On 21 April, 2016 – Stocks were mixed

Investor attention focused on earnings after the ECB maintained the status quo.
United States
US stocks closed broadly lower as the market pulled back after a three day rally. Traditional safe haven stocks such as phone companies and utilities had the biggest declines after having some of the biggest gains since the beginning of the year. The Dow Jones industrials were down 0.6 percent, the S&P retreated 0.5 percent and the Nasdaq was virtually unchanged (down 2.24 points).
Viacom soared after reaching a new agreement with Dish Network to carry its cable networks. Mattel stock was down after the company reported a larger than anticipated quarterly loss and disappointing sales of Barbie dolls. Alliance Data Systems, which manages loyalty and rewards programs for retailers and other companies, slid after the company issued a disappointing outlook for the current quarter. Las Vegas Sands slumped after the company’s latest quarterly results fell short of expectations. Under Armour advanced after the company reported strong quarterly sales. It also increased its outlook for the year. United Continental tumbled a day after the company reported a steep drop in quarterly earnings as higher taxes offset some of the gains from cheaper jet fuel. Revenue also fell partly because of a slump in business travel. General Motors advanced after the automaker said its profit more than doubled, thanks partly to strong demand in North America.
Microsoft reported a 5.5 decline in quarterly revenue as a strong US dollar reduced the value of sales from outside the United States and a weak personal computer market limited demand for its Windows operating system. The company’s net income fell to $3.76 billion or 47 cents per share in the third quarter ended March 31, from $4.99 billion or 61 cents per share a year earlier. Revenue fell to $20.53 billion from $21.73 billion. Adjusted revenue slipped to $22.08 billion from $21.73 billion.
Google’s parent Alphabet reported a 17.4 percent increase in quarterly revenue, driven by strong advertising sales on mobile devices. Alphabet said consolidated revenue rose to $20.26 billion in the first quarter ended March 31 from $17.26 billion a year earlier. Net income rose to $4.21 billion or $6.02 per Class A and B share and Class C capital stock from $3.52 billion or $5.10 per share.
The number of US workers who applied for unemployment benefits fell to the lowest level in 43 years, a sign of ongoing strength in the labor market. Initial claims for jobless benefits fell 6,000 to 247,000 in the week ended April 16.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$2.75 to US$1,249.25. Copper futures were up 0.4 percent to US$2.25. WTI spot crude was down 66 US cents to US$43.52. Dated Brent spot crude was down 95 US cents to US$45.85. The US dollar was up against the euro, pound, Swiss franc and the Canadian and Australian dollars. However, it declined against the yen. The Dollar Index was up 0.1 percent. The yield on US Treasury 30 year bond was up 3 basis points to 2.69 percent while the yield on the 10 year note was up 2 basis points to 1.87 percent.
Europe
Markets were mixed following three consecutive days of gains. There were no surprises in today’s announcement from the European Central Bank nor in ECB President Mario Draghi’s press conference. The FTSE was down 0.4 percent, the CAC lost 0.2 percent and the SMI was 0.3 percent lower. The DAX edged up 0.1 percent.
Volkswagen advanced on reports that the automaker is close to completing a deal to resolve litigations over the emissions issue in the United States. E.ON and RWE gained. Pernod Ricard sank after reporting a 3 percent decline in fiscal third quarter sales. Schneider Electric was up after its first quarter revenue beat estimates. Sky declined after reporting rising customer attrition rates across Europe.
Centrica was down after it agreed to acquire Danish energy management firm Neas Energy for £170 million in cash. Anglo American retreated despite reaffirming its 2016 output guidance. Smiths Group climbed after the technology company entered into an agreement to acquire California-based Morpho Detection from French technology firm Safran for an enterprise value of $710 million. Darty soared after Groupe Fnac launched a counterbid for the company. Ericsson tumbled in Stockholm after its first quarter sales missed estimates.
UK March retail sales volumes declined more than expected. Sales slid 1.3 percent after sinking 0.5 percent in February.
Having only just delivered its latest easing package a few weeks ago, the European Central Bank left its monetary policy on hold today. The benchmark refi rate remains at 0.00 percent while the (increasingly important) deposit rate remains at minus 0.40 percent and the rate on the marginal lending facility is held at 0.25 percent. ECB President Mario Draghi’s press conference offered few new insights. Draghi indicated that the monetary authority has started to expand its monthly asset purchases by €20 billion a month to €80 billion as it announced it would in March. He also reminded that other measures to boost the economic recovery would be used if deemed necessary. However, there was no new useful commentary on the outlook for interest rates which remains tied to the standard forward guidance line stating that rates will stay at current or lower levels for an extended period and well beyond the current horizon for asset purchases.
Asia Pacific
Most Asian indices advanced as oil prices rallied and the yen resumed its decline on expectations of further easing from the Bank of Japan when it meets next week. Investors remained focused on the European Central Bank policy announcement which would occur after markets here were closed for the day.
The Nikkei jumped 2.7 percent to hit a 2-1/2 month high, as oil prices bounced back and positive US housing data as well as expectations of further policy easing from the Bank of Japan weakened the yen. Mitsubishi Motors Corp plunged after the automaker admitted manipulating fuel economy data for about 625,000 vehicles sold in Japan. Toyota, Honda and Nissan however, climbed. Uniqlo operator Fast Retailing and energy explorer Inpex advanced. Sony shares closed higher. After the closing bell, the electronics giant said its full-year operating profit would be less than initially forecast due to a hefty impairment charge in its camera business.
The S&P/ASX added 1.1 percent while the All Ordinaries advanced 1.0 percent led by mining and energy shares. BHP Billiton, Rio Tinto and Fortescue Metals Group rose after iron ore prices jumped to a 10-month high on Wednesday. BHP Billiton spinoff South32 was up after saying it is on track to meet its FY16 guidance. Copper and gold miner Oz Minerals gained after reaffirming its production guidance. Woodside Petroleum, Santos and Origin Energy were higher after oil prices held steady in Asian deals after climbing overnight. Wesfarmers, the operator of Coles supermarkets, advanced on reporting a solid increase in third quarter sales. The big four banks climbed.
Chinese shares erased early gains, with the Shanghai Composite swinging between gains and losses before closing 0.7 percent lower. However, the Hang Seng rallied 1.8 percent. The Kospi was up 0.8 percent to reach its highest level this year amid foreign fund inflows ahead of the upcoming earnings season. The Sensex inched up 0.1 percent.
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*
April flash manufacturing PMIs will be released for Japan, the Eurozone, Germany, France and the US. Canada posts March consumer prices and February retail sales.
*Note — all releases are listed in local time.

Source: Fidelity

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