On 09 August, 2016 – Most stock indices advanced

The prospect of a September OPEC meeting and Chinese stimulus sparked stock rallies in Europe and Asia.
United States
US stocks were little changed near record highs Tuesday as weak oil prices offset gains in healthcare and technology stocks. Weak Chinese consumer prices stirred expectations of more stimulus from Beijing. The Dow Jones industrials and S&P were virtually unchanged (up 0.85 point and 3.76 points respectively) while the Nasdaq added 0.2 percent. Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets. Traders were waiting for key retail sales and producer price index data that will be released on Friday.
Oil was also in focus after OPEC announced that oil ministers of the 14-nation organization would meet next month ahead of their previously scheduled November meeting. It is unusual for OPEC to gather outside of their regularly set meetings.
The markets largely shrugged off a report from the Labor Department showing an unexpected drop in labor productivity in the second quarter. Productivity declined 0.5 percent in the second quarter after sliding by 0.6 percent in the first quarter. Meanwhile, unit labor costs were up 2.0 percent in the second quarter after edging down by a revised 0.2 percent in the first quarter.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$4.20 to US$1,341.00. Copper futures were down 0.9 percent to US$2.15. WTI spot crude was down 26 US cents to US$42.76. Dated Brent spot crude was down 40 US cents to US$44.99. The US dollar was down against the yen, euro, Swiss franc and the Canadian and Australian dollars. However, it was up against the pound. The Dollar Index was down 0.3 percent. The yields on both the US Treasury 30 year bond and 10 year note were down 5 basis points to 2.25 percent and 1.54 percent respectively.
Europe
European stocks continued to rally Tuesday. Energy stocks were among the top gainers on news that OPEC will hold talks in September in an effort to limit production. Investors were encouraged by some better than expected corporate financial results and some dovish comments from the Bank of England’s Ian McCafferty. The FTSE was up 0.6 percent, the SMI gained 0.7 percent, the CAC advanced 1.2 percent and the DAX added 2.5 percent.
Bank of England monetary policy committee member Ian McCafferty hinted at additional rate cuts and expansion of the quantitative easing by the central bank if the economic downturn worsens further. “If the economy proves to have turned down in line with the initial survey signals, I believe that more easing is likely to be required, but that can easily be delivered in coming months”, McCafferty wrote in The Times.
Munich Re climbed after its second-quarter profit beat expectations. In Paris, SFR Group advanced after Chief Executive Michel Combes said the company is now seeing a more normalized competitive environment and customers are ready to pay more for improved networks. In London, Standard Life was higher after reporting an 18 percent rise in underlying operating profit for the first half of 2016. Barclays advanced after the lender agreed to pay $100 million to 44 US states to settle allegations that it had manipulated inter-bank lending rates nearly a decade ago.
Smiths Group advanced on saying its revenue for the year ended 31 July 2016 is expected to be above both expectations and the previous year. Worldpay Group climbed after its first-half underlying earnings beat forecasts. Amec Foster Wheeler jumped after backing its profit target for 2016. Legal & General Group sank despite reporting a 23 percent rise in half-year pre-tax profit. Altice soared in Amsterdam after reporting a 2.7 percent rise in second-quarter core earnings. Pandora dropped in Copenhagen after its second-quarter sales and profit came in below estimates.
Germany’s June exports rose by adjusted 0.3 percent on the month reversing a 1.8 percent decrease in May. At the same time, imports were up 1.0 percent after remaining flat in the preceding month. The merchandise trade balance was €21.7 billion. UK June industrial production edged up a monthly 0.1 percent after sinking 0.6 percent in May. The UK visible trade deficit increased unexpectedly in June. The trade deficit was £12.4 billion compared to a £11.5 billion deficit in May.
Asia Pacific
Stocks were mixed Tuesday after a decline in oil prices offset hopes that lower July consumer price data will give Beijing room to ease monetary policy.
The Shanghai Composite was up 0.7 percent after today’s inflation numbers offered scope for more growth-supportive policies by the Chinese authorities. The Hang Seng however, slipped 0.1 percent. July consumer price index was up 1.8 percent on the year after increasing 1.9 percent in June.
The Nikkei was up 0.7 percent after swinging between gains and losses. Energy explorer Inpex, JX Holdings and Japan Petroleum advanced. Brother Industries jumped after revising up its earnings forecast. Videogame giant Nintendo advanced on reports its popular game Pokemon Go has chalked up $200 million in net revenue globally on the App Store and Google Play in its first month.
The S&P/ASX and All Ordinaries were up 0.3 percent and 0.2 percent respectively. Woodside Petroleum, Oil Search and Santos climbed after oil prices rallied overnight on speculation that OPEC would try to restrain output. BHP Billiton and Rio Tinto advanced. ANZ was higher after saying it had boosted capital and restructured its operations by exiting riskier assets. Commonwealth Bank of Australia, NAB and Westpac closed higher. Gold miners Evolution Mining and Northern Star Resources retreated each after gold futures finished at their lowest level in more than a week overnight.
The Kospi added 0.6 percent after OPEC hinted at taking action over production levels and Chinese inflation data helped to spur stimulus hopes. The Sensex was 0.3 percent lower. The Reserve Bank of India left its monetary policy unchanged.
Looking forward
Japan releases June machine orders and July producer price index. France posts June industrial production. In the US, June JOLTS will be reported.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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