On 02 May, 2016 – Global markets mixed in light trading

US and European markets steadied Monday after last week’s declines.
United States
Shares advanced Monday after tumbling last week. The Dow Jones industrials rebounded 0.7 percent, the S&P added 0.8 percent and the Nasdaq gained 0.9 percent. Some investors said better-than-expected corporate earnings have helped spur recent gains, and with the reporting season winding down, global economic concerns are likely to determine the next direction of major US indexes.
Consumer discretionary shares were among the biggest gainers. Wynn Resorts and Amazon.com advanced. Halliburton rose and Baker Hughes tumbled after a $34 billion merger with Baker Hughes was called off following antitrust concerns from the Justice Department. Apollo Education Group, which runs the University of Phoenix, rose sharply after a group of investors raised its bid for the company. Wells Fargo and JPMorgan climbed.
April ISM manufacturing index was 50.8, down from March’s 51.8. March construction spending was up 0.3 percent on the month and 8.0 percent from a year ago.
These data reflect observations at 4:00 PM US ET. Gold market closed for UK holiday. Copper futures were down 0.85 percent to US$2.26. WTI spot crude was down US$1.03 to US$44.89. Dated Brent spot crude was down US$1.49 to US$45.88. The US dollar was down against the euro, pound, Swiss franc and the Australian dollar. However, it was up against the yen. The US dollar was unchanged against the Canadian dollar. The Dollar Index was down 0.4 percent. The yields on both US Treasury 30 year bond and 10 year note were up 4 basis points to 2.72 percent and 1.87 percent respectively.
Europe
Stock markets were mixed Monday in thin trading. Markets in Greece, Ireland and the UK were closed for public holidays. European manufacturing data also failed to impress investors. The CAC was up 0.3 percent, the DAX added 0.8 percent and the SMI was 0.2 percent higher.
In a speech in Frankfurt, ECB President Mario Draghi said that low interest rates are not a problem themselves, but they mirror the underlying problem of weak investment demand. Further he said that there is a temptation to conclude that since very low rates generate these challenges, they are the problem. But they are not the problem. Rather, he said, they are the symptom of an underlying problem, which is insufficient investment demand across the world to absorb all the savings available in the economy. He also said that the long-term answer to raising real rates of return must be a structural rebalancing of global saving and investment.
BASF was down as it began trading on an ex-dividend basis. Allianz increased after its first-quarter net income attributable to shareholders rose to €2.2 billion from €1.8 billion in the prior year. The company also affirmed its full year guidance. Kering advanced after announcing the appointment of Valerie Duport as its Senior Vice President of Communications and Image, effective immediately. Vallourec retreated after the company announced that it finalized the disposal of Vallourec Heat Exchanger Tubes to American Industrial Acquisition on April 29. Banca Monte dei Paschi di Siena and UniCredit declined in Milan after the Italian government on Friday approved a number of changes to the country’s antiquated bankruptcy laws.
Eurozone manufacturing growth improved marginally in April. The manufacturing PMI edged up to 51.7 from 51.6 in March.
Asia Pacific
Asian shares fell across the board on Monday thanks to disappointing US data, falling commodity prices and a surging yen. Trading was thin with many markets closed for holidays. Chinese April manufacturing data also cast doubt over strength of a pick-up of its economy. China’s CFLP manufacturing PMI barely expanded for a second month, slipping to a reading of 50.1 from 50.2 in March. Other regional manufacturing surveys for April painted a mixed picture, with Japanese manufacturing activity contracting at the fastest pace in more than three years and activity levels across Australia’s manufacturing sector expanding at a slower pace, while South Kora’s manufacturing sector ended a three-month stretch of contraction.
The Nikkei tumbled 3.1 percent as the dollar notched a fresh 18-month low against the yen after the Bank of Japan refrained from further monetary easing Thursday. The Nikkei i has fallen more than 8 percent over the last seven trading sessions. The recent rise in the yen is clearly a one-sided speculative move and extremely worrying, Japanese Finance Minister Taro Aso was quoted as saying over the weekend. Takata plunged on a Nikkei report that US transport authorities plan to call for expanded recalls of cars fitted with potentially defective airbags. Automakers Honda Motor, Mazda, Nissan and Toyota also retreated. However, Mitsubishi Motors advanced after recent steep losses. Electronics makers Sharp, Panasonic and Sony slid. Japanese markets will remain closed for public holidays from Tuesday through Thursday.
The S&P/ASX was down 0.2 percent while the All Ordinaries slipped 0.1 percent ahead of the Reserve Bank of Australia’s interest rate. Westpac Banking tumbled after the country’s third largest lender reported a 3 percent rise in first-half cash profit, missing forecasts due to higher bad loans. ANZ was down ahead of its half-yearly results due on Tuesday while NAB also retreated ahead of its earnings announcement due on Thursday. Shares of Commonwealth Bank of Australia also were down. Miners advanced.
The Kospi average dropped 0.8 percent, a three-week after China’s manufacturing sector expanded less in April than the previous month. The Sensex lost 0.7 percent after India’s manufacturing sector hit a four month low in April. The April manufacturing PMI declined to a reading of 50.5 from 52.4 in March. Markets in mainland China, Hong Kong, Singapore, Taiwan, Malaysia and Thailand were closed in observance of Labor Day.
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*
Reserve Bank of Australia announces its monetary policy decision. China’s April manufacturing PMI is reported. UK April manufacturing PMI is released.

Source: Fidelity

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