On 13 February, 2017 – Stocks rallied globally

US indices continue to record new highs.
United States
US stocks hit record highs again on Monday as investors bet tax cuts promised by President Donald Trump would boost the economy. The Dow Jones industrials were up 0.7 percent while both the S&P and Nasdaq added 0.5 percent. The US dollar strengthened but bonds retreated. There were no economic data on Monday.
The President’s promise last week of a “phenomenal” tax plan sent stocks soaring. One of the best earnings season and recent economic data have reinforced the idea that the economy is on firm footing. Caterpillar and Goldman Sachs Group, JPMorgan and Boeing advanced. Apple shares reached their highest closing level ever Monday, as investors bet that the 10th anniversary iPhone expected later this year will return the world’s most valuable company to renewed momentum after its worst stumble in years. Shares in Popeyes Louisiana Kitchen were on the run following reports that the owner of Burger King had expressed interest in an acquisition. . Verizon Communications fell after the company said it was bringing back an unlimited data plan, sparking fears of a price war. AT&T, T-Mobile and Sprint declined.
Investors were looking ahead to comments from Federal Reserve Chair Janet Yellen, who is scheduled to appear before the US Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday to give testimony about monetary policy.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$6.05 to US$1,222.25. Copper futures were up 0.6 percent to US$2.79. WTI spot crude was down 97 US cents to US$52.89. Dated Brent spot crude was down US$1.13 to US$55.57. The US dollar was up against the yen, euro, Swiss franc and the Australian dollar. The currency declined against the pound and the Canadian dollar. The Dollar Index was up 0.1 percent. The yields on both the US Treasury 30 year bond and 10 year note were up 2 basis points to 3.03 percent and 2.43 percent respectively.
Europe
European stock markets rallied Monday. Investors appear to be relieved after US President Trump seems to have softened his stance on Japan and China. Trump recently confirmed that he will maintain the “one China” policy and his meeting with Japanese Prime Minister Shinzo Abe on Friday also eased concerns over a possible trade war with Japan. Investors were encouraged by some activity on the M&A front as German company Stada confirmed that it is involved in takeover talks.
Eurozone growth is expected to slow less this year than expected earlier. The economy has shown strong resilience to the Brexit negative shock last year according to a report from the European Commission. However, the outlook faces a higher-than-usual degree of uncertainty as the UK formally triggers its exit from the European Union and the new US President Donald Trump tries to implement his protectionist plans. Eurozone gross domestic product is expected to grow 1.6 percent this year after 1.7 percent growth in 2016.
Stada jumped after the generic drug maker confirmed that it had received two takeover offers, including that of private equity group Cinven Partners LLP. Aurubis gained after the copper producer backed its full-year outlook for significantly higher operating EBT after reporting a turnaround in the first quarter. Automakers Volkswagen, BMW and Daimler finished higher as did Peugeot and Renault.
In Paris, Ipsen rose after the drug maker agreed to acquire five consumer healthcare products in certain European territories from Sanofi. Royal Bank of Scotland Group was higher on reports that it is preparing to cut more than £1 billion of annual operating costs by eliminating jobs and closing branches. Mining stocks including Anglo American, Rio Tinto, Glencore, Antofagasta and BHP Billiton advanced.
Asia Pacific
Asian stocks rose broadly after US shares hit record closing highs Friday in the aftermath of strong earnings reports, upbeat Chinese data and President Donald Trump’s promise of “phenomenal” tax reform. Investor sentiment also improved after a meeting between Trump and Japanese Prime Minister Shinzo Abe avoided tough talk on currency and trade issues.
The Shanghai Composite was up for the fourth consecutive trading session this time by 0.6 percent. A rally in metals prices lifted material stocks. The Hang Seng also added 0.6 percent.
The Nikkei and Topix were up 0.4 percent and 0.5 percent respectively. Investors here were relieved that the Trump-Abe meeting ended with no public sparring over past accusations of currency manipulation or other issues. The yen weakened and gross domestic product for the final three months of last year came broadly in line with expectations, helping underpin investor sentiment. GDP was up 0.2 percent when compared with the previous quarter or at an annualized pace of 1.0 percent. When compared with the same quarter a year ago, GDP was 1.6 percent higher. Exporters Canon, Honda, Panasonic, Toyota and Toshiba advanced as the yen retreated. Inpex, JX Holdings and Japan Petroleum gained on the day.
Both the S&P/ASX and All Ordinaries advanced 0.7 percent as iron ore and copper prices jumped and companies posted strong financial results despite a somewhat challenging environment globally. Miners BHP Billiton, Rio Tinto and Fortescue Metals Group climbed as iron ore prices surged further after climbing on Friday. Oil Search, Origin Energy, Santos and Woodside Petroleum advanced after oil prices rose sharply Friday on reports that OPEC is showing a rare degree of discipline in sticking to its promise of output cuts. Newcrest Mining gained after more than doubling its first-half profit. Amcor, Aurizon Holdings and JB Hi-Fi rallied after unveiling their half-year financial results. However, Domino’s Pizza Enterprises tumbled on reports that its franchise owners are finding it very difficult to make a profit.
The Kospi was up 0.2 percent despite selling pressure from foreign investors after news about a ballistic missile launch by North Korea on Sunday. The Sensex edged up 0.1 percent in choppy trading.
Looking Forward
China releases January consumer and producer prices. Germany and the Eurozone report flash gross domestic product for the fourth quarter. The UK releases January consumer and producer prices. Germany reports February ZEW survey. The Eurozone releases December industrial production. In the US, January producer prices will be released. Fed Chair Janet Yellen begins her two days of testimony at the Senate Banking Committee.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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