On 07 June, 2017 – Most markets declined on weak energy stocks
Investors were also cautious ahead of the UK general elections and European Central Bank meeting.
United States
US stocks closed slightly higher on Wednesday as the financials sector helped to cap a sharp drop in energy shares. The Dow Jones Industrial Average rose and S&P 500 index were up 0.2% each and the Nasdaq Composite Index advanced 0.4%.
Shares in Nike, UnitedHealth Group and American Express were among the leading gainers, while Coca-Cola and Caterpillar declined. Energy shares plummeted after data from the Energy Information Administration showed crude-oil stockpiles unexpectedly rose in the latest week, a negative sign for supply at a time when demand remains tepid. Consequently, shares in Chevron, Marathon Oil and Helmerich & Payne declined.
Investors are focused on the so-called “Super Thursday”. They will closely monitor former Federal Bureau of Investigation Director James Comey’s testimony on alleged Russian interference in the 2016 US presidential election, the UK general election and meetings from the European Central Bank meeting.
Europe
European stocks ended a volatile session slightly lower on Wednesday, as investors took a cautious approach ahead of a jam-packed Thursday session that has the potential to shake up financial markets significantly. The Stoxx Europe 600 index, Germany’s DAX 30 and France’s CAC 40 slipped 0.1% each, while the UK’s FTSE 100 index declined 0.6%, largely due to the rising pound.
Shares in BP and Royal Dutch Shell declined in light of a fall in oil prices. Homebuilder Taylor Wimpey, Persimmon and Barratt Developments were among the gainers. In the mining sector, shares in Anglo American rose. Meanwhile, Spanish banks, including Santander, Bankia and CaixaBank rose. Elsewhere, RWE and E. ON were among the gainers. Shares in Covestro AG plummeted after Bayer further reduced its holding in Covestro as it prepares for its planned tie-up with Monsanto.
In economic news, Germany’s manufacturing orders slumped 2.1% in April, partly due to a relatively low share of bulk orders. In the UK, Halifax said that house prices in the three months to May were 3.3% higher than a year earlier, compared with a FactSet estimate of a 3% gain. Prices were down 0.2% on the preceding quarter.
Asia Pacific
Asian shares wobbled on Thursday as investors braced for any surprises from the UK elections, the European Central Bank’s policy meeting and congressional testimony from ex-FBI director James Comey who was fired by President Donald Trump last month. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.1% while Japan’s Nikkei was flat on Thursday morning. The Kospi fell 0.3% and Australia’s S&P/ASX 200 was down 0.1%.
Energy stocks in the region were weak, as shares in Oil Search, Woodside Petroleum Inpex and Japan Petroleum Exploration declined.
In economic news, China reported stronger-than-anticipated exports and imports for May despite falling commodity prices, suggesting the economy is holding up better than expected despite rising lending rates and a cooling property market. China’s May exports rose 8.7% from a year earlier, while imports expanded 14.8%, official data showed on Thursday. That left the country with a trade surplus of $40.81 billion for the month.
Looking forward
Central Bank activities
June 8
Eurozone
European Central Bank Monetary Policy Announcement
Europe
June 8
Germany
Industrial Production (April)
France
Merchandise Trade Balance (April)
Asia Pacific
June 8
Japan
Gross Domestic Product (Q1.2017 revised)
Australia
Merchandise Trade Balance (April)
China
Merchandise Trade Balance (May)
Americas
June 8
Canada
Housing Starts (May)
United States
Initial Unemployment Claims (week ending prior Saturday)
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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