On 09 October, 2015 – European markets rose on strong Asian markets and continued commodity strength

Most stocks advanced Friday and ended the week on a positive note. Investors reacted to the FOMC minutes that were released Thursday when Europe and Asia were closed for the day.
United States
Following the rally the day before, stocks saw some further upside trading on Friday. While buying interest was somewhat subdued on the day, the Dow and the S&P reached their best closing levels in over a month. The major averages posted modest gains but closed off their highs for the session. The Dow Jones industrials edged up 0.2%, the Nasdaq added 0.4% and the S&P inched 0.1%. On the week, the Dow soared by 3.7%, while the S&P jumped by 3.3% and the Nasdaq gained 2.6%. Trading was light. The modest strength came as traders continued to react positively to yesterday’s release of the minutes of the latest FOMC meeting.
Airline stocks also turned in a strong performance with United Continental helping to lead the sector higher after raising its third quarter profit margin forecast. Steel, biotechnology and trucking stocks also gained while brokerage and natural gas stocks moved to the downside. Apple was up for its best day in a month. Alcoa retreated after it reported earnings as did several other raw materials companies.
International Paper jumped after it said it is taking a step back from manufacturing in Asia as it exits a Chinese joint venture and evaluates the sale of 18 other factories in the region. Packaging company Westrock gained amid a report that it is idling some capacity in containerboard production. Marathon Oil and Chesapeake Energy slid but were still up for the week. Gap was down after a measure of September sales tumbled more than projected at its Banana Republic stores. Apollo Education Group dropped. The company said in a filing that its University of Phoenix was notified by the Defense Department that it has been placed on probationary status regarding tuition assistance for active duty military personnel.
Atlanta Fed President Dennis Lockhart said in prepared remarks Friday in New York that the first interest rate increase since 2006 will likely be warranted later this month or in December, as the economy “remains on a satisfactory track.”
Gold at the afternoon London fixing was up US$11.55 to US$1,251.55. Copper futures were up 3.0% to US$2.41. WTI spot crude was up 20 US cents to US$49.63. Dated Brent spot crude was down 40 US cents to US$52.65. The US dollar was up against the pound and the yen. However, it declined against the euro, Swiss franc and the Canadian and Australian dollars. The Dollar Index was virtually unchanged (down 0.04%). The yield on US Treasury 30 year bond was down 3 basis points to 2.92% while the yield on the 10 year note slipped 1 basis point to 2.09%.
Europe
European markets advanced Friday, capping a strong weekly performance and enjoying the largest weekly gain since January. Solid performance by Asian markets provided an early boost and commodity strength continued to fuel the gains. Mining stocks were particularly strong after Glencore announced that it will cut its zinc production. The FTSE was up 0.6%, the CAC gained 0.5%, the DAX advanced 1.0% and the SMI edged 0.1% higher. On the week the indices added 4.7%, 5.4% 5.7% and 1.9% respectively.
Investors had their first opportunity to react to the FOMC minutes which were released after the market here closed on Thursday. The minutes showed that Fed members were concerned about global growth risks and decided it was prudent to wait for additional information before raising interest rates.
Both RWE and E.ON gained. Deutsche Bank jumped after Thursday’s weak performance. Commerzbank also finished higher. Volkswagen, BMW, Daimler, Peugeot and Renault advanced. EDF and Schneider Electric gained. In London, SABMiller was up. The company raised its target annual run rate cost savings from its cost and efficiency program announced in May 2014, from US$500 million by 31 March 2018 to at least US$1,050 million by 31 March 2020. Glencore surged after announcing that it will cut zinc production by a third. Anglo American, Rio Tinto, Fresnillo, BHP Billiton and Antofagasta all advanced. Lloyds Banking Group shares gained after the UK government reduced its stake in the bank by another percentage point. Standard Chartered was up after the emerging-markets focused bank said is planning to cut up to 1,000 top jobs in a drive to reduce costs.
The Bank of England’s monetary policy committee voted 8 to 1 to keep interest rates at a record low of 0.5%, saying labor costs aren’t yet strong enough to push inflation back to its 2% target. The minutes of the European Central Bank’s September meeting noted that downside risks to the outlook for inflation had increased and more time was needed to gauge the effect of financial market volatility and slower growth in China.
Asia Pacific
Stocks advance in Asia and commodities rebounded after the FOMC minutes indicated the Federal Reserve is no hurry to raise short term interest rates. Dovish comments from the Bank of England and the European Central Bank also reinforced the view that global market liquidity will remain ample for a long time.
The Shanghai Composite added 1.3% as investors turned their focus to third quarter earnings season. The Hang Seng was up 0.5% after succumbing to profit taking the previous day. For the week, the Shanghai Composite was up 4.3% and the Hang Seng, 4.4%.
The Nikkei was up 1.6% and 4.0% for the week. The weekly gain was the biggest since July. NTN, Kobe Steel, Mazda Motor, Toho Zinc and Obayashi climbed as did Inpex and JX Holdings. Toshiba Corp rallied on talk it may be a prospective takeover target for Tsinghua Unisplendour. Nisshinbo Holdings jumped on a Nikkei report that it will buy Nanbu Plastics for about ¥10 billion. Fast Retailing shares plunged after it missed its profit targets in the wake of losses at its Uniqlo and J Brand businesses in the US.
Australian shares hit six-week high with buying seen across the board on expectations the Fed will not raise interest rates this year. Both the S&P/ASX and All Ordinaries gained 1.3%. The indices added 4.4% and 4.3% respectively on the week. The Sensex was up 0.9% on the day and 3.3% on the week.
Global Stock Market Recap

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.
Looking forward*
Monday — India posts September consumer prices and August industrial production.
Tuesday — China releases September’s merchandise trade data. Germany and the UK post September consumer price indices. Germany releases October ZEW survey and the UK reports September producer prices. In the US, September NFIB will be released along with the September Treasury budget.
Wednesday — Japan posts September producer prices. China reports September consumer and producer price indices. India releases September WPI while France and Italy release September consumer price indices. The UK reports September labour market data. The Eurozone releases August industrial output. In the US, September producer prices and retail sales will be released along with August business inventories. The Federal Reserve publishes the Beige Book in preparation for the upcoming FOMC meeting on October 27 and 28.
Thursday — Australia reports its September labour force data. In the US, October Empire State and Philadelphia Fed manufacturing surveys along with weekly jobless claims, money supply and Fed balance sheet will be reported.
Friday — Italy posts August merchandise trade and the Eurozone posts August merchandise trade and final September harmonized index of consumer prices. The US releases September industrial production, August JOLTS and Treasury international capital along with October preliminary consumer sentiment.
*Note — all releases are listed in local time.