On 03 January, 2017 – Global stocks mostly advanced

Positive economic data helped boost investor demand for risk.
United States
Stocks advanced on the first trading day of the New Year with health care companies moving higher. A surge in shares of financial companies also helped stocks advance. Health stocks sank last year even as the rest of the market rose. Energy companies also were higher. The Dow Jones industrials were up 0.6 percent while the Nasdaq added 0.9 percent and S&P added 0.8 percent.
Merck, Amgen and McKesson gained. Xerox advanced after it split itself in two, a move the company announced almost a year ago. The original Xerox kept its printer and copier business. The second company will focus on business process outsourcing, providing payment processing and other services. The new company is called Conduent. Southwestern Energy and Cabot Oil retreated. Nvidia declined. Telecom and tech stocks also sent the indices higher. Ford Motor was up after the carmaker said it would cancel a planned $1.6 billion factory in Mexico and invest $700 million at a Michigan factory, after Trump had harshly criticized the Mexico investment plan. Verizon advanced on a broker upgrade. Marathon Petroleum was up after the company said it would explore a spinoff of its retail business, caving to pressure from activist investor Elliott Management.
The Institute for Supply Management said its manufacturing index rose to 54.7 in December, its highest reading of 2016. That was the fourth straight month of expansion and the ninth out of the last 10. November construction spending jumped 0.9 percent on the month and was 4.1 percent higher than the same month a year ago.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$5.10 to US$1,151.00. Copper futures were down 0.62 percent to US$2.49. WTI spot crude was down US$1.17 to US$52.55. Dated Brent spot crude was down US$1.11 to US$55.71. The US dollar was up against the yen, euro, pound, Swiss franc and yuan. However, it was unchanged against the Canadian dollar and down against the Australian dollar. The Dollar Index was up 0.5 percent. The yield on US Treasury 30 year bond was down 3 basis points to 3.04 percent while the yield on the 10 year note was unchanged at 2.44 percent.
Europe
Stocks mostly advanced Tuesday despite paring gains late in the trading day. Investors’ spirits were lifted by some better than expected economic data. Chinese factory activity data pointed to stabilization in the economy and the UK manufacturing PMI hit a 30-month high in December. Miners received a boost from the strong Chinese data, while energy stocks climbed on rising crude oil prices. Banks and automakers also turned in a strong performance.
The FTSE was up 0.5 percent, the CAC gained 0.3 percent and the SMI was 1.2 percent higher. However, the DAX slipped 0.1 percent. Commerzbank and Deutsche Bank were higher. In Paris, Société Générale, BNP Paribas and Crédit Agricole finished higher. Auto makers Peugeot, Renault, Volkswagen, Daimler and BMW finished higher. Euronext climbed after announcing an irrevocable all-cash offer to acquire the London Stock Exchange Group’s French clearing business. Dassault Aviation advanced after saying that it has reduced its share capital by 9.6 percent.
In London, Tullow Oil rallied as an historical deal between OPEC and non-OPEC member countries kicked off on Sunday. Britvic advanced after the soft drinks maker announced an agreement in principle to acquire Bela Ischia Alimentos, a concentrates and juice business in Brazil, for a total cash consideration of about £54.5 million. Next retreated on a broker downgrade. InterContinental Hotels Group rose on a broker upgrade. Banks including Barclays, Lloyds Banking Group, Standard Chartered and Royal Bank of Scotland advanced.
The UK manufacturing sector expanded at the fastest pace in 30 months in December according to the CIPS/Markit PMI. The index climbed to 56.1 from 53.6 in November.
Asia Pacific
Stocks advanced Tuesday as most markets resumed trading after a long holiday weekend. However, trading volumes remained thin amid the New Year holidays in Tokyo and New Zealand. The dollar pulled back slightly in Asian deals after seeing its biggest single-day gain in more than two weeks on Monday. Japanese markets were closed for a holiday.
The Shanghai Composite was up 1.0 percent and the Hang Seng added 0.7 percent. The China Caixin manufacturing PMI climbed to 51.9 in December, its fastest rate in three years, from 50.9 in November. This survey followed the CFLP survey that indicated the manufacturing sector expanded at a slightly slower pace in December.
The S&P/ASX was up 1.2 percent while the All Ordinaries added 1.1 percent. Financials and material stocks paced the gainers, as prices of copper and oil advanced and domestic data on manufacturing and home prices painted a positive picture of the economy. ANZ advanced after the lender said it would sell its 20 percent stake in Shanghai Rural Commercial Bank for A$1.8 billion. Commonwealth, NAB and Westpac also advanced. Miners BHP Billiton, Rio Tinto and Fortescue Metals Group rallied along with Woolworths and Wesfarmers. Oil majors Origin Energy, Beach Energy and Woodside Petroleum gained as a deal between OPEC and non-OPEC member countries began on Sunday.
The Kospi was up 0.9 percent as foreign investors continued their buying spree and China’s factory data pointed to stabilization in the economy. The Sensex edged up 0.2 percent.
Looking Forward
Japan posts December manufacturing PMI. India reports December services PMI. Composite December PMIs will be released for the Eurozone, Germany and France. December flash harmonized index of consumer prices will be posted. In the US, December ADP private employment survey will be reported. The FOMC minutes from its December meeting will be published.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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