On 08 August, 2017 – Stocks were mixed amid a week of thin August volumes and little new economic data

Both Chinese and German merchandise trade data disappointed.
United States
The three main US stock indices closed lower on Tuesday after rising in mid-day. The Dow Jones industrials were down 0.1 percent while the S&P and Nasdaq retreated 0.2 percent. Trading will be moderated by a lack of legislative news from Washington as the US Congress is in recess until September 5.
US stocks turned sharply lower just minutes before the closing bell as US President Donald Trump warned North Korea of “fire and fury”, and the geopolitical jitters kept the Dow from setting its tenth straight record close. Just moments after Mr Trump spoke stocks gave up their gains after a day of otherwise steady trading. Some of the sell-off abated, however, though it still left the major indices in the red.
Apple pared gains after rising to an all-time high and provided the biggest boost to all three indexes, while healthcare stocks such as Johnson & Johnson were the biggest weight on the S&P. Marriott International declined after the hotelier projected that profit in the current quarter would come in slightly below estimates. SeaWorld Entertainment slid after the company said overall attendance at its parks dropped sharply in the first half of the year.
Michael Kors Holdings reported a 15 percent drop in quarterly profit. Net income declined to $125.5 million in the first quarter ended July 1 from $147.1 million a year earlier. Total revenue was down 3.6 percent to $952.4 million. The company, however, raised its annual revenue forecast.
Time, the publisher of Fortune, People and Time magazines, reported a lower-than-expected quarterly revenue hurt by declines in magazine sales and advertising revenue. Circulation revenue, which accounts for nearly 30 percent of Time’s total revenue, fell 12.3 percent to $207 million in the second quarter ended June 30. Advertising revenue also dipped about 12 percent to $374 million, driven by declines in both print and digital advertising.
Ralph Lauren reported a 13.2 percent drop in sales. The company’s net income was $59.5 million in the first quarter ended July 1 compared with a loss of $22.3 million a year earlier. Revenue fell to $1.35 billion from $1.55 billion.
Walt Disney reported a near 9 percent fall in quarterly profit, pulled down by higher programming costs and declining subscribers at ESPN. The company’s revenue fell marginally to $14.24 billion in the third quarter ended July 1 from $14.28 billion a year earlier. Net income fell to $2.37 billion from $2.6 billion.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$3.80 to US$1,261.80. Copper futures were up 1.15 percent to US$2.94. WTI spot crude was down 31 US cents to US$49.08. Dated Brent spot crude was down 39 US cents to US$51.98. The US dollar was down against the yen and the Canadian and Australian dollars. The currency was up against the euro and pound. The Swiss franc was unchanged. The Dollar Index was up 0.2 percent. The yields on both US Treasury 30 year bond and 10 year note were up 2 basis points to 2.85 percent and 2.27 percent respectively.
Europe
Stocks edged upward Tuesday. Disappointing merchandise trade data from both China and Germany weighed on investor sentiment. Regional earnings also proved to be a mixed. The FTSE and SMI inched up 0.1 percent while the CAC gained 0.2 percent and the DAX was 0.3 percent higher.
Deutsche Post DHL Group was higher after the company confirmed its FY17 outlook after reporting higher profit in its second quarter with good growth in revenues. Uniper climbed after the conventional-energy company raised the lower end of its outlook for fiscal 2017 adjusted EBIT and also increased its guidance for full-year dividend growth. Air France-KLM rose after the airline reported a 4.6 percent increase in passenger traffic and a 3.0 percent rise in capacity for July. Standard Life was lower after its Global Absolute Return Strategies (GARS) mandate saw £5.6 billion in net outflows in the first half of the year. Novartis and Nestlé edged higher while Roche retreated.
InterContinental Hotels Group dropped after reporting slower growth in revenue per room in the second quarter. Bellway gained after the company reported a jump in revenues in the year ending July 31, despite uncertain economic conditions. Aegon advanced in Amsterdam after the insurer has agreed to sell Unirobe Meeùs Groep, an independent financial advisory group, to Aon Groep Nederland for €295 million. Jewelry manufacturer and retailer Pandora plummeted in Copenhagen after its second quarter revenue and profits missed expectations.
In June, German exports declined the most in nearly two years in June though imports logged the biggest contraction since 2009, lifting the trade surplus to a higher level. Exports fell 2.8 percent on the month after they climbed 1.5 percent in May. At the same time, imports decreased 4.5 percent after May’s 1.3 percent increase. The French trade deficit widened in June to €4.66 billion from €4.43 billion in May.
Asia Pacific
Asian stocks were mostly lower Tuesday. A stronger yen sent exporters lower in Japan, oil prices slipped on concerns about major oil producers’ wavering commitment to cut output and China reported disappointing July merchandise trade data.
The Shanghai Composite edged up 0.1 percent as both export and import data missed expectations. The Hang Seng was up 0.6 percent. July exports climbed 7.2 percent from a year ago in in dollar terms. Imports were up 11.0 percent from a year ago. Expectations were for an increase of 10.8 percent for exports and 17.5 percent for imports.
The Nikkei was down 0.3 percent and the Topix declined 0.2 percent. Exporters Panasonic and Mazda Motor were lower. Pioneer dropped after the car electronics maker reported a loss for the first quarter and lowered its full-year sales outlook. Japan Steel Works soared after the company raised its operating profit outlook for the year ending March 2018. GS Yuasa jumped on a Nikkei report that the company is working on a lithium-ion battery that would be ready for mass production around 2020.
Both the S&P/ASX and All Ordinaries were down 0.5 percent, dragged lower by banking and energy stocks. Markets showed little reaction to a survey showing business conditions at highest levels in nine years. Commonwealth Bank, ANZ and Westpac declined. Santos, Oil Search and Beach Energy were lower as oil extended overnight losses ahead of API inventory data due late on Tuesday.
The Kospi was down 0.2 percent on institutional selling. The Sensex tumbled 0.8 percent after capital market regulator SEBI directed exchanges to initiate action against 331 suspected shell companies.
Looking forward
Australia releases home loans data for June. China posts July consumer and producer price indices. In the US, second quarter productivity and costs and June wholesale trade will be released.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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