On 16 May, 2017 – US, European and Asian stocks mixed

Economic data were mixed and so were the stock markets’ performance.
United States
Stock indices were mixed in lackluster trading after mixed economic data and earnings. The Dow Jones industrials were virtually unchanged (down 2.19 points) and the S&P slipped 0.1 percent. The Nasdaq hit another record high boosted by technology stocks. The Nasdaq added 0.3 percent. Investors were also cautious about potential delays to the government’s tax and regulation reform agenda.
In economic news, April housing starts declined while industrial production rallied. Housing starts were down 2.6 percent to an annualized pace of 1.172 million. Permits declined 2.5 percent to a rate of 1.229 million. Industrial production jumped 1.0 percent on the month. Manufacturing also increased 1.0 percent, the biggest increase since February 2014.
Home Depot reported a better-than-expected first-quarter performance, TJX, the owner of T.J. Maxx and Marshalls stores, posted slowing comparable store sales growth and a disappointing current-quarter profit forecast. Pfizer declined on a broker downgrade. Staples was lower after the office supplies retailer reported a decline in quarterly sales. Qorvo, Cavium and ON Semiconductor were some of the semiconductor sector’s best performers.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up 90 US cents to US$1,234.20. Copper futures were up 0.5 percent to US$2.55. WTI spot crude was down 25 US cents to US$48.60. Dated Brent spot crude was down 22 US cents to US$51.60. 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 0.75 percent. The yields on both the US Treasury 30 year bond and the 10 year note were down 2 basis points to 2.99 percent and 2.32 percent respectively.
Europe
Stocks were mixed Tuesday. While the FTSE (up 0.9 percent) and SMI (up 0.2 percent) advanced, the CAC slipped 0.2 percent and the DAX was down 2.551 points. The FTSE reached a new record high and closed above the 7,500 level for the first time ever.
Automakers Daimler, BMW, Volkswagen, Renault and Peugeot declined after April data for Europe’s new car registrations declined mainly due to the timing of Easter holidays. The number of passenger cars registered in the EU fell 6.6 percent on the year to 1.19 million units in April. Sales had increased 11.2 percent in March. EasyJet shares were lower after the budget carrier reported a larger loss for the first half, hit by foreign exchange headwinds and this year’s late Easter.
BTG sank after the biotech firm reported lower annual pretax profit. However, Vodafone rallied after the mobile phone giant raised its guidance for underlying profit growth. Premier Foods declined after the company posted a decline in full-year profits, citing tough trading conditions. UBS was down in Zurich after Singapore sovereign wealth fund GIC Private said it had off-loaded a 2.4 percent stake in the Swiss bank at a loss.
First quarter flash gross domestic product was up 0.5 percent on the quarter for a second consecutive quarter. The March euro area trade surplus increased from a month ago, as exports rose and imports declined. The seasonally adjusted trade surplus rose to a 3-month high of €23.1 billion from €18.8 billion in February. German May economic confidence improved according to the ZEW Indicator of Economic Sentiment. The index was up 1.1 points to 20.6. This was the highest reading since August 2015. UK inflation accelerated to the highest since 2013 largely due to higher air fares in April. Inflation rose to 2.7 percent in April from 2.3 percent in March.
Asia Pacific
Asian stocks were mixed. Some indices were boosted by higher crude oil prices. The yen weakened and Mainland Chinese shares reversed earlier losses amid efforts by China’s central bank to boost liquidity in the financial system. Overall gains remained limited after The Washington Post reported that US President Donald Trump revealed “highly classified information” to two top Russian officials last week, with lawmakers calling the alleged disclosures “inexcusable” and “deeply disturbing.”
The Shanghai Composite was up 0.7 percent amid signs that the government is moving to ease liquidity conditions and helped offset worries over slowing economic growth. The Hang Seng however, was down 0.1 percent.
Both the Nikkei and Topix added 0.3 percent. Japanese Prime Minister Shinzo Abe said in an interview that the labor market tightness indicates that wages will gradually increase as demanded by market pressures going forward. Toshiba tumbled after the Nikkei business daily reported that a legal battle with the company’s joint venture partner Western Digital Corp. could delay Toshiba’s sale of its memory unit beyond the fiscal year-end deadline.
Both the S&P/ASX and All Ordinaries were up 0.2 percent despite heightened fears over North Korea’s nuclear and missile development and the Trump administration’s trade and foreign policies. The minutes of the Reserve Bank of Australia’s May meeting showed no major changes to its positions on economic growth or financial stability. National Australia Bank declined on going ex-dividend, while the other three big banks advanced. Investment bank Macquarie Group retreated. Higher oil and iron ore prices lifted commodity-related stocks, with BHP Billiton, Fortescue, Rio Tinto, Oil Search, South32 and Origin Energy all increasing.
The Kospi was up 0.2 percent hitting a six-week high as firmer oil prices helped improved investors’ risk appetite. The Sensex added 0.9 percent — forecasts of normal monsoon rains this year, solid earnings and macroeconomic indicators along with continued capital inflows bolstered investor sentiment.
Looking Forward
Japan releases March machine orders. The UK releases April labour market report. The Eurozone posts April harmonized index of consumer prices. Canada releases March manufacturing sales. In the US, weekly petroleum status report will be released.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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