Investors were risk averse before the US presidential election.
United States
The S&P ended lower Friday for a ninth straight day — the longest losing streak for the index in more than 35 years. Investors were on edge prior to Tuesday’s US presidential election. Nasdaq also was lower for a ninth day while the Dow Jones industrials were down for a seventh consecutive day. The three indices were down 0.2 percent each Friday. On the week, the S&P declined 1.9 percent, Nasdaq retreated 2.8 percent and the Dow lost 1.5 percent. The indices had advanced earlier in the day thanks to a strong employment report. However, investors sold into the close. Falling crude prices also pressured the indices.
October employment was up 161,000 with gains in construction, healthcare and professional and business services. While below the consensus estimate, sizable upward revisions to August and September more than made up the difference. The unemployment rate slipped to 4.9 percent from 5.0 percent earlier. September’s international trade deficit narrowed to $36.4 billion, from $40.5 billion in August.
Higher-than-expected quarterly profits from Regeneron and Humana lifted their stocks. GoPro, the maker of wearable cameras, declined after it reported a 40 percent drop in revenue and gave a negative outlook for the holiday season. GoPro is showing signs of being unable to expand its product line. Procter & Gamble and Amazon.com declined. Willis Towers Watson tumbled after cutting its full-year revenue forecast. Wells Fargo also retreated.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$1.80 to US$1,302.80. Copper futures were up 0.7 percent to US$2.26. WTI spot crude was down 59 US cents to US$44.07. Dated Brent spot crude was down 77 US cents to US$45.58. The US dollar was up against the yen and the Canadian and Australian dollars. However, it declined against the euro, pound, Swiss franc and yuan. The Dollar Index was down 0.2 percent. The yield on US Treasury 30 year bond was down 4 basis points to 2.56 percent while the yield on the 10 year note slipped 3 basis points to 1.78 percent.
Europe
Stocks here were down on Friday and for the week on persistent fears surrounding the upcoming US presidential election along with disappointing economic data. On Friday, the FTSE was down 1.4 percent, the CAC declined 0.8 percent and the DAX and SMI each lost 0.6 percent. For the week, the FTSE dropped 4.3 percent, the CAC declined 3.8 percent, the DAX tumbled 4.1 percent and the SMI was 4.0 percent lower.
Commerzbank declined after posting a net loss in the third quarter amid hefty provisions for an extensive overhaul. Deutsche Bank was lower after Fitch Ratings placed its A- rating on negative watch citing a sluggish business environment in Europe as well as Asia Pacific. AXA tumbled after the insurer reported flat revenues during the first nine months of 2016. JCDecaux tumbled after warning of lower revenues in the fourth quarter. L’Oréal climbed after its third-quarter revenue beat estimates.
Sanofi and Hikma Pharmaceuticals sank in London on reports that the US Justice Department is mulling antitrust charges against more than a dozen major generic drug makers for alleged price fixing. British Airways parent International Consolidated Airlines Group declined after the airline lowered its growth outlook for the period 2016 to 2020. LafargeHolcim climbed in Zurich after reporting higher third-quarter earnings and backing its FY outlook. Richemont surged after the company announced management changes. In London, miners including BHP Billiton, Anglo American, Randgold Resources and Fresnillo retreated.
Eurozone October composite output index rose to 53.3 in October from 52.6 in September. However, the reading was below the flash estimate of 53.7.
Asia Pacific
Stocks were lower on Friday and for the week as investors fretted over the potential outcome of Tuesday’s US presidential election and waited for the release of the US October employment report. The data were released after markets here closed for the week.
The Nikkei and Topix declined 1.3 percent and 1.6 percent respectively. Investors ignored the October composite PMI that indicated activity in the services sector expanded for the first time in three months. On the week, the indices were 3.1 percent and 3.3 percent lower respectively. Exporters were under pressure from a stronger yen, with Canon, Toshiba, Sony and Panasonic retreating. Suzuki Motor dropped on news that it will invest about ¥100 billion in a second vehicle production line at its new plant in Gujarat. Honda, Toyota and Mazda Motor also declined. Mitsubishi UFJ Financial retreated along with oil stocks. Takata slid on a Nikkei report that the troubled airbag supplier is preparing for a possible bankruptcy filing for its US unit.
The S&P/ASX declined 0.9 percent while the All Ordinaries was down 0.8 percent. On the week, both indices were down 2.0 percent. Beach Energy, Oil Search and Origin Energy were lower even though oil prices were steady after five straight days of declines. The four big banks tumbled. Miners BHP Billiton and Rio Tinto retreated. Genworth Mortgage Insurance Australia shares tumbled after the company warned of a decline in premium income. Flight Centre Travel slumped after a profit warning.
The Shanghai Composite edged down 0.1 percent on the day but was the only index to advance for the week (up 0.7 percent). The Hang Seng was down 0.2 percent and lost 1.4 percent on the week. The Kospi slipped 0.1 percent and was down 1.9 percent on the week. The Sensex declined 0.6 percent Friday and lost 2.4 percent for the week.
Looking Forward

Central Bank activities

Nov 10

New Zealand

Reserve Bank of New Zealand Monetary Policy Announcement

Other

Nov 8

United States

Presidential Election Day

The following indicators will be released this week…

Europe

Nov 7

Eurozone

Retail Sales (September)

Germany

Manufacturing Orders (September)

Nov 8

Germany

Merchandise Trade (September)

Industrial Production (September)

France

Merchandise Trade (September)

UK

Industrial Production (September)

Nov 9

UK

Merchandise Trade (September)

Nov 10

France

Industrial Production (September)

Asia/Pacific

Nov 8

China

Merchandise Trade Balance (October)

Nov 9

China

Consumer Price Index (October)

Producer Price Index (October)

Nov 10

Japan

Private Machinery Orders (September)

Nov 11

Japan

Producer Price Index (October)

Americas

Nov 8

United States

JOLTS (September)

Nov 10

United States

Initial Unemployment Claims (week ending prior Saturday)

Nov 11

United States

Consumer Sentiment (November preliminary)

Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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