On 21 December, 2016 – Stocks were mixed in lackluster trading
There was little economic data to lure investors.
United States
US stocks were largely unchanged Wednesday with energy stocks slightly stronger and healthcare stocks struggling a little just a day after the Nasdaq and the Dow Jones industrials hit record highs. US stocks have rallied since the November 8 election on bets that President-elect Donald Trump’s plans for deregulation and infrastructure spending will boost the economy. Selling pressure remained relatively subdued limiting the downside for the markets. The Dow, S&P and Nasdaq all were down 0.2 percent.
Celgene and Anthem declined. Southwestern Energy and Chesapeake Energy gained along with drilling service and pipeline companies. Monster Beverage and Oreo maker Mondelez were higher along with General Mills. Goldman Sachs tumbled. AMC Entertainment took a step toward completing its purchase of competitor Carmike Cinemas after the Department of Justice said it will sign off on the sale if AMC sells certain properties. Nike gained after its second-quarter profit and sales came in stronger than expected.
Accenture retreated after the consulting and outsourcing software services provider’s revenue forecast missed estimates. Twitter declined after its chief technology officer said he would be leaving the company. FedEx was lower after the company’s quarterly results missed expectations. Swiss drug maker Actelion Pharmaceuticals has entered into “exclusive negotiations” with Johnson & Johnson about a “strategic transaction” just a week after the latter backed out of talks over a potential takeover deal.
November existing home sales were up 0.7 percent to an annualized pace of 5.610 million. All of the gain came in condo and coop sales which jumped 10 percent while sales of single-family homes remain near their highest level since February 2007. Sales were up by 15.4 percent on the year.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$7.95 to US$1,133.65. Copper futures were down 0.26 percent to US$2.50. WTI spot crude was down 80 US cents to US$52.50. Dated Brent spot crude was down 87 US cents to US$54.48. The US dollar was up against the Canadian and Australian dollars. However, it declined against the yen, euro, Swiss franc and the yuan. It was virtually unchanged against the pound. The Dollar Index was down 0.25 percent. The yields on both the US Treasury 30 year bond and the 10 year note slipped 2 basis points to 3.12 percent and 2.54 percent respectively.
Europe
Most stock indices retreated Wednesday from their highest levels in about 11 months as the holiday period neared. Banks were weak with investors concerned about Italian banking banks. Several European banks were also fined by the Swiss competition regulator for interest rate rigging. The FTSE (down 2.54 points) and DAX (up 3.90 points) were virtually unchanged. The CAC lost 0.3 percent and the SMI was 0.1 percent lower.
The Riksbank retained its negative interest rate and extended its quantitative easing program at its Wednesday meeting. The Executive Board decided to extend the purchases of government bonds by SEK 30 billion during the first half of 2017. The purchases include both nominal and real government bonds, each corresponding to SEK 15 billion, respectively.
Volkswagen rose after the carmaker agreed to a $1 billion settlement to fix additional diesel powered vehicles tainted with emissions cheating software. Linde advanced a day after company and its US competitor Praxair announced a merger to create a global giant in the sector. Banks including Deutsche Bank, Commerzbank, BNP Paribas and Société Générale were lower. In London, Barclays declined while Royal Bank of Scotland advanced after they were fined by the Swiss competition regulator for interest rate rigging. Carnival declined on profit taking after rallying the previous day. Rolls-Royce gained after receiving a contract worth nearly $408 million. Meggitt declined after the aerospace and engineering group sold its drone targets business to QinetiQ for £57.5 million in cash.
Actelion climbed in Zurich amid reports that Sanofi’s talks for a deal with the drug-maker were progressing. Banca Monte dei Paschi di Siena tumbled in Milan after the Italian lender cautioned that it could run out of cash at a faster pace than previously forecast if its recapitalization fails. Mediaset advanced after French media firm Vivendi said it has crossed the 20 percent and 25 percent thresholds of the share capital of the Italian broadcaster. Coca-Cola Hellenic gained after Coca-Cola bought a majority stake in an African bottling firm from AB InBev for $3.15 billion. Coca-Cola said it planned to hold all operations temporarily until they can be refranchised to other partners. Its existing bottling partners include Coca-Cola European Partners and Coca-Cola Hellenic.
Asia Pacific
Stocks were mixed even though underlying sentiment remained supported by higher oil prices and continued optimism about the US economy for 2017.
The Shanghai Composite index climbed 1.1 percent as liquidity worries eased and the State-owned Assets Supervision and Administration Commission pledged to deepen reforms in state-owned sectors. The Hang Seng index was up 0.4 percent. Traders deemed recent losses to be excessive and mainland companies rebounded on eased concern over short-term money-market rates.
The Nikkei was down 0.3 percent and the Topix declined 0.5 percent in choppy trading as a slight uptick in the yen overshadowed overnight advances in US stocks. Panasonic dropped after it unveiled plans to make PanaHome its wholly-owned subsidiary.
Both the S&P/ASX and All Ordinaries added 0.4 percent after the Dow and Nasdaq hit record highs overnight on optimism about President-elect Donald Trump’s new policy agenda to boost growth. Miners BHP Billiton and Rio Tinto climbed even though Chinese steel and iron ore futures sagged for a sixth day. Banks and energy stocks ended on a mixed note.
Both the Kospi and Sensex retreated 0.2 percent.
Looking Forward
Canada posts October retail sales and November consumer price index. The US releases November durable goods orders, final third quarter gross domestic product and corporate profits, November personal income and spending and weekly jobless claims, money supply and Fed balance sheet.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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