Mixed economic data led to mixed stock indices performance.
United States
US stocks were lower Friday after fluctuating during the course of the trading session. The Dow Jones industrials were virtually unchanged (down 8.49 points), the S&P was down 0.3 percent and the Nasdaq lost 0.5 percent. On the week, the Dow edged up 0.1 percent while the S&P and Nasdaq dropped 0.7 percent and 1.3 percent respectively. The Dow was down three of five days during the week while the S&P and Nasdaq retreated for four.
The lower close for stocks in the US Friday reflected a negative market reaction to news the FBI is re-opening its investigation into Hillary Clinton’s use of a private email server while Secretary of State. The news led to renewed uncertainty about the outcome of the upcoming presidential election, which previously seemed likely to result in a Clinton victory. The US dollar was down against all major counterparts.
Earlier in the day, traders reacted to the latest batch of economic and earnings news including the first estimate of third quarter growth — GDP was up at an annualized pace of 2.9 percent after increasing 1.4 percent in the second quarter. The stronger than expected GDP growth reflected the biggest increase since a 5.0 percent jump in the third quarter of 2014. The University of Michigan said its consumer sentiment index reading for October 87.2, down from the preliminary mid-month reading of 87.9 and down from September’s final reading of 91.2.
Amazon declined after the online retailer reported third quarter earnings that were below expectations. Exxon Mobil also came under pressure after reporting better than expected third quarter earnings but revenues were below estimates. Chevron advanced after reporting third quarter results that exceeded expectations. Hershey was higher after the chocolate maker reported better than expected third quarter results.
McKesson plunged to a three year low after its revenue fell about $1.5 billion short of estimates. The company slashed its annual outlook because of weaker drug prices. AmerisourceBergen and Cardinal Health declined as well. Amgen reported solid results for the third quarter and raised its guidance. General Electric and the oil and gas drilling services company Baker Hughes rose as they discussed a possible deal. GE said the discussions concerned a partnership and that it did not intend to buy Baker Hughes outright. United Technologies and Honeywell also were higher.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$6.75 to US$1,273.00. Copper futures were up 1.4 percent to US$2.19. WTI spot crude was down US$1.02 to US$48.70. Dated Brent spot crude was down 76 US cents to US$49.71. The US dollar was down against all of its major counterparts including the yen, euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was down 0.8 percent. The yield on US Treasury 30 year bond was up 2 basis points to 2.62 percent while the yield on the 10 year note was up 1 basis point to 1.85 percent.
Europe
Stocks were mixed in choppy trading Friday and for the week. Investors remained concerned about the continued selloff in global bonds. While the Federal Reserve is not expected to make any change to interest rates next week due to the upcoming presidential election. However, many believe an increase could still be a possibility in December. The FTSE edged up 0.1 percent and the CAC was up 0.3 percent. Both the DAX and SMI retreated 0.2 percent. On the week, the CAC was up 0.3 percent but the FTSE was down 0.3 percent, the DAX declined 0.1 percent and the SMI lost 1.6 percent.
The Linde Group climbed after reporting a rise in third-quarter net profit and confirming its outlook. Sanofi gained after the company reported strong third quarter results and raised its forecast for the full year. Total declined after the company reported adjusted net income for the third quarter of $2.07 billion, down from $2.76 billion in the corresponding period last year. BNP Paribas was higher after reporting better-than-expected profit for the third quarter.
Saint-Gobain advanced after the building materials firm posted good organic growth. Royal Bank of Scotland slid after the lender warned of a “range of uncertainties” after reporting a £469 million loss for the July to September period. British Airways parent International Consolidated Airlines Group gained despite cutting its 2016 earnings forecast. EasyJet and Carnival were higher as well. UBS Group rose in Zurich despite warning of tough markets. Electrolux advanced in Stockholm after its third-quarter profit beat expectations. AB InBev tumbled in Brussels after the company cut its revenue forecast for the year, citing challenging market conditions in Brazil.
Flash third quarter French gross domestic product was up 0.2 percent on the quarter after slipping 0.1 percent in the second when compared with the previous quarter. On the year, GDP was up 1.1 percent. Spain’s third quarter GDP climbed 0.7 percent on the quarter and was up 3.1 percent from a year ago.
Asia Pacific
Asian stocks were mixed once again Friday, with Japanese shares leading regional gains thanks to a weaker yen and a rise in global bond yields. Hong Kong stocks led losses ahead of US growth data that could strengthen the case for the Federal Reserve to raise rates by the year-end.
The Shanghai Composite was 0.3 percent lower as losses in the infrastructure sector overshadowed gains among financials in the wake of well-received earnings updates from banks and brokerages. The Hang Seng dropped 0.8 percent. For the week, the former added 0.4 percent while the latter retreated 1.8 percent.
The Nikkei and Topix were up 0.6 percent and 0.8 percent respectively. On the week they added 1.5 percent and 2.0 percent. Canon, Hitachi, Mazda Motor, Mitsubishi UFJ Financial and Nomura Holdings climbed. Advantest gained a day after the company raised its operating profit forecast for the year ending March 2017. Investors shrugged off disappointing inflation data, which showed that the country’s core inflation rate hit a three-year low in September. The jobless rate fell to 3 percent from 3.1 percent in the previous month while household spending slumped again when compared with a year ago.
The S&P/ASX was down 0.2 percent while the All Ordinaries slipped 0.1 percent. Both indices were 2.6 percent lower on the week. AMP shares slumped after the country’s biggest life insurer warned of an impairment charge of A$668 million for its wealth protection unit. ANZ retreated after saying it would book charges against its full-year after-tax profit. Investment bank Macquarie Group advanced despite reporting a drop in interim earnings. Santos, Woodside Petroleum, Origin Energy and Oil Search climbed as oil prices inched higher in Asian trading amid reports that OPEC member states are ready to cut output by 4 percent. Miners Rio Tinto, BHP Billiton and Fortescue Metals also rallied.
The Kospi was down 0.2 percent and down 0.7 percent for the week. The Sensex edged up 0.1 percent but was down 0.5 percent from a week ago.
Looking Forward
Central Bank activities

November 1

Japan

Bank of Japan Monetary Policy Announcement

Australia

Reserve Bank of Australia Monetary Policy Announcement

November 2

United States

FOMC Announcement

November 3

UK

Bank of England Monetary Policy Announcement

Bank of England Quarterly Inflation Report

The following indicators will be released this week…

Europe

October 31

Eurozone

Gross Domestic Product (Q3.2016 flash)

Harmonized Index of Consumer Prices (October flash)

Germany

Retail Sales (September)

November 1

UK

Manufacturing PMI (October)

November 2

Eurozone

Manufacturing PMI (October)

Germany

Manufacturing PMI (October)

Unemployment (October)

France

Manufacturing PMI (October)

November 3

Eurozone

Unemployment (September)

UK

Services PMI (October)

November 4

Eurozone

Composite & Services PMI (October)

Germany

Composite & Services PMI (October)

France

Composite & Services PMI (October)

Asia/Pacific

October 31

Japan

Industrial Production (September)

Retail Sales (September)

November 1

Japan

Manufacturing PMI (October)

China

Manufacturing PMI (October)

India

Manufacturing PMI (October)

November 3

Australia

Merchandise Trade Balance (September)

November 4

Australia

Retail Sales (September)

Americas

October 31

Canada

Monthly Gross Domestic Product (September)

United States

Personal Income & Spending (September)

Chicago PMI (October)

November 1

United States

Manufacturing PMI (October)

ISM Manufacturing Survey (October)

Construction Spending (September)

November 2

United States

ADP Private Employment (October)

November 3

United States

Initial Unemployment Claims (week ending prior Saturday)

Services PMI (October)

ISM Nonmanufacturing Survey (October)

Factory Orders (September)

November 4

Canada

Labour Force Survey (September)

International Trade (September)

United States

Employment Situation (October)

International Trade (September)

Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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