Stocks were mixed Friday after the US employment report disappointed traders.
United States
After initially moving to the downside, stocks rebounded over the course of the trading session Friday. Traders seemed to go bargain hunting after the release of the monthly jobs data initially weighed on the markets. The Dow Jones industrials were up 0.5 percent, the S&P added 0.3 percent and the Nasdaq advanced 0.4 percent. However, for the week, the three indices retreated — the Dow. S&P and Nasdaq lost 0.2 percent, 0.4 percent and 0.8 percent respectively.
April employment was up 160,000 and less than the expected increase of about 200,000. The unemployment rate remained at 5.0 percent for a second month. Both the average hourly earnings and the average work week were up. The data led to speculation the Federal Reserve will further delay raising interest rates.
The healthcare sector had among the day’s biggest declines with Endo International tumbling after the drug maker slashed its 2016 revenue and profit forecasts. Square, the mobile payments company, retreated a day after it reported a bigger than expected quarterly loss. Activision Blizzard jumped after the company delivered strong first-quarter earnings Thursday and lifted its full-year outlook.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$8.75 to US$1,289.00. Copper futures were virtually unchanged at US$2.15. WTI spot crude was up 34 US cents to US$44.66. Dated Brent spot crude was up 36 US cents to US$45.37. The US dollar was up against the pound, Swiss franc and the Canadian and Australian dollars. However, it declined against the yen and was virtually unchanged against the euro. The Dollar Index was up 0.05 percent. The yield on US Treasury 30 year bond was up 3 basis points to 2.63 percent while the yield on the 10 year note was up 4 basis points to 1.78 percent.
Europe
Stocks were mostly lower Friday after the release of the US employment report. However, the markets then rallied with some gaining on the day. The markets ended the session with mixed results. The disappointing US jobs growth appears to have cemented the opinion among investors that the Federal Reserve will leave interest rate unchanged in June. However, there is one more employment report prior to that FOMC meeting. The FTSE edged up 0.1 percent and the DAX added 0.2 percent. The CAC lost 0.4 percent and the SMI was 0.2 percent lower. For the week, the FTSE lost 1.9 percent, the CAC retreated 2.0 percent, the DAX declined 1.7 percent and the SMI was 2.8 percent lower.
Rhoen-Klinikum slipped after the hospital operator said it expects a drop in revenues of roughly 1 percent for the current financial year due to regulatory restrictions. Both Commerzbank and Deutsche Bank increased. Total and Technip advanced. In London, easyJet was down after the carrier reported a 0.4 percent decline in load factor for April from a year ago. InterContinental Hotels Group retreated after reporting a 1.5 percent rise in first-quarter global room revenue at constant exchange rates. Man Group sank on a broker downgrade. Randgold Resources and Fresnillo jumped on an increase in gold prices. ArcelorMittal declined after it narrowed its net loss in the first quarter, but cautioned about excess steel capacity in China.
Asia Pacific
Most Asian stocks drifted lower on Friday as a firmer dollar exerted downward pressure on commodities and investors looked ahead to the US jobs report due after markets here closed for the week. The Shanghai Composite dropped 2.8 percent, marking its biggest single-day loss in more than two months on worries about rising bond defaults and a broad sell-off in China’s commodities market. The Hang Seng retreated 1.7 percent. On the week, the indices lost 0.9 percent and 4.5 percent respectively.
The Nikkei was down 0.3 percent extending losses for the sixth consecutive session as trading resumed after a three day national holiday. Investors were worried about corporate profit growth thanks to the increasing value of the yen. For the week, the index retreated 3.4 percent. Exporters Toshiba, Sony, Inpex and Mitsubishi UFJ Financial retreated. Sharp dropped on a Nikkei report the company will report a net loss of ¥300 billion for the year through March. Olympus also declined after issuing a weak profit forecast. Mitsubishi Motors climbed after admitting to manipulating fuel economy test data for the last 25 years on some of its vehicles. April services PMI slipped to a reading of 49.3, down from 50.0 in March.
The S&P/ASX added 0.2 percent and the All Ordinaries was up 0.3 percent. Both were up 0.8 percent for the week. In its quarterly monetary policy report, the Reserve Bank of Australia revised downward its consumer price inflation forecasts helping keep the prospect of another possible interest rate cut alive. Banks were mixed. BHP Billiton gained after a Brazilian judge ratified the settlement that will see Samarco, BHP and Vale pay a government-estimated 20 billion reals or $A7.5 billion over a period of 15 years to cover damages for a deadly dam spill last year. Rio Tinto was down after saying it would reduce its near term maturing gross debt by A$1.5 billion.
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*

Central Bank activities

 

May 12

UK

Bank of England Monetary Policy Announcement

 

Bank of England Publishes Quarterly Inflation Report

 

 

The following indicators will be released this week…

 

Europe

 

May 9

Germany

Manufacturers’ Orders (March)

 

May 10

Germany

Industrial Production (March)

 

Merchandise Trade (March)

 

France

Industrial Production (March)

 

UK

Merchandise Trade (March)

 

May 11

UK

Industrial Production (March)

 

May 12

Eurozone

Industrial Production (March)

 

May 13

Eurozone

Gross Domestic Product (Q1.2016 second estimate)

 

Germany

Gross Domestic Product (Q1.2016 preliminary)

 

Italy

Gross Domestic Product (Q1.2016 preliminary)

 

 

Asia/Pacific

 

May 10

China

Consumer Price Index (April)

 

Producer Price Index (April)

 

 

Americas

 

May 9

Canada

Housing Starts (April)

 

May 10

United States

JOLTS (March)

 

May 12

United States

Initial Unemployment Claims (week ending prior Saturday)

Import/Export Prices (April)

 

May 13

United States

Retail Sales (April)

 

Producers Price Index (April)

 

Consumer Sentiment (May preliminary)

 

*Note — all releases are listed in local time.

Source: Fidelity

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