On 22 March, 2017 – Global stocks mostly lower
Investors watched the legislative process in the US unfold.
United States
US markets were mixed Wednesday. Investors were focused on President Donald Trump’s struggle to push through a healthcare bill and worried that promised tax cuts may face similar obstacles. The Dow Jones industrials were virtually unchanged (down 6.71 points), the S&P edged up 0.2 percent and the Nasdaq added 0.5 percent.
Trump and Republican lawmakers appeared to be losing the support they need for controversial healthcare legislation scheduled for a vote in the House of Representatives on Thursday. Losing or delaying the vote would bruise investors’ confidence in Trump’s legislative ability and his ability to keep his big promises to business.
Apple and Microsoft advanced and provided the biggest boost to the three major indexes. Nike dropped after the company missed quarterly revenue estimates. Sears Holdings declined after the retailer warned about its ability to continue as a going concern after years of losses and declining sales.
February existing home sales tumbled 3.7 percent to an annual rate of 5.48 million after jumping by 3.3 percent to a rate of 5.69 million in January.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$7.45 to US$1,249.05. Copper futures were up 0.8 percent to US$2.64. WTI spot crude was down 10 US cents to US$48.14. Dated Brent spot crude was down 23 US cents to US$50.73. The US dollar was up against the euro and the Australian dollar. The currency declined against the Canadian dollar, yen and Swiss franc. The dollar was unchanged against the pound. The Dollar Index was unchanged on the day. The yields on both the US Treasury 30 year bond and the 10 year note were down 2 basis points to 3.02 percent and 2.40 percent respectively.
Europe
Most stock indices, after starting the day lower, were down for the day. Some disappointing regional data negatively affected investors. However, concerns over the policies of US President Trump also contributed to the weak performance. The FTSE was down 0.7 percent, the CAC slipped 0.2 percent and both the DAX and SMI lost 0.5 percent.
Reports suggest that House Republicans may not have the votes to pass their healthcare plan in a vote expected to be held on Thursday. If it does manage to pass, the plan faces an even tougher battle in the Senate. If the healthcare bill fails, it could imperil other Trump policies that are favored by traders such as tax reform and increased infrastructure spending.
Stada rose after retaining its 2017 guidance. Banks including Deutsche Bank, Commerzbank, Société Générale and Crédit Agricole were down. Barclays, RBS and Standard Chartered also were lower. Kingfisher dropped after warning that uncertainty around French and British politics could hit its future demand. Novartis retreated in Zurich after its heart failure drug serelaxin failed in a pivotal study.
AkzoNobel declined after it rejected a second takeover bid from US rival PPG Industries. Miners Rio Tinto, BHP Billiton and Ashtead were down. Gold miners Randgold Resources and Fresnillo advanced along with BT. British Airways owner International Consolidated Air and Easyjet declined — both airlines would be affected by Britain joining the US in imposing restrictions on carry-on electronic devices on planes coming from certain airports in the Middle East and North Africa.
Asia Pacific
Asian stock indices followed those in the US and declined for their worst day this year on worries about whether President Donald Trump will be able to deliver his promises on reforming regulations, increasing infrastructure spending and lowering corporate taxes.
The Shanghai Composite was 0.5 percent lower while the Hang Seng tumbled 1.1 percent. The indices were dragged down by banks and property developers amid worries over tightening liquidity in the banking system.
Both the Nikkei and Topix dropped 2.1 percent as reports of a North Korean missile launch and worries that Trump will struggle to deliver promised tax cuts sent the safe haven yen soaring to strongest levels since November. Investors largely shrugged off better-than-expected merchandise trade data for February and the BoJ’s minutes from the January policy meeting. Exporters Canon, Hitachi, Sony, Panasonic, Honda Motor and Toyota Motor dropped thanks to the strengthening yen, which hit a four-month high against the US dollar. Banks Mitsubishi UFJ Financial, Mizuho Financial and Sumitomo Mitsui Financial declined along with Inpex and JX Holdings.
The S&P/ASX declined 1.6 percent and the All Ordinaries was 1.5 percent lower. BHP Billiton, Rio Tinto, Fortescue Metals Group and South32 retreated after iron ore prices fell below $US90 a ton overnight. Energy majors Origin Energy, Oil Search, Santos and Woodside Petroleum declined along with crude oil. The big four banks fell after uncertainty over what Trump may do hit bank stocks particularly hard in the US overnight.
The Kospi was down 0.5 percent although encouraging exports data helped to limit the downside. The Sensex closed down 1.1 percent.
Looking Forward
The Eurozone posts March EC economic sentiment. UK February retail sales will be reported along with March CBI distributive trades. In the US, February new home sales along with weekly jobless claims, money supply and Fed balance sheet will be reported.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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