On 02 March, 2017 – Global stocks mixed
Investors paused after Wednesday’s strong rally to catch their collective breaths and take profits.
United States
Caterpillar declined — it was not immediately clear why federal agents raided the three locations. Bank stocks declined on profit taking after Wednesday’s rally. Investors were watching the trading debut of Snap, the parent company of messaging app Snapchat. Both Facebook and Twitter declined. Kroger declined after reporting a surprise drop in fourth-quarter same-store sales as competition intensified in the US grocery industry.
Initial jobless claims fell to their lowest level in over 40 years in the week ended February 25th.The report said initial jobless claims dropped to 223,000, a decrease of 19,000 from the previous week’s revised level of 242,000. With the unexpected decrease, jobless claims fell to their lowest level since hitting 222,000 in the week ended March 31, 1973.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$2.30 to US$1,238.10. Copper futures were down 1.9 percent to US$2.68. WTI spot crude was down US$1.17 to US$52.66. Dated Brent spot crude was down US$1.23 to US$55.13. The US dollar was up against all of its major counterparts including the yen, euro, pound, Swiss franc and the Canadian and Australian dollar. The Dollar Index was up 0.4 percent. The yield on US Treasury 30 year bond was up 2 basis points to 3.08 percent while the yield on the 10 year note was up 3 basis points to 2.48 percent.
Europe
Shares were mixed after trading in a narrow range Thursday after Wednesday’s strong rally. Wednesday’s rally was fueled by US President Trump’s Tuesday night speech before Congress and the prospects of a Fed rate increase at March’s FOMC meeting. However, investors paused Thursday as they began to question whether the recent surge in equities is sustainable. The CAC edged up 0.1 percent while the DAX inched down 0.1 percent. The SMI added 0.3 percent. The FTSE was virtually unchanged (down 0.55 point).
Deutsche Telekom retreated after it posted lower profit for the full year 2016. Capita tumbled after the company announced the departure of chief executive Andy Parker after reporting a 19 percent decline in 2016 underlying pre-tax profit. Travis Perkins declined after it reported a 67 percent drop in pretax profit for 2016 because of restructuring costs. Merlin Entertainments was lower despite reporting a rise in 2016 profits. Melrose Industries jumped after the company more than tripled its full-year revenue and said it is in the process of looking for its next acquisition.
Adecco Group declined in Zurich even though it reported better than expected fourth quarter earnings. LafargeHolcim advanced after posting strong fourth quarter earnings and cash-flow growth. Builders’ merchant Travis Perkins tumbled after reporting a slump in 2016 profit and a downbeat outlook. ConvaTec surged after the British medical devices firm reported an 8 percent increase in annual operating profit for last year.
Flash February Eurozone inflation was up 2 percent on the year after increasing 1.8 percent in January. However, excluding food and energy, the HICP was only up 0.9 percent on the year. January Eurozone unemployment rate remained at 9.6 percent. The rate was the lowest since May 2009.
Asia Pacific
Asian stocks were mostly higher. Investors were reassured by President Trump’s more measured tone.
The Shanghai Composite declined 0.5 percent after a string of hawkish remarks from Federal Reserve officials stirred concerns that an US interest rate increase could trigger fresh capital outflows and hurt domestic liquidity. The Hang Seng was 0.2 percent lower.
The Nikkei was up 0.9 percent and the Topix was 0.7 percent higher thanks to a decline in the yen against the US dollar. Exporters Canon, Nikon and Sony advanced. Toshiba shares rallied after Taiwanese manufacturer Foxconn confirmed speculation that it is one of the companies bidding for the Japanese conglomerate’s chip business. Financials Sumitomo Mitsui Financial, Mitsubishi UFJ Financial and Dai-ichi Life Holdings along with commodity-related stocks like Toho Zinc and Tokai Carbon jumped. Toyota Motor was flat after reporting a drop in US auto sales for February.
The S&P/ASX was up 1.3 percent and the All Ordinaries added 1.2 percent with mining and banking stocks surging on optimism about the US economy. Investors shrugged off a mixed merchandise trade report and building approvals data. BHP Billiton and Rio Tinto rallied. South32 shares jumped after industrial metals advanced overnight. The four big banks gained.
The Kospi was up 0.5 percent. January industrial output was up 3.3 percent on the month and the fastest pace in over seven years. The Sensex retreated 0.5 percent dragged down by realty and pharma stocks.
Looking Forward
Composite PMIs will be released for Japan, Germany, France and the Eurozone. Services PMIs will be reported for India, the UK and US. Italy posts final fourth quarter gross domestic product. In the US, ISM nonmanufacturing index will be released. Fed Chair Janet Yellen and Vice Chair Stanley Fischer will speak.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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