at more than $7 billion, as the energy giants seek to overcome a Justice Department challenge to their planned merger.
Weekly jobless claims for the April 9 were down 13,000 to a total of 253,000, matching the March 5 week for the lowest since 1973 when the labor market was much smaller.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$11.90 to US$1,233.85. Copper futures were virtually unchanged at US$2.17. WTI spot crude was down 30 US cents to US$41.46. Dated Brent spot crude was down 32 US cents to US$43.86. The US dollar was up against the yen, euro, pound, Swiss franc and the Canadian dollar. However, it declined against the Australian dollar. The Dollar Index was up 0.2 percent. The yield on US Treasury 30 year bond was up 2 basis points to 2.60 percent while the yield on the 10 year note was up 3 basis points to 1.79 percent.

Europe
Most European markets recorded modest gains Thursday and added to the advances of the previous four trading sessions. Investors were cautious ahead of the weekend’s meeting of major oil producers in Doha. A mixed start to the earnings reporting season in Europe also contributed to the cautious atmosphere. The FTSE was virtually unchanged (up 2.21 points) while the CAC gained 0.5 percent, the DAX was up 0.7 percent and the SMI added 1.1 percent.
The Bank of England unanimously decided to leave its Bank Rate at 0.5 percent for the 85th month and its asset purchase ceiling at £385 billion. According to the minutes the monetary policy committee said that EU membership referendum effects “are likely to make macroeconomic and financial market indicators harder to interpret over the next few months, and the Committee is likely to react more cautiously to data news over this period than would normally be the case.”
BASF and Linde finished higher. Both Beiersdorf and Henkel advanced. In Paris, Sodexo dropped despite reporting increased first half profit and confirmed its FY16 targets. Rio Tinto slipped after reversing its controversial decision to double its payment period on its supply contracts. Burberry Group tumbled after it warned of lower profit for the fiscal year 2017 after reporting a decline in same store sales growth for the second half.
Royal Bank of Scotland rose after announcing it would cut around 600 jobs at its UK consumer bank. Entertainment One jumped on a media report that it has been approached by ITV over a possible takeover. The company denied that it had received any bid approach. Recruiting firm Hays climbed after it reported like-for-like fees growth of 4 percent in the third quarter. Homebuilders were under pressure after UK surveyors warned of a soft patch in housing. Persimmon, Barratt Development, Berkeley Group and Taylor Wimpey retreated. Nestle advanced after it confirmed its full-year outlook after reporting first quarter sales that beat estimates.

Asia Pacific
Stocks advanced as the yen slid further to hit a one-week low against the US dollar and Singapore’s central bank unexpectedly eased its currency policy, giving rise to new hopes that more central banks will seek ways to protect against external headwinds. While oil extended overnight losses on worries over an expanding supply glut and doubts over a potential agreement by major producers to limit output, hopes that the Chinese economy is stabilizing helped underpin investor interest in riskier assets.
The Shanghai Composite added 0.5 percent as investors braced for more upside surprises in first quarter GDP data to be released Friday. The Hang Seng gained 0.8 percent.
The Nikkei jumped 3.2 percent thanks to the yen’s retreated. Exporters including Canon, Mazda Motor, Panasonic and Toyota climbed. Steelmaker JFE Holdings gained on a broker upgrade. Uniqlo operator Fast Retailing, Fanuc and Mitsubishi UFJ Financial Group all rallied. Supermarket operator Aeon was up after its full-year operating profit beat estimates.
The S&P/ASX 200 was up 1.3 percent and the All Ordinaries gained 1.2 percent. The big banks gained while BHP Billiton and Rio Tinto rose after a jump in iron ore prices. Energy producer Santos and Origin Energy were up while Woodside Petroleum retreated. March unemployment rate slid to 5.7 percent while the economy added 26,100 jobs. The latter was well above forecasts of 18,600 new jobs.
The Kospi jumped 1.7 percent to hit a four month high as traders returned from a public holiday on Wednesday for elections. Singapore’s Straits Times added 0.8 percent after the country’s central bank shifted to a neutral policy of allowing for a “zero percent” appreciation of the local dollar and an advance estimate showed the economy grew by an annual 1.8 percent in the first quarter, the same growth pace as in the previous quarter. Markets in India were closed.

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*
China reports first quarter gross domestic product and March data for industrial output and retail sales. The Eurozone posts February merchandise trade. In the US, April Empire State manufacturing survey, April preliminary consumer sentiment and March industrial production will be released. Oil producers meet in Doha Qatar April 17.
*Note — all releases are listed in local time.

Source: Fidelity

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