On 08 June, 2016 – Global stocks mixed Wednesday

US stocks climbed while those in Europe retreated on profit taking. Asia was mixed.
United States
The Dow Jones industrials were up 0.4 percent to end the day above 18,000 for the first time since April thanks to the weaker dollar. The currency lifted some commodity-related shares and boosted the outlook for multinationals. The S&P and Nasdaq were 0.3 percent higher.
Caterpillar, Freeport-McMoRan and Newmont Mining gained along with Alcoa. Dave & Buster’s advanced after it reported strong first-quarter results and raised its outlook for the year. VeriFone Systems, which makes terminals used for electronic payments, declined after it cut its annual forecast and reported disappointing quarterly results. The company said it would eliminate jobs and review some of its struggling businesses.
Brown-Forman, the maker of Jack Daniel’s and other liquor brands, gained ground after it reported strong fourth-quarter results. Constellation Brands also gained. Both Verizon Communications and AT&T declined. Oxford Industries, the owner of Tommy Bahama, Lilly Pulitzer and other clothing lines, slumped after its first-quarter results disappointed investors. Skullcandy surged after the company’s founder said he might take the company private. Lululemon Athletica was higher after the yoga-wear maker raised its financial forecasts for the year.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing jumped US$22.00 to US$1,263.00. Copper futures were up 0.6 percent to US$2.06. WTI spot crude was up 99 US cents to US$51.35. Dated Brent spot crude was up US$1.12 to US$52.56. The US dollar was down against the yen, euro, Swiss franc and the Canadian and Australian dollars. However, it advanced against the pound. The Dollar Index was down 0.3 percent. The yield on US Treasury 30 year bond was down 3 basis points to 2.51 percent while the yield on the 10 year note slipped 1 basis point to 1.70 percent.
Europe
European stocks retreated Wednesday following Tuesday’s rally as investors took the opportunity to lock in some profits. Mixed Chinese trade data and continued concerns over a potential “Brexit” also weighed on sentiment. The FTSE added 0.3 percent while the CAC, DAX and SMI declined 0.6 percent, 0.7 percent and 0.9 percent respectively. Energy stocks were among the best performers thanks to climbing crude oil prices. Miners also advanced as the price of gold and other precious metals increased.
The World Bank trimmed its global growth outlook due to sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade and diminishing capital flows. The global economy is forecast to grow 2.4 percent this year instead of the 2.9 percent projected in January according to the World Bank’s June Global Economic Prospects report. The growth outlook for 2017 was trimmed to 2.8 percent from 3.1 percent. Nonetheless, the pace of expansion is expected to pick up to 3 percent by 2018, as stabilizing commodity prices provide support to commodity exporting emerging markets. The growth in the euro area is expected to remain unchanged at 1.6 percent this year and the next.
RWE and E.ON climbed after the European Central Bank reportedly began buying utility, insurance and telecom bonds in the secondary market as part of its corporate bond buying program. Banks including Commerzbank, Deutsche Bank, Société Générale, Crédit Agricole and BNP Paribas finished lower. In Paris, airline Air France-KLM dropped after releasing passenger traffic figures for May. Electronic payments solutions company Ingenico sank after its rival VeriFone posted disappointing earnings for the second quarter of fiscal 2016. In London, J. Sainsbury finished higher after reporting a 0.8 percent decline in like-for-like retail sales in the 12 weeks to June 4. WH Smith retreated after posting flat like-for-like sales growth in the 14 weeks to June 4. Miners including Anglo American, Fresnillo, Glencore, Randgold Resources and Antofagasta advanced.
British industrial production logged its fastest growth in almost four years in April largely driven by pharmaceutical sector. Industrial output advanced 2 percent on the month. It was the biggest monthly gain since July 2012.
Asia Pacific
Stocks were mixed in the Asia Pacific region in part due to May’s Chinese trade data and the cut in global growth prospects from the World Bank. Oil hovered near eight month highs and copper pared losses from the previous session on dollar weakness, helping to limit losses across the region.
The Shanghai Composite was down 0.3 percent ahead of a long weekend. The Hang Seng slipped 0.1 percent. Mainland Chinese markets will be closed on Thursday and Friday for the Dragon Boat Festival while Hong Kong’s market will only be closed on Thursday. Market reaction was muted to the Chinese trade data. Chinese exports dropped 4.1 percent on the year in May in US dollar terms while imports slid 0.4 percent from a year ago.
The Nikkei added 0.9 percent as the yen trimmed its early gains and energy shares benefited from higher oil prices. JX Holdings and Japan Petroleum advanced. Chubu Electric Power rallied on a report it plans to restart a nuclear reactor west of Tokyo. Japan’s economy grew faster than initially estimated during the January to March quarter, helped by a fractional revision in private consumption and business investment. The economy grew an annualized 1.9 percent in the first three months of 2016, up from a preliminary reading of 1.7 percent growth. The upward revision is viewed as lessening the chances of fresh policy moves at next week’s BoJ meeting.
Both the S&P/ASX and All Ordinaries were virtually unchanged. Market sentiment was subdued after mixed Chinese trade figures and disappointing home loan approvals data domestically. BHP Billiton and Rio Tinto along with Fortescue Metals Group declined despite iron ore prices hitting a two-week high on reports of more production curbs. BHP Billiton said it has agreed to sell its 75 percent stake in the IndoMet coal project in Indonesia to its local joint venture partner Adaro Energy. Rio Tinto offered to buy back up to A$3 billion of its corporate notes as part of its efforts to reduce gross debt. Banks were lower while energy stocks gained.
The Kospi was up 0.8 percent on buying by both foreign and institutional investors. The Sensex was virtually unchanged on the 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*
Japan releases April machine orders. China posts May consumer and producer price indices. Germany and the UK report April merchandise trade balances. In the US, weekly job claims, EIA natural gas report, Fed balance sheet and money supply will be released.
*Note — all releases are listed in local time.

Source: Fidelity

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