There was little reaction to the improved US employment data.
United States
Stocks rebounded from Thursday’s declines and managed to gain in the holiday shortened week as well thanks to a stronger than anticipated June employment report. Traders also kept an eye on developments at the G20 summit in Hamburg, Germany. The Dow Jones industrials were up 0.4 percent and 0.3 percent on the week. The S&P was up 0.6 percent Friday and edged up 0.1 percent while the Nasdaq was up 1.0 percent on the day and 0.2 percent for the week.
June employment jumped 222,000 following an upwardly revised 152,000 from 138,000 in May. Expectations were for an increase of 170,000. The unemployment rate inched up to 4.4 percent from 4.3 percent thanks primarily to a higher participation rate.
SkyWest, Ryanair and Alaska Air advanced. Tesla rose after the company said that about 3,500 vehicles were in transit to customers at the end of the second quarter and they would be counted as deliveries in the third quarter. Apple, Microsoft and Facebook advanced.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$9.25 to US$1,215.65. Copper futures were down 0.54 percent to US$2.65. WTI spot crude was down US$1.29 to US$44.23. Dated Brent spot crude was down US$1.40 to US$46.71. The US dollar was up against the yen, euro, pound and Swiss franc. The currency declined against the Canadian and Australian dollars. The Dollar Index was up 0.2 percent. The yield on US Treasury 30 year bond was up 3 basis points to 2.93 percent while the yield on the 10 year note was up 2 basis points to 2.39 percent.
Europe
Most European stock markets slipped Friday but ended little changed for the day. Falling crude oil prices and continued geopolitical concerns weighed on investor sentiment. The release of the better than expected US jobs report failed to provide much of a boost. Rather, traders remained cautious as the G20 summit began in Hamburg, Germany. The FTSE and DAX were up 0.2 percent and 0.1 percent respectively while the SMI was virtually unchanged (down 3.68 points) and the CAC slipped 0.1 percent. For the week, the FTSE, CAC and DAX all added 0.5 percent while the SMI was 0.3 percent lower.
In Frankfurt, Merck KgaA declined. The European Commission opened formal probes into the German pharmaceutical group, General Electric, and Canon alleging they broke merger rules in recent acquisitions. Carrefour declined after the retailer said the French market was a persistently challenging competitive environment.
Centrica climbed on takeover talk. EasyJet surged on a broker upgrade. Volvo Group retreated in Stockholm after selling its complete holding in the German listed engine manufacturer Deutz. Electrolux gained after it agreed to acquire Best for an undisclosed amount. Swatch and Vifor gained in Switzerland as did banks Credit Suisse and UBS. However both Total and Royal Dutch shell declined along with crude oil prices.
Germany’s May industrial production was up a monthly 1.2 percent while in France, output was up 1.9 percent. France’s foreign trade deficit narrowed in May from a year ago, as exports grew faster than imports. The UK trade deficit widened to £11.86 billion from £10.59 billion in April. UK May output slid 0.1percent on the month.
Asia Pacific
Stocks were mostly lower in Asia after US private sector job growth in June was less than expected. Also weighing on stocks, global sovereign debt yields rose across the board amid bets the European Central Bank will gradually remove policy accommodation in the near future. Simmering tensions in the Korean peninsula and caution prior to the G20 summit also signaled caution. Later in the global market day US June employment data including both private and public sector jobs will be reported — this too weighed on markets.
The Shanghai Composite added 0.2 percent despite concerns over slowing economic growth and expectations of higher interest rates globally. The Hang Seng index was down 0.5 percent. On the week, the Shanghai Composite was up 0.8 percent while the Hang Seng retreated 1.6 percent.
The Nikkei was down 0.3 percent while the Topix lost 0.5 percent. For the week, the Nikkei was down 0.5 percent and the Topix lost 0.3 percent. Shares hit a three week low despite a weaker yen after the Bank of Japan decided to raise its purchases of government bonds in its market operations. The dollar hit a seven week high against the yen as the central bank pledged to buy unlimited amounts of government debt with a 10-year maturity at a yield of 0.11 percent.
The S&P/ASX dropped 1.0 percent while the All Ordinaries was down 0.9 percent. For the week, both indices were down 0.3 percent. Shares retreated — they were dragged down by financials as investors pondered the prospect of the ECB turning off the flow of easy money. Mixed construction activity data also disappointed investors. The big four banks declined. Fortescue Metals Group dropped after the government forecast energy and resources exports to decline in the next two years. Oil Search, Santos and Woodside Petroleum were lower despite crude oil prices rising modestly overnight. Coca-Cola Amatil tumbled to extend Thursday’s sell-off after the company lost a major contract with Domino’s.
The Kospi lost 0.3 percent Friday and was down 0.5 percent on the week. The Sensex was virtually unchanged (down 8.71 points) but advanced 1.4 percent on the week.
Looking forward

Central Bank activities

July 12

Canada

Bank of Canada Monetary Policy Announcement

United States

Federal Reserve Beige Book Published

The following indicators will be released this week…

Europe

July 10

Germany

Merchandise Trade Balance (May)

July 12

Eurozone

Industrial Production (May)

UK

labour Market Report (June)

July 14

Eurozone

Merchandise Trade Balance (May)

Asia Pacific

July 10

Japan

Private Machine Orders (May)

China

Consumer Price Index (June)

Producer Price Index (June)

July 12

Japan

Producer Price Index (June)

India

Consumer Price Index (June)

Industrial Production (may)

July 13

China

Merchandise Trade Balance (June)

Americas

Jul 11

Canada

Housing Starts (June)

United States

NFIB (June)

JOLTS (May)

July 13

United States

Initial Unemployment Claims (week ending prior Saturday)

Producer Price Index (June)

July 14

United States

Consumer Price Index (June)

Retail Sales (June)

Industrial Production (June)

Business Inventories (May)

Consumer Sentiment (July preliminary)

Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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