On 07 November, 2016 – A global rally

Stocks rallied after worries over the US presidential election eased.
United States
US markets surged on the eve of Tuesday’s US presidential election after the Federal Bureau of Investigation said newly discovered emails did not warrant any action against Hillary Clinton. That appeared to ease the market’s anxiety, which had increased in recent weeks over signs that the presidential race was tightening. The Dow Jones industrials were up 2.1 percent, the S&P gained 2.2 percent and the Nasdaq added 2.4 percent. While few investors and analysts expect swings to vanish after the votes are counted, several said it was a moment of relief in a contentious election season. They said that a healthier economy and improving corporate earnings would likely support stocks in the longer term.
AbbVie advanced along with Regeneron Pharmaceuticals, Biogen, HCA Holdings and Humana. Seagate Technology and Western Digital both rallied. Blue Nile soared on news that the company, an online jewelry retailer, was being acquired by a group of funds managed by Bank Capital and Bow Street. LendingClub jumped after the company reported better-than-expected quarterly results.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$19.75 to US$1,283.05. Copper futures were up 2.1 percent to US$2.31. WTI spot crude was up 89 US cents to US$44.96. Dated Brent spot crude was up 72 US cents to US$46.30. The US dollar was up against the yen, euro, pound, Swiss franc and yuan. It retreated against the Canadian and Australian dollars. The Dollar Index was up 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 5 basis points to 1.83 percent.
Europe
Stocks rebounded from last week’s losses Monday. The FTSE was up 1.7 percent while the CAC, DAX and SMI all added 1.9 percent. Investors in Europe and the UK cheered the news that the FBI has once again cleared US Democratic presidential nominee Hillary Clinton of wrong doing related to her use of a private email server while Secretary of State.
Deutsche Bank and Commerzbank were higher on the day. BNP Paribas, Société Générale and Crédit Agricole also finished higher in Paris. In London, HSBC Holding climbed after the lender reported a third-quarter pre-tax profit that beat estimates. Daimler and BMW advanced. Renault gained on news that the car maker plans to open a manufacturing plant in Pakistan by 2018. Peugeot was up also.
Rio Tinto gained after an annual tender of diamonds from its Argyle mine in Western Australia achieved the highest average price per carat since the tender began in 1984. Glencore, BHP Billiton, Antofagasta and Anglo American all advanced as well. Ryanair gained after a well-received earnings update. Europe’s largest carrier by passengers lifted its long-term growth forecast by 10 percent and said it would return an additional €550 million euros to shareholders by February.
Eurozone retail sales annual growth slowed for a second straight month in September. Retail sales were down 0.2 percent on the month and up 1.1 percent on the year following 1.2 percent increase in August, revised sharply from 0.6 percent. German September factory orders contracted 0.6 percent, largely reflecting weak domestic demand and orders from the euro area.
Asia Pacific
Asian stocks rallied Monday after the FBI cleared US presidential candidate Hillary Clinton of wrong doing in its private email server investigation. Little attention was paid to the favorable October US employment report.
The Shanghai Composite added 0.3 percent with commodity-related stocks gaining after Chinese Premier Li Keqiang said Saturday that the government would maintain steady growth and speed up economic transformation. The Hang Seng was 0.7 percent higher even though realty stocks fell sharply after an increase in the stamp duty on property transactions. HSBC Holding shares were up after the lender reported a third-quarter pre-tax profit that beat estimates.
The Nikkei and Topix jumped 1.6 percent and 1.2 percent respectively. Exporters Hitachi, Honda Motor, Nissan, Panasonic, Toyota, Mazda and Toshiba gained as the US dollar rose against the yen. Fast Retailing, robot maker Fanuc and Softbank climbed. The minutes from the Bank of Japan’s September 20 and 21 meeting said that most board members believe it might take time to heighten inflation expectations in the country. Inflation is trending higher, although it has been slightly weaker in recent months, the bank said. It also said that exports and production are likely to remain sluggish in the near term.
The S&P/ASX and All Ordinaries jumped 1.4 percent and 1.3 percent respectively as worries over the US presidential election eased. Economic reports painted a mixed picture, with business conditions across Australia’s construction sector deteriorating at the fastest pace in 20 months in October, while job ads rose fractionally in the month. Higher iron ore prices boosted mining stocks, with Rio Tinto, BHP Billiton and Fortescue Metals Group advancing. Westpac Banking was higher despite posting flat profit results for 2016. Energy stocks including Oil Search, Woodside Petroleum, Origin Energy and Santos were up as oil prices rebounded in Asia after last week’s sharp losses.
The Kospi added 0.8 percent while the Sensex was 0.7 percent higher on the day.
Looking Forward
The US holds its presidential election. Germany and the UK post September industrial output. Germany and France report September merchandise trade. In the US, September JOLTS and October NFIB will be released.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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