On 27 February, 2017 – Globally stocks were mixed

Investors were cautious prior to Trump’s speech before Congress Tuesday night.
United States
The three major stock indices traded within a very narrow range Monday as investors waited for US President’s first speech to Congress in the Tuesday global day. The Dow Jones industrials and S&P edged up 0.1 percent while the Nasdaq was up 0.3 percent. With today’s gain, the Dow recorded its 12 straight record close. In addition to the President’s speech, the week is loaded with Federal Reserve speakers as well.
Energy shares led gains in the S&P as oil prices edged higher. Financials also rallied. Utilities retreated. Time Warner advanced on a Wall Street Journal article that said the Federal Communications Commission chairman said he does not expect the agency to review AT&T’s deal to buy Time Warner. AT&T slipped. Shares of US defense companies including Boeing, Raytheon, General Dynamics and Lockheed Martin rose after Trump said he would seek to boost Pentagon spending by $54 billion in his first budget proposal. La Jolla Pharmaceutical surged following the success of its lead experimental drug in a late-stage study.
January durable goods orders were up a seasonally adjusted 1.8 percent on the month but slumped 0.6 percent when compared with a year ago. However, core capital goods orders (excluding defense and aircraft) retreated 0.4 percent. The January pending home sales index which tracks initial contract signings slid 2.8 percent.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$3.55 to US$1,257.20. Copper futures were down 0.1 percent to US$2.69. WTI spot crude was up 7 US cents to US$54.08. Dated Brent spot crude was down 1 US cent to US$55.98. The US dollar was up against the yen, pound, Swiss franc and the Canadian dollar. The currency declined against the euro. The currency was unchanged against the Australian dollar and yuan. The Dollar Index was virtually unchanged. The yield on US Treasury 30 year bond was up 3 basis points to 2.98 percent while the yield on the 10 year note was up 5 basis points to 2.36 percent.
Europe
Stocks were mixed on Monday with narrow changes up or down. Early gains were pared after the planned merger between the London Stock Exchange and Deutsche Bourse hit a roadblock. However, the markets began to recover following the higher start in US markets. The FTSE edged up 0.1 percent while the DAX added 0.2 percent. The SMI slipped 0.1 percent and the CAC was virtually unchanged (down 0.06 point).
President Donald Trump will make his first address to a joint session of Congress Tuesday night. At that time he is expected to give some clarity to his fiscal and tax policies. Political concerns in Europe also gave investors pause Monday. Brexit worries weighed as media reports suggested that UK Prime Minister Theresa May’s team is preparing for Scotland to potentially call for an independence referendum in March. However, there was some respite surrounding France’s presidential election as two weekend polls showed that France’s independent presidential candidate Emmanuel Macron has his biggest lead over Republican Francois Fillon and has begun narrowing the gap with National Front leader Marine Le Pen.
Deutsche Bank gained after reports that the lender has cut its bonus pool for 2016 by almost 80 percent. Stada was higher after the generic drug-maker said it is opening its books to potential acquirers. Sanofi SA finished lower after it entered into a strategic partnership with Lonza Group to establish a large-scale biologics production facility in Switzerland. Total declined after signing a pact for the sale of stakes and the transfer of operatorship in various mature assets in Gabon to Perenco.
The London Stock Exchange Group was down. Over the weekend, the company said its proposed merger with Deutsche Börse is unlikely to be approved by the European Commission. Deutsche Börse was lower as well. Disposable products supplier Bunzl gained after reporting a rise in full-year pretax profit and raising its dividend. Persimmon advanced after the homebuilder reported a 23 percent rise in 2016 pretax profit and said it is in a “good position” to deliver further growth in 2017. Associated British Foods slid after the food to clothing retail conglomerate maintained its earnings guidance. Insurer Admiral and Direct Line tumbled after the government announced changes to a key discount rate used to calculate lump sum payouts.
February EC economic sentiment index rose marginally to 108.0 from 107.9 in January. Eurozone monetary aggregate growth slowed slightly in January, while loans to households increased at a faster pace. M3 grew 4.9 percent on the year in January after increasing 5 percent increase in December.
Asia Pacific
Stocks declined Monday thanks to lower commodity prices that weighed on resource stocks and investor caution before President Donald Trump’s speech to Congress Tuesday night. Investors are eagerly waiting for details on his promises of tax reform, deregulation and infrastructure spending.
The Shanghai Composite was down 0.8 percent after the securities regulator vowed stricter regulations to clamp down on speculation and pledged to speed up approvals of initial public offerings. The Hang Seng was 0.2 percent lower prior to the release of merchandise trade data later in the day.
The Nikkei and Topix tumbled 0.9 percent and 1.0 percent respectively — yen’s strength hurt exporters and lower US yields sent financials broadly lower. Exporters Honda Motor, Hitachi, Panasonic, Toshiba and Sony declined after the dollar dropped below the 112 yen level on Friday. Mitsubishi UFJ Financial, Sumitomo Mitsui Financial and Dai-ichi Life Holdings declined after benchmark 10-year Treasury note yield retreated. Inpex, JX Holdings and Japan Petroleum declined. SoftBank retreated on a CNBC report that the company is close to finalizing an investment worth more than $3 billion in US office-sharing startup WeWork.
The S&P/ASX was down 0.3 percent while the All Ordinaries lost 0.2 percent. Banks ANZ, Commonwealth and Westpac declined. Miners were mixed with BHP Billiton and Rio Tinto declining and Fortescue Metals Group advancing. QBE Insurance Group rallied after reporting an increase in full-year profit and announcing an A$1 billion share buyback.
The Kospi lost 0.4 percent as foreign investors continued to sell local stocks on uncertainty in the Trump era. The Sensex was 0.3 percent lower.
Looking Forward
Japan posts industrial production and retail trade for January. India reports fourth quarter gross domestic product. France releases January consumption of manufactured goods, the consumer and producer price indices and fourth quarter gross domestic production. In the US, second estimate of gross domestic product and January international trade of goods will be released. Also the February Chicago PMI and consumer confidence will be released.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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