On 12 April, 2017 – Most stock indices retreated

Geopolitical risks continued to worry investors.
United States
US stock indices were down Wednesday as geopolitical concerns continued to send investors into defensive positions. Industrials and materials were the biggest drags along with financials, while utilities, staples and telecommunications advanced. The Dow Jones industrials were down 0.3 percent, the S&P declined 0.4 percent and Nasdaq lost 0.5 percent. Investors were nervous on the day before three major banks — Wells Fargo, Citigroup and JPMorgan — begin earnings season.
In an interview with the Wall Street Journal, President Trump said that the dollar “is getting too strong” and he would prefer the Federal Reserve keep interest rates low. Treasuries advanced after he said that he hasn’t decided whether to reappoint Janet Yellen to a second term as Fed Chair (her term expires early next year).
Delta Air Lines was up thanks to a better-than-expected quarterly profit and an upbeat forecast for current-quarter passenger unit revenue. Steel stocks declined along with railroad stocks.
March import prices slipped 0.2 percent after climbing a revised 0.4 percent the month before. Export prices however, were up 0.2 percent after increasing 0.3 percent in February. Greenbrier and Trinity Industries declined.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$21.40 to US$1,274.30. Copper futures were down 2.5 percent to US$2.54. WTI spot crude was down 51 US cents to US$52.89. Dated Brent spot crude was down 58 US cents to US$55.65. The US dollar was down against all of its major counterparts including the yen, euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was down 0.4 percent. The yield on US Treasury 30 year bond was down 2 basis points to 2.91 percent while the yield on the 10 year note was down 3 basis points to 2.27 percent.
Europe
Stock markets were mixed Wednesday as early gains began to erode thanks to geopolitical concerns. Worries over the political situation in France saw markets go in reverse after a new poll showed that far-left candidate Jean-Luc Melenchon’s support has increased in the French presidential race. Investors were following developments around US Secretary of State Rex Tillerson’s visit to Russia. The FTSE was down 0.2 percent and the CAC slipped 0.75 point while the DAX and SMI added 0.1 percent and 0.3 percent respectively.
Daimler advanced after the company reported higher than expected first-quarter earnings, boosted by one-off gains and a strong performance of its new Mercedes-Benz E-Class brand. Puma jumped after the sporting goods firm raised its 2017 earnings forecast after reporting a 70 percent jump in first-quarter earnings. Rolls Royce gained.
Dialog Semiconductor retreated to extend Tuesday’s losses after an analyst warned that its biggest client Apple could move business away from the firm. Tesco tumbled despite reporting better-than-expected annual earnings. Morrison’s and Sainsbury also declined. BHP Billiton declined after the mining giant dismissed a minor shareholder’s proposal to overhaul its corporate structure and spin off its U.S. oil division. Rio Tinto, Anglo American, Antofagasta and Glencore were lower.
The UK ILO unemployment rate remained at 4.7 percent in the three months to February — its lowest level since 1975. However the claimant count unemployment rate inched up to 2.2 percent from 2.1 percent, its first increase since August 2016. However wages were soft with headline average annual earnings growth flat at 2.3 percent and, excluding bonuses, down 0.2 percentage points at 2.2 percent.
Asia Pacific
Stocks were mixed as increasing geopolitical tensions continued to spur demand for safe-haven assets such as gold and the Japanese yen. A rise in oil prices on reports that Saudi Arabia wants output cuts extended for another six months helped to cap regional losses. The US dollar fell under 110 yen for the first time in five months and gold prices hit five-month highs after North Korean state media warned of a nuclear attack on the United States at any sign of American aggression.
The Shanghai Composite was down 0.5 percent after March inflation data painted a mixed picture of the economy. While consumer inflation rebounded slightly in March after slipping to a more than two-year low in February, producer inflation cooled for the first time in seven months. The CPI was up 0.9 percent from a year ago while the PPI was up 7.6 percent. The Hang Seng added 0.9 percent.
Both the Nikkei and Topix were down 1.0 percent to hit their lowest levels in more than four months as the yen spiked to a five-month high amid mounting geopolitical concerns. Private machinery orders rebounded 1.5 percent, much less than the expected 3.9 percent gain in February. This also weighed on sentiment. Exporters Panasonic and Toyota and banks Mitsubishi UFJ Financial and Sumitomo Financial were lower. Toshiba slid after the company warned there are “material events and conditions” that make it questionable whether it can continue as a going concern.
Both the S&P/ASX and All Ordinaries edged up 0.1 percent. A private indicator of Australian consumer sentiment showed consumers are more pessimistic about the future economic outlook and the housing market. Telecom stocks including Telstra tumbled after rival TPG Telecom won a government tender for mobile phone airspace. Vocus Group retreated. CSL, which is facing legal action in the U.S. over a patent, was down. Gold Miners Newcrest, Evolution, Northern Star Resources and Regis Resources climbed as gold prices hit a five-month high on safe-haven demand.
The Kospi was up 0.2 percent after data showed the country’s March jobless rates decreased to 3.7 percent from 4.0 percent the month before. The Sensex lost 0.5 percent. Investors were cautious prior to the releases of industrial production and consumer price index.
Looking Forward
Thursday — Australia posts March labour force survey. Germany, France and Italy release March consumer price indices. Canada releases February manufacturing sales. In the US, March producer price index, preliminary April consumer sentiment and the weekly jobless claims, money supply and Fed balance sheet will be released.
Friday — March consumer price index and retail sales along with February business inventories will be reported.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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