On 18 April, 2016 – Global stocks mixed after failure in Doha

Shares decline in Asia but recover to finish higher in Europe and the US.
United States
Stocks advanced Monday led by a recovery in the energy sector. The market opened lower as the price of oil sank, but turned higher in morning trading and stayed higher for the rest of the day. In addition to energy stocks, health care and consumer companies posted big gains. The Dow Jones industrials were up 0.6 percent, the S&P added 0.7 percent and the Nasdaq was 0.4 percent higher.
The main focus in markets was the failure of the talks in Doha, Qatar, to reach a consensus on freezing production to support prices. Saudi Arabia said it would not back a deal if Iran, which is trying to ramp up output as international sanctions are lifted, was not involved. Word of the failed talks initially pulled oil prices lower, weighing on stocks. But investors decided that expectations for a deal on oil production had been very modest to begin with.
Hasbro jumped after reporting better results than expected. The toy maker turned in a solid quarter thanks to strong sales of “Star Wars,” Disney Princess and “Frozen” merchandise. Hess, Marathon Oil and Baker Hughes gained. Endo International and Regeneron Pharmaceuticals climbed. Amazon rose after the company introduced a stand-alone video streaming service available to non-Amazon Prime subscribers. Taser, which makes electrical weapons and body cameras, was down after news that Los Angeles would delay a plan to equip its police officers with body cameras. Walt Disney shares were up after “The Jungle Book” opened this weekend and topped the box office with strong sales.
After markets closed for the day, International Business Machines reported a 4.6 percent fall in quarterly revenue, hurt by a strong dollar and muted IT spending amid global economic uncertainty. Revenue declined for the 16th straight quarter, falling to $18.68 billion in the first quarter ended March 31 from $19.59 billion a year earlier. Net income fell to $2.01 billion or $2.09 per share from $2.33 billion or $2.35 per share a year earlier.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$7.20 to US$1,234.30. Copper futures were up 0.6 percent to US$2.18. WTI spot crude was down 51 US cents to US$39.85. Dated Brent spot crude was down 10 US cents to US$43.00. The US dollar was down against the euro, pound, Swiss franc and the Canadian and Australian dollars. However, it was up against the yen. The Dollar Index was down 0.3 percent. The yield on the US Treasury 30 year bond was up 2 basis points to 2.58 and the yield on the 10 year note was up 1 basis point to 1.76 percent.
Europe
European markets opened trading for the week on a down note after the meeting of oil producing nations in Doha over the weekend failed to result in an agreement on a production freeze. Crude oil prices were under heavy pressure but pared those losses as the session progressed. Stocks reversed direction and ended the day in positive territory. The FTSE was up 0.2 percent, the CAC gained 0.3 percent, the DAX advanced 0.7 percent and the SMI was 0.4 percent higher.
According to the Bundesbank’s monthly report, the German economy grew strongly in the first quarter but is likely to lose momentum in the second quarter. Domestic factors contributed to growth while exports remained relatively weak in the first quarter. Private consumption benefited from robust consumer sentiment and good weather conditions favored construction. However, the Bundesbank warned that sluggish new orders and weak business expectations are likely to weigh on activity in the second quarter.
Banks including Commerzbank, Deutsche Bank, BNP Paribas, Société Générale and Credit Agricole advanced. Automakers including BMW, Daimler, Volkswagen, Renault and Peugeot also were higher. In London, HSBC Holdings retreated after the Sunday Times reported that CEO Stuart Gulliver is preparing to step down in two years. Reckitt Benckiser Group gained after reporting slightly better-than-expected quarterly sales growth and affirming its 2016 targets. ARM Holdings and Dialog Semiconductor retreated after the Nikkei business daily reported that Apple will continue its reduced production of iPhones in the quarter ending June in light of sluggish sales. Both TUI and Thomas Cook Group were up on broker upgrades. Miners including Anglo-American, BHP Billiton and Rio Tinto advanced as copper prices rose, reversing earlier losses as funds bought metals on the back of a weaker dollar.
Asia Pacific
Most Asian stocks were down after oil prices tumbled when major oil producing nations in Doha failed to reach an agreement to freeze oil production. Japanese shares led regional losses after two powerful earthquakes hit the country last week, forcing major companies to curtail production.
The Shanghai Composite was down 1.4 percent and the Hang Seng lost 0.7 percent. Investors ignored upbeat data from China Real Estate Index System which showed that China’s home price gains accelerated in March, with 62 cities out of 70 surveyed by the government reporting monthly increases in new home prices.
The Nikkei tumbled 3.4 percent after the earthquakes on Thursday and Saturday disrupted the electronics supply chain. At the same time, Japan won little sympathy from its G20 counterparts for intervening in the currency market to curb one-sided gains in the yen. Toyota Motor retreated after suspending much of its production at plants across Japan following last week’s twin earthquakes. Honda Motor, Sony Renesas Electronics retreated. Mitsubishi UFJ Financial, oil explorer Inpex and Uniqlo operator Fast Retailing were down. Mitsubishi Electric declined after settling a class action lawsuit with indirect purchaser plaintiffs in a US District Court.
Both the S&P/ASX and All Ordinaries were down 0.4 percent. Santos, Oil Search and Origin Energy declined as did the four big banks. Qantas Airways tumbled after warning its domestic capacity growth over the last three months of the 2016 financial year will now be negative compared to the same time last year. BHP Billiton and Rio Tinto slid after iron ore prices fell the most since late March on Friday. The Kospi was down 0.3 percent.
The Sensex added 0.7 percent after software services firm Infosys posted a good quarterly performance and a government report showed India’s wholesale price-based inflation fell for a 17th straight month in March. If inflation continues on a downward path and monsoon rainfall is in line with forecasts, room would be created for more rate cuts, RBI Governor Raghuram Rajan said in an interview last week.
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*
The Reserve Bank of Australia publishes minutes from its policy meeting on April 5. The European Central Bank’s lending survey is released. Germany’s April ZEW survey is reported. In the US, March housing starts will be posted.
*Note — all releases are listed in local time.

Source: Fidelity

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