On 11 January, 2017 – Global stocks were mixed

US shares advanced with the Nasdaq closing at a new high again.
United States
US stock indices advanced Wednesday after spending much of the day wavering between small gains and losses. Energy stocks gained following crude oil prices higher. Health care stocks were down the most after President-elect Donald Trump said the government needs to overhaul how it buys drugs from pharmaceutical companies. The Dow Jones industrials were up 0.5 percent, the S&P gained 0.3 percent and the Nasdaq was up 0.2 percent to close at a new high.
During a press conference Wednesday morning, Trump said the government has to create new bidding procedures for the pharmaceutical industry “because they’re getting away with murder.” The remarks sent health care stocks broadly lower. Several pharmaceutical companies declined including Endo International, Perrigo and Mallinckrodt. Merck rose on news that the Food and Drug Administration will do a quick review of one of the company’s drugs for its potential to treat a type of lung cancer. Intuitive Surgical gained after the robotic surgical systems maker delivered a strong fourth-quarter sales forecast.
SuperValu retreated after the grocery store operator announced a weak third-quarter profit, partly because of falling food prices. Signet Jewelers shares were lower after the company cut its profit forecast for the fourth quarter and current fiscal year. Signet said its total sales fell 5 percent over the holidays, citing technical problems at its e-commerce business. BorgWarner was down after it issued a profit and sales forecast that fell short of expectations.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$10.95 to US$1,178.55. Copper futures were down 0.4 percent to US$2.60. WTI spot crude was up US$1.51 to US$52.33. Dated Brent spot crude was up US$1.58 to US$55.22. The US dollar was up against the yuan and the Australian dollar. However, it declined against the yen, euro, pound, Swiss franc and the Canadian dollar. The Dollar Index was down 0.2 percent. The yields on both the US Treasury 30 year bond and the 10 year note were down 2 basis points to 2.95 percent and 2.36 percent respectively.
Europe
Stocks were mixed Wednesday with indices fluctuating between small gains and losses during the day. The FTSE was up 0.2 percent and the DAX added 0.5 percent. The CAC was virtually unchanged (up 0.48 point) while the SMI was 0.3 percent lower.
Eurozone economic growth momentum is likely to be sustained in the first half of this year, driven by steady growth in private consumption and public spending, according to the group of three leading European economic institutes (Germany’s Ifo, France’s INSEE and Italy’s ISTAT). Gross domestic product is expected to increase 0.4 percent in the fourth quarter of 2016 and is expected to keep growing at the same pace over the first half of 2017. Inflation was forecast to increase to 1.5 percent in the first and second quarters of this year, up from 0.7 percent in the final three months of 2016. Energy prices are expected to drive overall price growth.
The World Bank lowered its global growth projections as rising trade protection could have adverse effects after US President-elect Donald Trump takes office this month. According to the Global Economic Prospects report of the World Bank, the global economy will grow 2.7 percent this year instead of 2.8 percent projected in June 2016. Going forward, growth was expected to be 2.9 percent each in 2018 and 2019. Growth in the euro area was expected to slow to 1.5 percent this year, before slowing slightly to 1.4 percent next year. Uncertainty about the ‘Brexit’ process is expected to weigh on growth in the UK during 2017-18. However, the World Bank observed that the EU referendum had limited short-term cross-border financial market spillovers.
Volkswagen climbed after the automaker confirmed it is closing in on a deal to settle a US probe into the rigging of diesel-powered cars to cheat emissions tests. RWE and E.ON gained along with ThyssenKrupp and Salzgitter. J Sainsbury rose after posting better-than-expected sales for the third quarter. Cobham tumbled after its group trading profit for the year ended December 31 fell short of guidance. Taylor Wimpey declined even though it expects to deliver full year profitability at the upper end of market consensus. Tullow Oil retreated after issuing a trading update for 2016. TUI declined on a broker downgrade.
UK November industrial production climbed 2.1 percent on the month after sliding 1.1 percent in October. November visible trade deficit widened to £12.2 billion from £ 9.9 billion in October.
Asia Pacific
Stocks were mixed Wednesday as investors in Asia waited for US President-elect Trump’s first news conference. US crude oil futures rebounded after retreating on Tuesday on doubts about the implementation of a global agreement by OPEC and other producers to cut production.
The Shanghai Composite was down 0.8 percent as the yuan held largely unchanged against the US dollar and investors waited to hear Trump’s press conference remarks. The Hang Seng was up 0.8 percent. The Nikkei was up 0.3 percent while the Topix added 0.5 percent. Toshiba advanced after its main creditors decided to continue giving financial support to the struggling firm.
The S&P/ASX edged up 0.1 percent while the All Ordinaries were up 0.2 percent. BHP Billiton, Rio Tinto and Fortescue Metals Group climbed after iron ore and copper prices surged amid further signs of a pick-up in the Chinese economy and forecasts of strong growth in the US. Gold Miners Newcrest and Northern Star gained as gold hovered near six-week highs on safe-haven demand amid fears of a “hard” Brexit and policy uncertainty in the US. ANZ Bank was lower after announcing the sale of its New Zealand-focused asset finance business UDC Finance to Chinese logistics company HNA Group for A$626 million. Bellamy’s Australia tumbled after the infant formula maker returned to trading after a nearly month in suspension.
The Kospi was up 1.5 percent. Investors shrugged off data showing that the number of unemployed South Koreans surpassed one million last year for the first time since 2000. The Sensex rallied 0.9 percent after oil prices fell sharply for the second straight session overnight and the World Bank said that demonetization may help lower lending rates and lift economic activity over the medium term.
Looking Forward
India releases December consumer prices and November industrial production. The Eurozone posts November industrial production and the European Central Bank publishes minutes from its most recent governing council meeting. In the US, December import & export prices will be reported along with weekly jobless claims, money supply and the Fed balance sheet.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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