On 21 November, 2016 – The Dow, S&P and Nasdaq hit new highs
But stocks were mixed in Europe and the Asia Pacific region.
United States
Dow Jones industrials, S&P and Nasdaq all finished at all-time highs Monday. Energy stocks drove the indices higher. The Dow was up 0.5 percent, the S&P gained 0.7 percent and the Nasdaq added 0.9 percent. Stocks have rallied since the US presidential election on November 8.
Energy companies climbed with the price of oil. Investors hope that OPEC countries will complete a deal that would cut oil production and help support prices when they meet in Vienna on November 30. They have agreed to preliminary terms of a deal that will reduce the production of oil slightly, but the details remain to be determined. Marathon Oil, Exxon Mobil and Chevron stock gained. Sunoco Logistics agreed to buy Energy Transfer Partners in an all-stock deal. The two companies are involved in the Dakota Access Pipeline project. Both companies were down on the day.
Tyson Foods tumbled after the company’s fourth quarter profit and sales fell far short of forecasts as the company’s chicken business struggled. Hormel Foods also retreated. LifeLock jumped after the security software maker Symantec agreed to buy the company for $2.3 billion. The deal valued LifeLock at $24 per share. The building products company Headwaters agreed to be bought by Boral Ltd. of Australia in a deal the companies valued at $2.6 billion, or $24.25 per share. Oracle said it would buy Dyn, a company that helps route internet traffic to its destination. Facebook, PayPal and Alphabet rallied.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$3.25 to US$1,214.25. Copper futures were up 2.1 percent to US$2.53. WTI spot crude was up US$1.80 to US$47.49. Dated Brent spot crude was up US$2.21 to US$49.07. The US dollar was up against the yen and yuan but declined against the euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was down 0.45 percent. The yield on US Treasury 30 year bond was down 4 basis points to 2.98 percent while the yield on the 10 year note slipped 3 basis points to 2.24 percent.
Europe
Stocks were mixed Monday. A rally in commodity prices provided a lift to miners, resource and energy stocks. A decline in the US dollar helped to drive commodity prices higher. Crude oil prices climbed on hopes for an OPEC production cut agreement. The FTSE was virtually unchanged (up 2.19 points) while the CAC and DAX added 0.6 percent and 0.2 percent respectively. The SMI retreated 0.7 percent.
There were very little economic data to drive trading. Investors were awaiting comments from European Central Bank President Mario Draghi, to see whether he will reiterate his dovish remarks supporting further monetary easing.
Italian banks were under pressure again Monday. Investors are concerned about the upcoming Italian constitutional referendum vote, which is scheduled for December 4. The Italian economy is forecast to grow less than previously projected in 2016. Growth in 2016 was lowered to 0.8 percent from 1.1 percent citing weak foreign demand. The 2016 forecast was in line with government projections.
Aixtron sank after the Committee on Foreign Investment in the U.S. objected to a Chinese takeover of the German technology firm for the second time in a little more than a year. Volkswagen climbed on reports that it plans to shift its focus to electric and battery-powered cars. Sanofi was lower after reports that the company plans to stop producing a bladder-cancer drug that was in short supply for several years. GlaxoSmithKline declined after a regulatory submission with the US Food and Drug Administration.
Essentra plunged after the company cut its sales and profit guidance for 2016 citing challenging marketing conditions in China. Mitie sank after the outsourcing firm issued another profit warning. It cited ongoing market uncertainties and weak UK business confidence. Mining stocks including Randgold Resources and Fresnillo advanced after precious metal prices climbed. Antofagasta, Anglo American and Polymetal International also were higher. Novartis retreated in Zurich after acquiring Selexys Pharmaceuticals, a company specializing in development of therapeutics in certain hematologic and inflammatory disorders.
Asia Pacific
Stocks were mixed on Monday. The yuan’s weakness along with the US dollar’s continued strength against the yen supported Chinese and Japanese shares. The Shanghai Composite advanced 0.8 percent to hit a fresh 10-month high, led by gains in cyclical shares on expectations that a weaker currency would boost exports. The Hang Seng edged up 0.1 percent. The yuan was on track for its worst monthly performance in more than a year in November as Beijing weakened the reference rate again.
The Nikkei and Topix were up 0.8 percent and 1.0 percent respectively as the yen weakened further and oil prices extended gains on data showing a rise in the US oil rig count for the eleventh time in 12 weeks. Among exporters, Panasonic, Sony and Hitachi rallied along with energy stocks Inpex and JX Holdings. Tokio Marine Holdings after an upgrade. MS&AD Insurance Group Holdings also gained. The October merchandise trade surplus was ¥496 billion. Exports and imports dropped 10.3 percent and 16.5 percent respectively from a year ago.
Both the S&P/ASX and All Ordinaries slipped 0.2 percent despite solid gains in the energy sector. Banks and miners ended on a mixed note. Gold miners Regis Resources, Evolution Mining and Northern Star climbed as gold prices steadied in Asia. Gold prices were hit by US dollar strength and on expectations that the Federal Reserve will raise interest rates when it meets mid-December. Energy companies Woodside Petroleum, Oil Search, Origin Energy and Santos rallied on expectations that OPEC is moving closer to a deal to cut oil output for the first time since 2008 at a meeting later this month.
The Kospi was 0.4 percent lower on institutional selling on expectations of faster-than-expected Federal Reserve interest rate increases. The Sensex tumbled 1.5 percent as a strengthening US dollar fueled fears about capital flight.
Looking Forward
The Eurozone reports flash EC consumer confidence. Canada releases September retail sales. In the US, October existing home sales will be released.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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