On 03 November, 2016 – Most global shares retreated

Investors are wary before the looming US election.
United States
US shares declined again Thursday with the S&P sliding for an eighth session — its longest since October 2008 — as investors grappled with mixed economic data, corporate earnings and the looming presidential election. The Dow Jones industrials were down 0.2 percent, the S&P retreated 0.4 percent and the Nasdaq tumbled 0.9 percent. The VIX index, a measure of expected equity volatility that is often referred to as Wall Street’s fear gauge, climbed 14.3 percent to its highest level since the aftermath of the late-June Brexit vote.
Fitbit, the maker of wearable fitness trackers and other devices, plunged after the company cut its outlook for the year, citing weak demand for its products. The company also cut its sales forecast for the holiday shopping season. Facebook stumbled after the company reported third-quarter results that easily exceeded analysts’ estimates but it also acknowledged that growth in advertising revenue was slowing. Starbucks shares rallied in the after-market on strong earnings and a dividend increase.
Cybersecurity firm FireEye reported a 12.6 percent rise in quarterly revenue helped by strong demand for its cloud-based products. Revenue rose to $186.4 million in the third quarter ended September 30 from $165.6 million a year earlier. CBS reported a 4.3 percent rise in quarterly revenue, helped by increased fees from CBS-affiliated stations as well as growth from digital distribution platforms. Revenue rose to $3.396 billion in the third quarter from $3.26 billion a year earlier. Net income from continuing operations rose to $514 million or $1.15 per share in the three months ended September 30, from $426 million or 88 cents per share.
In economic news, weekly jobless claims were up 7,000 to 265,000. Third quarter productivity was up at an annualized pace of 3.1 percent after sliding an annualized 0.2 percent in the second quarter. September factory orders were up 0.3 percent on the month. October ISM nonmanufacturing index was 54.8, down from September’s 57.1 but still a strong reading.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$2.75 to US$1,301.00. Copper futures were up 0.5 percent to US$2.24. WTI spot crude was down 67 US cents to US$44.67. Dated Brent spot crude was down 48 US cents to US$46.38. The US dollar was down against the yen, euro, pound, and the Canadian and Australian dollars. However, it gained against the yuan but was unchanged against the Swiss franc. The Dollar Index was down 0.3 percent. The yield on US Treasury 30 year bond was up 4 basis points to 2.60 percent while the yield on the 10 year note was up 1 basis point to 1.81 percent.
Europe
European stock indices were mostly lower when the trading day ended Thursday. Crude oil prices stabilized plus some strong earnings results from banks like ING and Société Générale provided some support. Investors remain cautious before Tuesday’s US presidential election. Traders are waiting for Friday’s US employment report for October tomorrow. The FTSE and SMI lost 0.8 percent, the CAC slipped 0.1 percent and the DAX declined 0.4 percent.
Bank of England voted unanimously to keep the key interest rate at 0.5 percent and asset purchases unchanged at £435 billion and corporate bond purchases of £10 billion. The BoE also raised its forecasts for both growth and inflation. The BoE also removed its statement from September that the majority of members expect to support a further cut in Bank Rate. Instead, the bank said “monetary policy can respond, in either direction.”
Prime Minister Theresa May had said the Article 50 will be triggered by late March next year, starting exit negotiations with the EU. However, the UK High Court ruled on Thursday that the government must seek Parliament approval before triggering Article 50. The May government has appealed the decision.
Volkswagen declined amid reports that its supervisory board will hold an extraordinary meeting on Friday to discuss brand overhaul. Adidas tumbled despite reporting better than expected earnings for the third quarter and confirming its 2016 outlook. Beiersdorf increased after the company said it now expects the EBIT margin for 2016 to significantly exceed the prior-year figure. In Paris, Société Générale jumped after its third-quarter earnings beat estimates. Air France-KLM surged after it reported third quarter earnings per share of €1.57 compared to €1.32 previously.
arsat surged after affirming its FY16 revenue outlook. Glencore declined after reporting lower production in most commodities. Wm Morrison Supermarkets rose after total sales excluding fuel declined 1.2 percent, but rose 1.1 percent including fuel in the 13 weeks to October 30, 2016. Credit Suisse Group was lower in Zurich. The banking giant raised its litigation provisions and warned of increased geopolitical and macro-economic uncertainty over the next several quarters after reporting a surprise profit in the third quarter. Reinsurer Swiss Re climbed after reporting a smaller-than-expected drop in third-quarter profit.
tember Eurozone unemployment rate remained unchanged for a second month at its lowest level in more than five years and the number of jobless declined the most in six months. The seasonally-adjusted unemployment rate was 10.0 percent, unchanged from the previous two months. The UK service PMI climbed to 54.5 in October from 52.6 the month before.
Asia Pacific
Stocks were mostly lower although the declines were limited thanks to a rebound in oil prices in Asia and the culture day holiday in Japan. The Federal Reserve held rates steady, as widely expected, but left the door open to a December rate increase amid signs of an improving economy.
The Shanghai Composite advanced 0.8 percent after the Caixin China services PMI rose to a four-month high of 52.4 thanks to increasing new orders. However, the Hang Seng was down 0.6 percent. The Hong Kong manufacturing sector continued to contract in October — the PMI was 48.2, and signaled a further decline in the health of Hong Kong’s private sector for the 20th month running. Not only was the headline index down from September, it was also the sharpest deterioration in operating conditions for three months.
Both the S&P/ASX and All Ordinaries inched 0.1 percent lower after a survey from the Australian Industry Group revealed that activity in the country’s services sector picked up strongly in October. The nation’s trade deficit also narrowed sharply in September, driven by higher commodity prices and a fall in consumer goods imports.
The Kospi added 0.2 percent a day after President Park Geun-Hye replaced both her prime minister and finance minister. The Sensex lost 0.4 percent in choppy trading. India’s private sector activity expanded at the fastest pace in almost four years in October, with both services and manufacturing growth improving.
Looking Forward
Australia posts September retail sales. October composite PMIs will be posted for France, Germany and the Eurozone. Canada releases October labour force survey and September international trade data. The US posts international trade data for September and the employment situation report for October.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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