On 12 September, 2017 – Stocks continued the relief rally globally as geopolitical fears receded along with hurricane Irma

The costs for Irma along with Harvey have yet to be tallied.

United States

The S&P and Nasdaq hit record closing highs for the second straight day Tuesday with financial stocks leading the charge. However decline in Apple after it unveiled its latest iPhone applied downward pressure. The feared impact of Hurricane Irma waned and the easing geopolitical tensions with North Korea receded and helped to push shares higher. The Dow Jones industrials, S&P and Nasdaq were all up 0.3 percent. Investors also had hopes for tax reform by year’s end.

Apple declined after investors reacted to the unveiling of the 10th anniversary edition of the iPhone. The stock turned negative during product demonstrations. McDonald’s tumbled on concerns about its third-quarter results. Goldman Sachs unveiled a growth plan that could add as much as $5 billion in revenue annually.

Banks including JPMorgan and insurers helped lead the way upward, reflecting an upswing in bond yields and investors’ relief that storm damage likely wouldn’t end up as burdensome as feared. However, health care, real estate, utilities and technology stocks declined. Teva advanced after it said it will sell its Pargard IUD product to Cooper Cos for $1.1 billion in cash. Cooper declined. Equifax advanced — it was downgraded late Monday — after declining Monday.

These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$7.70 to US$1,326.50. Copper futures were down 0.9 percent to US$3.04. WTI spot crude was up 20 US cents to US$48.27. Dated Brent spot crude was up 48 US cents to US$54.32. The US dollar was up against the yen, Swiss franc and the Canadian and Australian dollars. The currency declined against the euro and pound. The Dollar Index was up 0.04 percent. The yield on US Treasury 30 year bond was up 3 basis points to 2.77 percent while the yield on the 10 year note was up 4 basis points to 2.17 percent.

European markets

The majority of the European markets continued to climb Tuesday's session, adding to the gains from the previous session. The indices continued Monday’s relief rally after geopolitical concerns eased and damage reports following Hurricane Irma were less than had been anticipated. The CAC was up 0.6 percent, the DAX added 0.4 percent and the SMI was 0.8 percent higher. However, the FTSE retreated 0.2 percent after August’s consumer price index accelerated more than anticipated to hit the highest level in five years. The data added pressure on the Bank of England with its 2 percent inflation target to consider raising interest rates which it meets on Thursday.

ThyssenKrupp increased after the company said that a deal to merge its European steel business with that of Tata Steel could be struck this month. Volkswagen gained after reports that it plans to build electric versions of all 300 models by 2030. Crédit Agricole gained after selling a 16.2 percent equity stake in Banque Saudi Fransi for €1.3 billion. Virbac sank after the veterinary pharmaceutical firm cut its full-year revenue outlook. JD Sports rallied after reporting a big jump in sales in the first half of the year. Ashtead Group advanced — the industrial equipment rental firm expects an increase in demand for its fleet after Hurricanes Harvey and Irma hit the US.

Whitbread declined on a broker downgrade. Credit Suisse advanced on a broker upgrade. Dufry, ABB, LafargeHolcim and Richemont advanced in Zurich. Novartis also gained as it reported that its biosimilar rituximab to treat blood cancers and immunological diseases such as rheumatoid arthritis was accepted for review by the US Food and Drug Administration (FDA). British American Tobacco, Burberry Group and drug maker Shire all retreated. Home builders Taylor Wimpey and Persimmon declined.

UK August consumer price index increased 2.9 percent on the year — its highest level in over five years — driven by strong increase in clothing and petrol prices. August producer prices were up 3.4 percent, a three month high, after increasing 3.2 percent in July. Deutsche Bank, Commerzbank and Banco Santander were higher.

Asia Pacific

Asian stocks continued to rally Tuesday about Hurricane Irma and North Korea as the enormous storm weakened and the UN Security Council unanimously stepped up sanctions against North Korea for its latest missile and nuclear tests.

The Shanghai Composite edged up 0.1 percent as investors waited for the release of key economic data for August including industrial production, retail sales and fixed-asset investment. The Hang Seng also inched up 0.1 percent.

The Nikkei and Topix added 1.2 percent and 0.9 percent respectively as a weaker yen bolstered exporters and financials also gained in the wake of sharp gains in US bond yields and lower than expected damage from Hurricane Irma. Exporters Canon, Toyota, Honda Motor and Panasonic climbed. Banks Mitsubishi UFJ Financial and Sumitomo Mitsui Financial advanced along with Insurers MS&AD Insurance, Nomura and Dai-ichi Life Holdings.

The S&P/ASX added 0.6 percent and the All Ordinaries was up 0.5 percent. The big four banks rose to extend gains for the second straight day while investment bank Macquarie Group also was higher. Miners BHP Billiton, Fortescue Metals Group and Rio Tinto gained as Chinese iron ore and steel futures edged up after a five-day retreat. South32 shares jumped as much as 3.9 percent. Gold miners Evolution, Newcrest Mining and Regis Resources retreated as gold extended losses from the previous session amid gains in equities and the dollar's strength. Energy stocks also lost ground despite an increase in crude oil prices overnight.

The Kospi was up 0.3 percent as retail and institutional investors were net buyers, offsetting selling by foreigners. The Sensex added 0.9 percent.

Looking forward

Japan releases August producer price index. Germany reports final consumer price index for August. The UK posts its August labour market report and the Eurozone releases final July industrial production. In the US, August producer price index and weekly EIA petroleum status report will be posted.

*Note — all releases are listed in local time.

Source: Fidelity

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