On 23 May, 2016 – Global stocks mostly lower

Economic news was thin and what there was, was disappointing.
United States
Stocks drifted lower in light choppy trading with little corporate news. Investors stayed on the sidelines ahead of a possible fed funds rate increase when the Fed meets mid-June. Energy stocks were down along with crude oil. The Dow Jones industrials were down virtually unchanged (down 8 points), the S&P declined 0.2 percent and Nasdaq was down 0.1 percent.
Monsanto advanced after Bayer offered to buy the company for $62 billion. The deal would make the combined company the world’s largest producer of fertilizers and other agricultural products. Bayer was down in Germany. Tribune Publishing fell after the company rejected for a second time a takeover offer from Gannett. The company also announced a new investor, who bought a $70 million stake in Tribune. Freeport-McMoRan advanced after the company late Friday formally canceled plans to take its oil and gas business public.
The weekend meeting of the Group of 7 ended without agreement on a plan to revive global growth. Finance ministers stressed the importance of varying action for each country but the United States Treasury secretary, Jacob J. Lew, urged his Japanese counterpart, Taro Aso, to refrain from devaluing the yen to lift the country’s exports. Figures released Monday showed Japanese exports measured by value fell 10.1 percent in April from a year earlier, a worsening from March’s 6.8 percent decline.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$8.30 to US$1,245.90. Copper futures were unchanged at US$2.06. WTI spot crude was down 28 US cents to US$48.13. Dated Brent spot crude was down 32 US cents to US$48.40. The US dollar was up against the Canadian dollar. It declined against the yen and Swiss franc. The currency was virtually unchanged against the euro, pound and Australian dollar. The Dollar Index was up 0.1 percent. The yield on US Treasury 30 year bond was unchanged at 2.63 percent while the yield on the 10 year note slipped 1 basis point to 1.83 percent.
Europe
Stocks were mostly lower Monday after briefly turning positive earlier in the day on profit taking after last week’s gains. Traders were disappointed by the unexpected decrease in Eurozone composite PMI. The FTSE was down 0.3 percent while both the CAC and DAX lost 0.7 percent. The SMI added 0.5 percent.
Bayer was down after making an all-cash offer to acquire Monsanto for $62 billion. Nordex declined despite reporting higher first quarter profit and sales. Aixtron soared. China’s Fujian Grand Chip Investment Fund said it would make a voluntary public takeover offer to buy the German semiconductor equipment maker for about €670 million including net cash. Automakers Daimler, BMW, Volkswagen, Peugeot and Renault retreated. Inmarsat was down on a broker downgrade. Royal Mail advanced on a broker upgrade. Ryanair climbed after the company said its full year earnings per share were €115.63 after earning €62.46 a year ago. Novartis increased in Zurich after new guidelines on the treatment of heart failure strongly endorsed the use of its drug Entresto. Richemont declined on a broker downgrade.
Eurozone May flash consumer confidence improved for a second straight month and at a faster than expected pace to its highest level in four months. The May reading climbed to minus 7 from minus 9.3 in April. May flash composite PMI which combines readings for manufacturing and services slipped to a reading of 52.9 from 53 in April. The manufacturing component declined to a three month low of 51.5 from 51.7.
Asia Pacific
Shares were mixed. Investors continued to worry about possible impending interest rate increases by the Federal Reserve. While oil extended Friday’s losses, the yen gained after the US and Japan clashed over exchange rate policy at the two-day G7 finance ministers and central bank leaders meeting over the weekend.
The Shanghai Composite added 0.6 percent despite worries about slowing growth and fading hopes for more policy easing. The Hang Seng retreated 0.2 percent.
The Nikkei lost 0.5 percent thanks to the climbing yen, weak export data and fears the government will procced with sales tax increase weighing on sentiment. April exports dropped 10.1 percent from a year ago after sliding 6.8 percent in March. The data reflected in part, supply chain issues still lingering from the southern Japan earthquake along with weak international demand. The May flash manufacturing PMI was deeper in contractionary territory. The reading was 47.6, down drop 48.2 in April. Automaker Toyota, Inpex and Fast Retailing tumbled. Tsurumi Manufacturing, a manufacturer of construction pumps, slumped after posting disappointing results for the year ended March 31.
Both the S&P/ASX and All Ordinaries were down 0.6 percent, hitting their lowest level in nearly two weeks after iron ore futures dropped. Weakness in iron ore prices hit miners, with BHP Billiton, Rio Tinto and Fortescue Metals retreating. Oil & gas producers Santos, Oil Search and Woodside Petroleum declined as oil prices dipped in Asian trading on fears that the global supply of oil will continue to outpace demand. The four big banks declined.
The Kospi added 0.6 percent as both foreign and domestic institutional investors turned net buyers. The Sensex was down 0.3 percent after choppy trading.
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*
Germany posts revised first quarter gross domestic product and May ZEW survey. In the US, April new home sales and May Richmond Fed manufacturing index will be released.
*Note — all releases are listed in local time.

Source: Fidelity

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