On 14 March, 2017 – Most stock indices slipped Tuesday

Investors were waiting for Wednesday’s Federal Reserve policy decision.
United States
US stocks slipped in light trading as investors waited for the Federal Reserve decision. The Dow Jones industrials declined 0.2 percent while the S&P and Nasdaq were 0.3 percent lower. Trading was light and came as a winter storm struck the US East Coast including New York. Investors will be interested in hearing what Fed Chair Janet Yellen says about future rate increases at her post-FOMC press conference.
Energy stocks including Marathon Oil, Transocean and Halliburton retreated as the price of crude oil continued to decline. Valeant Pharmaceuticals declined after one of its biggest investors sold their entire stake in the company. Valeant’s stock has tumbled since its peak in the summer of 2015 because the company is facing more scrutiny for raising prices on its drugs. Health care stocks were volatile as traders digested a nonpartisan research report that showed 14 million Americans would lose medical insurance by next year under the Republican plan to dismantle the Obamacare healthcare reform.
Neiman Marcus said that it has hired advisers to explore strategic alternatives including a sale of the company or its assets. Hudson’s Bay, the Canadian-department store is reportedly in discussions to buy Neiman. Airline stocks fell for a second straight day as investors weighed the potential fallout on profits that winter storm Stella and the thousands of cancelled flights it has caused. United Continental led the decline. Also lower were American Airlines, Delta and Southwest. According to FlightAware, which tracks flight cancellations, 5,515 flights within, into or out of the US had been canceled while another 2,022 are experiencing delays.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$5.30 to US$1,236.80. Copper futures were up 0.65 percent to US$2.64. WTI spot crude was down 43 US cents to US$47.97. Dated Brent spot crude was down 19 US cents to US$51.16. The US dollar was up against the euro, pound, Swiss franc and the Canadian and Australian dollars. The currency declined against the yen. The Dollar Index was up 0.3 percent. The yield on US Treasury 30 year bond was down 2 basis points to 3.18 percent while the yield on the 10 year note was down 1 basis point to 2.60 percent.
Europe
Stocks retreated Tuesday with traders remaining cautious before Wednesday’s Dutch election and the Federal Reserve’s monetary policy announcement. The FTSE edged down 0.1 percent, the CAC declined 0.5 percent and the SMI was 0.2 percent lower. The DAX was virtually unchanged — down 1.24 points.
The Federal Reserve is expected to announce an increase in its fed funds interest rate at 2 PM ET in the US. The announcement will be followed by Fed Chair Janet Yellen’s press conference for clues about Fed policy going forward. The Netherlands will vote to choose members of the House of Representatives, with the results expected in the early hours of Thursday morning. With populism and nationalism surging across Europe and in the US, the election is seen as a bellwether for the French and German elections due later this year.
The British Chambers of Commerce upgraded the UK growth outlook for this year citing an upward revision to UK GDP data in the final quarter of 2016 and stronger than expected levels of consumer spending. Gross domestic product is forecast to expand 1.4 percent instead of 1.1 percent this year with 0.4 percent expected in the first quarter of 2017.
RWE advanced after the company forecast rising profits for 2017 and said it would not respond to “market rumors” that France’s Engie was considering a bid for its Innogy business. Innogy’s shares jumped. Wacker Chemie was lower after the chemical company forecast stagnating profits. Prudential gained after the company announced that it increased its full-year ordinary dividend by 12 percent to 43.5 pence per share. The Royal Bank of Scotland and Bank of Ireland declined.
January Eurozone industrial production was up 0.6 percent on the year following 2.5 percent growth in December. German March ZEW gained 2.4 points to 12.8. However, the reading was below the long-term average of 23.9 and the expected level of 13.0.
Asia Pacific
Stocks were mixed — tumbling oil prices, European political risks and the impending Federal Reserve announcement were high on investors’ radar. Investors were lukewarm to positive Chinese data. The falling price of oil ahead of oil market reports from OPEC and the International Energy Agency due this week and the latest Brexit developments also rendered underlying mood somewhat cautious.
The Shanghai Composite edged up 0.1 percent. Chinese factory output and fixed-asset investment figures for the first two months of the year exceeded estimates but retail sales slowed. Another report showed that China’s property sales surged in the first two months of the year despite a slew of government curbs since October. The Hang Seng was virtually unchanged (down 1.72 points).
The Nikkei was down 0.1 percent and the Topix retreated 0.2 percent as the yen gained against the US dollar prior to this week’s Bank of Japan and Federal Reserve monetary policy meetings. The Fed is widely expected to increase interest rates at the end of its two-day policy meeting on Wednesday, while the Bank of Japan is expected to keep its rates and yield-curve policy steady when it reviews its monetary policy on Thursday. Toshiba advanced despite reports that the electronics conglomerate will push back its deadline again to report third-quarter earnings. Mitsubishi Heavy Industries jumped after a favorable ruling of an arbitration panel over a $6.7 billion compensation claim for selling defective steam generators used at a US nuclear plant. Oil explorer Inpex and Japan Petroleum Exploration were higher after Japan agreed to encourage its companies to supply expertise and invest in Saudi Arabia.
The S&P/ASX was virtually unchanged (up 1.80 points) while the All Ordinaries were up 0.1 percent as investors waited for the Federal Reserve decision. Domestic data showing deteriorating business confidence in Australia also dampened sentiment. Miners BHP Billiton, Fortescue Metals Group and Rio Tinto retreated as copper as well as Chinese steel and iron ore futures advanced on fresh signs of stability in China. Woodside Petroleum, Santos and Origin Energy climbed while banks retreated.
The Kospi was up 0.8 percent as eased political uncertainties coupled with solid exports data encouraged foreign investors to buy. The Sensex surged 1.7 percent as investors cheered BJP’s landslide victory in Uttar Pradesh Assembly elections.
Looking Forward
Italy reports January retail sales. The UK releases February labour market report. In the US, February consumer price index and retail sales, March Empire State manufacturing survey and housing market index and January business inventories will be reported. The FOMC will announce its monetary policy decision. The Fed will publish its latest forecasts and Chair Janet Yellen will hold her quarterly press conference.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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