On 15 September, 2016 – European and US stocks rally

Mixed US data eases fears of a Fed interest rate next week.
United States
US stocks rebounded from Wednesday’s losses thanks to a rally in Apple shares, higher oil prices and mixed economic data that dimmed investors’ expectations for an interest rate increase next week. The Dow Jones industrials and S&P were up 1.0 percent while Nasdaq was 1.5 percent higher.
Skyworks Solutions, a chip supplier to Apple, soared as did Cavium. Apple advanced for a fourth day amid higher than expected demand for its latest iPhone. Hewlett-Packard Enterprise and Global Payments advanced. Energy companies rallied. A leak in the Colonial Pipeline that carries gasoline helped push crude prices higher along with energy shares. Goodyear Tire & Rubber climbed after the company increased its dividend and said it planned to return $4 billion to shareholders over the next few years. Aerie Pharmaceuticals surged after the company reported positive results from a late-stage trial of an experimental glaucoma drug.
Online brokerage firm E-Trade rose. AMC Networks retreated on a broker downgrade. Wells Fargo declined after regulators said last week that the bank had opened more than two million accounts that customers may not have authorized and transferred money into those accounts without their approval. The company agreed to pay a $185 million fine and said it would cut back on aggressive sales targets.
Among the many economic data releases Thursday was retail sales. They were down a more than expected 0.3 percent in August. Excluding a drop in auto sales, retail sales were also 0.1 percent lower after falling by 0.4 percent in July. August industrial production was down 0.4 percent, pulled down by manufacturing and utilities output. However, the outlook for manufacturing looks to improve in September with both the Empire State and Philadelphia Fed indices improving.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$10.95 to US$1,310.80. Copper futures were up 0.35 percent to US$2.16. WTI spot crude was up 25 US cents to US$43.83. Dated Brent spot crude was up 58 US cents to US$46.43. The US dollar was down against the yen, Swiss franc and the Canadian and Australian dollars. However, it advanced against the euro and was unchanged against the pound. The Dollar Index was down 0.1 percent. The yield on US Treasury 30 year bond was up 2 basis points to 2.47 percent while the yield on the 10 year note was unchanged at 1.70 percent.
Europe
Stocks rebounded in choppy trading Thursday. The indices followed here climbed into positive territory in afternoon trading thanks to rising US shares. However, investors remained in a cautious mood before next week’s Bank of Japan and Federal Reserve policy. A slew of US economic data released today was mixed. The FTSE jumped 0.9 percent, the CAC edged up 0.1 percent, the DAX advanced 0.5 percent and the SMI was 0.3 percent higher.
The Bank of England’s monetary policy committee voted unanimously to keep its key interest rate and asset purchase ceilings unchanged. The key bank rate was left at 0.25 percent and its asset purchase ceiling at £435 billion. The target for corporate bond buying remains at (up to) £10 billion. The Swiss National Bank published its quarterly policy announcement. The key deposit rate was again left unchanged at minus 0.75 percent, the mid-point of the minus 1.25 to minus 0.25 percent target range for 3-month CHF Libor. The SNB also firmly restated its commitment to intervene in the FX markets in order to prevent any further appreciation of the Swiss currency which it continues to regard as significantly overvalued.
Siemens gained after it said that it had signed a letter of intent to participate in up to €5 billion of energy, transportation and infrastructure projects in Argentina. Bayer retreated a day after announcing its merger with US based Monsanto with an improved takeover offer. EDF dropped despite the British government confirming its agreement for the construction of two EPR reactors at Hinkley Point. Zodiac Aerospace gained after reporting better than expected revenues for the full year. In London, Informa jumped after the publishing and events group reached an agreement to buy US based information services company Penton from private equity firms MidOcean Partners and Wasserstein for £1.18 billion. Wm Morrison Supermarkets jumped after reporting a rise in interim sales and profits. Tesco and Sainsbury also were higher. Next declined after the fashion chain issued a cautious outlook for the second half. The company reported a 1.5 percent decline in first-half profits.
Eurozone August inflation was confirmed at 0.2 percent from the same month a year ago. The euro area trade surplus decreased in July — exports declined while imports rose. British August retail sales decreased at a slower-than-expected pace after soaring in the previous month. Retail sales volume including automotive fuel slipped 0.2 percent on the month after jumping 1.9 percent climb in July.
Asia Pacific
Asian stocks were mixed before today’s Bank of England announcement and next week’s Bank of Japan and Federal Reserve meeting and the oil price downturn. While the BoE and the Federal Reserve are expected to keep rates on hold, analysts remain divided over what the Bank of Japan will do. Earlier in the day, the Swiss National Bank held its negative deposit rate steady and reiterated that it will remain active in the foreign exchange market to defend the Swiss franc. Markets in Mainland China, Taiwan and South Korea were closed for holidays.
The Nikkei retreated 1.3 percent thanks to a strong yen and on skepticism over the BoJ’s actions at next week’s monetary policy board meeting. Banks continued to fall, with Mitsubishi UFJ Financial, Mizuho Financial and Sumitomo Mitsui Financial all declining. Brokerage Nomura Holdings and Daiwa Securities Group tumbled. Mitsubishi ended marginally lower on a Nikkei report that the company is considering increasing its stake in convenience store operator Lawson. Shares of Lawson jumped.
Both the S&P/ASX and All Ordinaries erased early losses to end 0.2 percent higher, as gains among banks and miners offset losses in the energy sector. Investors shrugged off a mixed labour report. The unemployment rate unexpectedly declined to 5.6 percent in August to hit a three-year low from 5.7 percent in July while overall employment dropped by 3,900 in the month. Miners Rio Tinto, Fortescue Metals Group and BHP Billiton advanced. Woodside Petroleum, Origin Energy and Santos were lower after oil prices tumbled overnight amid reports that Libya’s state oil company is likely to double production within four weeks.
The Hang Seng added 0.6 percent while the Sensex edged up 0.1 percent.
Looking Forward
In the US, August the consumer price index will be released along with September preliminary consumer sentiment and July Treasury international capital.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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