On 28 February, 2017 – Global investors cautious

They awaited US President Donald Trump’s address to Congress.
United States
US stocks were lower Tuesday thanks to a disappointing profit outlook from Target that dragged down retailers. Investors were also bracing themselves for President Donald Trump’s address to Congress. The Dow Jones industrials were down 0.1 percent, the S&P declined 0.3 percent and Nasdaq was 0.6 percent lower. The Dow, S&P and Nasdaq were up 4.8 percent, 3.7 percent and 3.8 percent respectively.
Charles Schwab retreated after the company said it would cut its ETF trade and online equity fees, following similar cuts by Fidelity Investments. TD Ameritrade also dropped. Target tumbled after full-year profit forecast missed estimates and the company said it would take a $1 billion hit to its operating profit. Priceline advanced helping to offset Target’s impact on the S&P following quarterly revenue that beat estimates. Wal-Mart also declined. Frontier Communications posted a steep loss after reporting a wider than expected fourth quarter loss. Perrigo dropped after the drug maker reported a loss and said it had sold certain drug royalties.
A slew of economic data was released. The second estimate of fourth quarter gross domestic product was unrevised at an annualized gain of 1.9 percent. An upward revision to consumer spending was offset by downward revisions to state and local government spending and non-residential fixed investment. The Conference Board’s consumer confidence index climbed to 114.8 in February after falling to a revised 111.6 in January.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$1.60 to US$1,255.60. Copper futures were up 0.7 percent to US$2.72. WTI spot crude was down 4 US cents to US$54.01. Dated Brent spot crude was down 34 US cents to US$55.59. The US dollar was up against the pound, and the Canadian and Australian dollars. The currency declined against the yen, yuan and Swiss franc. The currency was unchanged against the euro.
The Dollar Index was virtually unchanged. The yield on US Treasury 30 year bond was down 1 basis point to 2.97 percent while the yield on the 10 year note was unchanged at 2.36 percent.
Europe
Stocks were mostly higher Tuesday after they fluctuated between small gains and losses. Investors were cautious prior to the highly anticipated speech from US President Trump before a joint session of Congress later in the global day. Traders are looking for additional details on his policies on tax reform, deregulation, and infrastructure spending. The FTSE and DAX edged up 0.1 percent while the CAC and SMI each added 0.3 percent. For the month of February, both the FTSE and CAC were up 2.3 percent, the DAX advanced 2.6 percent and the SMI was 3.1 percent higher.
Steelmaker Salzgitter declined after the company forecast an increase in sales and profit this year, but warned the outlook was subject to unforeseeable influences including selling and input prices and exchange rates. Hochtief was up after the company reported robust financial results for fiscal year 2016 and said it expects underlying profit to grow by as much as a quarter this year. Thales gained after the technology firm raised its dividend after reporting a rise in 2016 operating profit. GKN rallied after it beat forecasts with a 12 percent jump in full-year pre-tax profit.
Meggitt shares soared after the engineering firm specializing in aerospace equipment lifted its full-year dividend after reporting a rise in full-year adjusted profits. British Land shares rose — the property development & investment firm and its joint venture partner, Oxford Properties, are in advanced talks regarding the possible sale of their interests in the Leadenhall Building. Taylor Wimpey advanced after the homebuilder’s 2016 pretax profits before exceptional items rose by 21 percent as it benefited from a “resilient” UK housing market. Fresnillo finished unchanged after lowering its gold production targets for 2017.
France’s January household consumption rose a monthly 0.6 percent after a revised 1 percent slump in December.
Asia Pacific
Stocks were mixed Tuesday as investors awaited US President Donald Trump’s address before a joint session of Congress Tuesday night (9 PM US ET). He is expected to discuss his pro-business policies including tax reform, health care and infrastructure spending.
The Shanghai Composite was up 0.4 percent in thin trading after Trump said the United States attaches great importance to cooperative relations with China. The Hang Seng retreated 0.8 percent. In February the Shanghai Composite was up 2.6 percent and the Hang Seng was up 1.6 percent.
Both the Nikkei and Topix were up 0.1 percent even though the yen was stronger. BoJ Governor Haruhiko Kuroda said Japan was far from achieving its 2 percent inflation target. January economic reports painted a mixed picture, with industrial output declining for the first time in six months while housing starts expanded at a faster pace and retail sales increased for a third straight month. Exporters were mixed with Panasonic and Sony inching up while Honda and Toyota ended lower. Energy stocks such as JX Holdings and Japan Petroleum climbed. The Nikkei was up 0.4 percent while the Topix gained 0.9 percent for the month of February.
The S&P/ASX and All Ordinaries were down 0.2 percent. The indices were dragged down by miners including Rio Tinto and Fortescue Metals Group. Gold miners Newcrest, Evolution Mining, Norther Star and Regis Resources also were lower after gold prices retreated from a 3-1/2-month high. Financials ended broadly higher, with banks ANZ, Commonwealth and NAB inching up marginally and wealth manager AMP advancing. On the month, the S&P/ASX was up 1.6 percent while the All Ordinaries was 1.5 percent higher.
The Kospi was up 0.3 percent and was up 1.2 percent on the month. The Sensex slipped 0.2 percent as investors moved to the sidelines, awaiting third-quarter GDP data and Trump’s speech to the joint session of Congress. In February, the Sensex was up 2.9 percent.
Looking Forward
Australia posts fourth quarter gross domestic product. India, China and Japan release February manufacturing PMIs. China also releases February CFLP manufacturing PMI. February manufacturing PMIs will also be released for France, Germany, the Eurozone, UK and US. In the US, January personal income and spending and construction spending and February ISM manufacturing index will be released. The Federal Reserve publishes its Beige Book in preparation for its March FOMC meeting. The Bank of Canada announces its monetary policy decision.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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