On 11 May, 2017 – Stocks were mostly lower

Disappointing earnings led to concerns about the consumer sector.
United States
US shares declined with the Dow Jones industrials recording their third consecutive decline. The Dow was down 0.1 percent while the S&P and Nasdaq were each 0.2 percent lower.
Worse than anticipated results from department stores Macy’s and Kohl’s precipitated a selloff in department store shares. Shares of both were sent tumbling along those of Nordstrom and JC Penney. The results had investors focusing on Friday’s retail sales report in order to determine consumer spending strength at the start of the second quarter.
Snap, the parent of the messaging app Snapchat, declined after it reported earnings that missed expectations in almost every regard. Snap recorded a $2.2 billion loss for the first quarter while its revenue was lighter than expected. The company disclosed that its user growth was decelerating sharply.
Straight Path dropped after it agreed to be taken over by Verizon in a $3.1 billion deal turning down an offer from AT&T. Merck was up after the US FDA cleared its lung cancer combination treatment. FairPoint Communications, Frontier Communications and Cincinnati Bell declined.
Weekly jobless claims declined 2,000 to 236,000. April producer prices were up 0.5 percent and 2.5 percent from a year ago.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up 20 US cents to US$1,223.15. Copper futures were up 0.5 percent to US$2.51. WTI spot crude was up 44 US cents to US$47.77. Dated Brent spot crude was up 48 US cents to US$50.70. The US dollar was up against the euro, pound and the Canadian dollar. The currency declined against the yen, Swiss franc and the Australian dollar. The Dollar Index was virtually unchanged. The yield on US Treasury 30 year bond was down 1 basis point to 3.03 percent while the yield on the 10 year note was down 2 basis points to 2.39 percent.
Europe
Stocks in Europe retreated with only the FTSE virtually unchanged (up 1.39 points). The CAC and SMI were down 0.3 percent while the DAX lost 0.4 percent. After fluctuating around the unchanged mark, the majority of the markets turned lower in the afternoon after the weak US markets open.
The Bank of England’s monetary policy committee kept its policy Bank Rate at 0.25 percent. It also maintained its asset purchase program at £435 billion. The BoE lowered its 2017 growth outlook to 1.9 percent from 2 percent, citing weakening household spending. Growth for the second quarter was forecast at 0.4 percent. However, the Bank lifted the growth projection for 2018 to 1.7 percent from 1.6 percent and that for 2019 to 1.8 percent from 1.7 percent.
In its Spring Forecast, the European Commission raised the Eurozone growth forecast for this year to 1.7 percent from 1.6 percent. The prediction for 2018 remained at 1.8 percent. The growth projection for the EU was raised to 1.9 percent for both years from 1.8 percent.
Deutsche Post tumbled after the company reported lower than expected first quarter profit because of difficult price environment in its freight division. Crédit Agricole declined despite reporting a near fourfold increase in first-quarter profit. Barclays was lower after chief executive apologized to shareholders for his behavior over the recent whistleblowing incident. BT declined after the telecoms giant unveiled plans to cut 4,000 jobs worldwide in a major overhaul after reporting a decline in fourth-quarter pretax profit. Hikma Pharmaceuticals sank after US regulators delayed approval for a new drug. Zurich Insurance advanced after the company reported results that were slightly above expectations.
March UK industrial production declined for the third consecutive month this time by a monthly 0.5 percent. March UK visible trade deficit widened to £ 13.44 billion from £11.44 billion in February.
Asia Pacific
Asian stocks advanced Thursday thanks to a rebound in crude oil prices and rising optimism about the US economy lending some support.
Chinese shares reversed earlier losses to end higher, led by gains in realty and infrastructure stocks, after reports suggested that that the People’s Bank of China is likely to inject funds via its medium-term lending facility on Friday. The Shanghai Composite was up 0.3 percent while the Hang Seng added 0.4 percent.
The Nikkei was up 0.3 percent and the Topix gained 0.1 percent. While exporters turned in a mixed performance, Toyota Motor gained after announcing its financial results for the fiscal year ended March. Takata slid after the airbag maker reported a wider full-year loss. Takeda Pharmaceutical climbed after the company said it expects a 16 percent rise in operating profit for the year through March.
The S&P/ASX was up 2.90 points while the All Ordinaries added 0.94 point. Banks ended narrowly mixed amid signs that they are likely to pass on the bulk of a surprise federal tax to their customers through interest rate changes. Investment bank Macquarie Group advanced after a consortium led by the investment bank signed a deal to acquire a controlling stake in NSW electricity distributor, Endeavour Energy. GrainCorp jumped after its half-year underlying profit more than tripled. Rio Tinto and Fortescue Metals Group ended down as iron ore prices hovered near four-month lows.
The Kospi jumped 1.2 percent as foreign investors extended their buying on hopes that the newly formed government will unveil economic stimulus to boost economic growth. The Sensex was virtually unchanged adding 2.81 points.
Looking Forward
India reports March industrial production and April consumer price index. Hong Kong releases first quarter gross domestic product. Germany posts first quarter flash gross domestic product. The Eurozone releases March industrial production. In the US, April consumer price index and retail sales along with March business inventories will be released. Preliminary May consumer sentiment will also be reported.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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