On 06 April, 2017 – Global stocks were mixed

Investors were waiting for the outcome of the Trump/Xi Jinping meeting.
United States
US shares rebounded from Wednesday’s losses and advanced Thursday but closed off their highs for the day. Energy stocks rose with oil prices and financial stocks advanced. Traders decided the market overreacted to the Federal Reserve’s minutes on Wednesday. The Fed said that they are considering reductions to its balance sheet before year’s end. Some investors were cautious before President Trump’s meeting with his Chinese counterpart Xi Jinping. The Dow Jones industrials edged up 0.1 percent and both the S&P and Nasdaq gained 0.2 percent. Some investors were cautious before Friday’s employment report and before corporate earnings season begins next week.
Positive data about the economy has supported stocks recently, even as investors have weighed the possibility that policies like tax cuts might not be imminent. Energy stocks including Chesapeake Energy and Newfield Exploration advanced. Sunoco soared after Japan-based Seven & I Holdings which owns the 7-eleven chain said it would acquire more than 1,000 US convenience stores and gas stations from Sunoco for $3.3 billion.
CarMax gained after the nation’s biggest retailer of used cars beat earnings and sales estimates for the fourth quarter. Constellation Brands reported stronger fourth quarter earnings which it attributed to gains in high end whiskey sales. . L Brands jumped after reporting a smaller-than-expected drop in March sales. Bed Bath & Beyond, Staples and Kohl’s were higher.
Weekly jobless claims data showed that the number of Americans applying for new unemployment benefits dropped by 25,000 to 234,000.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$6.70 to US$1,252.50. Copper futures were down 0.8 percent to US$2.66. WTI spot crude was up 54 US cents to US$51.69. Dated Brent spot crude was up 47 US cents to US$54.83. The US dollar was up against the yen, euro, pound, Swiss franc and the Australian dollar. The currency declined against the Canadian dollar. The Dollar Index was up 0.2 percent.
The yields on the US Treasury 30 year bond and 10 year note were up 1 basis point to 2.99 and 2.34 percent respectively.
Europe
Most European stock indices began the day firmly lower — investors had their first opportunity here to react to the March Federal Reserve minutes which were published after markets here were closed Wednesday. The minutes indicated that the Fed is ready to start to shrink their $4.5 trillion balance sheet this year. However, early losses were pared over the course of the trading session and most finished with small increases. Investors remained cautious ahead of the two day meeting between US President Trump and Chinese President Xi Jinping and the release of the March US employment report Friday. The FTSE was down 0.4 percent and the SMI was virtually unchanged (down 2.14 points). The CAC and DAX added 0.6 percent and 0.1 percent respectively.
The European Central Bank published minutes from its March meeting. At that time, governing council members argued for an easing in the ECB’s commitment to cut rates further when the macroeconomic outlook worsened, saying that the economic situation and the balance of risks have clearly improved. Some put forward the idea that removing the downward bias regarding interest rates would be in line with a gradual and cautious adjustment of the Governing Council’s forward guidance. According to President Mario Draghi, the ECB is confident that its policy is working and the outlook for both the euro and the economy is gradually improving. But the Bank needs more evidence to confirm that inflation will converge on its near 2 percent inflation target. Therefore, there was no ground for reassessing the current policy stance.
Allianz gained after the European Insurance and Occupational Pensions Authority proposed to cut an interest rate used to price liabilities from January next year. BNP Paribas climbed after the bank announced the sale of its share in the loan financing of the controversial Dakota Access Pipeline. Accor Hotels finished higher after acquiring channel management firm Availpro for an undisclosed amount.
Pearson tumbled after going ex-dividend. Tullow Oil jumped as shares traded without rights to subscribe to its £607 million cash call. Hikma Pharmaceuticals dropped after the company said it has entered into a settlement agreement with Jazz Pharmaceuticals to resolve a patent litigation related to Jazz’s Xyrem. Unilever rose after the company announced the results of a business review to increase value for shareholders. Lloyds (ex-dividend) and Barclays retreated. British Land Company and Land Securities Group advanced along with easyJet.
February German factory orders rebounded on domestic demand while foreign orders were flat. Factory orders increased a monthly 3.4 percent.
Asia Pacific
Most stocks declined Thursday as oil prices retreated from one-month highs and the Caixin services PMI indicated a slowing in growth in China’s service sector. Fed minutes and anxiety ahead of a two-day meeting between U.S. and Chinese leaders also weighed on markets.
The Shanghai Composite was up 0.3 percent led by infrastructure companies after Beijing announced plans to build a special economic zone in the heartland of Hebei province. The Hang Seng however, dropped 0.5 percent.
The Nikkei and Topix tumbled 1.4 percent and 1.6 percent respectively. The yen strengthened after US House of Representatives Speaker Paul Ryan said on Wednesday that tax reform will take longer to accomplish than healthcare. Exporters succumbed to heavy selling with Canon, Honda Motor, Panasonic, Sony and Toyota declining. Toshiba ended on a flat note after reportedly sacking the chairman of Westinghouse Electric. Banks Mitsubishi UFJ Financial and Sumitomo Mitsui Financial declined after minutes from the recent FOMC meeting showed support for a reduction in the size of the Fed’s balance sheet by the end of 2017.
The S&P/ASX and All Ordinaries both were 0.3 percent lower after the Reserve Bank of Australia voiced concern over debt levels in the housing market. Investors here also reacted to the FOMC discussion regarding the Fed balance sheet. The big four banks were lower as they tracked overnight losses among their US peers. Gold miners Evolution Mining, Newcrest, Northern Star and Regis Resources advanced as gold prices edged up in Asian deals. BHP Billiton slid on saying it won’t meet its export commitments in northeast Australia.
The Kospi was down 0.4 percent to its lowest level since March 16, as the Fed minutes, geopolitical worries and weak Chinese data sapped investors’ risk appetite. The Sensex was 0.2 percent lower after the Reserve Bank of India kept its interest rate unchanged at 6.25 percent but lifted the reverse repo rate unexpectedly by a quarter point, citing upside risks to inflation.
Looking Forward
Germany posts February industrial production and merchandise trade balance. France and the UK also release industrial production. The UK also reports merchandise trade. Canada releases its March labour force survey. The US reports on the employment situation. The summit between Chinese President Xi Jinping and US President Donald Trump continues.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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