On 02 May, 2017 – Most global stock indices advanced as investors returned from a long weekend

Investors are waiting for the Federal Reserve’s decision Wednesday and Friday’s US employment report.
United States
Stocks traded with little direction and gyrated above and below the unchanged line. However, the Dow Jones industrials, S&P and Nasdaq managed to end the day slightly higher. The Dow was up 0.2 percent while both the S&P and Nasdaq added 0.1 percent. Investors were cautious ahead of Sunday’s French presidential runoff election and the US employment report on Friday.
The choppy trading came the day before the Federal Reserve’s monetary policy announcement. The FOMC is expected to leave its fed fund rate range at 0.75 percent to 1.00 percent. Fed watchers however, will parse the accompanying statement for the direction of future fed policy.
Airlines Delta and United Continental gained. Advanced Micro Devices dropped even though it reported quarterly results that matched estimates. Shares of auto makers lagged after major manufacturers reported weaker-than-expected car sales in April. MasterCard gained after the firm posted higher-than-expected revenue and growth in earnings as transactions rose. Cummins advanced after the engine manufacturer raised its forecast for the rest of the year. Coach shares rose after the company cut back on discounting in the United States and sold more expensive bags.
After markets closed, Apple reported that iPhone unit sales fell by 1 percent in the last quarter to 50.8 million units. Apple’s basic earnings per share rose 10 percent to $2.11. The drop in iPhone unit sales was counterbalanced by a 1 percent increase in revenues from Apple’s flagship device, as average selling prices were driven up $13 by the popularity of the larger 7 Plus model. Overall, Apple’s sales grew 5 percent to $52.9 billion, slightly below consensus estimates of $53.1 billion.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$11.00 to US$1,255.45. Copper futures were down 0.85 percent to US$2.64. WTI spot crude was down US$1.22 to US$47.62. Dated Brent spot crude was down US$1.11 to US$50.41. The US dollar was up against the yen and the Canadian dollar. The currency declined against the euro, pound and the Swiss franc. It was unchanged against the Australian dollar. The Dollar Index was down 0.15 percent. The yield on US Treasury 30 year bond was down 2 basis points to 2.98 percent while the yield on the 10 year note was down 3 basis points to 2.29 percent.
Europe
European stocks advanced Tuesday. Investor sentiment was boosted by news that Greece has agreed to a bailout deal along with upbeat economic data. The FTSE, DAX and SMI added 0.6 percent each while the CAC was up 0.7 percent.
Greece reached a deal with its international creditors early Tuesday on reforms ranging from further cuts to pensions to less tax breaks. This paves the way for the disbursement of the next tranche of funds from the €86 billion bailout agreed in 2015 and the start of talks on a possible debt relief.
Aberdeen Asset Management advanced after the fund manager reported narrower business outflows during the second quarter of 2017 as emerging markets recovered. Standard Life increased after it and Aberdeen Asset Management agreed to pay out tens of millions of pounds in retention bonuses to executives to stop them quitting during their £11bn merger deal. Shire gained after it reported a profit for its first quarter higher than the same period last year. Online grocer Ocado was higher on reports of a delivery tie-up with supermarket M&S. BP advanced after a rebound in crude prices and higher production helped the company report a sharp increase in first-quarter profit. Novartis gained in Zurich after winning a new drug approval from the US health regulator.
British manufacturing activity expanded at the sharpest pace in three years and Eurozone manufacturing activity also expanded at the fastest pace in six years. April manufacturing PMI jumped to 57.3 from 54.2 in March. Eurozone manufacturing activity expanded at the fastest pace in six years. The April manufacturing PMI climbed to 56.7 from 56.2 in March. Eurozone unemployment rate remained at 9.5 percent, unchanged from February.
Asia Pacific
Asian stocks were mostly higher Tuesday. The yen weakened for a fourth straight trading session and US Treasury Secretary Steven Mnuchin said the White House is making steady progress on its tax reform plan. Worries over North Korea eased somewhat after US President Donald Trump said that he would be “honoured” to meet North Korean leader Kim Jong Un under the right circumstances to defuse tensions over the country’s nuclear program. Investors were cautious as they waited for the Federal Reserve’s monetary policy decision which would come during the Wednesday global market day.
The Shanghai Composite dropped 0.3 percent after the April manufacturing PMI expanded at a slower pace on weak output and new orders. The Caixin manufacturing PMI hit a seven-month low of 50.3. The Hang Seng added 0.3 percent.
Both the Nikkei and Topix added 0.7 percent as the yen continued to decline. April services PMI continued to expand but at a slower pace. Minutes of the Bank of Japan’s March monetary policy meeting indicated that board members expect consumer prices to reach the central bank’s 2 percent inflation target. However, the BoJ needs to continue with its quantitative easing. Tokyo markets will be closed for three days from Wednesday for Golden Week holidays.
Both the S&P/ASX and All Ordinaries slipped 0.1 percent after the Reserve Bank of Australia kept its monetary policy interest rate unchanged at 1.5 percent as widely expected. ANZ retreated after posting weaker-than-expected earnings. Commonwealth, NAB and Westpac also declined. Miners eked out modest gains but Evolution tumbled 3 percent after gold prices hit their lowest level in nearly three weeks overnight.
The Kospi was up 0.6 percent led by technology and auto stocks on optimism over earnings. The Sensex was virtually unchanged (up 2.78 points).
Looking Forward
Germany posts April unemployment. The Eurozone reports flash first quarter gross domestic product. In the US, April ISM nonmanufacturing index and weekly EIA petroleum status will be released. The Federal Reserve announces its monetary policy decision.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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