Inflation prospects hit emerging markets.
United States
Stocks were mixed Friday with the Dow Jones industrials edging up 0.2 percent and the Nasdaq adding 0.5 percent. The S&P slipped 0.1 percent. Energy companies were down along with the price of crude oil. However, for the week, the Dow jumped 5.4 percent to a new record high while both the S&P and Nasdaq added 3.8 percent. The bond market was closed for the Veterans Day holiday.
Industrial companies and banks have led the surge in recent sessions as investors poured money into stocks they believe could benefit from possible increased government spending, less regulation and a pickup in inflation under a president-elect Donald Trump administration. Murphy Oil, Chesapeake Energy and Hess retreated. Nvidia surged after the company, which makes graphics processors for gaming and other applications, posted better-than-expected quarterly results late Thursday. Walt Disney advanced after the company said it was forging ahead with new streaming deals involving Netflix, Hulu and others. Amazon.com, Google parent Alphabet and Facebook were lower this week despite the broader market’s steep rise.
Federal Reserve Vice Chair Stanley Fischer said Friday that economic growth prospects appear strong enough for a gradual increase in interest rates. However, the Fed is monitoring an increase in long-term US government borrowing costs.
The University of Michigan preliminary consumer sentiment index for November jumped to 91.6 after slumping to 87.2 in October. It should be noted that the survey was completed prior to the presidential election.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$31.05 to US$1,236.45. Copper futures were down 1.65 percent to US$2.51. WTI spot crude was down US$1.25 to US$43.41. Dated Brent spot crude was down US$1.09 to US$44.75. The US dollar was up against the euro, Swiss franc, yuan and the Canadian and Australian dollars. However, it declined against the yen and pound. The Dollar Index was up 0.1 percent. The US Treasury market was closed for the Veterans Day holiday.
Europe
Although European markets got off to a positive start Friday, they were ultimately unable to sustain their early gains. The FTSE slumped 1.4 percent, the CAC retreated 0.9 percent and the SMI was 0.6 percent lower. However, the DAX added 0.4 percent thanks to a boost from Allianz who reported strong earnings. On the week, the FTSE was up 0.6 percent, the CAC added 2.6 percent, the DAX gained 4.0 percent and the SMI advanced 3.8 percent.
Allianz climbed after its third-quarter profit beat forecasts amid good performance across its business classes. Innogy was lower after the company, which was split from RWE last month, reported lower net income for the first nine months of fiscal year. Deutsche Bank and Commerzbank were higher. Automakers including BMW, Volkswagen, Daimler, Peugeot and Renault rallied. Royal Dutch Shell declined on a report that it plans to invest $10 billion in Brazil over the next five years. SIG plunged after the building materials supplier forecast lower underlying pretax profit for fiscal 2016, reflecting weaker than anticipated trading conditions and intensified competition in the UK. Fresnillo and Randgold Resources tumbled.
Asia Pacific
Most Asian stocks were down Friday — emerging market currencies retreated against the US dollar as soaring US bond yields on expectations of higher inflation and interest rates in the US raised concerns about capital outflows from the region.
The Shanghai Composite was up 0.8 percent to a 10-month high, after news that the long-awaited Shenzhen-Hong Kong Stock Connect will be officially launched on November 21. The Hang Seng however was down 1.3 percent. For the week, the former was up 2.3 percent while the latter was 0.5 percent lower. China’s yuan weakened for a second straight day to hit a fresh six-year low against the US dollar as investors braced for uncertainty over coming weeks.
The Nikkei and Topix added 0.2 percent and 0.1 percent respectively as the dollar continued to rise against the yen on expectations of expansionary fiscal policy under president-elect Donald Trump. Financials led gains amid the rise in U.S. Treasury yields. Mitsubishi UFJ Financial, Mizuho Financial and Sumitomo Mitsui Financial climbed. Mitsubishi Materials rallied after London copper prices jumped to hit their highest level in nearly 16 months Thursday. Pioneer slumped after the car electronics maker reported a net loss for the second quarter.
The S&P/ASX added 0.8 percent and the All Ordinaries was 0.7 percent higher. For the week the indices were up 3.7 percent and 3.5 percent respectively. BHP Billiton, Rio Tinto and Fortescue Metals Group gained after iron ore prices jumped to a two-year high Thursday. Santos advanced after Chinese private equity firm Hony Capital increased its stake in the oil & gas company. The big four banks gained along with investment bank Macquarie Group and insurer Suncorp Group. Gold miners Newcrest, Northern Star and Regis Resources tumbled along with gold prices.
The Kospi was down 0.9 percent but edged up 0.1 percent on the week. The Bank of Korea held its key rate at a record low of 1.25 percent as widely anticipated. The Sensex tumbled 2.5 percent and was down 1.7 percent on the week. Soaring US bond yields on expectations of higher inflation and interest rates in the country stoked worries about capital outflows from the region. Investors also pondered the social, political and economic implications of the currency crackdown in India in the near term, as banks struggled to handle panicked customers desperate to finally get some cash in their pockets or exchange their old currency notes.
Looking Forward

The following indicators will be released this week…

Europe

Nov 14

Eurozone

Industrial Production (September)

Nov 15

Eurozone

Merchandise Trade (September)

Gross Domestic Product (Q3.2016 flash)

Germany

Gross Domestic Product (Q3.2016 flash)

ZEW Survey (November)

Italy

Gross Domestic Product (Q3.2016 flash)

UK

Consumer Price Index (October)

Producer Price Index (October)

Nov 16

UK

Labour Market Report (October)

Nov 17

Eurozone

Harmonized Index of Consumer Prices (October final)

UK

Retail Sales (October)

Asia Pacific

Nov 14

Japan

Gross Domestic Product (Q3.2016 first estimate)

China

Industrial Production (October)

Retail Sales (October)

India

Consumer Price Index (October)

Nov 17

Australia

Labour Force Survey (October)

Americas

Nov 15

United States

Retail Sales (October)

Empire State Survey (November)

Import/Export Prices (October)

Nov 16

Canada

Manufacturing Sales (September)

United States

Industrial Production (October)

Producer Price Index (October)

Nov 17

United States

Initial Unemployment Claims (week ending prior Saturday)

Consumer Price Index (October)

Housing Starts (October)

Philadelphia Fed Survey (November)

Nov 18

Canada

Consumer Price Index (October)

Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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