On 13 March, 2017 – Global stocks mostly edge higher
Gains were limited as investors wait for central bankers’ decisions.
United States
US stock markets drifted with little change on Monday as investors waited for the FOMC announcement during the Wednesday global market day. The Dow Jones slipped 0.1 percent while the Nasdaq added 0.2 percent. The S&P was virtually unchanged (up 0.87 point).
Major US airlines retreated as cities up and down the mid-Atlantic and northeast US coast brace for a paralyzing blizzard that could bring as much as two feet of snow to some areas. United Continental, American Airlines, Southwest Airlines and Delta retreated. Both Marathon Oil and Murphy Oil declined. HSBC Holdings gained 1.4 percent after the bank said it appointed insurance executive Mark Tucker to succeed Douglas Flint as Chairman.
Intel was lower after the chipmaker struck a $15.3 billion deal to buy Mobileye, which makes technology for self-driving cars. Shares of Mobileye soared. Nvidia and Delphi Automotive were higher — both are involved in developing technology for cars. Health care stocks were down fractionally over uncertainties about Republican plans for Obamacare replacement.
Central banks including the Federal Reserve, Banks of Japan and England and the Swiss National Bank announce policy decisions this week. At the end of the week, the world’s most powerful finance ministers and central bankers convene in the German town of Baden Baden starting on Friday for their first meeting since Donald Trump won the US election.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$1.55 to US$1,204.20. Copper futures were up 1.4 percent to US$2.63. WTI spot crude was down 12 US cents to US$48.37. Dated Brent spot crude was down 3 US cents to US$51.34. The US dollar was up against the yen, euro and yuan. The currency declined against the pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was up 0.2 percent. The yields on both the US Treasury 30 year bond and 10 year note were up 4 basis points to 3.20 percent and 2.61 percent respectively.
Europe
European stocks were mostly higher with only the IBEX slipping 0.1 percent. Investors were reluctant to make any major moves ahead of some major events this week including the Dutch election and monetary policy decisions by several central banks including the Federal Reserve. Traders are also monitoring the Brexit bill debate after Brexit secretary David Davis warned Conservative MPs not to “tie the Prime Minister’s hands” by backing amendments to the Article 50 bill. The FTSE was up 0.3 percent, the CAC edged up 0.1 percent and both the DAX and SMI added 0.2 percent.
Rising metal prices provided a boost to mining stocks but energy stocks struggled as crude oil prices continued to decline. Wirecard advanced after the financial services and technology company announced an agreement with Citigroup subsidiaries to purchase the customer portfolio of Citi’s merchant acquiring business in 11 markets in Asia Pacific. Innogy SE retreated after the energy firm pointed to a “challenging” environment in key areas of its business, including renewables. Amec Foster Wheeler jumped after it agreed to the terms of an all-share offer from oilfield services company John Wood Group.
Bovis Homes Group soared after the homebuilder rejected two potential offers for the firm from Redrow and Galliford Try and said it was still in talks with Galliford. HSBC Holdings gained after the bank said it appointed insurance executive Mark Tucker to succeed Douglas Flint as Chairman. Mining stocks advanced as copper prices recovered from their biggest weekly fall since December. Fresnillo, Antofagasta, Anglo American, Rio Tinto, BHP Billiton, Glencore and Randgold Resources were higher. Aryzta sank in Zurich after the food firm announced a sharp drop in half-yearly earnings.
Italy’s industrial production declined a more than expected 2.3 percent in January reversing a 1.4 percent increase in December.
Asia Pacific
Most stock indices advanced Monday after the latest US employment report pointed to a resilient US economy, paving the way for a Federal Reserve rate increase on Wednesday. However, oil extended its decline below $50 a barrel and French presidential candidate Francois Fillon was put on the defensive again following two fresh controversies, helping limit overall gains across the region.
The Shanghai Composite advanced 0.4 percent after a senior government official sought to soothe investor fears of further monetary tightening, saying the debt risk for China’s main state-owned enterprises is controllable. The Hang Seng added 1.1 percent.
The Nikkei and Topix edged up 0.1 percent and 0.2 percent respectively. The yen edged up against the US dollar before Wednesday’s Dutch elections. Investors shrugged off weaker than core machinery orders data showing that January’s machinery orders unexpectedly tumbled 3.2 percent on the month. Toshiba climbed on a Nikkei report that it was seeking to sell shares in Toshiba Tec — the company, however, denied the report.
Both the S&P/ASX and All Ordinaries were 0.3 percent lower, dragged down by financials and energy stocks as investors waited for Wednesday’s FOMC decision. ANZ, Commonwealth and NAB were lower. Woodside Petroleum, Oil Search and Santos retreated as oil extended its decline below $50 a barrel after last week’s tumble. Miners reversed early losses to end flat to slightly higher after Shanghai rebar steel futures rose nearly 3 percent.
The Kospi added 1.0 percent to hit their highest level in over 20 months after the Constitutional Court ruled to remove scandal-hit President Park Geun-hye from office, helping ease political chaos in the country. Global rating agency Moody’s Investors Service said that the conclusion of the impeachment process is a credit positive for the country’s sovereign rating as it allows a new president to focus on formulation of policies that address structural economic challenges.
Looking Forward
China releases January/February industrial production and retail sales. India posts February WPI and CPI. Germany releases March ZEW and the Eurozone report January industrial production. In the US, the producer price index for February will be released.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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