Investors are waiting to see details on US tax cuts and other program changes.
United States
After declining for most of the day, US stocks managed to climb into positive territory just before Friday’s close. The Dow Jones industrials and S&P inched up 0.1 percent while the Nasdaq was 0.2 percent higher. The Dow has now increased for 11 consecutive days. For the holiday shortened week, the Dow gained 1.0 percent, the S&P was up 0.7 percent and the Nasdaq edged up 0.1 percent. Profit taking contributed to the early weakness.
JB Hunt Transport Services, Knight Transportation and Werner Enterprises advanced. Goldman Sachs declined on a broker downgrade. Hewlett Packard Enterprise declined after the company cut its full year profit forecast. JC Penney retreated after the department store operator reported a bigger-than-expected drop in same store sales for the holiday quarter.
January new home sales were up 3.7 percent to an annualized rate of 555,000 after dropping 7.0 percent to a revised 535,000 in December. Final February University of Michigan consumer sentiment reading was upwardly revised to 96.3 from a preliminary reading of 95.7.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$5.75 to US$1,253.65. Copper futures were up 1.4 percent to US$2.70. WTI spot crude was down 48 US cents to US$53.99. Dated Brent spot crude was down 59 US cents to US$55.99. The US dollar was up against the euro, pound, Swiss franc and the Australian dollar. The currency declined against the yen and Canadian dollar. The Dollar Index was up 0.2 percent. The yields on both the US Treasury 30 year bond and on the 10 year note were down 7 basis points to 2.95 percent and 2.31 percent respectively.
Europe
Most stocks were lower Friday. Both banks and miners declined thanks to a slew of disappointing earnings reports. Political worries also dented investor sentiment. The FTSE was down 0.4 percent, the CAC declined 0.9 percent, the DAX tumbled 1.2 percent and the SMI lost 0.5 percent. For the week, the FTSE lost 0.8 percent and the CAC was 0.5 percent lower. The DAX and SMI, however, were up 0.4 percent and 0.2 percent respectively.
Standard Chartered declined after it said it would not pay a dividend for 2016 due to restructuring costs. RBS also was lower after it reported a 2016 loss of £7 billion due to higher misconduct charges and restructuring costs. The Italian banking index was lower. Traders said the sector was hit by a surge in Italian government bond yield spreads, which more than offset initial enthusiasm for the successful outcome of UniCredit’s €13 billion cash call. After a higher open, UniCredit ended lower. French banks BNP Paribas, Société Générale and Crédit Agricole — stocks that are seen as particularly sensitive to the outcome of the upcoming French presidential election — retreated.
Miners including Rio Tinto, BHP Billiton and Antofagasta were lower. Pearson was up after gyrating during the trading session. British Airways owner IAG gained after reporting an 8.6 percent rise in annual operating profit and saying it would increase cash returns to shareholders through a stock buyback. EasyJet also advanced. Nordex tumbled after the wind turbines maker lowered its 2017 revenue forecast, citing sluggish business conditions in certain core markets. Saint-Gobain was lower after posting muted growth in full year net income on lower revenue. William Hill increased after the bookmaker said it expects a stronger performance in 2017 after posting a 10 percent decline in its annual adjusted operating profit.
Asia Pacific
Asian stocks declined Friday. Weaker commodity prices weighed on resource stocks. Media reports suggesting that US President Donald Trump may not take action on his proposed $550 billion infrastructure promise until 2018 helped fuel demand for safe-haven assets such as gold and the yen.
The Shanghai Composite inched up 0.1 percent and was1.6 percent higher on the week for its third consecutive weekly gain. The yuan was little changed after US Treasury Secretary Steven Mnuchin signaled no urgency to brand China as a currency manipulator. The Hang Seng was 0.6 percent lower and down 0.3 percent on the week.
The Nikkei was down 0.5 percent and the Topix was 0.4 percent lower — the yen’s strength hurt exporters. For the week, the Nikkei and Topix were 0.3 percent and 0.4 percent lower respectively. Honda Motor, Sony and Toyota declined as the yen rose amid political uncertainty in Europe and on concerns that proposed US tax cuts may face delays. Toshiba climbed on a Nikkei report that the company is thinking about having its US unit Westinghouse Electric file for Chapter 11 bankruptcy protection.
Both the S&P/ASX and All Ordinaries lost 0.8 percent Friday. The indices were dragged down by losses in the material sector after iron ore and copper prices retreated on worries over Chinese demand. BHP Billiton, Rio Tinto and Fortescue Metals Group declined after China’s iron ore futures fell on concerns that China’s 2017 steel demand will disappoint. Copper also tumbled Thursday night on worries about demand in China. Appearing before a parliamentary committee, RBA governor Philip Lowe ruled out a further cut in interest rates to boost household borrowing, saying lower rates would encourage risky lending and threaten financial stability. The S&P/ASX lost 1.2 percent and the All Ordinaries was down 1.1 percent on the week.
The Kospi was 0.4 percent lower amid selling pressure from both foreign investors and domestic institutions on uncertainty surrounding Trump’s policy proposals. The index added 0.7 percent on the week. Markets in India were closed for holiday. The Sensex was up 1.5 percent on the week.
Looking Forward

Central Bank activities

March 1

Canada

Bank of Canada Monetary Policy Announcement

United States

Federal Reserve Beige Book

The following indicators will be released this week…

Europe

Feb 27

Eurozone

EC Consumer and Business Confidence (February)

Germany

Retail Sales (January)

Feb 28

Eurozone

Harmonized Index of Consumer Prices (February flash)

France

Consumption of Manufactured Goods (January)

Gross Domestic Product (Q4.2016 preliminary)

March 1

Eurozone

Manufacturing PMI (February)

Germany

Manufacturing PMI (February)

France

Manufacturing PMI (February)

UK

Manufacturing PMI (February)

March 2

Eurozone

Unemployment Rate (January)

Spain

Gross Domestic Product (Q4.2016 final)

March 3

Eurozone

Composite & Services PMI (February)

Germany

Composite & Services PMI (February)

France

Composite & Services PMI (February)

UK

Services PMI (February)

Italy

Gross Domestic Product (Q4.2016 final)

Asia Pacific

Feb 28

Japan

Industrial Production (January)

Retail Sales (January)

March 1

Japan

Manufacturing PMI (February)

Australia

Gross Domestic Product (Q4.2016)

China

Manufacturing PMI (February)

CFLP Manufacturing PMI (February)

India

Manufacturing PMI (February)

March 2

Australia

Merchandise Trade Balance (January)

March 3

Japan

Services PMI (February)

Consumer Price Index (January)

Household Spending (January)

Unemployment Rate (January)

Americas

Feb 27

United States

Durable Goods Orders (January)

Pending Home Sales (January)

Feb 28

Canada

Industrial Product Price Index (January)

United States

Gross Domestic Product (Q4.2016 second estimate)

International Trade in Goods (January)

Chicago PMI (February)

S&P/Case Shiller House Price Index (December)

March 1

United States

Personal Income & Spending (January)

Manufacturing PMI (February)

ISM Manufacturing Index (February)

Construction Spending (January)

March 2

Canada

Monthly Gross Domestic Product (December)

Gross Domestic Product (Q4.2016)

United States

Initial Unemployment Claims (week ending prior Saturday)

March 3

United States

ISM Nonmanufacturing Index (February)

Composite & Services PMI (February)

Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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