On 08 August, 2016 – Global stocks mixed

Stocks rallied in Europe and Asia on Friday’s US employment report but gains in US faded with indices ending in negative territory.
United States
Investors paused after Friday’s gains in light trading and ended the day slightly lower. The Dow Jones industrials and S&P slipped 0.1 percent while the Nasdaq lost 0.2 percent. Stocks were weighed down by drug companies and consumer-focused stocks. Energy stocks however gained after OPEC said it would hold an informal meeting in September.
Bristol-Myers Squibb tumbled for a second day following news that the company’s cancer treatment Opdivo failed in a study aimed at extending its usage for lung cancer patients. Allergan slid after second-quarter revenue fell short of expectations. Walmart slipped after the company agreed to buy Jet.com for $3 billion in cash and another $300 million in stock. Marathon Oil, Tesoro and Chesapeake Energy gained. Mattress Firm soared after the mattress retailer agreed to be acquired by furniture seller Steinhoff International in a deal valued at $3.8 billion, including debt.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$3.60 to US$1,336.80. Copper futures were up 0.3 percent to US$2.16. WTI spot crude was up US$1.08 to US$42.88. Dated Brent spot crude was up 0.91 US cents to US$45.18. The US dollar was up against the yen, pound and Swiss franc. It was unchanged against the euro and Canadian dollar. However, it declined against the Australian dollar. The Dollar Index was up 0.2 percent. The yield on US Treasury 30 year bond was down 1 basis point to 2.30 percent while the yield on the 10 year note was unchanged at 1.59 percent.
Europe
European stock indices mostly advanced Monday on lingering euphoria from Friday’s strong US employment report Today’s encouraging report on June German industrial production also helped. Energy stocks were advanced on reports that OPEC will hold informal talks in September in an effort to limit oil production. The FTSE was up 0.2 percent, the CAC edged up 0.1 percent and the DAX added 0.6 percent. The SMI however slid 0.3 percent.
QSC jumped after the telecommunications provider confirmed its fiscal year outlook after reporting positive consolidated net income for the first time in eight quarters. Both Commerzbank and Deutsche Bank advanced. In Paris, Airbus Group retreated after the UK’s Serious Fraud Office launched a criminal investigation into allegations of fraud, bribery and corruption in the commercial airline business of the defense and aviation firm. Crédit Agricole, BNP Paribas and Société Générale were higher. In London, Barclays climbed on a broker upgrade. Royal Bank of Scotland, Lloyds Banking Group and Standard Chartered advanced. Miners including BHP Billiton, Antofagasta, Rio Tinto and Anglo American rallied.
Eurozone investor confidence improved in August as the outcome of the “Brexit” referendum had little impact on economic expectations according to the latest Sentix survey. Germany’s industrial production recovered in June, but the decline in output over the second quarter signals the least contribution to economic growth, leaving private spending as a source for expansion. Visa UK said that British consumer spending picked up last month, bucking other signs that Britons have become more cautious since June when they voted to leave the European Union.
Asia Pacific
Asian stocks advanced Monday as investors cheered a second straight month of strong US job growth. Non-farm payroll employment was up 255,000 jobs in July after jumping by an upwardly revised 292,000 jobs in June, providing further evidence of the strength of the country’s labor market. While many thought the report boosted the odds for a Federal Reserve interest rate, economists’ consensus forecasts show that many believe the Fed will wait for GDP growth to improve and inflation to move closer to its 2 percent target before increasing the fed funds rate.
The Shanghai Composite added 0.9 percent. Investors showed no reaction to disappointing forex reserves and merchandise trade data. The Hang Seng was up 1.6 percent. China’s foreign exchange reserves fell to $3.20 trillion in July after an uptick in June. Merchandise trade data indicated that China got off to a shaky start to the third quarter, with both exports and imports falling more than expected in US dollar terms. Dollar-denominated exports dropped 4.4 percent from a year earlier, extending declines for the fourth consecutive month while imports slid 12.5 percent.
The Nikkei jumped 2.4 percent as a weaker yen amid resurgent expectations of a Fed rate increase this year lifted exporters. Canon, Panasonic, Toshiba, Toyota Motor, Honda Motor and Hitachi climbed. Nissan Motor advanced on a Nikkei report that the automaker has started talks with Japanese and Chinese companies to sell its stake in a battery production venture with NEC. Fast Retailing and Softbank were higher as were energy stocks Inpex, JX Holdings and Japan Petroleum.
Australian shares ended firmly in positive territory, led by gains in mining, energy and financial stocks. The S&P/ASX and the broader All Ordinaries both were up 0.7 percent. Miners BHP Billiton, Rio Tinto and Fortescue Metals Group advanced as iron ore prices hit a fresh three month high to climb back above the US$60 threshold. Financials rebounded from last week’s losses with the big four banks along with Macquarie Group rallying.
The Kospi was up 0.7 percent as stronger than expected US employment data helped ease global growth worries. Global credit appraiser Standard & Poor’s (S&P) raised South Korea’s long-term sovereign credit rating to AA from AA-minus with a stable outlook, citing the country’s record of steady economic growth and improved fiscal and monetary flexibility. The Sensex added 0.4 percent.
Looking forward
China reports July consumer and producer price indices. The Reserve Bank of India announces its monetary policy decision. Germany and the UK release June merchandise trade data. The UK also posts June industrial production. In the US, second quarter productivity & costs will be reported along with wholesale trade.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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