On 22 November, 2016 – US stocks closed at record highs again

Stocks rallied globally on indications that OPEC might reach a production level agreement.
United States
The three major US stock indices closed at record highs once again on Tuesday. The gain pushed the Dow Jones industrials above the 19,000 level for the first time. The Dow last closed below 18000 on November 4. A rally following the US presidential election has especially helped industrial companies and bank shares. The Dow was up 0.4 percent, the S&P added 0.2 percent and the Nasdaq was 0.3 percent higher.
Retailers’ shares rose after Dollar Tree and Burlington Stores raised their forecasts. Dollar Tree raised its profit and sales forecasts after the chain reported solid results in the third quarter. Burlington Stores also raised its outlook after it posted a larger profit than expected. Dollar General also gained. Signet Jewelers advanced after it raised its outlook. Urban Outfitters and Target also rallied. Campbell Soup’s profit in its fiscal first quarter was better than expected because of lower expenses and better sales of snacks. Hormel, the maker of Spam, reported better results from its refrigerated foods business and its Jennie-O turkey unit. Hormel also gave solid guidance for the current fiscal year.
However, health care companies slumped after weak earnings from the medical device maker Medtronic. Patterson Companies plunged to a three-year low. The company said that its dental business struggled and that it had ended an exclusive relationship with the dental supplier Sirona that lasted about a decade. Its animal health business was hurt by weak prices for brand-name drugs. Medtronic sank after the company disclosed disappointing sales. Edwards Lifesciences, Johnson & Johnson and Abbott Laboratories retreated.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$2.00 to US$1,212.25. Copper futures were up 1.05 percent to US$2.55. WTI spot crude was down 35 US cents to US$47.89. Dated Brent spot crude was up 15 US cents to US$49.05. The US dollar was up against the yen, pound, Swiss franc and the Canadian dollar. However, it declined against the Australian dollar and was virtually unchanged against the euro and yuan. The Dollar Index was up 0.2 percent. The yield on US Treasury 30 year bond was unchanged at 3.00 percent while the yield on the 10 year note slipped 1 basis point to 2.31 percent.
Europe
Most stock indices advanced for a second day. Thanks to the continued rise in commodity prices mining, resource and energy shares also gained. Bank stocks also rose further on continued optimism for regulatory easing in the US. Economic data remained on the light side Tuesday. The FTSE was up 0.6 percent, the CAC gained 0.4 percent and the DAX was 0.3 percent higher. The SMI dropped 1.4 percent primarily because of the performance of the pharmaceutical heavyweights and the Swiss export data.
Lufthansa was down on reports that its pilots will go on strike Wednesday over a long-running pay increase demand. ThyssenKrupp and Salzgitter gained. Utility E.ON and peer RWE were higher. Essilor sank after the company cut its outlook. Zodiac Aerospace Group tumbled after its fiscal 2016 net income declined 41.5 percent. In London, Kingfisher retreated after it reported slower growth in third-quarter like-for-like sales due to further softness in France.
Hikma Pharmaceuticals slipped after signing a development and licensing agreement with Vectura to develop an asthma drug for the US market. Compass Group declined despite the catering firm delivering solid full-year results. Mining stocks including Anglo American, Glencore, BHP Billiton and Rio Tinto climbed. Swatch and Richemont fell in Zurich after Switzerland’s watch exports declined 16.4 percent — the fastest pace seen so far this year.
UK manufacturing order books improved but output growth slowed in November according to the latest Industrial Trends Survey from the Confederation of British Industry showed Tuesday. About 23 percent of manufacturers said orders were above normal and 26 percent said they were below normal, giving a balance of minus 3 percent.
Asia Pacific
Asian shares advanced Tuesday. Oil prices jumped on reports that OPEC is “highly likely” to reach an agreement on a production oil freeze at the end of the month. A powerful 6.9-magnitude earthquake hit northeastern Japan but no major damage was reported. The Shanghai Composite was up 0.9 percent to a fresh 10-1/2 month high, as the yuan steadied a bit from 8-1/2-year lows against the US dollar. The Hang Seng added 1.4 percent.
Both the Nikkei and Topix were up 0.3 percent. While Nikon, Pioneer, Mitsui Mining & Smelting and Nippon Suisan Kaisha rallied, Suzuki Motor, Mitsubishi Electric and Mazda declined. Nissan Motor dropped after the automaker agreed to sell its 41 percent stake in major parts supplier Calsonic Kansei to US investment firm Kohlberg Kravis Roberts.
The S&P/ASX was up 1.2 percent while the All Ordinaries added 1.1 percent. Commodity related stocks rallied after iron ore futures rebounded sharply on expectations of an improving Chinese appetite and oil extended gains on a weaker US dollar and amid hopes for an OPEC deal. Santos along with Origin Energy, Oil Search and Woodside Petroleum advanced. Rio Tinto gained after the company said it is cutting more jobs across its iron ore division in Western Australia. BHP Billiton and Fortescue Metals Group also rallied.
The Kospi added 0.9 percent on buying by foreign investors as the US dollar rally stalled and oil prices recovered. The Sensex rebounded 0.8 percent from six-month lows hit the previous day, although underlying sentiment remained cautious amid renewed capital outflows on growing concerns of demonetization and its aftermath.
Looking Forward
November flash manufacturing, services and composite PMIs will be released for the Eurozone, Germany and France. In the US, October durable goods orders and new home sales, September FHFA house price index, November flash manufacturing PMI and final consumer sentiment will be released along with weekly jobless claims. The minutes from the FOMC meeting held on November 2 will be published.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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