On 19 April, 2016 – Global stocks mostly higher

Energy prices advanced lifting stocks with them.
United States
Stocks closed mostly higher as energy and mining companies gained. However, technology shares lagged the rest of the market, pulling the Nasdaq lower. The Dow Jones industrials and the S&P were up 0.3 percent while the Nasdaq sagged 0.4 percent.
Rig operator Transocean and mining giant Freeport-McMoRan climbed as gains in energy and mining prices for oil, copper and other basic materials rose. Netflix tumbled after giving a disappointing forecast for subscriber additions. Netflix’s first quarter revenue also fell short of expectations. UnitedHealth Group advanced after the company raised its guidance for the year and reported strong results for the first quarter. Illumina sank after the company predicted that sales in the first quarter would be far lower than expected.
Kansas City Southern gained after the company posted larger-than-expected quarterly earnings. IBM declined after the company delivered improved first quarter earnings thanks to a big tax refund, but revenue was lower because of weaker software sales. Chevron and other energy stocks got a lift from a rally in crude after a strike by oil workers in Kuwait dented the OPEC country’s output. Johnson & Johnson rose after it reported a marginal growth in quarterly sales. Goldman Sachs advanced after the bank said its quarterly revenue fell 40 percent but still beat expectations.
Intel said it plans to reduce its global workforce by up to 12,000 jobs or 11 percent as the semiconductor giant reported a worse than expected 7 percent increase in first-quarter revenue. The company said the job cuts are part of the company’s restructuring away from a computer based company to one that powers the cloud and billions of connected computing devices.
March housing starts plummeted 8.8 percent while permits retreated 7.7 percent from February. Weakness was spread between single family and multi-family homes.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$21.10 to US$1,255.40. Copper futures were up2.65 percent to US$2.23. WTI spot crude was up US$1.22 to US$41.00. Dated Brent spot crude was up US$1.14 to US$44.05. The US dollar was down against the euro, pound, Swiss franc and the Canadian and Australian dollars. However, it gained against the yen. The Dollar Index was down 0.5 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
European markets extended Monday’s gains into Tuesday. Stronger than expected German economic sentiment data provided a boost to investor sentiment. Rising commodity prices provided a boost to energy and resource stocks. The FTSE was up 0.8 percent, the CAC gained 1.3 percent, the DAX added 2.3 percent and the SMI was 1.3 percent higher.
The negative deposit facility rate is having a positive impact on lending volumes, while at the same time exerting a negative effect on banks’ net interest income and loan margins according to the ECB’s lending survey. Banks reported a positive impact on lending volumes, specifically for loans to households. They reported a negative impact on their net interest income and loan margins for the last quarter of 2015 and the first quarter of this year. The survey also found that banks have mainly used the additional liquidity related to the ECB’s asset purchase program during the last quarter of 2015 and the first quarter of this year for lending.
Zalando declined after it posted slower first-quarter sales growth. RWE and E.ON gained along with ThyssenKrupp and Salzgitter. L’Oréal advanced after the cosmetic maker reported a 1.8 percent rise in quarterly sales and said 2016 results would be stronger than the first quarter. Remy Cointreau jumped after the company reported net sales for fiscal year 2015/16 that rose 8.9 percent from last year. Danone advanced after its first quarter sales growth beat expectations. Daimler and BMW were higher.
Publicis Groupe rallied but the advertising and communications company warned of tough times ahead after reporting first quarter sales that beat expectations. Associated British Foods was up after it lifted its interim dividend and reported a small rise in half year profits. Rio Tinto was higher after its iron ore production for the first quarter increased 13 percent. Anglo American, Antofagasta and Glencore also advanced. Experian increased after it signed a deal to acquire CSIdentity for $360 million. Roche Holding climbed in Zurich, after reporting a 5 percent increase in first-quarter sales and confirming its outlook for 2016.

Asia Pacific
Most Asian stocks advanced Tuesday after crude prices rebounded on news of a sharp drop in output in Kuwait due to an oil worker strike following the government’s move to cut wages. The strike in Kuwait slashed more than half the country’s oil output and offset concerns over the failed Doha Deal. Commodity currencies rose and the safe-haven yen weakened after US stocks shrugged off oil weakness to close at their best levels in several months overnight.
The Shanghai Composite was up 0.3 percent after the People’s Bank of China reportedly pumped 162.5 billion yuan into 18 financial institutions in open market operations via medium-term lending facility. The Hang Seng climbed 1.3 percent, led by energy shares.
The Nikkei retraced Monday’s steep losses as investors speculated that the Bank of Japan will boost stimulus to combat the economic fallout from Thursday’s earthquake in Kumamoto and subsequent aftershocks in southwestern Japan. Honda Motor, Sony, Toyota and Renesas Electronics climbed as concerns eased about the fallout from the earthquakes. Also advancing were Uniqlo, Inpex and Mitsubishi UFJ Financial,
Both the S&P/ASX and All Ordinaries were up 1.0 percent led by resource stocks after crude prices ended only fractionally lower overnight despite the failed Doha deal. The minutes from the Reserve Bank of Australia’s April 5 meeting indicated that members are in no hurry to cut interest rates despite growing discomfort with the value of the Australian dollar. Rio Tinto rallied after the company reaffirmed its output guidance for 2016 after lifting first quarter iron ore shipments by 11 percent. BHP Billiton and Fortescue Metals Group climbed after a recovery in iron ore prices.
The Kospi edged up 0.1 percent after the Bank of Korea kept its policy interest rate at 1.5 percent for the 10th consecutive month saying the current rate level supports economic growth. The BoK, however, cut its forecasts for growth and inflation, citing uncertainties to the nation’s growth path.

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*
Japan posts March merchandise trade balance. Germany releases March producer price index. The UK releases its labour market report. In the US, March existing home sales and weekly MBA mortgage applications and EIA petroleum status report will be released.
*Note — all releases are listed in local time.

Source: Fidelity

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