On 03 October, 2017 – Stocks were mostly higher for a second day as investors wait for economic data and earnings reports
Positive US economic data have boosted investor morale.
United States
US stocks continued to climb Tuesday, helped by gains in Ford Motor and General Motors after strong September vehicle sales. The strength reflected recent upward momentum, as traders seem optimistic about the economic outlook and the prospects for Republican tax reform. Nonetheless, trading activity remained relatively subdued, with a lack of major US economic data keeping some traders on the sidelines. The Dow Jones industrials gained 0.4 percent while both the S&P and Nasdaq added 0.2 percent. Investors are also looking at upcoming quarterly earnings from major companies to help justify the lofty market valuations.
Major automakers posted higher US new vehicle sales in September as consumers in hurricane-hit parts of the country rushed to replace flood-damaged cars. General Motors hit a record high, while Ford also advanced. Lennar jumped following a higher-than-expected quarterly profit. KB Home also advanced. Delta jumped the most in 20 months after the airline said it expects consolidated passenger unit revenue (PRASM) for the third quarter to increase 2 percent from the prior period. JetBlue surged the most in 14 months, while American Airlines, United Continental and Southwest Airlines gained.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$2.45 to US$1,271.25. Copper futures were up 0.07 percent to US$2.96. WTI spot crude was down 20 US cents to US$50.38. Dated Brent spot crude was down 18 US cents to US$55.94. The US dollar was up against the yen and pound. The currency retreated against the euro, Swiss franc and the Canadian and Australian dollars. The Dollar Index was down 0.1 percent. The yields on both the US Treasury 30 year bond and 10 year note were down 1 basis point to 2.86 and 2.33 percent respectively.
European markets
Most stock indices advanced Tuesday despite the lack of significant news. Germany’s DAX was closed for a holiday and economic data were on the light side. Spanish Prime Minister Mariano Rajoy on Monday said the government will seek a joint response with other political parties to the “pro-independence challenge” in Catalonia. Catalans voted in favor of independence in a contested referendum over the weekend. The FTSE was up 0.4 percent, the CAC gained 0.3 percent and the SMI was 0.5 percent higher. The IBEX steadied adding 1.80 points. Rio Tinto advanced after it successfully completed the first fully autonomous rail journey at its iron ore operations in the Pilbara region of Western Australia.
Ferguson rallied after the plumbing supplies group increased its dividend and announced a share buyback plan after reporting a rise in trading profit. Greggs jumped after reporting a 5 percent increase in like-for-like sales in the 13 weeks ending September 30. Nestlé gained on a broker upgrade. Royal Dutch Shell rose on a Bloomberg report that the company and its partners Eneco Holdings and Mitsubishi are seeking to sell a stake in two Dutch offshore wind-farm projects.
Shire slid after it sued Allergan for allegedly scheming to block doctors from prescribing its new treatment for dry eye disease. Sonova climbed after a broker upgrade. LafargeHolcim and Richemont gained while Swatch retreated. Banks Julius Baer, Credit Suisse and UBS advanced in Zurich. Novartis rose but Roche was down.
Eurozone producer prices increased 2.5 on the year in August after increasing 2 percent in July. Spain’s number of unemployed increased 27,858 in September from the previous month. UK construction sector contracted for the first time in more than a year in September with the index falling below the 50 breakeven level to 48.1.
Asia Pacific
Stocks were mixed in holiday-thinned trade Tuesday. Both Chinese and South Korean markets are closed for the week for the Harvest Festival and National Day holidays respectively. The dollar was bolstered by upbeat US economic data and tax reform hopes while oil prices slipped further in Asia after falling on Monday amid signs of higher output. The Hang Seng soared 2.2 percent after returning from Monday’s holiday.
The Nikkei was up 1.0 percent and the Topix added 0.6 percent on a weaker yen against the US dollar. Advantest, Kansai Electric Power and Mitsui Fudosan gained. Advertising agency Asatsu-DK soared after US investment fund Bain Capital said it would buy all outstanding shares in the company through a tender offer.
Both the S&P/ASX and All Ordinaries retreated 0.5 percent on lower oil prices. QBE Insurance, the country’s largest insurer, tumbled after it said it would increase its allowance for large individual risk and catastrophe claims. Woodside Petroleum, Santos and Origin Energy were lower as oil extended overnight losses. BHP Billiton and Rio Tinto gained while banks Commonwealth and NAB lower. TechnologyOne plummeted after lowering its annual profit guidance. The Sensex added 0.7 percent after the September PMI remained at 51.2 for a second month underpinned by increases in both output and new orders. Investors waited for the Reserve Bank of India’s policy decision Wednesday, although many expect the Bank to maintain status quo on lending rates, citing risks to inflation.
Looking Forward
The Reserve Bank of India announces its monetary policy decision. September composite PMIs will be released for Japan, France, Germany and the Eurozone. September services PMIs will be released for the UK and US. In the US, September ADP private employment report and ISM nonmanufacturing index will be reported along with the weekly petroleum status report.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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