On 07 March, 2017 – Most global stock exchanges retreat on Monday
With little news, investors focused on the upcoming European Central Bank and Federal Reserve policy meetings.
United States
US stocks retreated for a second day in subdued trading within a narrow range. The Dow Jones industrials slipped 0.1 percent while both the S&P and Nasdaq were 0.3 percent lower. Weakness in both drug and financial shares sent the indices lower. With little on the economic or earnings calendar to steer market direction, many investors focused on the upcoming European Central Bank monetary policy meeting Thursday. The Federal Reserve meets next week.
Pharmaceutical stocks were pressured after President Donald Trump tweeted that he was working on a “new system” to reduce drug prices in the industry, without providing details. Shares of Pfizer, Merck and Amgen dropped. Trump also backed a draft bill unveiled by Republicans on Monday to repeal and replace the Obamacare healthcare law, but said the bill was open to negotiation. Exxon Mobil was down after the company unveiled a $20 billion spending plan which was cheered by President Donald Trump.
Financials slipped, pulled lower by Wells Fargo and JPMorgan. Snapchat owner Snap tumbled after analysts gave the company a lukewarm reception following its red-hot market debut, attracting short-sellers. Nimble Storage soared after Hewlett Packard said it would buy the data storage provider for $1.09 billion in cash. HPE’s stock slipped however. Dish Network was up after S&P Dow Jones Indices said the company will join the S&P 500 on March 13.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$14.30 to US$1,216.65. Copper futures were down 1.45 percent to US$2.61. WTI spot crude was down 9 US cents to US$53.11. Dated Brent spot crude was down 12 US cents to US$55.89. The US dollar was up against the yen, euro, pound and Swiss franc. The dollar was down against Australian dollar. The currency was virtually unchanged against the Canadian dollar. The Dollar Index was up 0.1 percent. The yield on US Treasury 30 year bond was up 1 basis point to 3.11 percent while the yield on the 10 year note was up 2 basis points to 2.51 percent.
Europe
Shares were mixed Tuesday. Disappointing January manufacturing orders and continued political concerns in France weighed on investor sentiment. Investors were cautious looking forward to Thursday’s European Central Bank meeting and next week’s Federal Reserve meeting. The FTSE was down 0.2 percent, the CAC declined 0.3 percent and the SMI lost 0.5 percent. The DAX managed to edge up 0.1 percent.
Software AG increased after it decided to cancel 2.60 million treasury shares and to buy back its own shares worth up to €100 million excluding ancillary acquisition costs. Casino Group tumbled after posting its full-year results. Just Eat advanced after the online food order and delivery company doubled its full-year pre-tax profits and said it expects to see “material” growth in both revenue and underlying earnings in 2017. Aggreko tumbled after issuing a profit warning.
Ashtead retreated after reporting a mixed set of numbers for the third quarter. Sports Direct International dropped after saying the devaluation of the euro against the dollar will hit its gross margin in the current financial year. Logitech International gained in Zurich after reaffirming its fiscal 2017 outlook. Novartis, Roche, Shire and Sanofi all declined. French retailer Casino Guichard and bookmaker Paddy Power Betfair both tumbled following poor earnings updates.
Fourth quarter revised gross domestic product was up 0.4 percent on the quarter and was up 1.7 percent from a year ago. January German manufacturing orders dropped 7.4 percent on the month — the biggest decline in eight years on weak foreign and domestic demand. Orders had increased 5.2 percent in December. UK Halifax house prices edged up a monthly 0.1 percent in February — they declined a revised 1.1 percent in January.
Asia Pacific
Stocks were mixed Tuesday as investors in Asia continued to follow events in Washington DC and the US started deploying the “first elements” of its controversial missile defense system in South Korea following provocative actions by North Korea. Concerns about slowing growth in China, a looming Fed rate increase this month and ongoing uncertainty over the outcome of the French presidential election also kept investors nervous.
The Shanghai Composite added 0.3 percent before forex reserves data were released later in the day and merchandise trade data on Wednesday. The Hang Seng index was up 0.4 percent. China’s foreign exchange reserves unexpectedly rose for the first time in eight months in February, rebounding above $3 trillion as a regulatory crackdown and a steadying yuan helped staunch capital outflows. The People’s Bank of China said that February reserves were up $6.92 billion to total $3.005 trillion, their first increase since June 2016. That compared with a drop of $12.3 billion in January, when reserves fell to $2.998 trillion.
The Nikkei slipped 0.2 percent while the Topix was virtually unchanged (up 0.14 point). Rising geopolitical tensions, French election uncertainty and overnight losses in the European banking sector weighed on the markets. Exporters were mixed as the yen held steady at 113.92 per dollar. Oil stocks such as Inpex and JX Holdings climbed while banks Mitsubishi UFJ Financial, Mizuho Financial and Sumitomo Mitsui Financial ended lower. Sharp jumped on hopes of a turnaround under Taiwan’s Hon Hai Precision Industry.
The S&P/ASX was up 0.3 percent and the All Ordinaries added 0.2 percent after the Reserve Bank of Australia left its key interest rate unchanged at 1.5 percent. The RBA said that its policy stance remains consistent with sustainable growth in the economy and achieving the inflation target over time. Banks ANZ, NAB and Westpac advanced as did energy stocks Woodside Petroleum and Santos. Miners BHP Billiton and Rio Tinto were lower after iron ore prices declined overnight. Gold miners bore the brunt of the selling, with Evolution and Regis Resources declining. Ardent Leisure Group jumped after the company released a trading update for its embattled Dreamworld business.
The Kospi added 0.6 percent with shipbuilders and technology companies posting strong gains on expectations of improved earnings. The Sensex was down 0.2 percent as investors took profits from recent gains.
Looking Forward
Japan posts revised fourth quarter gross domestic product. China releases February merchandise trade data. Germany reports January industrial production. Canada releases February housing starts. In the US, February ADP private employment and fourth quarter productivity and costs will be released along with the weekly EIA petroleum status report.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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