On 01 June, 2017 – Most global stocks advanced

US indices hit new closing highs on better than anticipated economic data.
United States
The Dow Jones industrials, S&P and the Nasdaq set record closing highs Thursday after the latest batch of economic data suggested the US economy was picking up speed. The Dow was up 0.65 percent and both the S&P and Nasdaq were 0.8 percent higher.
According to ADP, private employers continued to hire more workers, adding 253,000 jobs in May after adding a revised 174,000 in April. Weekly jobless claims rose last week but remain low by historical standards. The May ISM manufacturing index edged up to a reading of 54.9 from 54.8 in April. However, construction disappointed, sinking 1.4 percent on the month in April after growing 1.1 percent in March.
Deere shares rose after it agreed to buy Wirtgen Group, a German maker of road-construction equipment for about €4.6 billion including debt. Ciena led the networking sector higher after reporting better than expected second quarter results. XBiotech and Minerva Neurosciences posted gains. Palo Alto Networks jumped after the company posted better than anticipated quarterly earnings. Hewlett Packard Enterprise retreated after reporting weaker than anticipated earnings. Charter Communications shares were mostly flat following news that it rejected a $100 billion buyout offer from Verizon. Verizon retreated. Express tumbled after missing first quarter earnings and revenue estimates.
Fed governor Jerome Powell shrugged off recent weakness in inflation Thursday and said “if the economy performs about as expected, I would view it as appropriate to continue to gradually raise rates.” San Francisco Fed President John Williams also played down anxiety over recent weakness in the US inflation rate and expressed confidence that an improving US economy warrants “three or four rate increases” this year.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$1.35 to US$1,264.85. Copper futures were up 0.23 percent to US$2.59. WTI spot crude was down 29 US cents to US$48.03. Dated Brent spot crude was down 43 US cents to US$50.33. The US dollar was up against the euro, Swiss franc and the Canadian and Australian dollars. The currency declined against the yen and was virtually unchanged against the pound. The Dollar Index was up 0.2 percent. The yields on both the US Treasury 30 year bond and on the 10 year note were unchanged at 2.87 percent and 2.21 percent respectively.
Europe
Stock indices advanced Thursday; however, investors remained cautious given the political uncertainties in the UK and Italy. The FTSE was up 0.3 percent, the CAC gained 0.7 percent, the DAX increased 0.4 percent and the SMI edged up 0.1 percent.
Saint Gobain advanced after launching a €750 million bond issue. Peugeot and Renault were higher after industry data showed French car registrations rose nearly 9 percent in May. Vivendi gained after it won conditional EU approval to take de facto control of Telecom Italia. Satellite telecommunications firm Inmarsat jumped on a report that Japan’s Softbank has begun talks with the firm for a possible tie-up.
AstraZeneca gained after Pfizer acquired its brand Neksium. BT Group slipped on concerns over its cash flows. Johnson Matthey tumbled after full year earnings per share climbed to 209.1 pence from 178.7 pence in the previous year. Banco Popular Español tumbled in Madrid on reports that senior EU officials have warned the bank could be dissolved if it can’t find a buyer by a self-imposed June 10 deadline. Mediclinic declined on broker downgrades.
May final manufacturing PMI for the Eurozone climbed to a 73-month high of 57.0. May UK manufacturing PMI moderated to 56.7 in May from 57.3 in April. UK Nationwide house prices declined for the third consecutive month for the first time since 2009. House prices declined 0.2 percent on the month in May following a 0.4 percent drop in April.
Asia Pacific
Stocks were mixed Thursday following mixed data on China’s manufacturing sector. However, the uncertain political situations in the UK and Italy also weighed on consumer sentiment. Investors were also waiting for Friday’s US non-farm payrolls numbers — a positive report is expected to pave the way for an increase in the Federal Reserve’s fed funds rate when the FOMC meets in two weeks.
The Shanghai Composite tumbled 0.5 percent after the Caixin manufacturing PMI for May slipped below the breakeven level of 50 between growth and contraction to 49.6. The reading had been barely above 50 at 50.3 in April. The Hang Seng however advanced 0.6 percent.
The Nikkei and Topix both added 1.1 percent. Exporters were mixed with Toyota, Panasonic and Canon rising while Toshiba declined. The May manufacturing PMI reading improved to 53.1 from 52.7 in April. Upbeat domestic data on capital spending also helped spur optimism about the economic outlook.
Both the S&P/ASX and All Ordinaries were up 0.2 percent, led by gains in healthcare and utility stocks. Wesfarmers dropped on a broker downgrade. Miners BHP Billiton, Rio Tinto and Fortescue Metals Group retreated a day after iron ore futures in China tumbled on worries about oversupply. Energy stocks also closed broadly lower.
The Kospi slipped 0.1 percent as foreign investors and local institutions locked in profits following a month-long rally. The Sensex was virtually unchanged (down 8.21 points). Investors reacted to the disappointing first quarter growth data that was released after markets closed on Wednesday. India’s GDP grew just 6.1 percent from a year earlier in the March quarter, lower than the 7 percent growth in the previous quarter. The report mirrored the impact of demonetization on key sectors including construction and financial services.
Looking forward
Canada and the US post international trade data for April. The US posts May employment situation report.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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